TransGlobe Energy Corporation Operations Update
CALGARY, ALBERTA -- (Marketwire) -- 01/11/13 -- 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
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"),
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).
Gross Prospective Oil Resources
(millions of barrels - MMbbl)
Low Best High Mean
Prospect Estimate Estimate Estimate Estimate
HL-5 Prospect 11.7 19.0 30.1 20.2
Prospective Resources are those quantities of oil and gas estimated
to be potentially recoverable from undiscovered accumulations. There
is no certainty that the Prospective Resources will be discovered. If
discovered, there is no certainty that it will be commercially viable
to produce any portion of the prospective resources. Application of
any geological and economic chance factor does not equate prospective
resources to contingent resources or reserves. In addition, the
following mutually exclusive Classification of Resources were used:
Low Estimate - This is considered to be a conservative estimate of
the quantity that will actually be recovered from the accumulation.
This term reflects a P90 confidence level where there is a 90% chance
that a successful discovery will be more than this resources
Best Estimate - This is considered to be the best estimate of the
quantity that will actually be recovered from the accumulation. This
term is a measure of central tendency of the uncertainty distribution
and in this case reflects a 50% confidence level where the successful
discovery will have a 50% chance of being more than this resources
High Estimate - This is considered to be an optimistic estimate of
the quantity that will actually be recovered from the accumulation.
This term reflects a P10 confidence level where there is a 10% chance
that the successful discovery will be more than this resources
estimate. Note that these distributions do not include consideration
of the probability of success of discovering and producing commercial
quantities of oil, but rather represent the likely distribution of
the oil deposits, if discovered.
Mean Estimate - In accordance with petroleum industry standards, the
mean estimate is the probability-weighted average, which typically
has a probability in the P45 to P15 range, depending on the variance
of prospective resources volume or associated value. Therefore, the
probability of a prospect or accumulation containing the
probability-weighted average volume or greater is usually between 45
and 15 percent. The mean estimate is the preferred probabilistic
estimate of resources volumes.
DMCL is a wholly owned subsidiary of D&M (http://www.demac.com/), a
global consulting firm providing a variety of services related to the
upstream sector of the petroleum industry, including evaluation of
the hydrocarbon potential of exploration areas, estimation and
classification of reserves to be recovered from new discoveries,
verification of hydrocarbon reserves, production forecasting, and
appraisal of properties for prospective acquisition, divestiture,
issuance of securities, or financing purposes. The firm offers
expertise in the primary scientific specialties related to petroleum
evaluation including Evaluation of Prospective Resources.
DMCL has acted independently in the preparation of the Report. DMCL
and its employees have no direct or indirect ownership in the
property appraised or the area of study described.
With respect to Assumptions and Limiting Conditions within the
Report, the Report is limited to a discussion of the potential
undiscovered oil and gas Prospective Resources of the subject
property. The Report does not attempt to place a value thereon. DMCL
reserves the right to revise its opinions of reserves and resources,
if new information is deemed sufficiently credible to do so. The
accuracy of any estimate is a function of available time, data and of
geological, engineering and commercial interpretation and judgment.
While the resources estimates presented herein are believed to be
reasonable, they should be viewed with the understanding that
additional analysis or new data may justify their revision and DMCL
reserves the right to make such revision.
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. Statements relating to "resources"
are forward-looking statements as they involve the implied
assessment, based on estimates and assumptions that the resources
described exist in the quantities predicted or estimated. 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, upon completion of the
primary term of any current exploration and/or production license,
TransGlobe would secure an extension or additional license for any
accumulation or discovered prospect; that TransGlobe intends to
proceed with development and operation of any commercially viable
discovered prospect, 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.
TransGlobe Energy Corporation
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