TransGlobe Energy Corp., Calgary, will reduce its 2020 capital budget to $7.1 million from $37.1 million and reduce its drilling program following a sharp drop in oil and gas prices from those originally used as the basis for its program, the company said Mar. 11.
In February, the company reported its $37.1-million drilling program that included 16 wells in Egypt and four wells in Canada (OGJ Online, Feb. 5, 2020).
Now, the company will allocate $5 million of the now $7.1-million budget (before capitalized G&A) to developing its assets in Egypt. The primary focus of which is drilling the HW-2A development well at West Bakr, targeting the Yusr sands. This well spudded prior to the price disruption.
The $2.1 million Canada program consists of one horizontal (multi-stage stimulated) well targeting the Cardium light oil resource in South Harmattan (the 100/13-16-029-03W5/0 well). This well also spudded prior to the price disruption. The well will be drilled but will not be completed in order to preserve the economic value of the flush production that comes from the initial phase of production for this type of well.
Total corporate production is now expected to be 13,300-14,300 boe/d for 2020 with a 93% weighting to oil and liquids. Egypt oil production is expected to be 11,300-12,100 b/d of oil this year. Canadian production is expected to be 2,000-2,200 boe/d in 2020.