(Drill rig EDC-64 at the SGZ-6X well. Image via TransGlobe Energy Corporation.)
The oil and gas market has been undeniably volatile in recent months, but experts inside the market expect a big comeback, especially in the Middle East, where 615 projects are scheduled to commence operations by 2025.
This comes via the latest report from
ResearchandMarkets.com, whose analysts predict 77 of these projects will be upstream, midstream would be 143, refinery at 83 and petrochemical would the highest with 312 projects, respectively.
This is good news for any operators in the Middle East, such as Calgary-based exploration and development company
TransGlobe Energy Corporation (TSX: TGL, NASDAQ: TGA, Forum).
In addition to its Canadian operation, the cash flow-focused oil and gas operator has another project in the Arab Republic of Egypt, where it generates most of its revenue.
Its blocks in Eastern Desert Egypt include West Gharib, West Bakr, NW Gharib and blocks in Western Desert Egypt includes South Alamein, South Ghazalat and North West Sitra.
In the Western Desert, TGL announced in
late March 2021 that it had concluded its recompletion of the SGZ-6X well to the deeper, more prospective lower Bahariya reservoir. The well began production at a field-estimated production rate of roughly 3,600 barrels of oil per day (bopd) of light oil.
The well was restricted to around 1,000 bopd of light-oil (field-estimated) on a reduced choke to facilitate reservoir data gathering and the preparation of an effective reservoir management plan for the lower Bahariya at this location. A rig has now rigged down at SGZ-6X and is mobilizing to these concessions, where operations on the budgeted 12-well 2021 drilling program are expected to start by April 2021.
TransGlobe’s production last year averaged
11,147 barrels per day (bbl/d) in Egypt alone, with sales averaging $35.94 (USD) / bbl.
Meanwhile, Kurdistan-focused oil development and exploration company
ShaMaran Petroleum Corporation (TSX-V: SNM, OTC: SHASF, Forum) holds a 27.6% working interest, through its wholly-owned subsidiary General Exploration Partners Inc., in the Atrush Block.
The Atrush Block is located in the Kurdistan region of northern Iraq. In 2021 the Atrush field gross average daily production is expected to range from 39,000 barrels of oil per day to 44,000 bopd. With further development, the field offers significant production growth potential.
In 2020, oil production increased
39% (2020 vs 2019), with cumulative production of 40 million barrels achieved on January 4th, 2021 despite a significantly reduced 2020 development program due to the global pandemic and first quarter 2020 collapse of crude oil prices. Q4 2020 saw an average production of approximately 40,800 bopd, which was lower than the year’s average due deferral of capital development wells, and operational interventions aggregated in this quarter. Full year 2020 average production of approximately 45,100 bopd in line with 2020 guidance.
President and Chief Executive Officer of ShaMaran, Dr. Adel Chaouch commented that in 2020, the team had witnessed the profound impact of the global COVID-19 pandemic and the collapse of crude prices on the oil and gas industry worldwide.
“Despite these tremendous challenges, ShaMaran remained resilient, delivering on its targets with a record production in excess of 16MM barrels in Atrush and a continuation of full replacement of 2P reserves year on year. The Company also successfully implemented rigorous cost reduction measures and secured new agreements with the bondholders that not only resolved its liquidity shortfall but also that put the Company on a stronger financial footing.”
Both companies, like many others in a similar space, have entered 2021 cautiously optimistic, despite continuous uncertainties in the global market.
Investors should stay focused on oil and gas players who continue to show financial discipline to generate strong cash flow. As markets recover, those who are truly worthy plays will be well positioned to enhance their production growth, and benefit from new market opportunities.
FULL DISCLOSURE: TransGlobe Energy Corporation and ShaMaran Petroleum Corporation are clients of Stockhouse Publishing.