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Calgary Herald: TransGlobe completes $60-million US Egypt acquisition

TransGlobe Energy has completed a $60-million US acquisition of the West Bakr play in Egypt.
04.01.12 | Interesting article at Calgary Herald

TransGlobe Energy has completed a $60-million US acquisition of the West Bakr play in Egypt, adding needed barrels to Middle Eastern operations affected by Yemen’s civil unrest.

The deal, approved by the Egyptian government Dec. 29, immediately brings 1,240 barrels per day of net oil production to the Calgary-based company, TransGlobe said Tuesday.

The assets were acquired from the Egypt Petroleum Development Co. Ltd. (of Japan) in an agreement announced last March.

Gross production from the leases, located next to TransGlobe’s West Gharib concession onshore in the western Gulf of Suez rift basin, totalled 4,350 bpd oil in December, the company said.

The two development leases are valid until 2020 under a production sharing concession with Egypt, with an optional five-year extension.

Closing the deal in the middle of a tumultuous regime change in Egypt was positive for TransGlobe, considering uncertainties around approvals, said Gerry Donnelly, with FirstEnergy Capital Corp. in London, England.

“The closure of the West Bakr transaction is material for the company’s 2012 production levels, not only helping to offset the Yemen block S1 shut-in production but also potentially serving to increase overall working interest production levels in excess of 20,000 barrels per day by mid-2012,” Donnelly said.

TransGlobe saw fourth quarter production from its Middle Eastern operations drop 12 per cent to 11, 779 bpd because of technical issues in Egypt and civil unrest in Yemen.