Calgary, Alberta – TransGlobe Energy Corporation (TSX: TGL) (NASDAQ: TGA) (AIM: TGL) (“TransGlobe” or the “Company”) announces an operations update. All dollar values are expressed in US dollars unless otherwise stated.
- Production averaged 12.4 MBoepd in Q1, 2022 (See “Oil & Gas Advisories” for production by product type);
- Two 100% working interest (one 2-mile, one 1-mile) Canada Harmattan horizontal Cardium reservoir development wells were drilled in Q1, 2022;
- Drilled and cased three Egypt Eastern Desert development wells in Q1, 2022;
- Production has been restored at the South Ghazalat SGZ-6X well;
- A cargo of Egypt crude oil is scheduled to lift through the end of April and into early May;
- The Company ended Q1, 2022 with ~$37 million cash.
RANDY NEELY, PRESIDENT AND CEO’S STATEMENT
“We achieved a solid operational start to the year with drilling in both Egypt and Canada generating production in line with guidance, and we have opportunistically retained the Canadian rig to accelerate the budgeted seven well drilling program as demand for services and equipment increases.
Corporately, a second quarter lifting is a testament to the continued alignment between Egyptian General Petroleum Corporation (“EGPC”) and ourselves following the signing of the merged concession agreement in January 2022. We continue to work closely with EGPC to finalize the effective date adjustment to be paid to TransGlobe.
With operations well in hand, the reinstated dividend, continued strong commodity prices, and a distribution policy to allocate a minimum of 75% of our annual free cash flow to shareholders through dividends and share buybacks, TransGlobe’s outlook for 2022 and beyond is very encouraging.”
Production Summary (WI before royalties and taxes):
|(Boepd)||Q4 2021||Jan 2022||Feb 2022||Mar 2022||YTD Average|
* See “Oil & Gas Advisories” for production by product type.
Corporate production in Q1 remains in line with 2022 annual guidance of 12.4-13.4 MBoepd. In Egypt production was impacted by poor weather in February and higher water cuts than anticipated at South Ghazalat. As expected, Canadian base production declined over the quarter with the fall-off in initial flush production from the horizontal wells brought onstream in Q4, 2021. Canadian production was also restricted in January and February due to extreme cold weather, while the planned shut-in of the highly productive 4-2 horizontal well during drilling operations on the 15-11 surface location negatively impacted March production.
Arab Republic of Egypt
Eastern Desert (100% WI)
The Company continued to use the EDC-64 rig in its Eastern Desert drilling campaign, managing to drill and case three additional development wells in K-Field, Arta Field and NWG-Field during the quarter.
The K-68 well, drilled at the end of 2021, was completed in the Asl-A reservoir in January as previously reported in the Company’s January 10, 2022, operations update. It is currently producing at a rate of 156 Bopd (heavy crude, field estimate).
K-67 was drilled to a total depth of 1,440 meters, and was fully logged and evaluated. The well encountered an internally estimated 16 meters of net oil pay in the Asl-A and 17 meters of net oil pay in the Asl-B. The well was completed in the Asl-B and is currently on production at a rate of 174 Bopd (heavy crude, field estimate).
Arta-76 was drilled to a total depth of 1,074 meters and was fully logged and evaluated. The well encountered an internally estimated 12 meters of net oil pay in the Nukhul reservoir.
NWG-1E was drilled to a total depth of 1,219 meters and encountered 9 meters of oil pay in the Nukhul reservoir after being fully logged and evaluated.
Both Arta-76 and NWG-1E will be stimulated as part of a multi-well stimulation campaign in Q2, 2022, subsequent to which they will be put on production.
The K-71 well was drilled to a total depth of 1,448 meters and was fully logged and evaluated. The well encountered an internally estimated 19 meters of net oil pay in the Asl-A reservoir and 23 meters of net oil pay in the Asl-B reservoir. The well is currently being completed and will be put on production in April 2022.
Following K-71, the EDC-64 rig will move to the K-78 well.
The Company is currently working to proactively mitigate potential supply chain issues brought about by the conflict in Ukraine and the resultant sanctions by engaging alternative materials suppliers. To date, TransGlobe’s operations have not been impacted by any material shortages.
Western Desert – South Ghazalat (100% WI)
Following the cessation of natural flow of SGZ-6X well at South Ghazalat in December 2022 due to low reservoir pressure, a rigless artificial lift system was successfully deployed to restore production. On artificial lift, the lower Bahariya reservoir at SGZ-6X is currently producing at 88 Bopd of light crude oil with an 89% watercut (field estimate).
Two 100% working interest (one 2-mile, and one 1-mile) Harmattan horizontal Cardium reservoir wells were drilled in the South Harmattan area of our Canada land holdings, with stimulation and equipping anticipated in June 2022.
The Company has moved the rig on the 15-11 surface location in anticipation of spudding another 100% working interest 2-mile Harmattan horizontal Cardium reservoir well in mid-April, to take advantage of a favorable rig rate and rig availability.
The Company has a cargo of Gharib blend crude scheduled to ship at the end of April through early May, with proceeds expected in June, 2022.
TransGlobe ended Q1, 2022 with ~$37 million of cash and $3.1 million outstanding under its RBL facility.
An updated corporate presentation has been posted to the Company’s website.