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TransGlobe Energy Corporation Announces an Operations Update


April 24, 201912:00 AM Globe Newswire

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, April 24, 2019 (GLOBE NEWSWIRE) — TransGlobe Energy Corporation (“TransGlobe” or the “Company”) announces a Q1 operations update. All dollar values are expressed in US dollars unless otherwise stated.

UPDATES

Production averaged ~15.9 MBoepd in Q1 2019 (January ~15.8 MBoepd, February ~15.0 MBoepd and March ~16.9 MBoepd) versus 15.3 MBoepd in Q4 2018;
Drilled 2 oil wells (M 10, NWG 38A8) and re-entered/deepened 2 water disposal wells (K 8 & K 10) during the quarter;
Drilled a new pool oil well (HW 2X) in West Bakr with an estimated 113 feet of net oil pay subsequent to the quarter;
Submitted South Ghazalat 6X development lease to EGPC for approval;
Equipped and tied in six Cardium oil wells (2018 program) in the Harmattan area, Canada during January;
Net proceeds of ~$25 million received in April for a cargo lifted in mid-March;
PRODUCTION

Production Summary:

(MBoepd) January 2019 February 2019 March 2019 Average
Egypt 13.0 13.2 14.6 13.6
Canada 2.8 1.7 2.3 2.3
Total 15.8 15.0 16.9 15.9
Corporate production increased during the first quarter due to drilling and well optimization results in Egypt and new wells in Canada, which was partially offset by reduced ethane production in Canada.

OPERATIONS UPDATE

ARAB REPUBLIC OF EGYPT

Eastern Desert

During the quarter:

Drilled and completed the M-10 replacement well (M-10 Twin) as an Asl A oil producer which was placed on production in February and is currently producing ~400 Bopd.
Drilled the NWG 38A-8 well to a total depth of 5,350 feet and cased as a potential Red Bed oil well/water injector. NWG 38A-8 was targeting the southern area of the NWG 38A Red Bed pool to provide water injection/reservoir pressure support for the 38A pool. The well was completed and placed on production at an initial average rate of 45 Bopd and 100 Bpd of water, confirming the well had intersected the oil water contact for the pool. Based on early production results, the well will be converted to water injection during Q2 to initiate water injection and pressure support for the NWG 38A pool.
Re-entered/deepened two suspended oil wells and converted them to water disposal wells (K-8 WDW and K-10 WDW).
Subsequent to the quarter:

Drilled a discovery oil well in H Block. The HW-2X exploration well was drilled to a total depth of 1,654 meters (5,425 feet) and cased as a Yusr oil well. Based on open-hole logs and wireline samples, the well encountered an internally estimated 34.5 meters (113 feet) of net oil pay in the Yusr formation. The HW 2X well is scheduled for completion this month and expected to be on production in early May. Following HW-2X, the drilling rig is scheduled to drill two development wells at (H-30 and K-63) and one exploration well (NWG 38 D-1).
Western Desert

Based on the previously announced (11/19/18) well test results* from SGZ-6X (3,840 Bopd of light oil), the Company filed a South Ghazalat development lease application with EGPC in late February. Subject to final approvals by EGPC, the Ministry and necessary regulatory approvals, the Company is targeting first production prior to year end. Concurrent to the construction of an early production facility and equipping SGZ 6X for production, the Company has submitted permits to drill an appraisal well in the SGZ 6X pool during the second half of 2019 and initiated a project to merge and reprocess two existing 3D seismic surveys over the proposed development lease area. In addition to the planned appraisal well, the Company is committed to drill a minimum of one additional exploration well.

*The SGZ-6X tested a combined 3,840 barrels per day of light oil from the upper and lower Bahariya. The lower Bahariya formation flowed naturally at an average rate of 2,437 barrels per day of light (38 API) oil, 21 barrels per day of water and 1.4 million cubic feet of natural gas per day on a 40/64 inch choke from a 42 foot perforated interval. A total of 918 barrels of oil and 7 barrels of water were produced during the 10 hour test. The upper Bahariya formation flowed at an average rate of 1,403 barrels per day of light (35 API) oil, 210 barrels per day of water and 1.0 million cubic feet of natural gas per day on a 64/64 inch choke from a 23 foot perforated interval. A total of 456 barrels of oil and 65 barrels of water were produced during the 8 hour test. Although encouraging, test rates are not necessarily indicative of long-term performance or ultimate recovery.

The Company continued South Alamein extension discussions with EGPC during the first quarter and resubmitted a request for military access to drill the SA 24X Jurassic exploration prospect, which was rejected by the military in April. Based on the 2017 well results in the Boraq area, the limited commerciality of the original Boraq 2 discovery (2009) and continued access restrictions in the eastern area of the concession, the Company is exploring a variety of extension options with EGPC, which include partial, or possibly complete, relinquishment of the concession.

Canada

In early January, the Company completed the equipping and tie-in of the six Cardium wells drilled and completed in the Harmattan area in late 2018. The wells were brought on production in a systematic manner in order to maximize ultimate recoveries, however this process was hampered somewhat by facility outages and extremely cold winter weather during the quarter.

The main gas processing plant (third party) for the Company’s gas production shut down their deep cut ethane extraction plant in January due to low ethane prices and pipeline egress issues in Alberta. It is expected that the ethane will remain in sales gas until the fourth quarter at a minimum, which will be sold with a higher energy content and is expected to be generally revenue neutral, due to the low prices for ethane. It is estimated that approximately 250 boepd of ethane is now sold as natural gas.

About TransGlobe

TransGlobe Energy Corporation is a cash flow 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.



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