It is difficult to provide a timeline for first oil production from the Boraq discovery. The Company had assumed a Q4-2013 startup of production for budget purposes with an average production rate of 460 Bopd for 2013.
South Mariut, Arab Republic of Egypt (60% working interest, operated)
Operations and Exploration
Al Azayem #1, the first well of a planned three well exploration program, commenced drilling in the fourth quarter and reached a total depth of 16,391 feet in January 2013. The well was plugged and abandoned. The primary Cretaceous reservoirs did not contain hydrocarbons. The Jurassic section of well encountered a gross section of approximately 4,000 feet of Jurassic shale and tight carbonates. The Jurassic shale had good hydrocarbon indicators recorded while drilling. Analysis of the drill cuttings will be carried out to determine source rock properties. The total well cost of approximately $9 million ($5.4 million to TransGlobe) was lower than the budgeted $9.6 million cost for a 14,500 foot test.
The rig is currently drilling the HL-5 prospect (Al Nahda #1) approximately 15 kilometers north of the Al Azayem prospect. The 10,500 foot Al Nahda #1 well is targeting an independent Cretaceous structure (four stacked zones) defined on 3-D seismic. The Al Nahda #1 exploration well is programmed to take approximately 40 days to drill at a budgeted cost of $4.3 million ($2.6 million to TransGlobe). As disclosed in the January 11, 2013 press release, the Al Nahda (HL-5) prospect was independently evaluated as of December 31, 2012 by DeGolyer and MacNaughton Canada Limited "DMCL". The Al Nahda #1 well is targeting a combined four potential reservoirs that have an unrisked Mean Gross Prospective Resource volume of 20.2 million barrels.
The third exploration well is the CT-4 prospect (Al Hammam #1), located along the coastal trend approximately 50 kilometers west of Al Nahda #1. The Al Hammam #1 well is targeting a Cretaceous horst block defined on 2-D seismic data. The well is programmed to reach total depth of approximately 8,500 feet at a budgeted cost of approximately $3.4 million ($2.1 million to TransGlobe). It is expected that this well will commence drilling in March using a smaller (1,500 horsepower) drilling rig.
EGPC BID ROUND RESULTS
During the quarter, EGPC announced that TransGlobe was the successful bidder on four concessions (100% working interest) in the 2011 EGPC bid round which closed on March 29, 2012. It is expected that the new concessions will be awarded in late 2013 following the ratification process which culminates when each concession is passed into law by the People's Assembly (Parliament).
North West Gharib (100% WI)
The Company's primary objective was obtaining the 655 square kilometer (162,000 acre) North West Gharib concession which surrounds and immediately offsets the Company's core West Gharib/West Bakr producing concessions (approx. 45,000 acres). At North West Gharib the Company expects to commence drilling shortly after ratification and final approval of the concession into law. The Company has identified more than 79 drilling locations based on existing well and seismic data for the area. The Company would also acquire 3D seismic data on portions of the concession not covered by 3D seismic, to develop additional exploration targets.
South West Gharib (100% WI)
The 195 square kilometer (48,000 acre) South West Gharib concession is located immediately south of the North West Gharib concession. The Company will acquire 3D seismic over the entire concession prior to drilling exploration wells in the first exploration phase.
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