EGYPT: TransGlobe Energy Provides Q1 2021 Financial & Operating Results

In Egypt, the Company sold 171.9 thousand barrels of entitlement crude oil to EGPC during the quarter, and had 455.7 Mbbls of entitlement crude oil inventory at March 31, 2021. The increase in inventoried crude oil is attributed to a decrease in sales volumes, offset by a slight decrease in production from the previous quarter. Subsequent to the quarter, TransGlobe sold a ~499 Mbbl cargo of Egypt entitlement crude oil, with net proceeds expected in May 2021.

The Company has reached an agreement with the Egyptian General Petroleum Company (EGPC) to merge its three existing Eastern Desert concessions with a 15-year primary term and improved Company economics. The Company recently held discussions with the Ministry of Petroleum, and was informed that due to the recent Egyptian election combined with internal process changes for ratification, the Ministry is now expecting ratification to occur in the second half of 2021. The February 1, 2020 effective date for the improved concession terms and assurances from the Ministry is supportive of increased investment in advance of ratification.

In Egypt, the recompletion of the SGZ-6X well to the deeper, more prospective lower Bahariya reservoir has been concluded in the Western Desert. The well commenced production in March 2021. The rig is mobilizing to the Company’s Eastern Desert concessions where operations on the budgeted twelve well 2021 drilling program will commence in May 2021.

OPERATIONS UPDATE

ARAB REPUBLIC OF EGYPT

EASTERN DESERT

West Gharib, West Bakr, and North West Gharib (100% working interest, operated)

Operations and Exploration

The EDC-64 rig has been mobilized to the Company’s Eastern Desert concessions where operations on the budgeted twelve well 2021 drilling program will commence in May 2021.

Production

Production averaged 10,050 bbls/d during the quarter, a decrease of 1% (79 bbls/d) from the previous quarter. The decrease was primarily due to natural declines.

Production in April 2021 averaged ~10,013 bbls/d.

WESTERN DESERT

South Ghazalat (100% working interest, operated)

Operations and Exploration

The recompletion of SGZ-6X well to the deeper, more prospective lower Bahariya reservoir has been concluded. The well commenced production on March 21, 2021 at a field estimated production rate of ~3,600 bbls/d of light oil on a 32/64-inch choke with 0% watercut.

As planned, on March 22, 2021 the well was restricted to a field-estimated ~1,000 bbls/d of light-oil on a reduced choke to facilitate reservoir data gathering and the preparation of an effective reservoir management plan for the lower Bahariya at this location. The Company will provide a further update on South Ghazalat once this plan has been developed, though an increased oil offtake rate is now considered unlikely.

Work to expand the early production facility at South Ghazalat has been completed.

Production

Production averaged 188 bbls/d during the quarter, an increase of 35% (49 bbls/d) from the previous quarter. The increase was due to the recompletion noted above.

Production in April 2021 averaged ~996 bbls/d.