Canadian oil and gas producer TransGlobe said it produced 12.8 Mbopd from Egypt in 4Q2017. It is currently finalizing its 2018 work plan and budget that will be announced in January, according to its 4Q2017 operational update. TransGlobe announced it lifted and sold 510k bbl of crude in Egypt in late November for estimated net proceeds of approximately USD 24.5 mn (inclusive of realized hedging loss and marketing costs).
Corporate production is expected to average ~15.4 MBoepd for 2017 (12.8 Mbopd from Egypt and 2.6 MBoepd from Canada) representing an increase of ~3.3 MBoepd or 27% over 2016 production of 12.1 MBoepd. Corporate production in 2017 was 93% weighted to oil and liquids (7% weighted to natural gas in Canada) providing excellent torque to strengthening oil prices.
In Egypt, production was impacted by the release of the workover rig in early August due to escalating safety and performance issues. A replacement rig was contracted and mobilized in late September and a second workover rig was operational December 1st. The reduction of the backlog of well workovers is anticipated in early 2018 with two workover rigs in operation.
In Egypt, the Company lifted and sold ~510,000 barrels of entitlement oil in November for net proceeds of ~$24.5 million (inclusive of realized hedging loss and marketing costs). Based on estimated sales and production for Q4, it is expected that the Company will exit 2017 with approximately 800 thousand barrels of inventoried entitlement crude oil, representing a 35% reduction from December 2016.
OPERATIONS UPDATE EGYPT
Subsequent to the third quarter press release (November 9, 2017), the Company drilled NWG 38A2 which was cased as a Red Bed oil well in the NWG 38 pool. The NWG 38 A2 appraisal well was drilled to a total depth of 5,315 feet and encountered approximately 112 feet of Red Bed formation with an estimated 17 feet of net oil pay based on open-hole logs and MDT samples. The well is scheduled for completion in early 2018 and will be tied into the NWG early production facility (“EPF”).
NWG 38 A2 is located approximately 0.4 km west of the NWG 38 A discovery well and intersected the NWG 38 red bed pool in a structurally lower position (~43 feet lower) increasing the known “oil down to” for the 38A pool, which is currently producing ~700 Bopd from two wells. Based on NWG 38A2 pressure data, the company has initiated permitting to drill a structurally down dip injector and commence a pressure maintenance scheme (water flood) in the first half of 2018 to increase recoveries similar to the Arta Red Bed pool in the adjacent West Gharib Concession. The drilling rig is stacked on site pending approval of additional drilling locations in the Eastern Desert concessions in early 2018. The Company is currently finalizing the 2018 work plan and budget which will be announced in January.
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