CALGARY, ALBERTA–(Marketwired – Feb. 2, 2017) – TransGlobe Energy Corporation (“TransGlobe” or the “Company”) (TSX:TGL)(NASDAQ:TGA) announces the 2017 capital budget. All dollar values are expressed in US dollars unless otherwise stated.
- 2017 capital budget of $56.4 million ($35.2 million firm and $21.2 contingent)
- Egypt $25.8 million firm and $14.4 million contingent
- Canada $9.4 million (C$12.5 million) firm and $6.8 million (C$9.0 million) contingent
- 2017 production of 15.5 to 18.5 MBoepd representing an increase of 30% to 55% over 2016
- Egypt 13.0 to 15.5 MBopd in 2017
- Canada 2.5 to 3.0 MBoepd in 2017
- January 2017 production ~16.8 MBoepd
2017 CAPITAL GUIDANCE
The Company’s 2017 capital program of $56.4 million (before capitalized G&A) includes $40.2 million for Egypt and $16.8 million (C$22.4 million) for Canada.
The approved $25.8 million Egypt firm program has $14.4 million (56%) allocated to exploration and $11.4 million (44%) to development. The $14.4 million exploration program includes drilling up to 6 wells in the Eastern Desert, 2 Boraq wells (1 new drill and 1 re-entry) at South Alamein and a large (600 km²) 3-D seismic acquisition program at NW Sitra in the Western Desert. The $11.4 million 2017 development program includes: one development well in West Bakr K-South field, development/maintenance projects at West Gharib, West Bakr and NW Gharib.
The approved $14.4 million Egypt contingent program has $2.0 million (14%) allocated to exploration and $12.2 million (86%) allocated to development. The program includes 9 additional wells (2 exploration and 7 development) focused primarily in NW Gharib to appraise/develop the NW Gharib discoveries and to increase West Bakr production. The $14.4 million budget is contingent upon timing of cargo/inventory sales, oil prices and Q1 drilling results.
The approved $9.4 million (C$12.5 million) Canada firm program consists of 4 horizontal (multi-stage frac) wells targeting the Cardium light oil resource at Harmattan and additional maintenance/development capital for potential workover/refracs. The initial Cardium well program is designed to provide a current benchmark for well costs and improved frac design/performance in the Harmattan area (no drilling conducted on the acquired lands since 2013). Based on historical offset wells and third party engineering estimates, it is expected that the horizontal wells will cost approximately $2.0 million (C$2.7 million) per well targeting a one mile lateral with approximately 600 tonnes of sand (30 stages) per well. It is expected that drilling will commence in the third quarter with all wells completed and on production prior to year-end to provide updated information for 2017 year-end reserves.
The approved $6.8 million (C$9.0 million) Canada contingent program consists of an additional four horizontal wells in the Harmattan area, to accelerate production growth in the Canadian operations. The $6.8 million budget is contingent on results of the initial drilling program and commodity prices.
The approved 2017 capital program is summarized in the following table:
|Concession||TransGlobe 2017 Capital ($MM) firm & contingent||Gross Well Count|
*Wells includes new wells, completions, workovers, recompletions, equipping and development leases.
2017 PRODUCTION OUTLOOK
The 2017 production outlook for the Company is provided as a range to reflect the firm and contingent budget which has been approved. The bottom end of the range is more reflective of the firm budget and the upper end of the range is reflective of the contingent budget. By its nature, the contingent budget is less certain and generally would be deployed later in 2017 when contingencies have been met. The full production growth impact of the contingent budget would not be realized until 2018.
Corporate production is expected to range between 15.5 MBoepd and 18.5 MBoepd for 2017 representing a 30% to 55% increase over 2016 production of approximately 12.0 MBopd. Egypt production is expected to range between 13.0 and 15.5 MBopd in 2017 representing an increase of 8 to 29% over 2016 production. Canadian production is expected to range between 2.5 and 3.0 MBoepd (~60% oil and liquids) in 2017.
Total Company production averaged 16.8 MBoepd in January, comprised of 14.0 MBopd in Egypt and 2.8 MBoepd (60% oil and liquids) in Canada.
TransGlobe Energy Corporation is a Calgary-based, growth-oriented 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 under the symbol TGL and on the NASDAQ Exchange under the symbol TGA. TransGlobe’s convertible debentures trade on the Toronto Stock Exchange under the symbol TGL.DB.