Transglobe

completed

TransGlobe was incorporated in Calgary in 1968 and listed on the Toronto Stock Exchange in 1997 and on the NASDAQ in 2008. TransGlobe currently has interests in nine oil and gas blocks, five located in Egypt and four in Yemen. TransGlobe has been awarded 4 additional exploration blocks through the EGPC 2012 bid round; the licenses are pending ratification from Parliament.TransGlobe’s operated production assets are limited to the West Gharib and West Bakr concessions located in the Egyptian Eastern Desert. The Company purchased the West Gharib concession across 2007 and 2008 which represented TransGlobe’s first production operation in Egypt. The West Gharib purchase included a 50% interest in the Joint Venture operating company (“Petrodara”) which had been formed with the Government of Egypt to operate the West Gharib development leases. TransGlobe subsequently purchased Epedeco’s 100% interest in the West Bakr concession and 50% share in West Bakr Petroleum Company (joint venture operating company) in December, 2011. In June and July 2012 TransGlobe acquired the El Paso and Cepsa subsidiaries in Egypt with exploration concessions in the Western Desert.IFC is considering a reserve based loan of up to US$33.5 million to partially finance TransGlobe’s 2013 development and exploration program for its oil and gas assets in Egypt (the "Project"), including:(i) the development of the West Gharib and West Bakr producing assets in Egypt; (ii) TransGlobe’s 2013 exploration and appraisal program in Egypt of up to 48 onshore wells. - Operated Assets:West Bakr – the onshore West Bakr Field Concession, located in the Eastern Desert, Egypt, covers an area of 45 square kilometers across two development leases. TransGlobe acquired a 100% working interest in the West Bakr Concession agreement from The Egyptian Petroleum Development Co. Ltd. (of Japan) in December 2011, and is comprised of three onshore fields, receiving facilities and an oil export pipeline. The facilities were first commissioned in 1980 with current facilities including 32 producing development wells each with their own dedicated 2-3 km flowline or a line shared with adjacent wells, connected to two separate process stations. At each receiving station the oil is treated and stabilized via receiving manifolds, test tanks, receiving tanks, oil heaters, degassing and dehydration tanks. Separated produced water is treated and collected in purpose built lined or concrete water pits prior to disposal via re-injection via dedicated disposal or water injection wells (TransGlobe discontinued the practice of surface water disposal and this will remain the strategy for West Bakr produced water). Oil is exported via a 16km pipeline to GPC’s Bakr No. 1 Station which is subsequently transferred into the GPC operated transmission system and onward to the GPC operated Ras Gharib terminal on the coast of the Gulf of Suez. Neither the GPC transmission line nor Ras Gharib terminal are considered to be associated facilities.In addition, a separate field office block was commissioned in 2011 between the two receiving stations. Staff accommodations, a materials store and marshalling yard are situated at Ras Gharib with engineering offices in Cairo.West Gharib (Petrodara operating company) – abutting to the north, east and west of the West Bakr concession, the onshore West Gharib Field Concession, located in the Eastern Desert, Egypt, covers an area of 114 square kilometers across seven development leases. TransGlobe acquired a 100% working interest in the West Gharib Concession in 2007 and 2008, with the main stake purchased from Tanganyika Oil in September 2007. Production at the West Gharib concession commenced in 2000 from the Hana field. Currently 65 wells are in production across the concession with produced water reinjection being implemented via 6 injection wells. At the point of TransGlobe’s acquisition, wells were produced through single well batteries consisting of a pump jack, tank, and generator and subsequently transported by truck to the GPC Bakr No. 1 Station. However, recent focus has been to rationalize the facilities with the construction of multi-well batteries. These new facilities improve production separation by adding heat along with larger tank capacities to increase retention time and thereby reducing water volume previously trucked to GPC. Currently there are two new facilities in operation with an additional three to be constructed during 2013. TransGlobe are currently assessing feasibility options of integrating the field with existing West Bakr infrastructure along with the development of a pipeline export option.Further to the operating facilities, a field office with supporting accommodation space is located within the field boundaries as well as a materials warehouse and workshop areas. The Petrodara headquarters are located in Cairo. - Exploration Concessions:South Alamein - TransGlobe holds a 100% Working Interest in South Alamein, a 1,423 square kilometer onshore exploration concession located in the Western Desert, Egypt, following the acquisition of El Paso in June and Cepsa in July 2012. TransGlobe seeks to complete a total of 8 exploration wells of which 2 are appraisal wells during 2013. Currently, there are no operations in the South Alamein concession.South Mariut – TransGlobe acquired a 60% working interest in the onshore 3,350 square kilometer onshore South Mariut concession located in the north eastern area of the Western Desert through the El Paso acquisition. The remaining 40% is held by RWE, a German oil and gas E&P company. TransGlobe plans to drill 2 commitment wells during 2013.- Non-Operated AssetsEast Ghazalat – In 2011, TransGlobe farmed into a 50% working interest in the East Ghazalat block located in the Western Desert of Egypt, operated by Vegas oil and gas, a Greek oil and gas E&P company. East Yemen - TransGlobe holds 13.8% working interest in Block 32 and 20% working interest in Block 72. Block 32 has been producing since 2000 and is operated by DNO ASA, a Norwegian oil and gas E&P company, and Block 72 is an exploration block and is operated by Total, a French oil and gas E&P company. West Yemen - TransGlobe holds a 25% working interest in both Blocks S-1 and 75. The former is currently producing light crude oil with the latter an exploration concession. The blocks are operated by Occidental Petroleum, a U.S. oil and gas E&P company.