In Egypt, total capital expenditures in 2012 were $50.2 million (2011 - $63.2 million). During 2012, the Company drilled 24 wells in West Gharib (13 at Arta, seven at East Arta, three at Hoshia and one at Fadl). The Company also drilled seven wells at West Bakr and two wells at East Ghazalat. Production was constrained at West Gharib during 2012 due to volume constraints at the processing facility. As a result, the capital cost per well drilled at West Gharib was lower in 2012 as the Company chose not to proceed with the completion and equipping of some of the new wells. The wells are scheduled for completion in 2013, now that some of the production constraints have been removed.
On June 7, 2012, the Company closed a Share Purchase Agreement to acquire 100% of the common shares of a wholly-owned subsidiary of EP Energy LLC which holds, through wholly-owned subsidiaries, a non-operated 50% interest in the South Alamein PSC in Egypt and an operated 60% working interest in the South Mariut PSC in Egypt. The transaction was structured as an all-cash deal, effective April 1, 2012, funded through working capital and the proceeds of the issuance of convertible debentures. Total consideration for the transaction was $22.9 million, which represents a $15.0 million base purchase price plus $7.9 million in working capital and other closing adjustments.
On July 26, 2012, the Company closed a Share Purchase Agreement to acquire 100% of the common shares of Cepsa Egypt, a wholly-owned subsidiary of Cepsa. Cepsa Egypt holds an operated 50% working interest in the South Alamein PSC in Egypt. As a result, the Company now holds a 100% working interest in the South Alamein concession through two wholly-owned subsidiaries. The Cepsa transaction was structured as an all-cash deal, effective July 1, 2012, funded through working capital. Total consideration for the transaction was $4.5 million, which represents a $3.0 million base purchase price plus $1.5 million in consumable drilling inventory (which is classified as exploration and evaluation assets), working capital and other closing adjustments.
FINDING AND DEVELOPMENT COSTS/FINDING, DEVELOPMENT AND NET ACQUISITION COSTS
National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), specifies how finding and development ("F&D") costs should be calculated. NI 51-101 requires that exploration and development costs incurred in the year along with the change in estimated future development costs be aggregated and then divided by the applicable reserve additions. The calculation specifically excludes the effects of acquisitions and dispositions on both reserves and costs. TransGlobe believes that the provisions of NI 51-101 do not fully reflect TransGlobe's on-going reserve replacement costs. Since acquisitions can have a significant impact on TransGlobe's annual reserves replacement cost, to not include these amounts could result in an inaccurate portrayal of TransGlobe's cost structure. Accordingly, TransGlobe has also reported finding, development and acquisition ("FD&A") costs that will incorporate acquisitions, net of any dispositions during the year.
Proved($000s, except volumes and $/Bbl amounts) 2012 2011 2010--------------------------------------------------------------------------------------------------------------------------------------------------------Total capital expenditure 51,651 70,119 65,342Acquisitions 27,305 39,497 -Dispositions - - -Net change from previous year's future capital (4,706) (6,165) 4,776---------------------------------------------------------------------------- 74,250 103,451 70,118----------------------------------------------------------------------------Reserve additions and revisions (MBbl)Exploration and development 10,999 4,672 4,845Acquisitions, net of dispositions - 7,448 -----------------------------------------------------------------------------Total reserve additions (MBbl) 10,999 12,120 4,845----------------------------------------------------------------------------Average cost per BblF&D 4.27 13.45 14.47FD&A 6.75 8.54 14.47Three-year weighted average cost per BblF&D 8.77 8.76 8.06FD&A 8.86 7.85 8.10--------------------------------------------------------------------------------------------------------------------------------------------------------Note:The aggregate of the exploration and development costs incurred in the mostrecent financial year and the change during that year in estimated futuredevelopment costs generally will not reflect total finding and developmentcosts related to reserves additions for that year.Proved Plus Probable($000s, except volumes and $/Bbl amounts) 2012 2011 2010--------------------------------------------------------------------------------------------------------------------------------------------------------Total capital expenditure 51,651 70,119 65,342Acquisitions 27,305 39,497 -Dispositions - - -Net change from previous year's future capital 1,191 (14,256) 42,546---------------------------------------------------------------------------- 80,147 95,360 107,888----------------------------------------------------------------------------Reserve additions and revisions (MBbl)Exploration and development 10,888 6,612 9,895Acquisitions, net of dispositions - 11,586 -----------------------------------------------------------------------------Total reserve additions (MBbl) 10,888 18,198 9,895----------------------------------------------------------------------------Average cost per Bbl F&D 4.46 7.07 10.90 FD&A 7.36 5.24 10.90Three-year weighted average cost per Bbl F&D 7.42 8.04 8.00 FD&A 7.27 6.79 7.83--------------------------------------------------------------------------------------------------------------------------------------------------------Note:The aggregate of the exploration and development costs incurred in the mostrecent financial year and the change during that year in estimated futuredevelopment costs generally will not reflect total finding and developmentcosts related to reserves additions for that year.RECYCLE RATIO Three-Year WeightedProved Average 2012 2011 2010--------------------------------------------------------------------------------------------------------------------------------------------------------Netback ($/Bbl)(i) 22.85 22.08 26.24 20.07Proved F&D costs ($/Bbl) 8.77 4.27 13.45 14.47Proved FD&A costs ($/Bbl) 8.86 6.75 8.54 14.47--------------------------------------------------------------------------------------------------------------------------------------------------------F&D Recycle ratio 2.61 5.17 1.95 1.39FD&A Recycle ratio 2.58 3.27 3.07 1.39--------------------------------------------------------------------------------------------------------------------------------------------------------(i) Netback, for the purposes of calculating the recycle ratio, is defined as net sales less operating, exploration, G&A (excluding non-cash items), foreign exchange (gain) loss, interest and current income tax expense per Bbl of production. Three-Year WeightedProved Plus Probable Average 2012 2011 2010--------------------------------------------------------------------------------------------------------------------------------------------------------Netback ($/Bbl)(i) 22.85 22.08 26.24 20.07Proved plus Probable F&D costs ($/Bbl) 7.42 4.46 7.07 10.90Proved plus Probable FD&A costs ($/Bbl) 7.27 7.36 5.24 10.90--------------------------------------------------------------------------------------------------------------------------------------------------------F&D Recycle ratio 3.08 4.95 3.71 1.84FD&A Recycle ratio 3.14 3.00 5.01 1.84--------------------------------------------------------------------------------------------------------------------------------------------------------(i) Netback, for the purposes of calculating the recycle ratio, is defined as net sales less operating, exploration, G&A (excluding non-cash items), realized foreign exchange (gain) loss, cash finance costs and current income tax expense per Bbl of production.
