TransGlobe has announced a new exploration project in the western desert of Arab Republic of Egypt, an operations update and an expanded 2010 Capital Budget. All dollar values are expressed in United States dollars unless otherwise stated.
East Ghazalat (50% Working Interest)
TransGlobe has signed a farm-out agreement with Vegas Oil & Gas SA to earn a 50% interest in the East Ghazalat Concession in the Western Desert of Egypt, subject to the approval of the Egyptian Government. The East Ghazalat Concession is operated by Vegas, a privately owned oil and gas company with extensive Egypt experience and success.
The 858 km2 East Ghazalat Concession is located in the prolific Abu Gharadiq basin of Egypt's Western Desert, approximately 250 km west of Cairo. East Ghazalat was awarded to Vegas on June 5, 2007 and is currently in the first, three-year exploration period. There are two additional exploration period extensions of two years each. TransGlobe has committed to pay 100% of three (3) exploration wells to a maximum of $9.0 million to earn a 50% working interest in the East Ghazalat Concession. To date, the Operator has acquired 450 km of 3-D seismic to complement the existing 1,548 km of 2-D seismic and 218 km of 3-D seismic.
Drilling commenced on the first exploration well (Gawad #1) on January 14, 2010. The well is planned to reach a total depth of approximately 9,480 feet by the end of February.
The Gawad #1 well is targeting a Jurassic prospect. TransGlobe's estimated petroleum initially in place ("PIIP") for the Gawad prospect is approximately 80 million barrels of light, crude oil in the P-mean case, with an upside potential of 150 million barrels PIIP in the P10 case.
The second and the third exploration wells are targeting 64 and 25 million barrels of light, crude oil, respectively, in the P-mean case with an upside of 140 and 50 million barrels in the P10 case, respectively (TransGlobe PIIP estimates). These wells are planned to be drilled consecutively following Gawad #1 during the first half of 2010.
Ross Clarkson, President and CEO, was quoted "TransGlobe's entry into the prolific Western Desert in the East Ghazalat Concession is an exciting addition to our 2010 exploration program. We are executing on our strategy to build a strong, well funded, exploration and production company with a broad portfolio of drilling opportunities."
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