TransGlobe Energy Corporation operations update
Tuesday, Jan 15, 2013
TransGlobe Energy Corporation (TSX:TGL) (NASDAQ:TGA) ("TransGlobe" or the "Company") provides an operation update on South Mariut. All dollar values are expressed in United States dollars unless otherwise stated.
South Mariut, Arab Republic of Egypt (60% working interest, operated)
Operations and Exploration
The Al Azayem #1 well (first well of a planned three well exploration program) reached a total depth of 16,391 feet and will be plugged and abandoned. The primary Cretaceous reservoirs did not contain hydrocarbons. The Jurassic section of the well encountered a gross section of approximately 4,000 feet of Jurassic shale and tight carbonates. The shale in the Jurassic had good hydrocarbon indicators recorded while drilling. Analysis of the drill cuttings will be carried out to determine source rock properties. It is expected that the total well cost will be approximately $9 million ($5.4 million to TransGlobe) which is lower than the budgeted $9.6 million well cost for a 14,500 foot test.
Following rig release, the drilling rig is scheduled to drill the HL-5 prospect (Al Nahda #1) approximately 15 kilometers north of the Al Azayem prospect. The 10,500 foot Al Nahda #1 well is targeting an independent Cretaceous structure (four stacked zones) defined on 3-D seismic. Budgeted at $4.3 million ($2.6 million to TransGlobe), the Al Nahda #1 exploration well is programmed to take approximately 40 days to drill. The Al Nahda (HL-5) prospect was independently evaluated as of December 31, 2012 by DeGolyer and MacNaughton Canada Limited "DMCL". The Al Nahda #1 well is targeting a combined four potential reservoirs that have a Pg unadjusted Mean Gross Prospective Resource volume of 20.2 million barrels.
It is expected that the joint venture partners will finalize the third exploration location early in 2013.
The DMCL prospective resources estimates were prepared in accordance with the requirements of Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities Section 5.9 ("NI 51-101").
Capitalized terms related to resources classifications used in this press release are based on the definitions and guidelines in Section 5.3.5 of the Canadian Oil and Gas Evaluation Handbook ("COGEH"), Volume 1.
Historic well data, regional geology and seismic data were reviewed by DMCL to prepare a probabilistic Prospective Resources Estimate. The following table shows the gross estimated prospective resources expressed in millions of barrels. These estimates have not been adjusted for the probability of geologic success (Pg).
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