TransGlobe Energy Corporation Acquires Epedeco's West Bakr Concession Agreement in Egypt
28 Marzo 2011 - 2:45PM
Marketwired
TransGlobe Energy Corporation (TSX: TGL)(NASDAQ: TGA) ("TransGlobe"
or the "Company") today announces the signing of a Sale and
Purchase Agreement ("SPA") to acquire a 100% working interest in
the West Bakr Concession agreement in the Arab Republic of Egypt
("Egypt") from The Egyptian Petroleum Development Co. Ltd. (of
Japan) subject to the approval of the Egyptian Government and
customary closing conditions. All dollar values are expressed in
United States dollars unless otherwise stated.
The transaction highlights include:
-- $60 million all-cash deal, effective July 1, 2010, with operatorship of
three fields with 28 producing wells; funded through working capital and
existing credit facility;
-- Immediately accretive to funds flow from operations and net income;
-- 100% working interest in production and reserves:
-- 4,000 barrels of oil per day ("Bopd"); 7.4 million barrels ("MMBbl")
Proved reserves; 8.8 MMBbl Proved plus Probable reserves;
-- Transaction metrics are approximately $15,000 per producing barrel of
oil for the assets, or $6.82 per Proved plus Probable barrel of oil;
-- 45.2 square kilometres (11,600 acres) in two development leases;
-- Located immediately adjacent to TransGlobe's existing West Gharib
development leases;
-- Integration opportunities with the TransGlobe West Gharib operations;
-- Numerous development optimization projects identified; and
-- A map showing the purchased acreage can be found on TransGlobe's web
site http://www.trans-globe.com/operations/egypt/west-bakr.
West Bakr, Egypt (100% operated working interest)
TransGlobe West Bakr Inc. ("TGWB"), a wholly owned subsidiary of
TransGlobe Energy Corporation, has entered into a SPA to acquire
all the Egyptian assets of The Egyptian Petroleum Development Co.
Ltd. (of Japan) ("EPEDECO") for $60 million plus or minus
adjustments, effective July 1, 2010 subject to approval from the
Egyptian Government. EPEDECO holds a 100% working interest in the
West Bakr Production Sharing Concession ("PSC"). EPEDECO is the
operator of the West Bakr Concession through its joint venture
operating company (West Bakr Petroleum Company). Subject to
Government approval, TGWB will assume operatorship of the West Bakr
Concession agreement.
The West Bakr PSC is located onshore in the western Gulf of Suez
rift basin of Egypt adjacent to TransGlobe's West Gharib
Concession. The two West Bakr development leases encompass 45.2
square kilometres (approximately 11,600 acres) and are valid until
2020 with an optional five-year extension to 2025. Modern 3-D
seismic covers the development leases. Current gross oil production
from the three producing fields is approximately 4,000 Bopd
(approximately 1,140 net Bopd after the production sharing split
with the Government of Egypt). There are three oil fields on the
lands with cumulative production of approximately 50 MMBbl. The
Company's independent reserve evaluator (DeGolyer and MacNaughton
Canada Limited) assigned remaining Proved reserves of 7.4 MMBbl and
Proved plus Probable reserves of 8.8 MMBbl, effective July 1, 2010.
The Company has identified a number of optimization/development
projects and drilling opportunities that could increase production
and recoverable reserves.
The produced oil ranges from 17 degrees to 20 degrees API and is
pipeline connected to the Ras Gharib terminal on the coast, which
is the same export terminal that West Gharib production is
currently trucked to. The West Bakr blend has historically received
Brent minus 25% pricing.
The West Bakr Concession production sharing terms are as
follows: cost oil of 30%, production sharing of 15% to the
Contractor and 85% to the Government, excess cost oil goes 100% to
the Government, capital investments are amortized over five years
and operating expenses are amortized in the quarter incurred. All
Government royalties and taxes are paid out of the Government's
share of production sharing oil.
TransGlobe intends to fund the acquisition with working capital
and existing credit facility. Closing is subject to customary due
diligence, closing conditions and Government approval.
TransGlobe expects to close the acquisition shortly after
receiving the necessary Government approvals. TransGlobe cannot
make assurances that it will successfully close the subject
transaction.
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 Investor Relations Scott
Koyich 403.264.9888 investor.relations@trans-globe.com
www.trans-globe.com
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