SEGMENTED INFORMATION

The Company has two reportable operating segments for the year-ended December 31, 2017: the Arab Republic of Egypt and Canada. The Company, through its operating segments, is engaged primarily in oil exploration, development and production and the acquisition of oil and gas properties.

In presenting information on the basis of operating segments, segment revenue is based on the geographical location of assets which is also consistent with the location of the segment customers. Segmented assets are also based on the geographical location of the assets. There are no inter-segment sales.

TransGlobe's management regularly reviews funds flow from operations generated by each of TransGlobe's operating segments. Funds flow from operations is a measure of profit or loss that provides the management with the ability to assess the operating segments’ profitability and, correspondingly, the ability of each operating segment to sustaining capital, future growth through capital investment, and to repay debt.

The accounting policies of the operating segments are the same as the Company’s accounting policies.



	Egypt					Canada					Corporate						Total
(000s)	2017		2016			2017			2016		2017			2016			2017			2016
Revenue
Oil sales, net of royalties	$	130,987	$	62,634		$	17,477		$	500	$	—		$	—		$	148,464		$	63,134
Finance revenue	33		102			—			—		75			571			108			673
Total segmented revenue	131,020		62,736			17,477			500		75			571			148,572			63,807

Segmented expenses
Production and operating	44,705		40,054			5,507			269		—			—			50,212			40,323
Transportation	—		—			793			12		—			—			793			12
Selling costs	2,495		875			—			—		—			—			2,495			875
G&A	5,782		7,060			1,147			—		8,324			10,495			15,253			17,555
Stock-based compensation	—		—			—			—		(1,478		)	(2,418		)	(1,478		)	(2,418		)
Lease inducement	—		—			—			—		91			95			91			95
Settlement of ARO	—		—			695			—		—			—			695			—
Realized foreign exchange loss	—		—			—			—		194			3,607			194			3,607
Unrealized foreign exchange loss	—		—			—			—		35			(4,292		)	35			(4,292		)
Realized loss on financial instruments	2,935		956			(64		)	—		—			—			2,871			956
Income tax expense	21,819		12,446			—			—		—			—			21,819			12,446
Income taxes - deferred	—		3,009			—			—		—			—			—			3,009
Segmented funds flow from operations	$	53,284	$	(1,664	)	$	9,399		$	219	$	(7,091	)	$	(6,916	)	$	55,592		$	(8,361	)


Capital expenditures
Exploration and development	$	31,151	$	26,658		$	6,967		$	—	$	—		$	—		$	38,118		$	26,658
Property acquisition	—		—			—			59,475		—			—			—			59,475
Corporate	—		—			—			—		41			—			41			—
Total capital expenditures																	$	38,159		$	86,133

Reconciliation of funds flow from operations to net loss:



(000's)	December 31, 2017			December 31, 2016
Funds flow from operations	$	55,592		$	(8,361	)
Depletion, depreciation and amortization	(40,036		)	(29,177		)
Accretion	(256		)	—
Deferred lease inducement	91			95
Impairment of exploration and evaluation assets	(79,025		)	(33,426		)
Stock-based compensation	(1,478		)	(2,418		)
Finance costs	(6,233		)	(6,068		)
Income tax expense	(21,819		)	(12,446		)
Loss on financial instruments	(8,121		)	(7,027		)
Unrealized (gain) loss on foreign currency translation	35			(4,292		)
Asset retirement obligations settled	695			—
Income taxes paid	21,819			15,455
Net loss	$	(78,736	)	$	(87,665	)

The carrying amounts of reportable segment assets and liabilities are as follows:



December 31, 2017
(000s)	Egypt		Canada		Total
Assets
Accounts receivable	$	14,956	$	2,684	$	17,640
Intangible exploration and evaluation assets	41,478		—		41,478
Property and equipment
Petroleum properties	127,363		73,618		200,981
Other assets	2,381		27		2,408
Other	49,769		3,467		53,236
Segmented assets	235,947		79,796		315,743
Non-segmented assets					11,959
Total assets					$	327,702

Liabilities
Accounts payable and accrued liabilities	$	17,035	$	4,004	$	21,039
Derivative commodity contracts	7,813		157		7,970
Long-term debt	58,792		11,207		69,999
Asset retirement obligation	—		12,332		12,332
Segmented liabilities	83,640		27,700		111,340
Non-segmented liabilities					6,355
Total liabilities					$	117,695



December 31, 2016
(000s)	Egypt		Canada			Total
Assets
Accounts receivable	$	13,778	$	620		$	14,398
Intangible exploration and evaluation assets	105,869		—		122,020	105,869
Property and equipment
Petroleum properties	138,757		71,270			210,027
Other assets	2,785		—			2,785
Other	21,977		—			21,977
Segmented assets	283,166		71,890			355,056
Non-segmented assets						51,086
Total assets						$	406,142

Liabilities
Accounts payable and accrued liabilities	$	14,005	432			14,437
Current and long-term note payable			11,162			11,162
Asset retirement obligation	—		12,099			12,099
Segmented liabilities	14,005		23,693			37,698
Non-segmented liabilities						83,128
Total liabilities						$	120,826