South East Gharib (100% WI)
The 508 square kilometer (125,000 acre) South East Gharib concession is located immediately south of the South West Gharib concession. The Company will acquire extensive 2D and 3D seismic over this area prior to drilling exploration wells in the first exploration phase.
South Ghazalat (100% WI)
The 1,883 square kilometer (465,000 acre) South Ghazalat concession is located in the Western Desert to the West of the company's East Ghazalat concession in the prolific Abu Gharadig basin. The Company will acquire extensive 3D seismic over this area prior to drilling exploration wells in the first exploration phase.
YEMEN EAST- Masila Basin
Block 32, Republic of Yemen (13.81% working interest)
Operations and Exploration
No wells were drilled during the fourth quarter.
Production
Production sales from Block 32 averaged 3,271 Bopd (452 Bopd to TransGlobe) during the quarter. The reported gross sales production rate represents the amount of oil that was lifted and sold during the quarter. It is expected that sales production rates and the field production rates will vary quarter to quarter depending on the timing of tanker liftings during the respective quarter.
The actual field production during the fourth quarter averaged 2,442 Bopd (337 Bopd to TransGlobe) which is approximately 4% lower than the previous quarter due to natural declines.
Field production averaged approximately 2,484 Bopd (343 Bopd to TransGlobe) during January and 2,390 Bopd (330 Bopd to TransGlobe) during February.
Quarterly Block 32 Production and Sales (Bopd) 2012---------------------------------------------------------------------------- Q-4 Q-3 Q-2 Q-1----------------------------------------------------------------------------Gross field production rate 2,442 2,532 2,575 2,704Gross sales production rate 3,271 1,501 2,839 2,151TransGlobe working interest 452 207 392 297TransGlobe net (after royalties) 253 123 232 166TransGlobe net (after royalties and tax) (i) 185 96 179 120----------------------------------------------------------------------------(i) Under the terms of the Block 32 Production Sharing Agreement, royalties and taxes are paid out of the Government's share of production sharing oil.
Block 72, Republic of Yemen (20% working interest)
Operations and Exploration
No new wells were drilled during the fourth quarter. The joint venture partners have approved the Gabdain #3 exploration well, subject to the resolution of logistic/security issues in the area. The current exploration phase of the PSA has been extended to October 12, 2013.
Gabdain #3 is targeting a large fractured basement prospect originally drilled at Gabdain #1 in 2010. Gabdain #1 tested approximately 170 Bopd light oil from the Kholan formation with 85% drawdown (which overlies the basement) during a two-day production test. Test rates are not necessarily indicative of long-term performance. The basement fractures at Gabdain #1 were tight and non-productive. The Gabdain #3 well is located approximately five kilometers from Gabdain #1 and is targeting fractures in the basement. It is expected that the 3,500 meter (11,500 feet) exploration well will cost approximately $11.5 million ($2.3 million to TransGlobe).
