TransGlobe Energy Corporation Announces Its 2021 Year End Reserves

Source: www.oilegypt.com 3/7/2022, Location: Africa

TransGlobe Energy Corporation (TGL) ("TransGlobe") is pleased to announce the results of its independent reserves evaluation ("Reserves Evaluation") for the year ended December 31, 2021 as prepared by GLJ Ltd. ("GLJ"). All dollar values are expressed in US dollars unless otherwise stated.

HIGHLIGHTS

- Proved Developed Producing ("PDP") gross reserves increased 30% to 19.9 MMboe from 15.3 MMboe at year end 2020.
- Total proved ("1P") gross reserves increased ~23% to 28.0 MMboe (YE 2020: 22.8 MMboe) while total proved plus probable ("2P") gross reserves increased ~19% to 46.1 MMboe (YE 2020: 38.9 MMboe).
- TransGlobe replaced 199% and 211% of 2021 production (4.7 MMboe) on a 1P and 2P gross reserves basis, respectively (excluding economic factors).
- Net present value of future net revenues increased to $423 MM (2P reserves discounted at 10%, forecast pricing, after tax), 114% higher than year end 2020 ($198 MM).
- Canadian net present value of future net revenues (2P reserves discounted at 10%, forecast pricing, after tax) increased to $134 MM, 58% higher compared to 2020 primarily due to increased reserves at South Harmattan and an increase in forecast commodity pricing.
- Egyptian net present value of future net revenues (2P reserves discounted at 10%, forecast pricing, after tax) increased to $289 MM, 155% higher compared to 2020, principally due to the increased net entitlement share resulting from the Merged Concession Agreement as well as an increased Brent oil price forecast from year end 2020.

EGYPT

In Egypt, the Parliamentary ratification and President's signature into law in December 2021 of the agreement to merge, amend and extend the Company's three existing Eastern Desert concessions (West Gharib, West Bakr and North West Gharib) (the "Merged Concession Agreement") resulted in increases to both reserves volumes and values.

2P drilling additions of 2.4 MMbbls (1P: 1.4 MMbbls) resulted from successful drilling in the K and H field, while improved production performance and the term extension realized from the Merged Concession Agreement resulted in positive 2P technical revisions of 3.2 MMbbls (1P: 6.8 MMbbls). Egypt represents 65% and 58% of TransGlobe's reserves on a 1P and 2P basis, respectively.

CANADA

In Canada, continued success in the South Harmattan area has led to significant increases in both reserves volumes and values, providing the Company with a large inventory of high value development locations.

2P drilling additions of 5.7 MMboes (1P: 1.3 MMbbls) resulted from the 3 well drilling program in South Harmattan and associated undeveloped location bookings. To date TransGlobe has drilled 5 wells (5 net) in the South Harmattan area. Canada represents 35% and 42% of TransGlobe's reserves on a 1P and 2P basis, respectively.

Randy Neely, President & Chief Executive Officer of TransGlobe:

"We are thrilled with the updated year-end 2021 reserves. This puts a resounding stamp of justification on the years of hard work to both complete the Eastern Desert PSC consolidation and establish a second core operating area in Canada. Although improved commodity prices contributed to the increase in reserves and value, the quantum of the reserves increase is chiefly due to both the amended commercial terms in Egypt and the strong technical and operating work done in both Egypt and Canada. Our team has done a tremendous job over the past four plus years.

"With this chapter behind us, the next step will be to establish an appropriate balance between maintaining/ growing our business, while providing a meaningful return to our shareholders. We are particularly grateful to our strong core shareholder base who have weathered the long journey to re-establish ourselves as a strong participant in the marketplace, and we intend to address our distribution policy in the coming weeks."

RESERVES DETAIL

TransGlobe's 2021 Reserves Evaluation by GLJ uses the price forecast of the three consultants' average (GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Ltd.), dated January 1, 2022.

In Egypt the reserves include the effects of the Merged Concession Agreement in the Eastern Desert. The Reserves Evaluation includes 100% of TransGlobe's oil and gas properties and was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGEH"). Reserves shown below are Company gross reserves and are defined as the working interest share of reserves prior to the deduction of interests owned by others (burdens).


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