Petroleum Africa
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Thursday, June 23, 2016
TransGlobe Energy Corp., in its mid-quarter update for Q2 updated its ongoing activities in Egypt. Since the start of Q2 the company has upgraded its production guidance by 600 bpd of oil; previous guidance had the company’s target at 10,800 bpd Q2 production, TransGlobe has now upgraded that to 11,400 bpd. It lifted and sold 516,901 barrels of oil in May, its second cargo in 2016, for net proceeds of $16.9 million. TransGlobe expects to lift and sell its third cargo in September.
Operationally it commenced its 2016 drilling program in Q2 with one drilling rig while a second drilling rig is expected to arrive in August to allow TransGlobe to expand its 2016 drilling program. Further to its Q1 release in mid-May the company has prepared a production recovery plan (PRP) for the balance of 2016 to arrest the production declines associated with extremely low oil prices and near zero investment since Q4 2015. TransGlobe said that with Brent oil prices strengthening back to the $50 per barrel range it has begun reactivating and repairing pumps on wells which were shut-in/curtailed due to low oil prices. This is what led to TransGlobe upgrading its previous production guidance for the quarter.
The 2016 PRP is targeting to increase production to 13,000-14,000 bpd by the end of 2016. This recovery plan consists of two additional development wells at the West Bakr concession’s K South, 16 plus recompletion/work overs to primarily access oil pay behind pipe, associated facility/infrastructure investment and the commencement of production from the NWG concession in Q4. It estimates a capital outlay of around $8 million for the PRP, that is assuming all the planned work is completed by year-end. The additional $8 million for the PRP brings the company capital spend to about $38 million for the year.
The accelerated exploration program that will launch when the second rig arrives in August will allow for two additional development wells in TransGlobe’s drilling schedule. If the company receives regulatory approval, work could commence on the recompletions in Q3 along with upgrades to the associated facilities/infrastructure.
In addition TransGlobe is targeting to develop the North West Gharib 3 (NWG 3) Red Bed discovery in Q4. It is expected that NWG 3 will commence production in the 500-1,000 bpd range in Q4.
To date, the company has drilled three wells in the 2016 drilling program resulting in one oil discovery with the drilling of the K-48 on the West Bakr and two dry holes, the NWG 29 and the NWG 21 on the North West Gharib. The first well (K-48) was drilled, cased and completed as an Asl A oil producer in the K South field and placed on production in early June. The well is currently averaging 460 bpd from the upper Asl A formation. K-48 is the first well drilled in the K field southern extension, since receiving military access approval in late-2015, which had been subject to a drilling moratorium for the past 20 years due to military activities in the area.
The first exploration well (NWG 29) was drilled to a total depth of 9,210 ft targeting the Kareem, Asl and lower Rudeis sandstones on a prospect north and east of the Hana pool. The well encountered good quality reservoirs with minor oil shows, however was plugged and abandoned as the zones were wet. The second exploration well (NWG 21) was drilled to a total depth of 5,245 ft targeting the Nukhul/Red Bed reservoirs similar to and south of the Arta/East Arta pools. The well encountered the targeted Red Bed sands, which were wet. The well was plugged and abandoned.
The next exploration well (NWG 27) is targeting in the Nukhul/Red Bed formations on the northern edge of the NWG concession.
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