TransGlobe Energy Corporation has completed the acquisition of an additional 25 percent in certain leases on its West Gharib (Arab Republic of Egypt) properties from its partner, a private company registered in Cyprus, for consideration of US$18.0 million adjusted to June 1, 2008. This acquisition brings TransGlobe's holdings to a 100 percent working interest on all nine West Gharib leases.
The acquisition was funded from TransGlobe's expanded credit facility and working capital. TransGlobe's average daily production increases by approximately 400 barrels of oil per day ("Bopd"), effective today. The purchase price paid by TransGlobe translates into approximately US$16.20 per barrel of Proved Plus Probable reserves or approximately US$45,000 per flowing Bopd, in line with recent similar transactions in the area.
Depending upon the size of future reserve additions in the East Hoshia and South Rahmi fields, TransGlobe has agreed to pay the partner a success fee up to $5.0 million and $2.0 million, respectively.
Ross Clarkson, President and CEO of TransGlobe, commented, "The West Gharib acquisition established TransGlobe as a producing operator in the Middle East and we are very pleased to increase our interest. The early drilling successes have proved the value of the assets. We believe there are more production and reserve gains to come from the West Gharib lands."
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