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TransGlobe Energy Provides Operational Update on Egypt

EASTERN DESERT

West Gharib, West Bakr, and North West Gharib (100% working interest, operated)

Operations and Exploration

Following mobilization of the rig from the Western Desert, the Company drilled a development oil well in the Eastern Desert at West Bakr. The HW-8 development well was drilled to a total depth of 1,640.5 meters, successfully encountering oil-bearing sands in the Yusr-C and Bakr formations.

The reservoir section was fully logged and evaluated, with an internally estimated 5.9 meters of net oil pay in the Yusr-C sand and 28.1 meters of net oil pay across four sands in the Bakr reservoir. The Bakr reservoir was brought into production late in the quarter at a field estimated 622 bbls/d.

HW-8 was the first well in TransGlobe’s 12 well development program in 2021 designed to grow oil production and increase reserves in the Eastern Desert.

The second well in this program, K-64, a development well in the Eastern Desert at West Bakr, was drilled to a total depth of 1,538 meters, successfully encountering oil-bearing sands in the Asl-A, Asl-B and Asl-D formations.

The reservoir section was fully logged and evaluated, with an internally estimated 20.9 meters of net oil pay in the Asl-A sand, 17.8 meters of net oil pay across the Asl-B sand and 9.7 meters of net oil pay in the Asl-D sand. Subsequent to the quarter, the Asl-B was brought into production at a field estimated 609 bbls/d in mid-July. The Asl-A is expected to be recovered through a future recompletion of this well and the Asl-D through other well drainage points.

In anticipation of increased gross fluid offtake to be generated by new projects in the new merged concession area, the Company has accelerated plans to upgrade its water management systems in H2-2021. Dependent upon anticipated rig efficiencies, the Company also expects to drill an additional well in K-field as a part of the 2021 drilling program.

The substantial capital investment in 2021 is supported by the Company’s previously disclosed merger of its three Eastern Desert concessions into a single agreement, currently awaiting ratification.

Production

Production averaged 9,917 bbls/d during the quarter, a decrease of 1% (133 bbls/d) from the previous quarter. The decrease was primarily due to natural declines prior to the bringing into production of the first 2021 Eastern Desert drill wells.

Production in July 2021 averaged ~10,611 bbls/d.

Sales

The Company sold 338.5 Mbbls of entitlement crude oil to EGPC and sold one cargo lifting of 498.6 Mbbls of entitlement crude oil to third-party buyers during the quarter. The overlift portion of the cargo (~129.5 Mbbls) was settled against outstanding receivables from EGPC during the quarter.

WESTERN DESERT

South Ghazalat (100% working interest, operated)

Operations and Exploration

Following evaluation of the reservoir pressure and Gas Oil Ratio (“GOR”) data from the initial production phase of the lower Bahariya reservoir at SGZ-6X in the South Ghazalat field, the well has been put on GOR control management to preserve reservoir pressure and maximize recovery. The well is currently producing at a field estimated 680 – 730 bbls/d of light oil with a ~24% watercut. Further reservoir pressure data is being collected to evaluate the impact of aquifer pressure support to the reservoir as that is activated.

With stronger oil prices and spare capacity available in the South Ghazalat production facility and dependent upon anticipated rig efficiencies, the Company expects to accelerate the drilling of an exploration well on the SGZ-7B prospect to the east of SGZ-6X. The earliest SGZ-7B could be drilled is Q4-2021.

Production

Production averaged 810 bbls/d during the quarter, an increase of 331% (622 bbls/d) from the previous quarter. The increase was due to the oil production impact of the SGZ-6X lower Bahariya recompletion over a whole quarter.

Production in July 2021 averaged ~697 bbls/d.

Sales

The Company sold 27.8 Mbbls of inventoried entitlement crude oil to EGPC during the quarter.

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