TransGlobe Energy Corporation ("TransGlobe" or the "Company") (TSX:TGL)(NASDAQ:TGA) announces an operational update. All dollar values are expressed in US dollars unless otherwise stated.
EASTERN DESERT - ARAB REPUBLIC OF EGYPT
North West Gharib, Arab Republic of Egypt (100% working interest, operated)
The Company is pleased to provide an update on the NWG exploration and development activities.
NWG 38 - Red Bed Discovery now on production
NWG 38 was completed and placed on production in mid-January at an initial pumping rate of ~750 Bopd. NWG 38 is located on a separate Red Bed structure approximately 1.4 kilometers east of NWG 3 which was placed on production in late December at a flowing rate of ~1,000 Bopd from the Red Bed formation. NWG 38 is pipeline connected to the NWG 3 early production facility ("EPF") where the oil is gathered and subsequently trucked to the Company's West Bakr oil terminal at K station. The Company's entitlement oil from NWG is lifted and sold with the Company's West Gharib and West Bakr entitlement oil as part of the Ras Gharib blend.
The NWG 38 discovery well was drilled in August of 2016 and encountered a thick (98 foot) Red Bed section with approximately 40 net feet of oil pay in a sandy/conglomerate sequence. The NWG 38 discovery was included in the initial NWG development lease ("NWG DL #1") application which included the NWG 3 and NWG 16 discoveries. The NWG DL #1 was approved in December of 2016 and covers approximately 18 square kilometers.
The NWG 3 well was placed on production in late December 2016 at a flowing rate of ~1,000 Bopd from an estimated 42 feet of net Red Bed oil pay with approximately 25 feet of high quality sandstone. Based on internal estimates of subsequent flow and down hole build-up data (which measured a stabilized drawdown of 5.5% at the perforations while flowing 1,000 Bopd), it is expected that NWG 3 will be produced in the 1,500 to 2,000 Bopd range when equipped with a down hole pump later this year.
The Company has analyzed the NWG 3 and NWG 38 discoveries along with the analogous Red Bed production from the Company's East Arta and Arta fields located 3 and 13 kilometers to the south, respectively, to estimate potential development well performance. For planning purposes, the Company has modeled a typical Red Bed oil development well at a cost of $700k per well with an IP30 of 800 Bopd and an EUR of 800 Mbbls/well for the northern NWG area, which is similar to the NWG 38 well. The economics of a Red Bed development well are very positive with a finding and development ("F&D") cost of less than $1.00/Bbl.
Future NWG Exploration & Development Plans
Currently the Company has two drilling rigs active on NWG.
The first rig is drilling NWG 27 1A which is an appraisal well to the NWG 27 discovery well which encountered a thick (215 feet) Red Bed section with approximately 55 feet of net oil pay above the oil water contact in a 90 foot conglomerate sequence which overlays a 125 foot high quality sandstone. NWG 27 1A is targeting the Red Bed in a structurally higher position above the oil water contact in NWG 27. The NWG 27 discovery is approximately 2.7 kilometers north of NWG 3.
The Company has received access approvals for an additional 28 well locations in the northern NWG area which could be drilled during 2017/18 depending on additional exploration/appraisal results. NWG 27-1A is the first of eight budgeted (2017 firm and contingent) Red Bed appraisal/development wells planned for the area in 2017. Following the NWG 27 1A well the rig is scheduled to return to exploration drilling, with three additional Red Bed exploration wells planned in the area to the east of NWG 27.
The second drilling rig is currently drilling the NWG 28 exploration well targeting a Rudeis/Asl prospect in the southern portion of the NWG concession, approximately 4.3 kilometers south east of the West Bakr K field.
South West Gharib, Arab Republic of Egypt (100% working interest, operated)
Subsequent to the January 30, 2017 update, the Company drilled SWG 4 which was plugged and abandoned. SWG 4 was drilled to a total depth of 7,145 feet targeting Pre-rift Matulla/Raha/Nubia clastic structures which were wet. The Company has met its phase 1 exploration commitments for the concession and will relinquish the concession at the end of phase 1 (May 7, 2017).