TransGlobe Energy sets 2019 Capital Budget for Egypt at $24.1 million
TransGlobe Energy Corporation announces the 2019 plan and capital budget.
- 2019 capital budget of $34.1 million (before capitalized G&A)
- Egypt $24.1 million
- Canada $10.0 million (C$13.0 million)
- 2019 production of 14.0 to 15.0 MBoepd with a mid-point of 14.5 MBoepd
- Egypt 11.6 to 12.4 MBopd in 2018
- Canada 2.4 to 2.6 MBoepd in 2018
- 2018 drilling program includes, 7 Egypt wells (4 development and 3 exploration) and 4 Canadian horizontal Cardium wells (3 development and 1 outpost)
2019 CAPITAL GUIDANCE
The Company’s 2019 capital program of $34.1 million (before capitalized G&A) includes $24.1 million for Egypt and $10.0 million (C$13.0 million) for Canada. The 2019 Plan was prepared to maximize free cash flow to direct at future value growth opportunities in Egypt and outside of Egypt.
The $24.1 million Egypt program has $7.0 million (30%) allocated to exploration and $17.1 million (70%) to development.
The $7.0 million 2019 exploration program includes 2 exploration wells in the Eastern Desert (1 well in West Bakr, 1 well in NW Gharib), an appraisal well and contingent early development capital at South Ghazalat. The West Bakr exploration well is in H block targeting a potential Asl A pool extension of the Rabul field which was discovered and placed on production in the adjacent GPC concession to the south. The NW Gharib exploration well is targeting an undrilled fault block north of the NWG 38A pool.
The $17.1 million 2019 development program is focused on the Eastern Desert which includes: 3 development wells in West Bakr (1 each in M, H and K pools) and 1 development well in the NW Gharib 38A pool, 10 recompletions in West Bakr, facility and water handling expansion at West Bakr and development/maintenance projects in the Eastern Desert (West Bakr, NW Gharib and West Gharib).
The primary focus of the 2019 Egypt plan is to sustain/grow Eastern Desert production and to evaluate the South Ghazalat exploration concession in the Western Desert. No additional production has been forecast from South Ghazalat pending test results of the SGZ 6X well and subsequent discussion with EGPC. Additional investment in South Alamein is conditional on negotiating the necessary extensions following the recent Military access rejection of the SA 24 X exploration well.
The $10.0 million (C$13.0 million) Canada program consists of 4 (4 net) horizontal (multi-stage frac) wells targeting the Cardium light oil resource at Harmattan and additional maintenance/development capital. The Cardium drilling program in 2019 consists of 3 development wells and 1 outpost well (deferred from the 2018 program) to evaluate the south Harmattan acreage acquired in 2018. The 2019 program is contingent on improved differentials for Western Canadian Edmonton light sweet oil sales.
The approved 2019 capital program is summarized in the following table:
2019 PRODUCTION OUTLOOK
The 2019 production outlook for the Company is provided as a range to reflect timing and performance contingencies.
Total corporate production is expected to range between 14.0 MBoepd and 15.0 MBoepd for 2019 (mid-point of 14.5 MBoepd) with a 94% weighting to oil and liquids. Egypt oil production is expected to range between 11.6 and 12.4 MBopd in 2019. Canadian production is expected to range between 2.4 and 2.6 MBoepd in 2019. The Canadian production range includes 12 months production from the 2018 6 well development drilling program which will be completed and ready for production in December of 2018. The Company is closely monitoring the recent increase in the western Canadian light oil differentials and may choose to defer commencing post frac production from the 2018 6 well program until differentials improve later in 2019.
TransGlobe Energy Corporation is a Calgary-based, growth-oriented oil and gas exploration and development company whose current activities are concentrated in the Arab Republic of Egypt and Canada. TransGlobe’s common shares trade on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol TGL and on the NASDAQ Exchange under the symbol TGA.