TransGlobe Energy Corporation has reached an agreement with the Egyptian General Petroleum Corporation (EGPC) to merge the three existing Eastern Desert concessions (West Gharib, West Bakr and North West Gharib concessions) into a new modernised concession agreement
The agreement is subject to the usual ratification by the Egyptian Parliament and the satisfaction of the other closing conditions.
Randy Neely, president and CEO, stated, “After a lengthy and constructive negotiation, I believe we have arrived at an incredible win-win amendment for both TransGlobe and EGPC. The efficiencies gained from the consolidation of our Eastern Desert concessions and the improved netbacks and extended term are expected to provide TransGlobe with the fiscal incentive and time to unlock meaningful additional reserves and production through modern technology and optimisation of infrastructure. This will also allow us to move forward with important ESG initiatives to improve our environmental footprint and continue to be a major employer in the Ras Gharib region for the foreseeable future.
“We intend to continue to manage the finances of the company with a conservative approach and expect that, under a reasonable range of oil prices, the company will be able to fund the equalisation payments and a continuous capital investment programme from existing resources and cash flows. In addition, as soon as practicable, direct returns to our shareholders will be prioritised.
“This agreement is a critical first step in achieving our stated goal of becoming a leading independent Middle East/North Africa region cashflow-focused energy producer. The Merged Concession will provide the platform to allow us to increase our efforts on completing complementary mergers and acquisitions to further support this objective.
“We appreciate the commitment and vision of the leadership team at EGPC to extending the life of these mature oil fields, and we look forward to working closely with them to realise the significant mutual benefits of this Merged Concession. In the immediate future, we will begin to plan for increased activities that should in the near to medium term arrest and reverse recent production declines.”
