• Corporate production averaged approximately 14.9 MBoepd during June
• Received net proceeds of $27.2 million in mid-July for the June cargo of 450 Mbbls
• Sold 501 Mbbls of entitlement oil July 19 (3rd cargo of 2018), priced off July Brent, proceeds expected in 30 days
• Western Desert: drilled NW Sitra 9 exploration well (Cretaceous target) to a total depth of 5,950 feet and abandoned as dry, rig moving to South Ghazalat for two exploration wells (Cretaceous targets).  Rigged up on NW Sitra 12 exploration well (Jurassic target), finalizing acceptance testing with drilling expected to commence in the next week
• Eastern Desert: mobilized a drilling rig to M field in West Bakr to commence a three well development drilling program (2 in M field and 1 well in NWG 38 pool)

PRODUCTION

June production averaged ~14.9 MBoepd (12.3 MBopd Egypt, 2.6 MBoepd Canada)

MARKETING

In Egypt, the Company completed two crude oil cargo sales from inventory during the second quarter.  The first cargo was lifted in April (~452 Mbbls) for proceeds of ~$26.5 million and the second cargo was lifted in June (~450 Mbbls) with proceeds of ~$27.2 million received mid-July.  Total sales including direct sales to EGPC during the second quarter totaled approximately 1.0 million barrels of entitlement oil from inventory for proceeds of ~$58 million before hedging adjustments.

In addition, the Company lifted ~501Mbbls of entitlement crude oil on July 19th, with proceeds due 30 days from lifting (July Brent pricing less quality adjustments for Ras Gharib blend).  The Company expects the final lifting of the year to occur in Q4 2018.

ARAB REPUBLIC OF EGYPT

Western Desert
In North West Sitra (“NWS”) the Company drilled the NWS 9 exploration well to a total depth of 5,950 feet targeting a stacked Cretaceous prospect.  The well did not encounter hydrocarbons in the targeted zones and was abandoned. Although disappointing, NWS 9 has provided key information that will be integrated into the regional database and prospect mapping for the area. The NWS 9 well cost was ~$1.0 million to drill and abandon.

The rig is now moving to the South Ghazalat #1 to drill the first of two planned exploration wells in the South Ghazalat concession, targeting Cretaceous prospects.

The larger 2,000 HP drilling rig is rigged up on NWS 12 and is expected to commence drilling in the next week, following the close out of acceptance testing. NWS 12 is targeting a deeper stacked Cretaceous/Jurassic prospect with a planned drilling time of approximately 60 days. 

The Company requested and received a six-month extension to the first exploration phase (now expiring January 7, 2019) in NWS to drill and evaluate the Phase 1 exploration commitment wells (NWS 9 & 12).  Prior to January 7, 2019, the Company can elect to enter the second and final exploration phase (3.0 years after the extension of phase one), which has a two well ($6.0 million) work commitment and a mandatory relinquishment of 30% of the original concession area not held by development leases.

Eastern Desert
The Company has mobilized a third drilling rig in Egypt and is preparing to drill the first of three planned development wells in the Eastern Desert. 

In West Bakr, drilling is expected to commence on the M-North well in the next few days.  M-North is the first of two wells targeting the producing Asl formations in the M field.  Following the M wells, the drilling rig will move to NW Gharib to drill NWG 38A-7. 

The NWG 38A-7 well is targeting the 38A Red Bed pool in a structurally lower position as a potential water injector approximately 0.4 kilometers south of the NWG 38A Injector well (drilled Q2) which encountered 92 feet of Red Bed with an internally estimated net oil pay of approximately 34 feet.  The NWG 38A Injector well was completed and confirmed oil in the lower portion of the Red Bed. The NWG 38AInjector well will require a fracture stimulation prior to producing (similar to NWG 38A-1).  Should the NWG 38A-7 well also encounter additional oil column, the Company has planned an additional well further south at NWG 38A-8 as a contingency for reservoir pressure support.

In addition, production from the four well (Arta 48, Arta 54, NWG 1AX, NWG 5X) stimulation program completed during May/June targeting Nukhul and tight Red Bed conglomerate wells, has averaged approximately 775 Bopd (~195 Bopd/ well) during the respective first 30 days of production after recovering frac fluid.