Financial Instruments and Risk Management (Tables)

12 Months Ended

Dec. 31, 2017

Carrying value and fair value of financial assets

Carrying value and fair value of financial assets and liabilities are summarized as follows:



	December 31, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
Classification (000s)	Value		Value		Value		Value
Financial assets at fair value through profit or loss	$	47,449	$	47,449	$	31,468	$	31,468
Loans and receivables	18,090		18,090		33,159		33,159
Financial liabilities at fair value through profit or loss	7,970		7,970		72,655		72,655
Other liabilities	97,103		98,329		35,691		35,691

Carrying value and fair value of financial liabilities

Carrying value and fair value of financial assets and liabilities are summarized as follows:



	December 31, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
Classification (000s)	Value		Value		Value		Value
Financial assets at fair value through profit or loss	$	47,449	$	47,449	$	31,468	$	31,468
Loans and receivables	18,090		18,090		33,159		33,159
Financial liabilities at fair value through profit or loss	7,970		7,970		72,655		72,655
Other liabilities	97,103		98,329		35,691		35,691

Schedule of outstanding derivative commodity contract positions

The following table summarizes TransGlobe’s outstanding derivative commodity contract positions as at December 31, 2017:



Financial Brent Crude Oil Contracts
Transaction Date	Period Hedged	Contract	Volume bbl	Bought Put USD$/bbl	Sold Call USD$/bbl	Sold Put USD$/bbl
7-Apr-17	Mar-18	3-Way Collar	250,000	53.00	61.15	44.00
12-Apr-17	Jun-18	3-Way Collar	250,000	54.00	63.10	45.00
12-Apr-17	Sep-18	3-Way Collar	250,000	54.00	64.15	45.00
12-Apr-17	Dec-18	3-Way Collar	250,000	54.00	65.45	45.00
23-May-17	Jul 2020 - Dec 2020¹	3-Way Collar	300,000	54.00	63.45	45.00
31-Aug-17	Jan 2020 - Jun 2020²	3-Way Collar	300,000	54.00	61.25	46.50
12-Oct-17	Jan 2019 - Dec 2019³	3-Way Collar	396,000	53.00	62.10	46.00
26-Oct-17	Jan 2019 - Dec 2019⁴	3-Way Collar	399,996	54.00	61.35	46.00
^1.50,000 bbls per calendar month through Jul 2020 - Dec 2020
^2.50,000 bbls per calendar month through Jan 2020 - Jun 2020
^3. 33,000 bbls per calendar month through Jan 2019 - Dec 2019
^4. 33,333 bbls per calendar month through Jan 2019 - Dec 2019



Financial WTI Crude Oil Contracts
Transaction Date	Period Hedged	Contract	Volume bbl	Sold Swap USD$/bbl	Bought Put CAD$/bbl	Sold Call CAD$/bbl
15-Dec-17	Jan 2018 - Dec 2018¹	Swap	60,225	56.35	—	—
15-Dec-17	Jan 2018 - Dec 2018¹	Put Option	60,225	—	64.00	—
15-Dec-17	Jan 2018 - Dec 2018¹	Call Option	60,255	—	—	78.85
^1.165 bbls per day

Schedule of loss on financial instruments

The loss on financial instruments for 2017 and 2016 was comprised of the following:



(000's)	December 31, 2017	December 31, 2016
Realized derivative loss on commodity contracts settled during the year	2,871	956
Unrealized derivative loss on commodity contracts outstanding at the end of the year	7,970	—
Fair value adjustment on convertible debentures - (Note 21)	151	7,027
	10,992	7,983



(000s)	December 31, 2017		December 31, 2016
Neither impaired nor past due	$	10,534	$	620
Impaired (net of valuation allowance)
Not impaired and past due in the following period:
Within 30 days	3,804		—
31-60 days	2,575		—
61-90 days	—		—
Over 90 days	1,177		14,216
	$	18,090	$	14,836

Contractual maturities of financial liabilities

The following are the contractual maturities of financial liabilities at December 31, 2017:



(000s)		Payment Due by Period^{1 2}
	Recognized
	in Financial	Contractual		Less than
	Statements	Cash Flows		1 year		1-3 years		4-5 years
Accounts payable and accrued liabilities	Yes - Liability	$	27,104	$	27,104	$	—	$	—
Long-term debt	Yes - Liability	69,999		—		11,207		58,792
Financial derivative instruments	Yes - Liability	7,970		4,015		3,955		—
Office and equipment leases³	No	3,587		1,707		1,880		—
Minimum work commitments⁴	No	5,129		5,129		—		—
Total		$	113,789	$	37,955	$	17,042	$	58,792
¹ Payments exclude on-going operating costs, finance costs and payments required to settle derivatives.
² Payments denominated in foreign currencies have been translated at December 31, 2017 exchange rates.
³ Office and equipment leases include all drilling rig contracts.
⁴ Minimum work commitments include contracts awarded for capital projects and those commitments related to exploration and drilling obligations (see Note 22).

Based on the Company's current forecast of future production and current Brent Crude prices the estimated future debt payments on long-term debt as of December 31, 2017 are as follows:



(000s)
2018	$	—
2019	—
2020	—
2021	58,792
	$	58,792

Disclosure of objectives, policies and processes for managing capital

The Company defines and computes its capital as follows:



(000s)	2017			2016
Long-term debt, including the current portion (net of unamortized transaction costs)	69,999			—
Long-term note payable, including the current portion	—			11,162
Convertible debentures	—			72,655
Working capital	(50,639		)	16,764
Net debt obligations	$	19,360		$	100,581
Shareholders’ equity	210,007			285,316
Total capital	$	229,367		$	385,897

The Company’s net debt-to-funds flow ratio is computed as follows:



(000s)	2017			2016
Long-term debt, including the current portion (net of unamortized transaction costs)	$	69,999		$	—
Long-term note payable, including the current portion	—			11,162
Convertible debentures	—			72,655
Working capital	(50,639		)	16,764
Net debt obligations	19,360			100,581

Cash flow from operating activities	59,450			(1,065		)
Changes in non-cash working capital	(3,858		)	(7,296		)
Funds flow from operations (Note 28)	$	55,592		$	(8,361	)
Ratio	0.3			(12.0		)