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Transglobe Energy Gives Working Update In Egypt, Others

TransGlobe Energy has announced an operations update of crude oil Production averaged 12.1 MBoepd in Q2, 2022 to 11 June. Full Canadian production restored in May following completion of planned maintenance at a major processing plant owned by a third party. Canadian June production has averaged 2,727 boed for the month to 11 June following the turnaround. As budgeted, production in Canada will be impacted over the coming quarter as wells will be shut in temporarily to protect the stimulation operations on the adjacent new wells. Two 100% working interest 2-mile horizontal Cardium reservoir development wells were drilled in Q2, 2022 to date in Canada. The company has Drilled and cased four Egypt Eastern Desert development wells in Q2, 2022 to date; and has  sold a ~451 Mbbl cargo of Egypt entitlement crude oil for proceeds of ~$46 million.

“The Company’s operations continue to be in-line with plan, with both Egypt and Canada generating production within guidance. Canadian production was curtailed for part of April and much of May as a result of planned third party plant maintenance which was completed on schedule.

A full (~451 MBbls) cargo lifting was completed in the second quarter. While the proceeds for this recent lifting were the highest realized since 2014, we also experienced a higher Brent differential as compared to recent liftings which appears to be related to increased supply being available to the blend’s traditional buyers.

Corporately, we continue to examine portfolio optimization opportunities and other value enhancing strategies that are complementary to our previously announced distribution policy,” Randy Neely, President and CEO, commented.

Production

Corporate production remains in line with 2022 annual guidance of 12.4-13.4 MBoepd. In Egypt, Eastern Desert oil production continues to respond positively to ongoing drilling, offset by higher water cuts than anticipated at South Ghazalat. As anticipated, all Canadian wells were returned to production from mid-May following planned scheduled maintenance at our third-party gas processor.

OPERATIONS

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 four additional development wells in the K-Field during the quarter to date.

The K-71 well, reported on in the previous operations update of April 6, 2022, was put on production from the Asl-B reservoir only and is currently producing at 480 Bopd (heavy crude, field estimate) and 20% water cut. The Asl-A reservoir was not perforated and was internally estimated to have 19 m of net oil pay. The Asl-A is a potential future recompletion.

The K-78 well was drilled to a total depth of 1,420 meters. The well was fully logged and evaluated with an internally estimated 21.8 meters of net oil pay in the Asl-A reservoir and 10.2 meters of net oil pay in the Asl-B reservoir. The Asl-B was perforated and put on production with a current field estimated rate of 10 Bopd (heavy crude, field estimate) and 97% water cut. The well is being evaluated for either a work over to shut-off water production from the Asl-B reservoir, or to move ahead with an early recompletion to the Asl-A reservoir.

The K-75 well was drilled to a total depth of 1,396 meters. The well was fully logged and evaluated. The well encountered 4.9 meters of net oil pay in the Asl-A. The Asl-A was perforated and the well is scheduled to be put on production.

The K-74 well was drilled to a total depth of 1,399 meters. The well was fully logged and evaluated. The well encountered 9.6 meters of net oil pay in the Asl-A reservoir. The Asl-A was perforated and the well is scheduled to be put on production.

The K-73 well was drilled to a total depth of 1,406 meters. The well was fully logged and evaluated with an internally estimated 20.6 meters of net oil pay in the Asl-A reservoir and 1.9 meters in the Asl-B reservoir. The well is currently waiting on completion and tie-in.

The K-77 well in K-Field has recently been spudded by the EDC-64 rig.

The Arta-76 and NWG-1E vertical wells, previously reported as drilled in the April 6, 2022 operations update, have been stimulated. These wells confirmed the presence of oil in the Nukhul, were cored to provide data to update the reservoir models, and have successfully delineated the reservoir for optimal targeting of the forthcoming horizontal wells. Both wells are expected to be used for microseismic monitoring of the multi-stage stimulation of the horizontal wells, and this data will be used to calibrate our stimulation model for optimization of the future horizontal well development program. Meanwhile, the two wells have been put on production with the Arta-76 currently producing at 14 Bopd with a 28% water cut, and NWG-1E currently producing while cleaning up at 32 Bopd with an 70% water cut (both heavy crude, field estimate).

The Company continues working to proactively mitigate potential supply chain issues by engaging alternative materials suppliers. In the short term, materials shortages causing delays to the tie-in of some recently drilled wells are being addressed.

Western Desert – South Ghazalat (100% WI)
A problem with the rigless artificial lift system deployed on SGZ-6X well at South Ghazalat is under investigation. On artificial lift, the lower Bahariya reservoir at SGZ-6X was producing 128 Bopd of light crude oil with an 82% watercut (field estimate) prior to well shut-in.

Canada

During the quarter to date, two 100% working interest 2-mile Harmattan horizontal Cardium reservoir wells were drilled in the South Harmattan area, completing the four well winter drill campaign. Stimulation and equipping of all four wells is anticipated to commence in June 2022, with first production anticipated in August 2022.

The Company has spudded a 100% working interest 1-mile Harmattan horizontal Cardium reservoir well, the start of a three horizontal well Harmattan Cardium reservoir summer drill program.

Corporate The Company sold a ~451 Mbbl cargo of Egypt entitlement crude oil for proceeds of ~$46 million.

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