TransGlobe Energy Corporation Announces First Quarter 2014 Financial and Operating Results

TransGlobe Energy Corporation Announces First Quarter 2014 Financial and 
Operating Results 
CALGARY, ALBERTA -- (Marketwired) -- 05/07/14 --   TransGlobe Energy
Corporation ("TransGlobe" or the "Company") (TSX: TGL)(NASDAQ: TGA)
is pleased to announce its financial and operating results for the
three months ended March 31, 2014. All dollar values are expressed in
United States dollars unless otherwise stated.  


 
 
--  First quarter production averaged 18,067 Bopd (17,932 Bopd sales); 
--  First quarter funds flow of $32.5 million; 
--  First quarter earnings of $16.7 million (includes a $3.5 million
    unrealized loss on convertible debentures); 
--  Spent $14.3 million on exploration and development during the quarter; 
--  Drilled nine wells in the quarter resulting in seven oil wells, one dry
    hole, and one well that was suspended for a future sidetrack; 
--  Ended the quarter with $107.6 million in cash and cash equivalents;
    positive working capital of $258.9 million or $171.1 million net of debt
    (including convertible debentures); 
--  Collected $29.4 million in accounts receivable from the Egyptian
    Government during the quarter; 
--  Received all access approvals for 15 of 18 wells at North West Gharib;
    drilling is expected to commence in June. 

Aconference call to discuss TransGlobe's 2014 first quarter results
presented in this news release will be held Wednesday, May 7, 2014 at
9:00 AM Mountain Time (11:00 AM Eastern Time) and is accessible to
all interested parties by dialing 416-340-2218 or toll free at
1-866-225-0198 (see also TransGlobe's news release dated May 1,
2014). The webcast may be accessed at
http://www.gowebcasting.com/5453 


 
 
FINANCIAL AND OPERATING RESULTS                                           
(US$000s, except per share, price, volume amounts and % change)           
 
                                          Three months ended March 31     
                                      ----------------------------------- 
Financial                                     2014        2013   % Change 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
Oil revenue                                153,140     159,915         (4)
Oil revenue, net of royalties               78,366      79,366         (1)
Production and operating expense            19,578      14,532         35 
General and administrative expense           7,008       7,100         (1)
Depletion, depreciation and                                               
 amortization expense                       13,165      11,180         18 
Income taxes                                19,281      23,921        (19)
Funds flow from operations                  32,487      36,005        (10)
 Basic per share                              0.44        0.49            
 Diluted per share                            0.43        0.44            
Net earnings                                16,692      24,878        (33)
Net earnings - diluted                      16,692      21,427        (22)
 Basic per share                              0.22        0.34            
 Diluted per share                            0.22        0.26            
Capital expenditures                        14,365      18,193        (21)
Working capital                            258,858     277,997         (7)
Long-term debt, including current                                         
 portion                                         -      17,097       (100)
Convertible debentures                      87,765      93,842         (6)
Common shares outstanding                                                 
 Basic (weighted average)                   74,637      73,805          1 
 Diluted (weighted average)                 75,520      82,228         (8)
Total assets                               692,341     672,675          3 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
 
Operating                                                                 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
Average production volumes (Bopd)           18,067      18,001          - 
Average sales volumes (Bopd)                17,932      17,909          - 
Average price ($ per Bbl)                    94.89       99.21         (4)
Operating expense ($ per Bbl)                12.13        9.02         35 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 

CORPORATE SUMMARY 
TransGlobe Energy Corporation's ("TransGlobe" or the "Company") total
production averaged 18,067 barrels of oil per day ("Bopd") during the
quarter which is down slightly from Q4-2013 production. 
In the Eastern Desert the Company is currently proceeding with lease
construction on the approved NW Gharib wells. Drilling in NW Gharib
is expected to commence in June, with a second rig arriving in July.
Year-to-date the Company has drilled eleven wells in the Eastern
Desert resulting in nine oil wells, one water injector well and one
well which was plugged back to surface casing and suspended for a
future sidetrack. The Company has received access approvals to begin
the seismic acquisition program in the NW Gharib, SW Gharib and SE
Gharib blocks, and expects seismic acquisition to commence in the
third quarter of 2014 subject to crew availability. The Eastern
Desert seismic acquisition program will include 1,000+ square
kilometers of 3-D and 300+ kilometers of 2-D. 
In the Western Desert the Company participated in three wells
year-to-date at East Ghazalat, resulting in two oil wells and one dry
hole. The 3-D seismic acquisition program for the South Ghazalat
block is expected to cover 800 square kilometers. TransGlobe has
applied for and received military access approvals for South
Ghazalat. 
Dated Brent oil prices averaged $108.18 in the first quarter of 2014,
which was consistent with Q4-2013 prices. Egypt crude is sold at a
quality discount to Dated Brent and received a blended price of
$94.43 during the quarter. The Company had funds flow of $32.5
million and ended the quarter with positive working capital of $258.9
million or $171.1 million net of debt (including the convertible
debentures). The Company collected $29.4 million of accounts
receivable from the Egyptian government during the quarter, resulting
in an accounts receivable balance of $174.0 million as at March 31,
2014. 
The Company had net earnings in the quarter of $15.6 million, which
included a $3.5 million non-cash unrealized loss on convertible
debentures. The $3.5 million loss represents a fair value adjustment
in accordance with IFRS, but does not represent a cash loss or a
change in the future cash outlay required to repay the convertible
debentures.  
On March 15, 2014, TransGlobe announced a proposed merger with
Caracal Energy Inc. ("Caracal"). On April 14, 2014, the arrangement
agreement was terminated due to the fact that Caracal received an
unsolicited cash offer to acquire all of the outstanding shares of
Caracal, and the unsolicited offer constituted a "Superior Proposal"
under the terms of the arrangement agreement. Accordingly, Caracal
terminated the agreement and paid TransGlobe the reverse termination
fee of $9.25 million in accordance 
with the terms of the agreement.
The Company was disappointed with the termination of the agreement to
merge with Caracal. Although the Caracal merger was a much larger
transaction than what we had been seeking, it met all the attributes
of a deal that would have increased shareholder returns while
maintaining our stated strategy of onshore, operated oil development
and exploration in our region of expertise. Management and the board
of directors remain committed to expanding the Company's portfolio of
assets to increase returns to shareholders and mitigate the risks
inherent in a concentrated portfolio, particularly political or
economic concentration. In addition, TransGlobe has obtained the
required approvals for the previously announced (and subsequently
suspended) dividend of $0.05/share per quarter. TransGlobe will also
pay a special dividend of $0.10/share from the proceeds of the
reverse termination fee received from Caracal. 
The Annual General and Special Meeting of Shareholders was
rescheduled to June 10, 2014, which was the earliest date available
following the termination of the Caracal arrangement agreement.  
The Company remains in a strong financial position and is embarking
on an exciting period of high potential exploration commencing with
drilling at NW Gharib, in parallel with a large 3-D seismic
acquisition program on the new concessions. The Company believes that
the same structural configuration that created the pools found in the
West Gharib and West Bakr concessions is present in the NW Gharib, SW
Gharib and SE Gharib blocks, which will be tested over the next few
years. In addition, the Company will continue to pursue business
development opportunities both within and outside of Egypt. 


 
 
             Annual General and Special Meeting of Shareholders            
             Tuesday, June 10, 2014 at 3:00 p.m. Mountain Time             
                   Centennial Place West, Ten Peaks Room                   
          3rd Floor, 250 5th Street S.W., Calgary, Alberta, Canada         

OPERATIONS UPDATE 
ARAB REPUBLIC OF EGYPT 
West Gharib, Arab Republic of Egypt (100% working interest, operated) 
Operations and Exploration 
Five wells were drilled in the Arta/East Arta area during the first
quarter resulting in two Lower Nukhul oil wells, two Upper Nukhul oil
wells, of which one well was plugged back to surface casing and
suspended for a future sidetrack. The two Lower Nukhul oil wells were
completed and placed on production at initial rates of 300 Bopd and
700 Bopd respectively. The two Upper Nukhul wells are scheduled for
completion and stimulation during the second quarter. 
Subsequent to quarter-end, one additional development oil well was
drilled at Hana, which is scheduled for completion in May. The
drilling rig then moved to the Arta well which was plugged and
suspended in the first quarter for a potential sidetrack location and
is currently drilling. The drilling rig is scheduled to remain in
West Gharib during the first half of 2014 and is scheduled to move to
the North West Gharib concession for exploration/appraisal drilling
for the remainder of 2014. 
Production 
Production from West Gharib averaged 11,100 Bopd to TransGlobe during
the first quarter, a 7% (883 Bopd) decrease from the previous
quarter. 
Production to TransGlobe averaged 10,230 Bopd in April. 
Production at West Gharib thus far in the year has been adversely
impacted by a combination of lower than expected drilling results,
premature failures of new progressive cavity pumps ("PCPs") and
increased water cuts associated with natural declines. 
The two Arta Lower Nukhul development wells drilled early in Q1
encountered approximately 50% less net pay at the top of the
structure. The two wells are currently on production at approximately
1,000 Bopd combined, which is 1,000 Bopd less than in the original
2014 plan. 
In 2013, the Company received several consignments of PCPs from a new
manufacturer who was the successful bidder in the 2013 tender
process. The new pumps were used to replace existing PCPs and for new
wells starting in late 2013 / early 2014. Unfortunately approximately
60% of the new pumps failed prematurely from as early as a few weeks
up to three months, which is significantly less than the historical
run times of 1 to 2 years for PCPs in West Gharib. The poor PCP
performance has adversely impacted 2014 production due to increased
down time associated with the more frequent pump changes, slower
response time for pump changes due to increased demands on service
rig availability and a shortage of properly sized replacement pumps
which has impacted well optimization plans. Approximately 40% of the
West Gharib production was produced using PCPs with the balance
produced using sucker rod pumps. The PCPs are often used for higher
volume producers, which further impacts production when shut-in for
pump changes. The Company is working with the pump manufacturer to
determine if the problem is an elastomer design issue, a
manufacturing issue for this batch of pumps, or some combination of
both. The Company received a new consignment of pumps from this
supplier which may or may not have similar problems depending upon
the root cause of the failures. Concurrently the Company placed a
special order for additional pumps with another supplier/manufacturer
which are expected to arrive in Egypt early in the third quarter. The
Company is currently tendering a 2 year supply agreement for PCPs.
This contract is expected to be awarded by early June, at which time
the Company can procure a proper supply of new pumps. It is estimated
that the PCP failures impacted 2014 average Q1 production by
approximately 1,000 Bopd and will continue to impact future
production until the faulty pumps are replaced with more reliable
pumps. Given the current outlook for the supply chain delivery time,
we do not expect the pump situation to be fully resolved and all
wells properly optimized until Q4-2014. 


 
 
Quarterly West Gharib Production                                           
 (Bopd)                                  2014             2013             
---------------------------------------------------------------------------
                                          Q-1       Q-4       Q-3       Q-2
---------------------------------------------------------------------------
Gross production rate                  11,100    11,983    12,274    12,829
TransGlobe working interest            11,100    11,983    12,274    12,829
TransGlobe net (after royalties)        6,350     6,600     6,865     7,066
TransGlobe net (after royalties and                                        
 tax) (i)                               4,562     4,592     4,812     4,995
---------------------------------------------------------------------------
(i) Under the terms of the West Gharib Production Sharing Concession,      
 royalties and taxes are paid out of the Government's share of production  
 sharing oil.                                                              

West Bakr, Arab Republic of Egypt (100% working interest, operated) 
Operations and Exploration 
The Company drilled three oil wells during the first quarter (two in
the K-field and one in the H-field). The first K-field well
encountered oil in the Asl A, B and E which was completed in the Asl
E and placed o
n production at an initial rate of 190 Bopd in late
January. The second K-field well encountered oil in the Asl A, which
was completed and is producing approximately 20 Bopd due to high
water cuts. The H-field well only encountered oil in the Bakr
formation and was placed on production at the end of March at an
initial rate of 30 Bopd. 
Subsequent to quarter end, the Company drilled two wells in the
H-field resulting in an oil well and a water injection well for the
H-field water flood. The oil well encountered oil pay in the three
Yusr zones (A, B & C) and will be completed in the lower most Yusr C
zone this month. 
The rig is currently drilling in the K-field and it is expected that
it will continue working in West Bakr throughout 2014. 
Production 
Production from West Bakr averaged 5,757 Bopd to TransGlobe during
the first quarter, a 4% (236 Bopd) increase from the previous
quarter. Production increases compared to 2013 are attributable to
new drilling and successful well work over activities. 
Production averaged 5,240 Bopd in April. In general 2014 production
is behind plan due to lower production from new wells, which is a
combination of completing multi-zone wells in the deeper formations
first (which have lower productivity due to thinner zones and
structural proximity to water) along with mixed early drilling
results in 2014. 


 
 
Quarterly West Bakr Production                                             
 (Bopd)                                  2014             2013             
---------------------------------------------------------------------------
                                          Q-1       Q-4       Q-3       Q-2
---------------------------------------------------------------------------
Gross production rate                   5,757     5,521     5,393     4,889
TransGlobe working interest             5,757     5,521     5,393     4,889
TransGlobe net (after royalties)        2,024     2,026     1,488     1,624
TransGlobe net (after royalties and                                        
 tax) (i)                               1,611     1,631     1,102     1,274
---------------------------------------------------------------------------
(i) Under the terms of the West Bakr Production Sharing Concession,        
 royalties and taxes are paid out of the Government's share of production  
 sharing oil.                                                              

North West Gharib Block, Arab Republic of Egypt (100% working interest) 
Operations and Exploration 
During the fourth quarter of 2013 and the first quarter of 2014 the
Company prepared and submitted an initial 18 wells for the necessary
approvals on the North West Gharib ("NWG") block in the Eastern
Desert. The Company has received environmental approval for 18 wells
and military access approval for the first 15 wells submitted, with
the remaining approvals anticipated in the coming weeks. The Company
is proceeding with lease construction on the approved wells and is
finalizing a long term drilling contract for a 1,200 horsepower
("hp") drilling rig which is expected to start drilling on NWG #1 in
June. The NWG #1 well is targeting an Upper/Lower Nukhul prospect
immediately north of the West Gharib main Arta Lower Nukhul pool. In
addition, the drilling rig currently in West Gharib is scheduled to
move to NWG in July and remain in NWG for the balance of the year. 
The Company has identified 79 drilling locations based on existing
3-D seismic and geological modeling of the area. Based on current
mapping the Company has internally estimated a prospective resource
of 71 million barrels on an un-risked deterministic basis for the NWG
block. The 2014 drilling program will target up to 58 million barrels
of the total 71 million barrels of prospective resource identified to
date. 
New Exploration Blocks, Eastern & Western Desert (100% working
interest, operated) 
Exploration Seismic 
Based on surface and remote-sensing mapping, the Company believes the
same structural configuration that created the pools found in the
West Gharib concession is likely present in the NWG, SW Gharib
("SWG") and SE Gharib ("SEG") blocks. The historical field size
distribution data indicates that the average field size in the
broader onshore Gulf of Suez (Eastern Desert) area is roughly 20
million barrels per field of recoverable resource. The Company has
identified an additional 15 areas of interest ("leads") in the NWG
block, four leads on the SWG block and two leads on the SEG block
that will be followed up and further refined by field mapping and the
high-resolution seismic acquisition program. The Company has approved
a large (1,000+ square kilometers of 3-D and 300+ kilometers of 2-D)
seismic acquisition program for the Eastern Desert in 2014. The
Company has submitted and received the necessary military approvals
for the planned Eastern Desert seismic program. The Company is
targeting early Q3 to commence seismic acquisition in the Eastern
Desert. 
In the Western Desert, the Company will conduct an 800 square
kilometer 3-D seismic acquisition program during the initial
evaluation of the South Ghazalat concession. During the quarter the
Company submitted the applications for and received the necessary
military approvals. This large block is situated on the western
margin of the prolific Abu Gharadig Basin, immediately west of the
non-operated East Ghazalat block, where a Jurassic gas-condensate
discovery was made and announced late in 2013. 
The total seismic program (approximately 1,800 square kilometers of
3-D seismic and 300 kilometers of 2-D seismic) is out to tender, with
bids due in early May. It is expected that the contracts will be
finalized and awarded during the second quarter. The Company's target
is to commence acquisition in the Eastern Desert during third quarter
of 2014 subject to crew availability. It is expected the full
program, providing broad coverage of the new concessions, will be
completed in early 2015. 
East Ghazalat Block, Arab Republic of Egypt (50% working interest) 
Operations and Exploration 
The Company participated in two wells during the quarter resulting in
one oil well at Safwa and one dry hole at East Ghazalat #3.
Subsequent to the quarter an additional oil well was drilled on the
Safwa development lease. The drilling rig was released following the
completion of the three well drilling program. 
The first Safwa well was placed on production in mid-March at an
initial flowing rate of 680 Bopd. The second Safwa well was placed on
production in April at an initial pumping rate of 560 Bopd. 
The operator filed and received approval for the North Dabaa
development lease which includes 6 development blocks (approximately
18 square kilometers), effective February 18, 2014. The Company has
approved an exploration/appraisal well offsetting the North Dabaa
gas/condensate discovery (announced November 13, 2013 in the third
quarter press release) as part of the 2014 capital budget. The North
Dabaa #2 well is planned to commence drilling in the third quarter
subject to rig availability. 
Production 
Production from East Ghazalat averaged 868 Bopd (434 Bopd to
TransGlobe) during Q1, a 30% increase from the previous quarter.
Production increases are attributed to the new Safwa producer which
effectively doubled field production in mid-March. 
The Safwa field production averaged 1,580 Bopd (790 Bopd to
TransGlobe) in April with the addition of the second Safwa
development well drilled in April. 


 
 
Quarterly East Ghazalat Production                                         
 (Bopd)                                  2014             2013             
---------------------------------------------------------------------------
                                          Q-1       Q-4       Q-3       Q-2
---------------------------------------------------------------------------
Gross production rate                     868       670       421       786
TransGlobe working interest               434       335 
      211       393
TransGlobe net (after royalties)          218       168       106       189
TransGlobe net (after royalties and                                        
 tax) (i)                                 174       134        84       149
---------------------------------------------------------------------------
(i)Under the terms of the East Ghazalat Production Sharing Concession,     
 royalties and taxes are paid out of the Government's share of production. 

South Alamein, Arab Republic of Egypt (100% working interest, operated) 
Operations and Exploration 
The Company has not provided guidance for any wells in 2014 due to
the prolonged delays in receiving military approvals for new wells
primarily in the central portion of the concession which includes the
Boraq discovery. The Company has negotiated and received EGPC
approval that the final exploration period for approximately 800
square kilometers of the concession (which has been deemed non
accessible by the military due to ongoing training and other
activities in the area) will be suspended effective July 8, 2012. The
South Alamein concession was scheduled to reach the end of the final
exploration period on April 4, 2014. Effective April 4, 2014 the
remaining exploration lands outside of the restricted access zone
were relinquished in accordance with the concession agreement. The
relinquished lands were evaluated and were not considered
prospective. The remaining lands and the South Alamein concession
agreement are extended until such time as military access is
approved, at which time the Company will have approximately 20 months
to complete additional exploration and appraisal in the final
exploration phase. All other provisions of the South Alamein
concession agreement (including historical cost pools of
approximately $92.0 million) remain in place. The current South
Alamein concession lands include the Boraq discovery and the
remaining exploration prospects of interest. The Company continues to
actively engage the military to find solutions which will provide the
access to the remaining concession area. 
The Company has the financial capacity to increase the 2014 capital
program if the necessary approvals can be obtained in 2014. 
REPUBLIC OF YEMEN 
Block 32, Republic of Yemen (13.81% working interest) 
Operations and Exploration 
No wells were drilled during the first quarter. 
Production 
Sales production from Block 32 averaged 938 Bopd (130 Bopd to
TransGlobe) during the quarter. The reported gross sales production
rate represents the amount of oil that was lifted and sold during the
quarter. It is expected that sales production rates and the field
production rates will vary quarter to quarter depending on the timing
of tanker liftings during the respective quarter. 
The actual field production during the first quarter averaged 968
Bopd (134 Bopd to TransGlobe) which is approximately 50% lower than
the previous quarter due to pipeline and general service/supply
interruptions. Production from Block 32 was shut-in February 9 due to
tribal issues which have affected service and supplies for the field
operations in the region. Limited production operations recommenced
February 25 following the partial resumption of services. Some
progress has been made over the past 3 months, however, access to
diesel continues to be the main impediment to production. A portion
of the Tasour field is on production using diesel from the Tasour
diesel topping plant; the balance of the Tasour field and the Godah
field were shut-in. 
Production from the block averaged 833 Bopd (115 Bopd to TransGlobe)
during April. The Godah field, which produces approximately 900 Bopd
(125 Bopd to TransGlobe) was restarted in early May. 


 
 
Quarterly Block 32 Production and                                          
 Sales (Bopd)                            2014             2013             
---------------------------------------------------------------------------
                                          Q-1       Q-4       Q-3       Q-2
---------------------------------------------------------------------------
Gross field production rate               968     1,995     2,310     2,211
Gross sales production rate               938     2,718     1,673     3,100
TransGlobe working interest               130       375       231       428
TransGlobe net (after royalties)          103       283       169       264
TransGlobe net (after royalties and                                        
 tax) (i)                                  94       256       150       211
---------------------------------------------------------------------------
(i) Under the terms of the Block 32 Production Sharing Agreement, royalties 
and taxes are paid out of the Government's share of production.             

Block 72, Republic of Yemen (20% working interest) 
Operations and Exploration 
No new wells were drilled during the quarter. The joint venture
partners initially approved the Gabdain #3 exploration well in the
2013 budget, subject to the resolution of logistic/security issues in
the area which have not been resolved to date. The well is included
in the 2014 exploration budget subject to resolution of tribal issues
in the area. 
YEMEN WEST - Marib Basin 
Block S-1, Republic of Yemen (25% working interest) 
Operations and Exploration 
No wells were drilled during the first quarter. 
Production 
Sales production from Block S-1 averaged 2,044 Bopd (511 Bopd to
TransGlobe) during the quarter. The reported gross sales production
rate represents the amount of oil that was lifted and sold during the
quarter. It is expected that sales production rates and the field
production rates will vary quarter to quarter depending on the timing
of tanker liftings during the respective quarter. 
Field production averaged 2,568 Bopd during the first quarter (642
Bopd to TransGlobe). 
Field production averaged approximately 3,447 Bopd (862 Bopd to
TransGlobe) during January and 4,436 Bopd (1,109 Bopd to TransGlobe)
during February. Block S-1 production was shut-in approximately 11
days in January due to export pipeline restrictions. It had produced
continuously during February until the sales pipeline was attacked in
late February. The pipeline attack was primarily over unresolved
contractor issues with local tribes which are under negotiation. When
a settlement is reached it is expected that the operations and
production will commence within a few days. 


 
 
Quarterly Block S-1 Production and                                         
 Sales (Bopd)                            2014             2013             
---------------------------------------------------------------------------
                                          Q-1       Q-4       Q-3       Q-2
---------------------------------------------------------------------------
Gross field production rate             2,568     1,624         -         -
Gross sales production rate             2,044         -         -         -
TransGlobe working interest               511         -         -         -
TransGlobe net (after royalties)          357         -         -         -
TransGlobe net (after royalties and                                        
 tax) (i)                                 318         -         -         -
---------------------------------------------------------------------------
(i) Under the terms of the Block S-1 Production Sharing Agreement, royalties
and taxes are paid out of the Government's share of production.             

Block 75, Republic of Yemen (25% working interest) 
Operations and Exploration 
No wells were drilled during the quarter. 
Future drilling is suspended pending resolution of logistics and
security concerns. 
READER ADVISORIES 
Forward-Looking Statements 
Certain statements or information contained herein may constitute
forward-looking statements or information under applicable securities
laws, including, but not limited to, management's assessment of
future plans and
 operations, the anticipated amount and timing of
future dividend payments, the sustainability of future dividend
payments, anticipated increases to the Company's reserves and
production, collection of accounts receivable from the Egyptian
Government, drilling plans and the timing thereof, commodity price
risk management strategies, adapting to the current political
situations in Egypt and Yemen, reserve estimates, management's
expectation for results of operations for 2014, including expected
2014 average production, funds flow from operations, the 2014 capital
program for exploration and development, the timing and method of
financing thereof, method of funding drilling commitments, and
commodity prices and expected volatility thereof. Statements relating
to "reserves" are deemed to be forward-looking statements, as they
involve the implied assessment, based on certain estimates and
assumptions, that the reserves described can be profitably produced
in the future. 
Forward-looking statements or information relate to the Company's
future events or performance. All statements other than statements of
historical fact may be forward-looking statements or information.
Such statements or information are often but not always identified by
the use of words such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe", and similar expressions. 
Forward-looking statements or information necessarily involve risks
including, without limitation, risks associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation, loss of markets, economic and political instability,
volatility of commodity prices, currency fluctuations, imprecision of
reserve estimates, environmental risks, competition from other
producers, inability to retain drilling rigs and other services,
incorrect assessment of the value of acquisitions, failure to realize
the anticipated benefits of acquisitions, delays resulting from or
inability to obtain required regulatory approvals and ability to
access sufficient capital from internal and external sources. The
recovery and reserve estimates of the Company's reserves provided
herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Events or circumstances may
cause actual results to differ materially from those predicted, as a
result of the risk factors set out and other known and unknown risks,
uncertainties, and other factors, many of which are beyond the
control of the Company. 
In addition, forward-looking statements or information are based on a
number of factors and assumptions which have been used to develop
such statements and information in order to provide shareholders with
a more complete perspective on the Company's future operations. Such
statements and information may prove to be incorrect and readers are
cautioned that such statements and information may not be appropriate
for other purposes. Although the Company believes that the
expectations reflected in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
forward-looking statements or information because the Company can
give no assurance that such expectations will prove to be correct. In
addition to other factors and assumptions which may be identified
herein, assumptions have been made regarding, among other things: the
impact of increasing competition; the general stability of the
economic and political environment in which the Company operates; the
timely receipt of any required regulatory approvals; the ability of
the Company to obtain qualified staff, equipment and services in a
timely and cost efficient manner; drilling results; the ability of
the operator of the projects which the Company has an interest in to
operate the field in a safe, efficient and effective manner; the
ability of the Company to obtain financing on acceptable terms; field
production rates and decline rates; the ability to replace and expand
oil and natural gas reserves through acquisition, development and
exploration; the timing and costs of pipeline, storage and facility
construction and expansion and the ability of the Company to secure
adequate product transportation; future commodity prices; currency,
exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in
which the Company operates; and the ability of the Company to
successfully market and receive payment for its oil and natural gas
products. 
Readers are cautioned that the foregoing list is not exhaustive of
all factors and assumptions which have been used. As a consequence,
actual results may differ materially from those anticipated in the
forward-looking statements. Additional information on these and other
factors that could affect the Company's operations and financial
results are included in reports on file with Canadian securities
regulatory authorities and may be accessed through the SEDAR website
(www.sedar.com), EDGAR website (www.sec.gov) and at the Company's
website (www.trans-globe.com). Furthermore, the forward-looking
statements or information contained herein are made as at the date
hereof and the Company does not undertake any obligation to update
publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required by applicable securities laws. 
The reader is further cautioned that the preparation of financial
statements in accordance with IFRS requires management to make
certain judgments and estimates that affect the reported amounts of
assets, liabilities, revenues and expenses. Estimating reserves is
also critical to several accounting estimates and requires judgments
and decisions based upon available geological, geophysical,
engineering and economic data. These estimates may change, having
either a negative or positive effect on net earnings as further
information becomes available, and as the economic environment
changes. 
DIVIDENDS 
On May 5, 2014, TransGlobe's Board of Directors approved and declared
a special dividend of $0.10 per share and the initial quarterly
dividend of $0.05 per share, payable in cash as follows: 


 
 
Ex-dividend date         Record date      Payment date    Per share amount
--------------------------------------------------------------------------
May 20, 2014            May 22, 2014      May 28, 2014               $0.10
June 12, 2014          June 16, 2014     June 30, 2014               $0.05
--------------------------------------------------------------------------

The initiation of a quarterly dividend payment program is a key
component of TransGlobe's objective to create value for its
shareholders. The Company believes that it is well positioned to
sustain a modest quarterly dividend payment, and intends to approve
and declare regular quarterly dividends on a go-forward basis. 
The actual amount of future quarterly dividends will be proposed by
management and subject to the approval and discretion of the Board.
The Board reviews proposed dividend payments in conjunction with
their review of quarterly financial and operating results. Future
dividend levels will be dependent upon economic factors including
commodity prices, capital expenditure programs and production
volumes, and will be evaluated regularly to ensure that dividend
payments do not compromise the strong financial position or the
growth of the Company. 
The dividends (both special and quarterly) declared on May 5, 2014
have been designated as eligible dividends under the Income Tax Act
(Canada). 
MANAGEMENT STRATEGY AND OUTLOOK 
The 2014 outlook provides information as to management's expectation
for results of operations for 2014. Readers are cautioned that the
2014 outlook may not be appropriate for other purposes. The Company's
expected results are se
nsitive to fluctuations in the business
environment and may vary accordingly. This outlook contains
forward-looking statements that should be read in conjunction with
the Company's disclosure under "Forward-Looking Statements". 
2014 Production Outlook 
Production guidance has been lowered to a range of 17,000 to 19,000
Bopd for 2014, with a mid-point of 18,000 Bopd. The 18,000 Bopd
mid-point of guidance for 2014 is essentially flat with 2013
production. The changes in 2014 production guidance are summarized
below. 
In Egypt, production from West Gharib is approximately 1,500 Bopd
behind the 2014 plan due to premature progressive cavity pump ("PCP")
failures and two high volume development wells at Arta which are
producing at 50% of the planned volumes. West Bakr production is
approximately 900 Bopd behind the 2014 plan due to mixed drilling
results in early 2014. East Ghazalat production is approximately 200
Bopd ahead of the 2014 plan due to positive development drilling at
Safwa. The Company has not included any production from the North
West Gharib ("NWG") and South Alamein concessions in the 2014 plan.
The Company is planning to drill 14 to 16 wells at NWG in 2014
(starting early June) which could impact production in late 2014 if
successful and approved for development prior to the fourth quarter.
Development of the South Alamein Boraq discovery remains contingent
upon receiving surface access approvals from the Military. 
In Yemen, Block 32 is approximately 300 Bopd behind the 2014 plan due
to regional tribal issues which has restricted diesel supplies and
shut down development/appraisal drilling activities planned for 2014.
Block S-1 is forecast to produce at 50% for the year due to ongoing
tribal negotiations. 
Year-to-date 2014 production is described in greater detail in the
Operations Update section of the interim report. The reduction in
production guidance for 2014 has not impacted reserves assigned at
year end 2013. 
In the near-term, second quarter production is expected to range
between 16,500 and 17,000 Bopd due to uncertainties relating to the
performance of PCPs in West Gharib and tribal issues in Yemen. 


 
 
Production Forecast                                                      
                     2014 Guidance  2014 Mid-point  2013 Actual % Change 
------------------------------------------------------------------------ 
Barrels of oil per                                                       
 day               17,000 - 19,000          18,000       18,284     (1.5)
------------------------------------------------------------------------ 
------------------------------------------------------------------------ 

2014 Funds Flow From Operations Outlook 
Funds flow from operations guidance of $125.0 million ($1.66/share),
which is based on an annual average Dated Brent oil price of $100/Bbl
and using the mid-point of the production guidance. The funds flow
sensitivity to a $10/Bbl change in Brent for the balance of the year
is approximately $11 million. 


 
 
Funds Flow Forecast                                                        
($ millions)             2014 Guidance       2013 Actual          % Change 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
Funds flow from                                                            
 operations                      125.0             139.1               (10)
-------------------------------------------------------------------------- 
Brent oil price ($                                                         
 per bbl)                       100.00            108.64                (8)
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
2014 Capital Budget                                                       
($ millions)                                                              
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Egypt                                                                 93.6
Yemen                                                                  6.4
--------------------------------------------------------------------------
Total                                                                100.0
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The 2014 capital program is split 68:32 between development and
exploration, respectively. The Company plans to participate in 51
wells in 2014. It is anticipated that the Company will fund its 2014
capital budget from funds flow from operations and working capital. 
ADDITIONAL MEASURES 
Funds Flow from Operations 
This document contains the term "funds flow from operations", which
should not be considered an alternative to or more meaningful than
"cash flow from operating activities" as determined in accordance
with IFRS. Funds flow from operations is a measure that represents
cash generated from operating activities before changes in non-cash
working capital. Management considers this a key measure as it
demonstrates TransGlobe's ability to generate the cash flow necessary
to fund future growth through capital investment. Funds flow from
operations may not be comparable to similar measures used by other
companies. 
Reconciliation of Funds Flow from Operations 


 
 
                                              Three months ended March 31 
------------------------------------------------------------------------- 
($000s)                                                 2014         2013 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
Cash flow from operating activities                    3,211       51,900 
Changes in non-cash working capital                   29,276      (15,895)
------------------------------------------------------------------------- 
Funds flow from operations(i)                         32,487       36,005 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
(i) Funds flow from operations does not include interest costs. Interest    
expense is included in financing costs on the Condensed Consolidated Interim
Statements of Earnings and Comprehensive Income. Cash interest paid is      
reported as a financing activity on the Condensed Consolidated Interim      
Statements of Cash Flows.                                                   

Debt-to-funds flow ratio 
Debt-to-funds flow is a measure that is used to set the amount of
capital in proportion to risk. The Company's debt-to-funds flow ratio
is computed as long-term debt, including the current portion, plus
convertible debentures over funds flow from operations for the
trailing twelve months. Debt-to-funds flow may not be comparable to
similar measures used by other companies. 
Netback 
Netback is a measure that represents sales net of royalties (all
government interests, net of income taxes), operating expenses and
current taxes. Management believes that netback is a useful
supplemental measure to analyze operating performance and provide an
indication of the results generated by the Company's principal
business activities prior to the consideration of other income and
expenses. Netback may not be comparable to similar measures used by
other companies. 
TRANSGLOBE'S BUSINESS 
TransGlobe is a Canadian-based, publicly traded, oil exploration and
production company whose activities are concentrated in two main
geographic areas: the Arab Republic of Egypt ("Egypt") and the
Republic of Yemen ("Yemen"). 
SELECTED QUARTERLY FINANCIAL INFORMATION 


 
 
                2014  
            2013                        2012          
----------------------------------------------------------------------------
($000s, except per share,                                                   
 price and volume amounts)                                                  
                 Q-1     Q-4     Q-3     Q-2     Q-1     Q-4     Q-3     Q-2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Average                                                                     
 production                                                                 
 volumes                                                                    
 (Bopd)       18,067  18,519  18,197  18,417  18,001  17,875  18,143  16,978
 
Average sales                                                               
 volumes                                                                    
 (Bopd)       17,932  18,213  18,109  18,539  17,909  19,148  17,124  16,978
Average price                                                               
 ($/Bbl)       94.89   96.10   97.18   90.48   99.21   98.70   96.88   95.84
Oil sales    153,140 161,035 161,900 152,646 159,915 173,864 152,624 148,078
Oil sales,                                                                  
 net of                                                                     
 royalties    78,366  81,196  78,531  76,223  79,366  92,281  74,540  73,633
Cash flow                                                                   
 from                                                                       
 operating                                                                  
 activities    3,211 109,226  22,035  16,347  51,900  65,250   2,368  24,603
Funds flow                                                                  
 from                                                                       
 operations                                                                 
 (i)          32,487  36,743  33,483  32,887  36,005  46,839  35,397  35,174
Funds flow                                                                  
 from                                                                       
 operations                                                                 
 per share                                                                  
 - Basic        0.44    0.49    0.45    0.45    0.49    0.63    0.49    0.48
 - Diluted      0.43    0.49    0.44    0.40    0.44    0.57    0.47    0.43
Net earnings  16,692   6,893  16,344  10,397  24,878  34,836  11,774  30,149
Net earnings                                                                
 - diluted    16,692   6,893  16,344    (183) 21,427  32,156  11,774  20,821
Net earnings                                                                
 per share                                                                  
 - Basic        0.22    0.09    0.22    0.14    0.34    0.48    0.16    0.41
 - Diluted      0.22    0.09    0.22       -    0.26    0.39    0.16    0.25
Total assets 692,341 675,800 723,708 670,996 672,675 653,425 635,529 620,937
Cash and cash                                                               
 equivalents 107,607 122,092 128,162 101,435 112,180  82,974  45,732  72,230
Convertible                                                                 
 debentures   87,765  87,539  85,300  81,830  93,842  98,742 102,920  95,043
Total long-                                                                 
 term debt,                                                                 
 including                                                                  
 current                                                                    
 portion           -       -  39,040  15,224  17,097  16,885  31,878  37,855
Debt-to-funds                                                               
 flow ratio                                                                 
 (ii)            0.6     0.6     0.8     0.6     0.7     0.8     1.0     1.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
(i) Funds flow from operations is a measure that represents cash generated  
 from operating activities before changes in non-cash working capital and   
 may not be comparable to measures used by other companies.                 
(ii) Debt-to-funds flow ratio is measure that represents total long-term    
 debt (including the current portion) plus convertible debentures over funds
 flow from operations from the trailing 12 months and may not be comparable 
 to measures used by other companies.                                       

During the first quarter of 2014, TransGlobe has: 


 
 
--  Maintained a strong financial position, reporting a debt-to-funds flow
    ratio of 0.6 at March 31, 2014; 
--  Reported net earnings of $16.7 million, which includes a $3.5 million
    unrealized non-cash loss on convertible debentures; 
--  Experienced a decrease in oil sales compared to Q1-2013 primarily as a
    result of decreased oil prices; 
--  Achieved funds flow from operations of $32.5 million; 
--  Experienced a significant decrease in cash flow from operating
    activities as compared to Q4-2013, which was almost entirely due to
    higher cash collections in Q4-2013; and 
--  Spent $14.4 million on capital programs, which was funded entirely with
    funds flow from operations. 

2014 TO 2013 NET EARNINGS VARIANCES 


 
 
                                                   $ Per Share             
                                              $000s    Diluted  % Variance 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
Q1-2013 net earnings(i)                     24,878        0.33             
-------------------------------------------------------------------------- 
Cash items                                                                 
Volume variance                                184           -           - 
Price variance                              (6,959)      (0.09)        (28)
Royalties                                    5,775        0.08          23 
Expenses:                                                                  
 Production and operating                   (5,046)      (0.07)        (20)
 Cash general and administrative              (362)          -          (1)
 Exploration                                  (331)          -          (1)
 Current income taxes                        3,180        0.04          13 
 Realized foreign exchange gain (loss)         (10)          -           - 
 Interest on long-term debt                    324           -           1 
Other income                                    51           -           - 
-------------------------------------------------------------------------- 
Total cash items variance                   (3,194)      (0.04)        (13)
-------------------------------------------------------------------------- 
Non-cash items                                                             
Unrealized foreign exchange gain             1,602        0.02           6 
Depletion and depreciation                  (1,985)      (0.03)         (8)
Unrealized gain (loss) on financial                                        
 instruments                                (6,509)      (0.09)        (26)
Stock-based compensation                       444        0.01           2 
Deferred income taxes                        1,460        0.02           6 
Deferred lease inducement                       10           -           - 
Amortization of deferred financing                                         
 costs                                         (14)          -           - 
--------------------------------------------------------------------------
 
Total non-cash items variance               (4,992)      (0.07)        (20)
-------------------------------------------------------------------------- 
Q1-2014 net earnings                        16,692        0.22         (33)
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
(i) Diluted earnings per share for Q1-2013 is presented prior to the       
 dilutive effect of the convertible debentures in that period              

Net earnings decreased to $16.7 million in Q1-2014 compared to $24.9
million in Q1-2013. Reduced prices and increased production and
operating costs resulted in a reduction in government take as a
percentage of revenue from 65% in Q1-2013 to 62% in Q1-2014. The
resulting decreases in royalties and current income taxes offset
approximately 75% of the impact of decreased prices and increased
operating costs. The remaining earnings variance relates mostly to
the recognition of an unrealized loss on convertible debentures of
$3.5 million in Q1-2014 compared with an unrealized gain on
convertible debentures of $3.0 million in Q1-2013. 
BUSINESS ENVIRONMENT 
The Company's financial results are influenced by fluctuations in
commodity prices, including price differentials. The following table
shows select market benchmark prices and foreign exchange
rates: 


 
 
                                       2014              2013              
---------------------------------------------------------------------------
                                        Q-1     Q-4     Q-3     Q-2     Q-1
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Dated Brent average oil price                                              
 ($/Bbl)                             108.18  109.27  110.27  102.44  112.59
U.S./Canadian Dollar average                                               
 exchange rate                        1.103   1.050   1.039   1.023   1.009
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The average price of Dated Brent oil averaged 1% lower in Q1-2014
compared with Q4-2013. All of the Company's production is priced
based on Dated Brent and shared with the respective governments
through PSCs. When the price of oil increases, it takes fewer barrels
to recover costs (cost recovery barrels) which are assigned 100% to
the Company. The contracts provide for cost recovery per quarter up
to a maximum percentage of total revenue. Timing differences often
exist between the Company's recognition of costs and their recovery
as the Company accounts for costs on an accrual basis, whereas cost
recovery is determined on a cash basis. If the eligible cost recovery
is less than the maximum defined cost recovery, the difference is
defined as "excess". In Egypt, depending on the PSC, the Contractor's
share of excess ranges between 0% and 30%. In Yemen, under the
Production Sharing Agreements, the excess is treated as production
sharing oil. If the eligible cost recovery exceeds the maximum
allowed percentage, the unclaimed cost recovery is carried forward to
the next quarter. Typically maximum cost recovery or cost oil ranges
from 25% to 30% in Egypt and 50% to 60% in Yemen. The balance of the
production after maximum cost recovery is shared with the respective
governments (production sharing oil). In Egypt, depending on the
contract, the government receives 70% to 86% of the production
sharing oil or profit oil. In Yemen, the government receives 65% of
the production sharing oil or profit oil. Production sharing splits
are set in each contract for the life of the contract. Typically the
government's share of production sharing oil increases when
production exceeds pre-set production levels in the respective
contracts. During times of increased oil prices, the Company receives
less cost oil and may receive more production sharing oil. For
reporting purposes, the Company records the respective government's
share of production as royalties and taxes (all taxes are paid out of
the Government's share of production). 
Egypt has been experiencing significant political changes over the
past three years and while this has had an impact on the efficient
operations of the government in general, business processes and the
Company's operations have generally proceeded as normal. While
exploration and development activities have generally been
uninterrupted, the Company has continued to experience delays in the
collection of accounts receivable from the Egyptian Government. The
Company is in continual discussions with the Egyptian Government to
improve the delayed cash collections, and expects to recover the
accounts receivable balance in full. During the first quarter of
2014, the Company collected $29.4 million in accounts receivable from
the Egyptian Government. 
The Company has received environmental approvals for all 18 well
plans submitted for the NW Gharib block, and has received military
approvals for the first 15 well plans submitted. The remaining
military approvals are expected in the coming weeks. In addition, our
partner that operates the East Ghazalat concession filed and received
an approved development plan for the North Dabaa discovery in the
first quarter. The timely receipt of these approvals is a positive
indication that Egypt's oil and gas processes continue to normalize
despite the recent political changes. 
OPERATING RESULTS AND NETBACK 
Daily Volumes, Working Interest before Royalties and Other (Bopd) 
Sales Volumes 


 
 
                                               Three months ended March 31
--------------------------------------------------------------------------
                                                        2014          2013
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Egypt                                                 17,291        17,667
Yemen                                                    641           242
--------------------------------------------------------------------------
Total Company                                         17,932        17,909
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Netback 


 
 
Consolidated                                                               
                                                Three months ended March 31
---------------------------------------------------------------------------
                                           2014                2013        
---------------------------------------------------------------------------
(000s, except per Bbl amounts)              $     $/Bbl         $     $/Bbl
---------------------------------------------------------------------------
Oil sales                             153,140     94.89   159,915     99.21
Royalties                              74,774     46.33    80,549     49.97
Current taxes                          19,894     12.33    23,074     14.32
Production and operating expenses      19,578     12.13    14,532      9.02
---------------------------------------------------------------------------
Netback                                38,894     24.10    41,760     25.90
---------------------------------------------------------------------------
 
Egypt                                                                      
                                                Three months ended March 31
---------------------------------------------------------------------------
                                            2014                2013       
---------------------------------------------------------------------------
(000s, except per Bbl am
ounts)              $     $/Bbl         $     $/Bbl
---------------------------------------------------------------------------
Oil sales                             146,944     94.43   157,489     99.05
Royalties                              73,023     46.92    79,644     50.09
Current taxes                          19,435     12.49    22,790     14.33
Production and operating expenses      16,307     10.48    12,731      8.01
---------------------------------------------------------------------------
Netback                                38,179     24.54    42,324     26.62
---------------------------------------------------------------------------

The netback per Bbl in Egypt decreased 8% in Q1-2014 compared with
Q1-2013. The main reason for the decreased netback was the effect of
a 5% reduction in realized oil prices as compared to Q1-2013.
Production and operating expenses increased by 31% on a per Bbl
basis, which was principally related to a significant increase in
well servicing costs relating to faulty progressive cavity pumps at
West Gharib, which has also negatively impacted production, combined
with increased fuel costs. The increase in production and operating
expenses resulted in an increase in cost oil allocated to the
Company, which reduced royalties and taxes on a per Bbl basis. In
Q1-2014, the average selling price was $13.75/Bbl lower (Q1-2013 -
$13.54 lower) than the average Dated Brent oil price for the period
of $108.18/Bbl (Q1-2013 - $112.59) which is a result of a
gravity/quality adjustment.  
Royalties and taxes as a percentage of revenue decreased to 63% in
Q1-2014 compared with 65% in Q1-2013. This decrease is due to higher
operating costs which has increased the Company's cost recovery,
combined with decreased oil prices which reduces excess cost
oil. 


 
 
Yemen                                                                      
                                              Three months ended March 31  
-------------------------------------------------------------------------- 
                                           2014                2013        
-------------------------------------------------------------------------- 
(000s, except per Bbl amounts)              $     $/Bbl        $     $/Bbl 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
Oil sales                               6,196    107.40    2,426    111.39 
Royalties                               1,751     30.35      905     41.55 
Current taxes                             459      7.96      284     13.04 
Production and operating expenses       3,271     56.70    1,801     82.69 
-------------------------------------------------------------------------- 
Netback                                   715     12.39     (564)   (25.89)
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 

In Yemen, the Company achieved a netback per Bbl of $12.39 in the three
months ended March 31, 2014. While production and operating expenses
per Bbl were reduced substantially as compared to Q1-2013, they
remain at elevated levels in Q1-2014 as a result of production
shut-ins on Block S-1 and Block 32 during the quarter. While
production volumes were down, the Company continued to incur the
majority of the operating costs which significantly impacted
operating expenses per Bbl. These operating costs will be recovered
from cost oil when production resumes. 
Royalties and taxes as a percentage of revenue decreased to 36% from
49% in the three months ended March 31, 2014, compared with 2013. The
reduced government take is the result of the recovery of cost pools
that were built up in 2013 while Block S-1 was shut-in. 
GENERAL AND ADMINISTRATIVE EXPENSES ("G&A") 


 
 
                                               Three months ended March 31 
-------------------------------------------------------------------------- 
                                                  2014                2013 
-------------------------------------------------------------------------- 
(000s, except Bbl amounts)                  $    $/Bbl         $     $/Bbl 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
G&A (gross)                            7,810      4.84     6,907      4.29 
Stock-based compensation                 834      0.52     1,278      0.79 
Capitalized G&A and overhead                                               
 recoveries                           (1,636)    (1.01)   (1,085)    (0.67)
-------------------------------------------------------------------------- 
G&A (net)                              7,008      4.35     7,100      4.41 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 

G&A expenses in Q1-2014 were consistent with Q1-2013 both on a net and
per Bbl basis. G&A (gross) was elevated in Q1-2014 compared to
Q1-2013 mostly due to an increase in banking fees associated with the
letters of credit ($60.5 million) required to backstop the Company's
financial commitments under the recently ratified PSCs in Egypt.
These banking fees were capitalized in their respective concessions,
which is the reason for the increased capitalized G&A. The reduction
in stock-based compensation is mainly due to a 21% reduction in the
number of outstanding stock options as at March 31, 2014 compared to
March 31, 2013, combined with the fact that the stock options
outstanding in Q1-2014 are on average further along in their life
cycles than those that were outstanding in Q1-2013. 
FINANCE COSTS 
Finance costs for the three-month period ended March 31, 2014
decreased to $1.9 million compared with $2.2 million in the same
period in 2013. Interest expense on the convertible debentures for
the three-month period ended March 31, 2014 was $1.3 million (Q1-2013
- $1.5 million). The decrease in this portion of the interest expense
is due to foreign exchange fluctuations, as the interest on the
convertible debentures is paid in Canadian dollars. The remaining
decrease in interest expense is due to a lower utilization of the
Company's Borrowing Base Facility as at March 31, 2014 compared to
March 31, 2013.  


 
 
-----------------------------------------------------------------------
---
                                               Three months ended March 31
--------------------------------------------------------------------------
(000s)                                                  2014          2013
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Interest expense                                    $  1,616      $  1,940
Amortization of deferred financing costs                 276           262
--------------------------------------------------------------------------
Finance costs                                       $  1,892      $  2,202
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The Company had no long-term debt outstanding under the Borrowing Base
Facility as at March 31, 2014 (March 31, 2013 - $18.5 million). The
term of the facility extends to December 31, 2017 and the borrowing
base is currently $100.0 million. The Borrowing Base Facility bears
interest at LIBOR plus an applicable margin that varies from 5.0% to
5.5% depending on the amount drawn or utilized under the facility. 
In February 2012, the Company sold, on a bought-deal basis, C$97.8
million ($97.9 million) aggregate principal amount of convertible
unsecured subordinated debentures with a maturity date of March 31,
2017. The debentures are convertible at any t
ime and from time to
time into common shares of the Company at a price of C$15.10 per
common share. Under certain circumstances the debentures may also be
redeemed by the Company. The conversion price of the convertible
debentures will adjust for any amounts paid out as dividends on the
common shares of the Company. Interest of 6% is payable semi-annually
in arrears on March 31 and September 30. At maturity or redemption,
the Company has the option to settle all or any portion of principal
obligations by delivering to the debenture holders sufficient common
shares to satisfy these obligations. 
DEPLETION AND DEPRECIATION ("DD&A") 


 
 
                                                Three months ended March 31
---------------------------------------------------------------------------
                                                   2014                2013
---------------------------------------------------------------------------
(000s, except per Bbl amounts)              $     $/Bbl         $     $/Bbl
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Egypt                                  12,370      7.95    10,890      6.85
Yemen                                     702     12.17       202      9.27
Corporate                                  93         -        88         -
---------------------------------------------------------------------------
                                       13,165      8.16    11,180      6.94
---------------------------------------------------------------------------
---------------------------------------------------------------------------

In Egypt, DD&A increased 16% on a per Bbl basis in the three months
ended March 31, 2014 compared to 2013. This increase is mostly due to
a lower reserve base over which to deplete costs in Egypt along with
increased future capital costs at West Bakr. 
In Yemen, DD&A increased 31% on a per Bbl basis in the three months
ended March 31, 2014 compared to 2013 due to a declining reserve base
at Block 32 combined with increased future capital costs. 
CAPITAL EXPENDITURES 


 
 
                                               Three months ended March 31
--------------------------------------------------------------------------
($000s)                                                 2014          2013
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Egypt                                                 13,916        17,688
Yemen                                                    434           495
Corporate                                                 15            10
--------------------------------------------------------------------------
Total                                                 14,365        18,193
--------------------------------------------------------------------------
--------------------------------------------------------------------------

In Egypt, total capital expenditures in 2014 were $13.9 million (2013 -
$17.7 million). During Q1-2014, the Company drilled five wells in
West Gharib (four oil wells and one well which was plugged back to
surface casing and suspended for a future sidetrack). The Company
also drilled three oil wells at West Bakr and two wells at East
Ghazalat (one oil well and one dry hole).  
OUTSTANDING SHARE DATA 
As at March 31, 2014, the Company had 74,714,494 common shares issued
and outstanding and 5,595,467 stock options issued and outstanding,
which are exercisable in accordance with their terms into a maximum
of 5,595,467 common shares of the Company.  
LIQUIDITY AND CAPITAL RESOURCES 
Liquidity describes a company's ability to access cash. Companies
operating in the upstream oil and gas industry require sufficient
cash in order to fund capital programs necessary to maintain and
increase production and reserves, to acquire strategic oil and gas
assets and to repay debt. TransGlobe's capital programs are funded
principally by cash provided from operating activities. A key measure
that TransGlobe uses to evaluate the Company's overall financial
strength is debt-to-funds flow from operations (calculated on a
12-month trailing basis). TransGlobe's debt-to-funds flow from
operations ratio, a key short-term leverage measure, remained strong
at 0.6 times at March 31, 2014 (December 31, 2013 - 0.8). This was
within the Company's internal guideline of no more than 2.0 times.
The following table illustrates TransGlobe's sources and uses of cash
during the periods ended March 31, 2014 and 2013: 


 
 
Sources and Uses of Cash                                                  
                                               Three months ended March 31
--------------------------------------------------------------------------
($000s)                                                2014           2013
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Cash sourced                                                              
 Funds flow from operations(i)                       32,487         36,005
 Exercise of options                                    716            396
--------------------------------------------------------------------------
                                                     33,203         36,401
Cash used                                                                 
 Capital expenditures                                14,365         18,193
 Deferred financing costs                                 -             50
 Transfer to restricted cash                              1              1
 Finance costs                                        3,847          3,373
 Other                                                  514            580
--------------------------------------------------------------------------
                                                     18,727         22,197
--------------------------------------------------------------------------
                                                     14,476         14,204
Changes in non-cash working capital                 (28,961)        15,002
--------------------------------------------------------------------------
Increase (decrease) in cash and cash                                      
 equivalents                                        (14,485)        29,206
Cash and cash equivalents - beginning of                                  
 period                                             122,092         82,974
--------------------------------------------------------------------------
Cash and cash equivalents - end of period           107,607        112,180
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(i) Funds flow from operations is a measure that represents cash generated
 from operating activities before changes in non-cash working capital, and
 may not be comparable to measures used by other companies.               

Funding for the Company's capital expenditures was provided by funds
flow from operations. The Company expects to fund its 2014
exploration and development program of $100.0 million including
contractual commitments through the use of working capital and cash
generated by operating activities. Fluctuations in commodity prices,
product demand, foreign exchange rates, interest rates and various
other risks including timely collections of accounts receivable from
the Egyptian Government may impact capital resources. 
Working capital is the amount by which current assets exceed current
liabilities. At March 31, 2014, the Company had working capital of
$258.9 million (December 31, 2013 - $242.0 million). The increase to
working capital in Q1-2014 is due almost entirely to an increase in
accoun
ts receivable, which was partially offset by a decrease in cash
and cash equivalents. The majority of the Company's accounts
receivable are due from Egyptian General Petroleum Company ("EGPC"),
and the recent political changes in the country have increased EGPC's
credit risk, which has increased the Company's credit risk. The
Company is in continual discussions with EGPC and the Egyptian
Government to improve the delayed cash collections, and expects to
recover the entire accounts receivable balance in full. 
To date, the Company has experienced no difficulties with
transferring funds abroad. 
At March 31, 2014, TransGlobe had $100.0 million available under a
Borrowing Base Facility of which no amounts were drawn, however, the
Company was utilizing $60.5 million in the form of letters of credit. 
COMMITMENTS AND CONTINGENCIES 
As part of its normal business, the Company entered into arrangements
and incurred obligations that will impact the Company's future
operations and liquidity. The principal commitments of the Company
are as follows: 


 
 
                                    Payment Due by Period (1 2)            
---------------------------------------------------------------------------
                       Recognized                                      More
                       in                         Less                 than
                       Financial    Contractual   than     1-3   4-5      5
($000s)                Statements    Cash Flows 1 year   years years  years
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Accounts payable and   Yes -                                               
 accrued liabilities   Liability         37,096 37,096       -     -      -
Convertible debentures Yes -                                               
                       Liability         87,765      -  87,765     -      -
Office and equipment   No                                                  
 leases (3)                              13,554  7,867   2,611 1,890  1,186
Minimum work           No                                                  
 commitments (4)                         61,250    750  60,500     -      -
---------------------------------------------------------------------------
Total                                   199,665 45,713 150,876 1,890  1,186
---------------------------------------------------------------------------
(1) Payments exclude ongoing operating costs, finance costs and payments   
 made to settle derivatives.                                               
(2) Payments denominated in foreign currencies have been translated at     
 March 31, 2014 exchange rates.                                            
(3) Office and equipment leases include all drilling rig contracts.        
(4) Minimum work commitments include contracts awarded for capital projects
 and those commitments related to exploration and drilling obligations.    

Pursuant to the PSC for North West Gharib in Egypt, the Company has a
minimum financial commitment of $35.0 million and a work commitment
to drill 30 wells and acquire 200 square kilometers of 3-D seismic
during the initial-three year exploration period, which commenced on
November 7, 2013. 
Pursuant to the PSC for South East Gharib in Egypt, the Company has a
minimum financial commitment of $7.5 million and a work commitment to
drill two wells, acquire 200 square kilometers of 3-D seismic and
acquire 300 kilometers of 2-D seismic during the initial three-year
exploration period, which commenced on November 7, 2013. 
Pursuant to the PSC for South West Gharib in Egypt, the Company has a
minimum financial commitment of $10.0 million and a work commitment
to drill four wells and acquire 200 square kilometers of 3-D seismic
during the initial three-year exploration period, which commenced on
November 7, 2013. 
Pursuant to the PSC for South Ghazalat in Egypt, the Company has a
minimum financial commitment of $8.0 million and a work commitment to
drill two wells and acquire 400 square kilometers of 3-D seismic
during the initial three-year exploration period, which commenced on
November 7, 2013. 
Pursuant to the PSC for Block 75 in Yemen, the Contractor (Joint
Interest Partners) has a remaining minimum financial commitment of
$3.0 million ($0.8 million to TransGlobe) for one exploration well in
the first exploration period, which has been extended to March 9,
2015. 
In the normal course of its operations, the Company may be subject to
litigations and claims. Although it is not possible to estimate the
extent of potential costs, if any, management believes that the
ultimate resolution of such contingencies would not have a material
adverse impact on the results of operations, financial position or
liquidity of the Company. 
The Company is not aware of any material provisions or other
contingent liabilities as at March 31, 2014.  
EVENTS AFTER THE REPORTING PERIOD 
Termination of Arrangement Agreement with Caracal Energy Inc. 
On March 15, 2014, TransGlobe announced that they had entered into an
arrangement agreement to merge with Caracal Energy Inc. ("Caracal")
by way of an exchange of shares. On April 14, 2014, TransGlobe
announced the termination of the arrangement agreement after being
advised by Caracal that it had received an unsolicited cash offer to
acquire all of the outstanding shares of Caracal, and that the
unsolicited offer constituted a "Superior Proposal" under the terms
of the arrangement agreement. Accordingly, Caracal terminated the
agreement and paid TransGlobe the reverse termination fee of $9.25
million in accordance with the terms of the agreement. 
Declaration of Special and Quarterly Dividend 
On May 5, 2014, the Board of Directors declared a special dividend of
$0.10 per common share and a quarterly dividend of $0.05 per common
share, both of which will be paid in cash. The special dividend is
payable to shareholders of record on May 22, 2014, and will be paid
on May 28, 2014. The first quarterly dividend is payable to
shareholders of record on June 16, 2014, and will be paid on June 30,
2014. 
CHANGES IN ACCOUNTING POLICIES 
IFRS 10 (revised) "Consolidated Financial Statements" 
In October 2012, the IASB issued amendments to IFRS 10 to define
investment entities, provide an exception to the consolidation of
investment entities by a parent company, and prescribe fair value
measurement to measure such entities. These amendments are effective
for annual periods beginning on or after January 1, 2014;
accordingly, the Company adopted this standard for the year ended
December 31, 2014. The adoption of this standard had no material
impact on the Condensed Consolidated Interim Financial Statements. 
IFRS 12 (revised) "Disclosure of interests in other entities" 
In October 2012, the IASB issued amendments to IFRS 12 to prescribe
disclosures about significant judgments and assumptions used to
determine whether an entity is an investment entity as well as other
disclosures regarding the measurement of such entities. These
amendments are effective for annual periods beginning on or after
January 1, 2014; accordingly, the Company adopted this standard for
the year ended December 31, 2014. The adoption of this standard had
no material impact on the Condensed Consolidated Interim Financial
Statements. 
IAS 32 (revised) "Financial Instruments: Presentation" 
In December 2011, the IASB issued amendments to IAS 32 to address
inconsistencies when applying the offsetting criteria. These
amendments clarify some of the criteria required to be met in order
to permit the offsetting of financial assets and financial
liabilities. These amendments are effective for annual periods
beginning on or after January 1, 2014; accordingly, the Company has
adopted this standard for the year ended December 31, 2014. The
adoption of this standard had no material impact on the Condensed
Consolidated Interim Financial Statemen
ts. 
IFRIC 21 (new) "Levies" 
In May 2013, the IASB issued IFRIC 21, "Levies", which was developed
by the IFRS Interpretations Committee ("IFRIC"). IFRIC 21 clarifies
that an entity recognizes a liability for a levy when the activity
that triggers payment, as identified by the relevant legislation,
occurs. The interpretation also clarifies that no liability should be
recognized before the specified minimum threshold to trigger that
levy is reached. IFRIC 21 is effective for annual periods beginning
on or after January 1, 2014; accordingly, the Company has adopted
this standard for the year ended December 31, 2014. The adoption of
this standard had no material impact on the Condensed Consolidated
Interim Financial Statements. 
INTERNAL CONTROLS OVER FINANCIAL REPORTING 
TransGlobe's management designed and implemented internal controls
over financial reporting, as defined under National Instrument 52-109
Certification of Disclosure in Issuers' Annual and Interim Filings,
of the Canadian Securities Administrators and as defined in Rule
13a-15 under the US Securities Exchange Act of 1934. Internal
controls over financial reporting is a process designed under the
supervision of the Chief Executive Officer and the Chief Financial
Officer and effected by the Board of Directors, management and other
personnel to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements
for external purposes in accordance with IFRS, focusing in particular
on controls over information contained in the annual and interim
financial statements. Due to its inherent limitations, internal
controls over financial reporting may not prevent or detect
misstatements on a timely basis. A system of internal controls over
financial reporting, no matter how well conceived or operated, can
provide only reasonable, not absolute, assurance that the objectives
of the internal controls over financial reporting are met. Also,
projections of any evaluation of the effectiveness of internal
control over financial reporting to future periods are subject to the
risk that the controls may become inadequate because of changes in
conditions, or that the degree of compliance with policies or
procedures may deteriorate. 
No changes were made to the Company's internal control over financial
reporting during the period ended March 31, 2014 that have materially
affected, or are reasonably likely to materially affect, the internal
controls over financial reporting. 


 
 
Condensed Consolidated Interim Statements of Earnings and Comprehensive   
 Income                                                                   
(Unaudited - Expressed in thousands of U.S. Dollars, except per share     
amounts)                                                                  
 
                                              Three months ended March 31 
                                                     2014            2013 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
REVENUE                                                                   
 Oil sales, net of royalties                $      78,366   $      79,366 
 Finance revenue                                       97              46 
------------------------------------------------------------------------- 
                                                   78,463          79,412 
------------------------------------------------------------------------- 
 
EXPENSES                                                                  
 Production and operating                          19,578          14,532 
 General and administrative                         7,008           7,100 
 Foreign exchange (gain) loss                      (3,110)         (1,518)
 Finance costs                                      1,892           2,202 
 Exploration                                          438             107 
 Depletion, depreciation and amortization          13,165          11,180 
 Unrealized (gain) loss on financial                                      
  instruments                                       3,519          (2,990)
------------------------------------------------------------------------- 
                                                   42,490          30,613 
------------------------------------------------------------------------- 
 
Earnings before income taxes                       35,973          48,799 
 
Income tax expense (recovery)                                             
 - current                                         19,894          23,074 
 - deferred                                          (613)            847 
------------------------------------------------------------------------- 
                                                   19,281          23,921 
------------------------------------------------------------------------- 
NET EARNINGS AND COMPREHENSIVE INCOME FOR                                 
 THE PERIOD                                 $      16,692   $      24,878 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
 
Earnings per share                                                        
 Basic                                      $        0.22   $        0.34 
 Diluted                                    $        0.22   $        0.26 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
 
Condensed Consolidated Interim Balance Sheets                              
(Unaudited - Expressed in thousands of U.S. Dollars)                       
 
                                                       As at          As at
                                                   March 31,   December 31,
                                                        2014           2013
---------------------------------------------------------------------------
---------------------------------------------------------------------------
ASSETS                                                                     
Current                                                                    
 Cash and cash equivalents                     $     107,607  $     122,092
 Accounts receivable                                 174,037        148,284
 Prepaids and other                                   11,070          8,460
 Product inventory                                     3,240          1,525
---------------------------------------------------------------------------
                                                     295,954        280,361
Non-Current                                                                
 Restricted cash                                       1,547          1,546
 Deferred financing costs                              2,402          2,678
 Intangible exploration and evaluation assets         90,113         89,991
 Property and equipment                                                    
  Petroleum properties                               290,016        288,756
  Other assets                                         4,129          4,288
 Goodwill                                              8,180          8,180
---------------------------------------------------------------------------
                                               $     692,341  $     675,800
---------------------------------------------------------------------------
---------------------------------------------------------------------------
 
LIABILITIES                                                                
Current                                                                    
 Accounts payable and accrued liabilities      $      37,096  $      38,392
---------------------------------------------------------------------------
                              
                        37,096         38,392
Non-Current                                                                
 Convertible debentures                               87,765         87,539
 Deferred taxes                                       48,250         48,863
 Other long-term liabilities                             760            816
---------------------------------------------------------------------------
                                                     173,871        175,610
---------------------------------------------------------------------------
 
SHAREHOLDERS' EQUITY                                                       
 Share capital                                       161,531        160,561
 Contributed surplus                                  16,310         15,692
 Retained earnings                                   340,629        323,937
---------------------------------------------------------------------------
                                                     518,470        500,190
---------------------------------------------------------------------------
                                               $     692,341  $     675,800
---------------------------------------------------------------------------
---------------------------------------------------------------------------
 
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity
(Unaudited - Expressed in thousands of U.S. Dollars)                       
 
                                              Three months ended March 31  
                                                        2014          2013 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
 
Share Capital                                                              
 Balance, beginning of period                 $     160,561   $    158,721 
 Stock options exercised                                716            396 
 Transfer from contributed surplus on exercise                             
  of options                                            254            142 
-------------------------------------------------------------------------- 
 Balance, end of period                       $     161,531   $    159,259 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
 
Contributed Surplus                                                        
 Balance, beginning of period                 $      15,692   $     11,714 
 Share-based compensation expense                       872          1,307 
 Transfer to share capital on exercise of                                  
  options                                              (254)          (142)
-------------------------------------------------------------------------- 
 Balance, end of period                       $      16,310   $     12,879 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
 
Retained Earnings                                                          
 Balance, beginning of period                 $     323,937   $    265,425 
 Net earnings and total comprehensive income         16,692         24,878 
-------------------------------------------------------------------------- 
 Balance, end of period                       $     340,629   $    290,303 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
 
Condensed Consolidated Interim Statements of Cash Flows                   
(Unaudited - Expressed in thousands of U.S. Dollars)                      
 
                                              Three months ended March 31 
                                                     2014            2013 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
CASH FLOWS RELATED TO THE FOLLOWING                                       
 ACTIVITIES:                                                              
 
OPERATING                                                                 
 Net earnings for the period                $      16,692   $      24,878 
 Adjustments for:                                                         
  Depletion, depreciation and amortization         13,165          11,180 
  Deferred lease inducement                           105             115 
  Stock-based compensation                            834           1,278 
  Finance costs                                     1,892           2,202 
  Income tax expense                               19,281          23,921 
  Unrealized (gain) loss on financial                                     
   instruments                                      3,519          (2,990)
  Unrealized (gain) loss on foreign currency                              
   translation                                     (3,107)         (1,505)
 Income taxes paid                                (19,894)        (23,074)
 Changes in non-cash working capital              (29,276)         15,895 
------------------------------------------------------------------------- 
Net cash generated by (used in) operating                                 
 activities                                         3,211          51,900 
------------------------------------------------------------------------- 
 
INVESTING                                                                 
 Additions to intangible exploration and                                  
  evaluation assets                                (1,196)         (3,476)
 Additions to petroleum properties                (13,080)        (14,677)
 Additions to other assets                            (89)            (40)
 Changes in restricted cash                            (1)             (1)
 Changes in non-cash working capital                  315            (893)
------------------------------------------------------------------------- 
Net cash generated by (used in) investing                                 
 activities                                       (14,051)        (19,087)
------------------------------------------------------------------------- 
 
FINANCING                                                                 
 Issue of common shares for cash                      716             396 
 Financing costs                                        -             (50)
 Interest paid                                     (3,847)         (3,373)
 Increase (decrease) in other long-term                                   
  liabilities                                        (130)           (144)
------------------------------------------------------------------------- 
Net cash generated by (used in) financing                                 
 activities                                        (3,261)         (3,171)
------------------------------------------------------------------------- 
Currency translation differences relating to                              
 cash and cash equivalents                           (384)           (436)
------------------------------------------------------------------------- 
NET INCREASE (DECREASE) IN CASH AND CASH                                  
 EQUIVALENTS                                      (14,485)         29,206 
CASH AND CASH EQUIVALENTS, BEGINNING OF                                   
 PERIOD                                           122,092          82,974 
------------------------------------------------------------------------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD    $     107,607   $     112,180 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 

TransGlobe En
ergy Corporation is a Calgary-based, growth-oriented oil
and gas exploration and development company focused on the Middle
East/North Africa region with production operations in the Arab
Republic of Egypt and the Republic of Yemen. TransGlobe's common
shares trade on the Toronto Stock Exchange under the symbol TGL and
on the NASDAQ Exchange under the symbol TGA. TransGlobe's convertible
debentures trade on the Toronto Stock Exchange under the symbol
TGL.DB. 
Cautionary Statement to Investors: 
This news release may include certain statements that may be deemed
to be "forward-looking statements" within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. Such statements
relate to possible future events. All statements other than
statements of historical fact may be forward-looking statements.
Forward-looking statements are often, but not always, identified by
the use of words such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe" and similar expressions. These statements involve known and
unknown risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in such
forward-looking statements. Although TransGlobe's forward-looking
statements are based on the beliefs, expectations, opinions and
assumptions of the Company's management on the date the statements
are made, such statements are inherently uncertain and provide no
guarantee of future performance. In particular, this press release
contains forward-looking statements regarding the Company's
appraisal, development and evaluation plans and the focus of the
Company's exploration budget. In addition, information and statements
relating to "resources" are deemed to be forward-looking information
and statements, as they involve the implied assessment, based on
certain estimates and assumptions, that the resources described exist
in the quantities predicted or estimated, and that the resources
described can be profitably produced in the future.  
Actual results may differ materially from TransGlobe's expectations
as reflected in such forward-looking statements as a result of
various factors, many of which are beyond the control of the Company.
These factors include, but are not limited to, unforeseen changes in
the rate of production from TransGlobe's oil and gas properties,
changes in price of crude oil and natural gas, adverse technical
factors associated with exploration, development, production or
transportation of TransGlobe's crude oil and natural gas reserves,
changes or disruptions in the political or fiscal regimes in
TransGlobe's areas of activity, changes in tax, energy or other laws
or regulations, changes in significant capital expenditures, delays
or disruptions in production due to shortages of skilled manpower,
equipment or materials, economic fluctuations, and other factors
beyond the Company's control. With respect to forward-looking
statements contained in this press release, assumptions have been
made regarding, among other things: the Company's ability to obtain
qualified staff and equipment in a timely and cost-efficient manner;
the regulatory framework governing royalties, taxes and environmental
matters in the jurisdictions in which the Company conducts and will
conduct its business; future capital expenditures to be made by the
Company; future sources of funding for the Company's capital
programs; geological and engineering estimates in respect of the
Company's reserves and resources; and the geography of the areas in
which the Company is conducting exploration and development
activities. TransGlobe does not assume any obligation to update
forward-looking statements if circumstances or management's beliefs,
expectations or opinions should change, other than as required by
law, and investors should not attribute undue certainty to, or place
undue reliance on, any forward-looking statements. Please consult
TransGlobe's public filings at www.sedar.com and
www.sec.gov/edgar.shtml for further, more detailed information
concerning these matters, including additional risks related to
TransGlobe's business. 
Contacts:
TransGlobe Energy Corporation
Steve Langmaid
Investor Relations
(403) 444-4787
investor.relations@trans-globe.com
www.trans-globe.com
 
 
Press spacebar to pause and continue. Press esc to stop.