Petroleum Africa
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Thursday, January 28, 2021
TransGlobe Energy Corp. has announced that its 2021 drilling program includes 12 wells in Egypt. The news comes as the company released its 2021 capital budget and production guidance which comes in at $27.2 million (before capitalized G&A) which is broken down between its operations in Egypt and Canada. Egypt will see $16.6 million and Canada $10.6 million.
As announced in early December 2020, the Company reached an agreement with the Egyptian General Petroleum Company (EGPC) to merge its three existing Eastern Desert concessions with a 15-year primary term and improved Company economics. Ratification of the concession is anticipated in Q2, 2021, and the February 1, 2020 effective date for the improved concession terms supports increased investment in parallel with ratification.
The $16.6 million program in Egypt is entirely allocated to development. The primary focus of the 2021 Egypt plan is to accelerate the exploitation of the Company’s Eastern Desert acreage with the aim of increasing oil production, while evaluating and increasing production from the more prospective lower Bahariya reservoir on the South Ghazalat development lease in the Western Desert
The 2021 development program is principally focused on the Eastern Desert and includes: nine development wells in West Bakr (three in H and six in K pools), one Red Bed appraisal well in the NW Gharib 3X pool, two development wells targeting the Arta Nukhul reservoir in West Gharib, two recompletions in West Bakr, two recompletions in West Gharib, three conversions to water injectors in West Gharib, and development/maintenance projects in the Eastern Desert (West Bakr, NW Gharib and West Gharib). A recompletion of SGZ-6X well to the more prospective lower Bahariya reservoir is also planned.
Egypt production is expected to average between 9.7 and 10.5 Mbopd for the year and an exit rate of 10.4 to 10.7 Mbopd.
Randy Neely, Chief Executive Officer of TransGlobe, said: “With the approval of the agreement to merge our Eastern Desert concessions behind us and recent commodity price improvements, the Company is rapidly moving forward to re-start investment in Egypt and Canada to support our growth plans in both countries. In Egypt, the focus will be chiefly on growing production in the Eastern Desert while we work to mature our contingent resource portfolio and restart our evaluation of the South Ghazalat acreage. In Canada, the focus will be on developing South Harmattan with a specific goal of decreasing the uncertainty across the northern land holdings. Our 2021 budget underlines the confidence we have in the potential of the TransGlobe portfolio and paves the way to resume dividend distributions in 2022.”
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