Here is the new ratification terms when completed

Here is the new ratification terms when completed !

ratification terms when completed


This Announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No.
596/2014 (“MAR”). Upon the publication of this Announcement, this inside information is now considered to be
in the public domain.

TRANSGLOBE ENERGY CORPORATION ANNOUNCES AN
AGREEMENT
TO MERGE, EXTEND AND MODERNIZE ITS EASTERN DESERT CONCESSIONS

AIM & TSX: “TGL” & NASDAQ: “TGA”
Calgary, Alberta, December 03, 2020 – TransGlobe Energy Corporation (“TransGlobe” or the “Company”)
announces it has reached an agreement with the Egyptian General Petroleum Corporation (“EGPC”) to
merge the Company’s three existing Eastern Desert concessions (the West Gharib, West Bakr and North
West Gharib concessions) into a new modernized concession agreement (the “Merged Concession” or
“Agreement”). The Agreement is subject to the usual Egyptian Parliamentary ratification and the
satisfaction of other closing conditions. All dollar values are expressed in US dollars unless otherwise stated.
KEY ELEMENTS OF THE MERGED CONCESSION
The West Gharib, West Bakr, and North West Gharib concessions, including all existing development
leases within these concessions, will be merged into the Merged Concession with a new 15-year
development term and a 5-year extension option.
Modernized financial concession terms promote increased investment and implementation of new
technology in the mature fields through:
o Improved cost recovery terms to support continued investment in higher-cost mature fields.
o Production sharing terms scaled to oil prices to support TransGlobe’s returns during lower oil prices
and government returns during higher oil prices.
o Improved netbacks and increased cash flows are expected to fund new investments in incremental
recovery projects.
Near-term operational netbacks (revenue less royalties, taxes and operating expenses) are
estimated to improve by the following ranges relative to Brent pricing assuming current
production levels, operating costs and historical differentials to Brent:
Brent Oil Price ($/bbl) Netback Increase ($/bbl)
$40 ~$5 to $7
$50 ~$7 to $9
$60 ~$9 to $11
Modernized terms are to be applied from the February 2020 effective date of the Merged
Concession


Incremental, internally estimated, Company Gross risked best estimate Economic Contingent Resource
volume of 59.1 million barrels oil (Company Contingent Resources are separate from Company
reserves; please see Advisory Regarding Oil and Gas Information later in this release).
Subject to final ratification, the Company will pay EGPC a signature bonus and an equalization (or
modernization) payment in installments. The Company anticipates that the equalization payment and
signature bonus will be funded from existing resources and expected improved cash flows.
o The equalization payment compensates EGPC for the improved fiscal terms on the underlying base
forecasted production.
o An initial equalization payment of $15 million and signature bonus of $1 million are due on
ratification, with five further annual equalization payments of $10 million each being made over
five years (beginning February 1, 2022 until February 1, 2026).
Minimum financial work commitments of $50 million per each five-year period of the primary
development term, commencing on the February 1, 2020 effective date. All investments which exceed
the five-year minimum $50 million threshold will carry forward to offset against subsequent five-year
commitments.
o For context, the Company’s average annual capital expenditures in Egypt over the last five full
calendar years has been greater than $30 million per year, and the Company expects to fund these
future investments from existing resources and future cash flows.
Merge the existing Joint Venture Operating Companies’ (Dara Petroleum Company, West Bakr
Petroleum Company and North West Gharib Petroleum Company) assets, facilities, and infrastructure
into a new Joint Venture Operating Company in order to substantially increase operational efficiencies.


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