March 28, 2011 / 3:45 PM / 7 years ago

UPDATE 1-Transglobe Energy to buy assets in Egypt

* Deal valued at $60 mln

* Transglobe will get three fields with 28 producing wells

* Deal to immediately add to funds flow from operations, net income (Follows alerts)

March 28 (Reuters) - TransGlobe West Bakr Inc, a unit of TransGlobe Energy Corp , has agreed to buy all the Egyptian assets of The Egyptian Petroleum Development Co Ltd (of Japan), for $60 million.

The Egyptian Petroleum Development Co is the operator of the West Bakr Concession through its joint venture operating company West Bakr Petroleum Co.

Transglobe will get three fields with 28 producing wells, with access to production of 4000 barrels of oil per day and 7.4 million barrels of proved reserves.

The deal is effective retrospectively from July 1, 2010, and the final price would be adjusted accordingly from that date to the closing date of the deal, which is yet to be announced, said Lloyd Herrick, chief operating officer of Transglobe.

“So what happens from July 1 last year to say May 1 this year, for those months in between, the revenue and expenses will be to our account, so if there’s more revenue than expenses up to that closing date, then you pay them less cash.”

The company expects the deal to immediately add to funds flow from operations and net income, it said in a statement.

Transglobe also said it intends to fund the acquisition with working capital and existing credit facility.

Calgary, Alberta-based TransGlobe’s shares were trading up 6 percent at C$14.50 on Monday morning on the Toronto Stock Exchange. (Reporting by Amruta Sabnis in Bangalore; Editing by Jarshad Kakkrakandy)

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