TransGlobe Energy has made two oil finds in Egypt, the company announced on August 11. The company said the NWG 27 and NWG 38 wells had respectively found 18 million and 12 million barrels of oil in place, according to internal estimates. TransGlobe said it had drilled five exploration wells, giving it a 40% success rate.
In addition to its exploration work, the company has also pushed ahead with its development plans. The K-48 well, in the South-K field, was drilled and put into production during the quarter, with initial output of 460 bpd. More wells are planned for the field in the third quarter.
A first exploration well is planned for the South East Gharib concession, using the same rig. It added another rig in July, drilling the NWG 38. Next up is the NWG 26 well, to test a structure to the west of NWG 27. The company is planning to drill seven more exploration wells this year.
Drilling costs are 30-40% below what TransGlobe had planned, a result of better contract terms and optimised drilling.
Production in the second quarter was 11,472 bpd, with a net loss of US$12.1 million. TransGlobe said it was working on a production recovery programme, which should increase capacity to 13,000-14,000 barrels per day of oil by the end of the year.
The recovery plan covers two additional wells at South-K, in addition to 16 or more recompletions and other work, such as pump optimisation, at West Gharib and West Bakr.
Capital expenditure is estimated at US$33 million in 2016, down from the previous guidance of US$38 million. The savings come from its drilling programme, reductions on its recovery programme and some facility project deferrals into 2017.
A note from FirstEnergy said the exploration results were better than had been expected and that TransGlobe was “positioning itself for material production growth” in 2016, with an implied increase of 13-22%.
In addition to TransGlobe’s results update, Dana Gas also set out its second quarter performance on August 11. Net profit in the quarter was flat year-on-year at US$7 million, while production was up as a result of an additional 4,000 boepd from Egypt’s Balsam fields. Total output was 66,650 boepd in the second quarter, up 1% year on year. Egyptian production was 36,550 boepd in the quarter.
Dana also noted that BP had begun drilling the Mocha-1 well, in early May. The well is being drilled on the Nile Delta’s El Matariya (Block 3) onshore concession. It will be drilled to a target depth of 6,200 metres with initial results in the fourth quarter of this year.
Dana’s CEO, Patrick Allman-Ward, said there had been a “notable” production increase in Egypt, with its gas processing plant reaching maximum capacity. “We are currently drilling the deep Oligocene exploration well onshore Nile Delta and we anticipate that the well results will be known before year-end.” Allman-Ward did go on to say that the “overall business environment remains challenging”.
Work at Balsam was part of a production enhancement agreement with the Egyptian government, which was agreed in August 2014. This deal should provide additional production over three years and, as a result, Cairo’s overdue debts to the company should be repaid by 2019.
As of the end of the first half, the amount owed by Egypt to Dana was US$230 million, up from US$221 million at the end of 2015.