Canaccord Genuity ups target price on TransGlobe Energy

Analysts at Canaccord Genuity upped their target price on development and exploration firm TransGlobe Energy from 235.0p to 245.0p on Monday as a result of some increased Canadian production.

Canaccord said the success of TransGlobe's Cardium play in the South Harmattan area of Western Canada in late 2019 had provided "a significant milestone" in raising the profile of the group's assets in the country and enhancing the "second leg" of its story.

The Canadian broker also highlighted that TransGlobe's outlook for accelerating high-value production growth from the play was "very encouraging", though it noted that the firm was still "very early" in the operational expansion's roll-out in the area.

Turning their attention elsewhere, Canaccord said the Canadian news dovetailed well with the "strong performance" from the firm's mature producing assets in the Eastern Desert of Egypt.

"Production there averaged c.13.7 kbopd, an uplift of over 10% on 2018 levels and the average over the three previous years," said Canaccord.

"We see this as very good evidence that these licences in the Eastern Desert of Egypt - West Bakr, West Gharib, NW Gharib - do still offer running room for production growth."

Canaccord, which reiterated its 'buy' rating on the stock, also noted that TransGlobe was continuing discussions with EGPC in regard to consolidation, extension, and amendment of the Egyptian production sharing contracts - and was "confident" of a successful conclusion in the second-half of 2020.

"That would provide the foundation for longer-term development to fully realise the potential of the area."