TransGlobe Energy Corporation Operations Update
AIM & TSX: “TGL” & NASDAQ: “TGA”
This Announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 (“MAR”). Upon the publication of this Announcement, this inside information is now considered to be in the public domain.
CALGARY, Alberta, Sept. 29, 2021 (GLOBE NEWSWIRE) — TransGlobe Energy Corporation (“TransGlobe” or the “Company”) provides the following operations update. All dollar values are expressed in US dollars unless otherwise stated.
Production Summary (WI before royalties and taxes):
|(Boepd)||Q2 2021||Jul 2021||Aug 2021||Sep 2021
(to Sep 18th)
Compared to Q2, 2021, during the current quarter to date, natural production declines in Egypt were more than offset by well optimization activities and new drilling. Production in Canada declined naturally while awaiting the production start from recent new drilling, which is anticipated in early Q4-2021.
Please see the table entitled “Production Disclosure” at the end of this news release for the detailed constituent product types and their respective quantities measured at the first point of sale for all production amounts disclosed in this news release on a Bopd and Boepd basis.
Arab Republic of Egypt
Eastern Desert (100% WI)
The Company continues to utilize the EDC-64 rig drilling development oil wells.
In West Bakr, during the quarter, the Company successfully drilled two development oil wells and is moving on to a third well, K-66, at quarter end.
The K-62 development well was drilled to a total depth of 1,473 meters, and encountered oil-bearing sands in the Asl-A formation. The reservoir section has been fully logged and evaluated, with an internally estimated 24.2 meters of net oil pay in the Asl-A reservoirs. The Asl-A2 was completed for oil production.
The second well in West Bakr, K-65, was drilled to a total depth of 1,730 meters, and encountered oil-bearing sands in the Asl-A, Asl-B, Asl-C, Asl-D and Asl-E formations. The reservoir section has been fully logged and evaluated, with an internally estimated 10.6 meters of net oil pay in the Asl-A sand, 12.5 meters of net oil pay across the Asl-B sand, 6.1 meters of net oil pay across the Asl-C sand, 5.5 meters of net oil pay across the Asl-D sand and 11.4 meters of net oil pay in the Asl-E sand (total net oil pay 46.1 meters). The Asl-E is expected to be completed for production in this well. The Asl-A, Asl-B, Asl-C, and Asl-D are expected to be recovered through future recompletions of this well.
The Company drilled one well in North West Gharib, NWG-3B-2, to a total depth of 1,627 meters to assess Red Bed potential in the northern area of our development leases. The well encountered Red Bed sands which were wet. The results are under evaluation to identify any up-dip sidetrack potential.
Western Desert (100% WI)
The lower Bahariya reservoir at SGZ-6X continues to produce on Gas Oil Ratio (“GOR”) control at a field estimated 680 Bopd of light oil with a 46% watercut.
With improved oil prices and spare capacity available in the South Ghazalat early production facility, the Company has accelerated drilling of an oil exploration well on the SGZ-7B prospect to the east of SGZ-6X. The well will target light oil in the Bahariya reservoir and fulfills our commitments to EGPC as part of the grant to the Company of a 10-block development lease in 2019. The Company anticipates spudding this well in early Q4, 2021.
The Company successfully drilled, completed, and equipped one 2-mile and two 1-mile horizontal wells in the northern area of our exciting Cardium reservoir extension at South Harmattan, first identified by the 2-20 well in 2019.
A 6 km gas line to connect to Company infrastructure is nearing completion, along with the final surface tie-ins. The Company expects the wells to be brought into production sequentially during October 2021. Additional information on individual well performance will be provided when sufficient stabilized production history has been obtained late 2021 / early 2022.
The Mercuria Prepayment Agreement was fully repaid during the quarter with the final $10 million being paid in August 2021. The Agreement has been amended to $10 million (undrawn) and extended to December 31, 2021 to coincide with the expiry of our remaining Brent crude oil hedges of 150,000 bbls.
The Company expects the ratification of the consolidated and amended Eastern Desert Production Sharing Contracts to occur in the next quarter.
“We are pleased with the progress of the Egypt drilling program, reversing 2020 declines and now increasing production. The Company eagerly awaits the results from the new South Harmattan wells in Canada, and is also excited by the prospect that with the Egyptian parliament beginning its fall session in early October, ratification of our transformational PSC consolidation will occur shortly.”
TransGlobe Energy Corporation is a cashflow focused oil and gas exploration and development company whose current activities are concentrated in the Arab Republic of Egypt and Canada. TransGlobe’s common shares trade on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol TGL and on the NASDAQ Exchange under the symbol TGA.
For further information, please contact:
|TransGlobe Energy Corporation
Randy Neely, President and CEO
Eddie Ok, CFO
|+1 403 264 9888
or via Tailwind Associates
|Tailwind Associates (Investor Relations)
|+1 403 618 8035
|Canaccord Genuity (Nomad & Joint-Broker)
|+44(0) 20 7523 8000|
|Shore Capital (Joint Broker)
|+44(0) 20 7408 4090|
Advisory on Forward-Looking Information and Statements
Certain statements included in this news release constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward-looking statements or information typically contain statements with words such as “anticipate”, “strengthened”, “confidence”, “believe”, “expect”, “plan”, “intend”, “estimate”, “may”, “will”, “would” or similar words suggesting future outcomes or statements regarding an outlook. In particular, forward-looking information and statements contained in this document include, but are not limited to, the Company’s strategy to grow its annual cash flow; anticipated drilling, completion and testing plans, including, the anticipated timing thereof, prospects being targeted by the Company, and rig mobilization plans; expected future production from certain of the Company’s drilling locations; TransGlobe’s plans to drill additional wells, including the types of wells, anticipated number of locations and the timing of drilling thereof; the timing of rig movement and mobilization and drilling activity; the Company’s plans to file development lease applications for certain of its discoveries, including the expected timing of filing of such applications and the expected timing of receipt of regulatory approvals; anticipated production and ultimate recoveries from wells; to negotiate future military access (including the expected timing thereof), including the anticipated timing of wells on production; TransGlobe’s plans to continue exploration, development and completion programs in respect of various discoveries; future requirements necessary to determine well performance and estimated recoveries; the ratification of the amendment, extension, and consolidation of the Company’s Eastern Desert Concessions; and other matters.
Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. Many factors could cause TransGlobe’s actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, TransGlobe.
In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things, anticipated production volumes; the timing of drilling wells and mobilizing drilling rigs; the number of wells to be drilled; the Company’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which the Company conducts and will conduct its business; future capital expenditures to be made by the Company; future sources of funding for the Company’s capital programs; geological and engineering estimates in respect of the Company’s reserves and resources; the geography of the areas in which the Company is conducting exploration and development activities; current commodity prices and royalty regimes; availability of skilled labour; future exchange rates; the price of oil; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; future operating costs; uninterrupted access to areas of TransGlobe’s operations and infrastructure; recoverability of reserves and future production rates; that TransGlobe will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; that TransGlobe’s conduct and results of operations will be consistent with its expectations; that TransGlobe will have the ability to develop its properties in the manner currently contemplated; current or, where applicable, proposed industry conditions, laws and regulations will continue in effect or as anticipated as described herein; that the estimates of TransGlobe’s reserves and resource volumes and the assumptions related thereto (including commodity prices and development costs) are accurate in all material respects; and other matters.
Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward-looking statements or information include, among other things, operating and/or drilling costs are higher than anticipated; unforeseen changes in the rate of production from TransGlobe’s oil and gas properties; changes in price of crude oil and natural gas; adverse technical factors associated with exploration, development, production or transportation of TransGlobe’s crude oil reserves; changes or disruptions in the political or fiscal regimes in TransGlobe’s areas of activity; changes in tax, energy or other laws or regulations; changes in significant capital expenditures; delays or disruptions in production due to shortages of skilled manpower equipment or materials; economic fluctuations; competition; lack of availability of qualified personnel; the results of exploration and development drilling and related activities; obtaining required approvals of regulatory authorities; volatility in market prices for oil; fluctuations in foreign exchange or interest rates; environmental risks; ability to access sufficient capital from internal and external sources; failure to negotiate the terms of contracts with counterparties; failure of counterparties to perform under the terms of their contracts; and other factors beyond the Company’s control. Readers are cautioned that the foregoing list of factors is not exhaustive. Please consult TransGlobe’s public filings at www.sedar.com and www.sec.goedgar.shtml for further, more detailed information concerning these matters, including additional risks related to TransGlobe’s business.
The forward-looking statements or information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise unless required by applicable securities laws. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
Oil and Gas Advisories
Mr. Ron Hornseth, B.Sc., General Manager – Canada for TransGlobe Energy Corporation, and a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009, of the London Stock Exchange, has reviewed the technical information contained in this report. Mr. Hornseth is a professional engineer who obtained a Bachelor of Science in Mechanical Engineering from the University of Alberta. He is a member of the Association of Professional Engineers and Geoscientists of Alberta (“APEGA”) and the Society of Petroleum Engineers (“SPE”) and has over 20 years’ experience in oil and gas.
BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 MCF: 1 Bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
References in this press release to production test rates, are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for TransGlobe. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the Company cautions that the production test results should be considered to be preliminary.
The following abbreviations used in this press release have the meanings set forth below:
|boe||barrels of oil equivalent of natural gas, on the basis of one barrel of oil or NGLs for six thousand cubic feet of natural gas|
|Boepd||Barrels of oil equivalent per day|
|Bopd||barrels of oil per day|
|Mcf/d||thousand cubic feet per day|
|MMcf/d||million cubic feet per day|
|NGL||Natural Gas Liquids|
|IP30||Average daily production over first 30 days post-completion|
|IP60||Average daily production over first 60 days post-completion|
|Production Summary (WI before royalties and taxes):|
|(Boepd)||Q1 2021||Q2 2021||Jul 2021||Aug 2021||Sep 2021
(to Sep 18th)
|Eastern Desert (bbls/d)||10,052||9,917||10,611||10,874||10,561||10,204|
|Heavy Crude (bbls/d)||9,419||9,736||10,429||10,697||10,394||9,868|
|Light and Medium Crude (bbls/d)||633||181||182||177||167||336|
|Western Desert (bbls/d)||186||810||700||667||653||554|
|Light and Medium Crude (bbls/d)||186||810||700||667||653||554|
|Light and Medium Crude (bbls/d)||564||687||643||562||574||617|
|Natural Gas (Mcf/d)||4,259||4,834||4,534||4,583||4,764||4,565|
|Associated Natural Gas Liquids (bbls/d)||710||857||832||684||618||766|
|Total Company (boe/d)||12,221||13,077||13,541||13,551||13,200||12,902|