TransGlobe Energy Corporation (TSX: TGL) (NASDAQ: TGA)("TransGlobe"
or "the Company") is pleased to provide a mid-quarter production
and operations update for the third quarter of 2010 and announces
the Company's attendance at the Peters & Co. 2010 North
American Oil & Gas Conference and the FirstEnergy/Societe
Generale Global Energy Conference.
Highlights
-- Continued success in an expanding Nukhul development at West Gharib;
-- New field discovery at East Arta #4;
-- Record production in August of 10,204 barrels of oil per day ("Bopd");
-- Five rigs currently working on TransGlobe properties in Egypt and Yemen:
-- Two rigs drilling on the West Gharib leases;
-- Drilling started on the East Ghazalat Block;
-- Development drilling underway on Block S-1, Yemen;
-- Exploration well started drilling on Block 32, Yemen;
-- Rig contracted for drilling on the Nuqra Block in Q4 2010; and
-- TransGlobe added to S&P/TSX Small Cap Index.
OPERATIONS
ARAB REPUBLIC OF EGYPT
West Gharib, Arab Republic of Egypt (100% working interest,
TransGlobe operated)
Drilling
During the third quarter, the Company drilled four oil wells
(East Arta #3, East Arta #4, Arta #21 and Hana #23) and one dry
hole at Hoshia #9.
The East Arta #3 exploration well was drilled, cased and
completed as a potential Nukhul oil well in July. East Arta #3
encountered a thin sand section in the Nukhul on a separate
structure approximately 2.4 kilometres northeast of East Arta #2.
The well had limited inflow on initial completion and is being
evaluated for fracture stimulation ("frac").
The East Arta #4 exploration well was drilled, cased and
completed as new field discovery Nukhul oil well. The well
encountered a thick Nukhul formation with an estimated 32 feet of
net pay. The well was completed and fracture stimulated in early
September and is producing at an initial rate of 500 to 600
Bopd.
The Arta #21 well was drilled and cased as a potential Nukhul
oil well. The well will be completed and frac'd in September. Arta
# 21 was drilled approximately 2.1 kilometres north of Arta
#11.
The Hana #23 well was drilled, cased and completed as a
producing Kareem oil well at an initial rate of 100 Bopd.
Two exploration wells are currently drilling, targeting Nukhul
prospects at West Hoshia and at North Hoshia. The rigs are then
scheduled to move to Arta and East Arta, respectively, for
additional appraisal/exploration wells.
Fracture stimulations
During the third quarter, the Company successfully fracture
stimulated five wells in the Nukhul formation (Arta #6, Arta #7,
Arta #14, East Arta #4 and Hoshia #8).
Total Arta field production has increased from an average of 130
Bopd in January 2010 to approximately 722 Bopd in the second
quarter, 969 Bopd in July and 1,381 Bopd in August.
The Company has successfully fracture stimulated the Nukhul
formation in eleven vertical wells and one horizontal well in the
West Gharib area. The initial, pre-frac production from these wells
was between 0 and 90 Bopd. The post-frac initial rates have ranged
between 100 Bopd on the crest of the Arta pool and as high as 1,000
Bopd on the thicker wells drilled on the flank. The wide range in
post-frac performance makes it challenging to type curve the
post-frac performance, however trends are emerging. The original
group of vertical wells frac'd near the crest of the Arta pool had
initial production rates ranging from 100 to 400 Bopd appear to be
stabilizing in the 90 to 200 Bopd range after six months of
production. The newer wells drilled further down the Arta structure
appear to have at least twice the productive capacity based on the
initial production rates of 600 to 1,000 Bopd.
The Arta #12 horizontal ("Hz") well produced approximately 200
Bopd during August. A new pump is being manufactured in Canada to
improve the pumping efficiency which has been impacted by the
associated gas produced from the horizontal well. The pump is
scheduled for a November delivery and could increase production to
the 300 to 400 Bopd range, which may induce natural flow achieved
in the better producers.
The new pool at East Arta is producing 500 to 600 Bopd from East
Arta #4 in early September. Two stepout appraisal wells (East Arta
#5 and #6) are planned for October/November.
The Nukhul formation in Hoshia #8 was frac'd during September
and is producing at a post-frac rate of 175 Bopd.
The East Arta #2 well (drilled as a down dip eastern extension
to the Arta Nukhul pool) was completed in the lower Nukhul and
placed on initial production at 120 Bopd and stabilized at an
un-stimulated rate of 85 Bopd. The well will be completed and
frac'd in the upper main Nukhul zone, following a frac of the lower
Nukhul this week. The commingled Nukhul is expected to be on
production later this month.
East Ghazalat Block, Arab Republic of Egypt (50% working
interest)
Operations and Exploration
A three well drilling program commenced on September 13 at the
Sabbar #1 location. The Sabbar #1 well is the first of two planned
wells on the Safwa structure. Sabbar #1 is located approximately
1.7 kilometres northeast of Safwa NW-1 which tested 250 Bopd and
Safwa #1 which tested 300 Bopd from the Upper Bahariya
(un-stimulated). The total Safwa structure has an internally
estimated Petroleum Initially in Place ("PIIP") of 20.6 million
barrels of oil ("MMBbl") using the P-mean case.
The third well is targeting the Nakhil prospect which has an
internally estimated PIIP of 10.4 MMBbl using the P-mean case. The
Nakhil prospect is located approximately 8 kilometres southwest of
Safwa #1.
Nuqra Block 1, Arab Republic of Egypt (71.43% working interest,
TransGlobe operated)
Operations and Exploration
TransGlobe is finalizing a contract for a 1,200 Hp drilling rig
to drill two exploration wells in Nuqra commencing in the fourth
quarter. The rig will initially be contracted for one year and will
be available for Nukhul development drilling at West Gharib
following the Nuqra program. The first two wells will test the
Diwan and Selsella prospects.
The Company has mapped five prospects in the eastern extension
of the Kom Ombo sub-basin where the Al Baraka oil field was
discovered by Dana Gas. The following table is a summary of the
current Nuqra prospects:
Name Gross
PIIP(i)
Status (MMBbl)
----------------------------------------------------------------------------
Diwan Prospect 46.0
Selsella Prospect 13.6
Raghama Prospect 162.0
Dabud Lead 37.2
W. Diwan Lead 22.4
----------------------------------------------------------------------------
(i) Internally estimated PIIP using the probabilistic P-mean
case.
REPUBLIC OF YEMEN
Yemen East - Masila Basin
Block 32, Republic of Yemen (13.81% working interest)
The Operator is preparing to spud an exploration well at Safa
#1. The Safa #1 is targeting a small Qishn prospect between the
Tasour and Godah fields. A development well at Godah #12 will be
drilled following Safa #1.
Block 72, Republic of Yemen (20% working interest)
The Block 72 joint venture partnership has entered into a
farm-out agreement with TOTAL E&P Yemen who is the Operator of
Block 10 in the Masila Basin. Under the terms of the agreement, the
Company will reduce its working interest from 33% to 20%. An
exploration well targeting a fractured basement prospect on the
northern portion of Block 72 is planned for the fourth quarter of
2010.
Yemen West - Marib Basin
Block S-1, Republic of Yemen (25% working interest)
Drilling
The An Nagyah #4 vertical well was re-entered and completed as a
horizontal producing Lam A oil well during August. The An Nagyah #4
Hz well was placed on production at an initial flowing rate of
approximately 500 Bopd in September.
A new development horizontal well at An Nagyah #29 is currently
drilling. In total, six to eight horizontal wells are planned for
the An Nagyah pool. In addition to An Nagyah development drilling
program, two exploration wells (one on Block S-1 and one on Block
75) and a horizontal appraisal well in the Osaylan pool are
planned.
PRODUCTION
Production averaged 10,204 Bopd to TransGlobe during August, up
from 9,395 Bopd during July. Production, during the first 12 days
of September, has averaged 10,644 Bopd (8,012 Bopd in Egypt, 2,632
Bopd in Yemen).
2010 Production (Bopd) Egypt Yemen Total
----------------------------------------------------------------------------
Q1 6,848 2,846 9,694
Q2 6,631 2,575 9,206
July 7,255 2,140 9,395
August 7,643 2,561 10, 204
Year-to-date (8 months) 6,926 2,615 9,541
Guidance 10,000 - 10,500
----------------------------------------------------------------------------
Production increases in August were attributed to new stimulated
Nukhul producers at West Gharib in Egypt and new wells at An Nagyah
in Yemen.
The average production for 2010 is expected to be at the lower
end of guidance which remains at 10,000 to 10,500 Bopd. The primary
focus of the current drilling program in West Gharib is delineating
reserves and identifying new Nukhul pools. In 2011, the West Gharib
drilling program will shift to infill development wells on the
Nukhul pools. The exit rate for 2010 is expected to be
approximately 11,000 Bopd.
INVESTOR RELATIONS
TransGlobe is pleased to advise that Mr. Ross G. Clarkson,
President and Chief Executive Officer, will make a presentation on
the Company's activities at the Peters & Co. 2010 North
American Oil & Gas Conference in Toronto, Canada on Thursday,
September 16 at 10:10 am Eastern Daylight Time (8:10 am Mountain
Daylight Time). Investors are invited to listen to the live web
cast of the presentation via the following link:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3189780.
Mr. Ross Clarkson will also make a presentation at the
FirstEnergy/Societe Generale Global Energy Conference in London,
United Kingdom on Monday, September 20 at 11:20 am British Summer
Time (4:20 am Mountain Daylight Time). Investors are invited to
listen to the live web cast of the presentation via the following
link: http://jetslides.tv/lobby/225.
The links to these webcasts will also be available on
TransGlobe's Web site at www.trans-globe.com.
TransGlobe Energy Corporation is a Calgary-based,
growth-oriented oil and gas exploration and development company
focused on the Middle East/North Africa region with production
operations in the Arab Republic of Egypt and the Republic of Yemen.
TransGlobe's common shares trade on the Toronto Stock Exchange
under the symbol TGL and on the NASDAQ Exchange under the symbol
TGA.
Cautionary Statement to Investors:
This news release may include certain statements that may be
deemed to be "forward-looking statements" within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. Such
statements relate to possible future events. All statements other
than statements of historical fact may be forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as "seek", "anticipate",
"plan", "continue", "estimate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe" and similar expressions. These statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking statements. Although
TransGlobe's forward-looking statements are based on the beliefs,
expectations, opinions and assumptions of the Company's management
on the date the statements are made, such statements are inherently
uncertain and provide no guarantee of future performance. Actual
results may differ materially from TransGlobe's expectations as
reflected in such forward-looking statements as a result of various
factors, many of which are beyond the control of the Company. These
factors include, but are not limited to, unforeseen changes in the
rate of production from TransGlobe's oil and gas properties,
changes in price of crude oil and natural gas, adverse technical
factors associated with exploration, development, production or
transportation of TransGlobe's crude oil and natural gas reserves,
changes or disruptions in the political or fiscal regimes in
TransGlobe's areas of activity, changes in tax, energy or other
laws or regulations, changes in significant capital expenditures,
delays or disruptions in production due to shortages of skilled
manpower, equipment or materials, economic fluctuations, and other
factors beyond the Company's control. TransGlobe does not assume
any obligation to update forward-looking statements if
circumstances or management's beliefs, expectations or opinions
should change, other than as required by law, and investors should
not attribute undue certainty to, or place undue reliance on, any
forward-looking statements. Please consult TransGlobe's public
filings at www.sedar.com and www.sec.gov/edgar.shtml for further,
more detailed information concerning these matters.
Contacts: TransGlobe Energy Corporation Scott Koyich Investor
Relations 403.264.9888 investor.relations@trans-globe.com
www.trans-globe.com
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