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, Dec. 17, 2018 (GLOBE NEWSWIRE) — TransGlobe Energy Corporation (AIM & TSX: “TGL” & NASDAQ: “TGA”) (“TransGlobe” or the “Company”) announces an interim fourth quarter update. All dollar values are expressed in US dollars unless otherwise stated.
- Increasing Q4 production: October ~14.6 MBoepd, November ~14.8 MBoepd and December (to date) ~16.3 MBoepd compared with average production during Q3 2018 of 14.3 MBoepd.
- NWG 38A-7 expected water injector found additional oil column, currently producing 360 Bopd from Red Bed.
- Accelerated two 2019 wells into 2018 program:
- Drilling M-10 twin well targeting Asl A pool as a potential producer or injector;
- Preparing wellsite for NWG 38A-8 potential Red Bed injector or oil well.
- Submitted declaration of commercial oil well discovery for SGZ – 6X discovery, to begin development discussions with the Egyptian General Petroleum Company (“EGPC”).
- Equipping the 2018 Cardium Hz wells (five one-mile and one two-mile) for production, following frac stimulation and flow cleanup. With improved light oil differentials, the Company is targeting production by year end.
|(MBoepd)||Q3 2018||October||November||December to Date|
Corporate production increased during the fourth quarter due to drilling and well optimization results in Egypt which were partially offset by reduced production in Canada during November associated with unscheduled compression maintenance and curtailments due to low pricing. With the dramatic improvement in Canadian light oil differentials, it is expected that the six new Cardium horizontals will be placed on production by year end.
During the quarter, the Company sold 450 Mbbls of entitlement crude oil for $27 million, inclusive of realized hedging losses of ~$3.9 million.
Also during the quarter, the Company repurchased the ceilings on half the 2019 hedge position and increased the entire 2020 hedge ceiling to $70 from $62.35/bbl for an aggregate cost of ~$3.9 million.
ARAB REPUBLIC OF EGYPT
Based on the previously announced well test results from SGZ-6X, the Company filed a declaration with EGPC of a Commercial Discovery to initiate early development discussions with EGPC which could result in initial production by mid-2019.
In South Alamein (“SA”), the Company resubmitted a request for military access to drill the SA 24X Jurassic exploration prospect and entered into extension discussions with EGPC.
In West Bakr (“WB”), the two M field infill wells (M-North and M-South) continue to exceed internal pre-drill estimates producing at rates of ~800 Bopd per well. During November the Company received early approval to drill a replacement well for the M-10 well which was originally drilled in 2000. The M-10 well was abandoned due to well bore mechanical issues encountered during a water shut off remedial program in September 2018. The replacement well (M-10 twin) is targeting the main M pool Asl A sand and was originally planned for 2019. It has subsequently advanced into the current drilling schedule and commenced drilling in early December. The M-10 twin is anticipated to produce oil although it is structurally lower in the pool. If the well encounters water it will be converted to a water injection well to provide pressure support for the M pool.
In North West Gharib (“NWG”), the NWG 38A-7 was completed (unstimulated) in the main Red Bed formation and confirmed the presence of oil. NWG 38A-7 was placed on production in late November and is currently producing 360 Bopd. The NWG 38A-7 well has extended the known oil column height structurally down an additional 101 feet to a total of 445 feet for the NWG 38 pool, which should increase the reserves assigned to the NWG 38 pool in 2018. Based on the results of NWG 38A-7, the Company has commenced wellsite construction at NWG 38A-8, located approximately 0.4 km south of NWG 38A-7 which is targeting the Red Bed pool to potentially provide water injection/reservoir pressure support for the 38A pool. NWG 38A-8 is scheduled for drilling following the M-10 twin well.
In Canada, the Company completed the 2018 Cardium development program, which included six gross (five net) horizontal Cardium development wells drilled from a common pad to improve efficiencies and reduce costs. The Company drilled and completed five one-mile horizontal wells and the Company’s first two-mile horizontal well. The wells were fracture stimulated during November and December and are being equipped to produce by year end. In addition, the Company completed construction of a new oil gathering pipeline during the quarter to connect the new multi-well pad and two existing producers to the Company’s main oil processing facility to reduce trucking in the community and associated operating expenses.
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.