Operations Update
ARAB REPUBLIC OF EGYPT
West Gharib, Arab Republic of Egypt (100% working interest, operated)
Operations and Exploration
Four wells were drilled during the fourth quarter resulting in three (Hoshia) oil wells and one (Fadl) dry well.
Subsequent to year-end four additional oil wells have been drilled in the Arta/East Arta area.
One drilling rig is currently drilling in the Arta/East Arta area of the West Gharib concession.
Production
Production from West Gharib averaged 11,563 Bopd to TransGlobe during the fourth quarter, a 5% (619 Bopd) decrease from the previous quarter. Production during the fourth quarter was impacted by an illegal eight day labor protest at the start of the October which deferred approximately 100,000 barrels of production.
Production averaged 12,270 Bopd during January, 13,232 Bopd during February and approximately 13,400 Bopd to date in March. Production increases in February and March are attributed to new wells, production optimization and increased take away capacity attributed to the West Bakr K station trucking terminal.
The Company commissioned a truck receiving terminal at the West Bakr K station to receive West Gharib production in late December. The new K station receiving terminal is designed to receive the majority of the Hana/Hana West production from West Gharib, which is then shipped via the West Bakr pipeline to the GPC receiving terminal. By diverting up to 2,500 Bopd of Hana/Hana West production through the West Bakr pipeline system, West Gharib is able to utilize a portion of the Hana/Hana West capacity at the GPC truck terminal to deliver additional West Gharib production. West Gharib production was curtailed in 2012 due to GPC truck terminal constraints. Additional unidentified constraints could be experienced in the GPC processing facilities when the combined production approaches the 20,000+ Bopd level. The Company is working with GPC to identify bottlenecks and optimize throughput. Currently West Gharib and West Bakr are delivering approximately 18,000 Bopd into the GPC system.
The Phase 2 expansions of the new Hoshia and Arta South multi-well batteries ("MWB") were completed in early 2013. In addition, a new MWB located in the North West corner of East Arta will be commissioned in early March, 2013 and plans have been finalized for a new Arta Main MWB in the central part of Arta, targeting a Q4-2013 startup.
The Company continues to progress a number of longer term infrastructure projects in the West Gharib/West Bakr fields to deliver West Gharib production to GPC by pipeline and thereby eliminate oil trucking outside the West Gharib field area.
Quarterly West Gharib Production (Bopd) 2012---------------------------------------------------------------------------- Q-4 Q-3 Q-2 Q-1----------------------------------------------------------------------------Gross production rate 11,563 12,182 12,356 12,065TransGlobe working interest 11,563 12,182 12,356 12,065TransGlobe net (after royalties) 6,697 6,757 6,847 6,581TransGlobe net (after royalties and tax) (i) 4,884 4,741 4,805 4,536----------------------------------------------------------------------------(i) Under the terms of the West Gharib Production Sharing Concession, royalties and taxes are paid out of the Government's share of production sharing oil.
