TransGlobe Energy Corporation reported the closing of the acquisition of privately-held GHP Exploration which holds a 30% interest in the West Gharib Concession area in the Arab Republic of Egypt. The West Gharib Concession consists of eight development leases and associated infrastructure located onshore Gulf of Suez.
TransGlobe Petroleum International Inc., a wholly owned subsidiary of TransGlobe Energy Corporation, acquired all the shares of GHP for US$40.2 million, plus working capital adjustments, effective September 30, 2007.
GHP holds a 30% working interest in eight development leases and one pending development lease comprising the West Gharib Production Sharing Concession ("PSC").
TransGlobe boasts, upon acquisition, an additional 900+ Bopd; 1.7 million barrels ("MMBbls") proved reserves; 3.0 MMBbls proved plus probable reserves.
TransGlobe funded the acquisition with an expanded credit facility and working capital. Interest charges and a working capital adjustment of approximately US$6.2 million will bring the total cost of the acquisition to US$46.4 million. The acquisition increased total debt to US$98 million. The proceeds from the sale of TransGlobe's Canadian assets, expected to close in the second quarter of 2008, will be applied to the total debt and working capital.
The eight West Gharib development leases encompass 178 square kilometers (approximately 44,015 acres) and are valid for 20 years. Modern 3-D seismic covers the majority of the development leases. One additional development lease is currently awaiting final approval signature by the Egyptian Petroleum Minister.
Independent reserve auditors have assessed GHP's working interest share of the eight leases to contain 1.7 MMBbls proved reserves and 3.0 MMBbls of proved plus probable reserves.
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