TransGlobe Energy Corporation Exploration Update, Block S-1, Republic of Yemen

Jan 03, 2000 - 04 04 ET

CALGARY, ALBERTA--TransGlobe Energy Corporation (TSE symbol "TGL";
OTC-BB symbol "TGLEF") announced the results of last year's 
exploration program on Block S-1 in the Republic of Yemen. 

TransGlobe Energy Corporation holds a 25% working interest in 
Block S-1 through its wholly owned subsidiary, TG Holdings Yemen 
Inc. The remaining 75% is held by Vintage Petroleum Yemen Inc., a 
100% subsidiary of Vintage Petroleum Inc. ("VPI" NYSE). Vintage, 
as operator, drilled four exploration wells in the 2000 
exploration program on Block S-1. 

The first and fourth exploration wells (An Naeem #1 and #2) tested
at rates up to 40 MMcfpd of gas and 1,000 barrels per day of 
condensate from excellent quality Alif sand reservoirs. The 
geochemical characteristics of the condensate indicate the 
presence of an underlying oil rim to the An Naeem pool. Additional
drilling will be required to determine if an oil rim is indeed 
present on the An Naeem structure, similar to the adjacent Halewah
field which produces 15,000 Bopd from an oil rim down dip of a 
large gas cap.   

The Harmel #1 well, the second exploration well drilled by 
Vintage, was recently pump tested using a variable speed hydraulic
pump. The test yielded combined daily production ranging between 
180 and 470 barrels of oil. The medium gravity sweet crude was 
tested from three separate zones between 465 to 673 meters (1,526 
to 2,208 feet). As previously announced, the Harmel #1 initially 
swab tested at a combined rate of 500 barrels of oil per day of 20
degree API gravity oil from the same three zones. The Company has 
begun to analyze the resulting production, pressure and fluid test
data to determine the likelihood of commerciality of this area. If
the results of the technical evaluation prove encouraging, then 
appraisal drilling will be undertaken to provide the additional 
reservoir information necessary to determine if sufficient 
reserves exist to establish commerciality. A structural closure of
up to 25 square kilometers (10 square miles) can be mapped on good
quality 3-D seismic data. The Harmel #1 discovery is located 
approximately 10 kilometers (6 miles) from the nearest pipeline 
tie-in point. The combination of shallow drilling depths and 
nearby pipeline facilities will significantly enhance development 

The Company's independent engineering firm, Fekete Associates 
Inc., has analysed the seismic, well data and test results from 
Harmel #1 and conducted a probabilistic volumetric estimate of the
hydrocarbons in-place for the three zones tested in the Harmel 
structure. The potential in-place hydrocarbon volume for all three
zones ranges from 97 million barrels to  660 million barrels 
in-place with a most likely estimate (50% probability) of 253 
million barrels. Additional appraisal drilling and well testing 
will be required to estimate recoverable reserves and to determine
whether to proceed with full development. Should development 
proceed, as many as forty additional shallow wells could be 
required to fully exploit the structure. Production testing of 
Fordus #1, the third exploration well on Block S-1, was completed 
in December 2000. Four separate zones were tested without 
recovering any significant hydrocarbons. The Fordus #1 well was 
subsequently plugged and abandoned. 

In addition to potential follow-up drilling locations at An Naeem,
Harmel and An Nagyah, TransGlobe has identified more than twenty 
additional undrilled prospects and leads utilizing 2-D and 3-D 
seismic on the 1,100,000 acre Block. Although the 2001 exploration
program has not been finalized, the Company anticipates drilling 
several additional exploration wells in the near future due to the
very encouraging results of the joint venture's first exploration 
drilling program on Block S-1. There are three years remaining in 
the exploration phase of the Production Sharing Agreement. A 
production period of twenty years can be entered into should 
Vintage and TransGlobe wish to proceed with development of an oil 

This release includes certain statements that may be deemed to be 
"forward-looking statements" within the meaning of the US Private 
Securities Litigation Reform Act of 1995. All statements in this 
release, other than statements of historical facts, that address 
future production, reserve potential, exploration drilling, 
exploitation activities and events or developments that the 
company expects are forward-looking statements. Although 
TransGlobe believes the expectations expressed in such 
forward-looking statements are based on reasonable assumptions, 
such statements are not guarantees of future performance and 
actual results or developments may differ materially from those in
the forward-looking statements. Factors that could cause actual 
results to differ materially from those in forward-looking 
statements include oil and gas prices, exploitation and 
exploration successes, continued availability of capital and 
financing, and general economic, market or business conditions. 

On Behalf of the Board of Directors of 


Mary Chandler, 

Vice President, Finance & CFO 



TransGlobe Energy Corporation
Ross G. Clarkson, President & CEO
(403) 264-9888


TransGlobe Energy Corporation
Lloyd Herrick, Vice President & COO
(403) 264-9888


TransGlobe Energy Corporation
Mary Chandler, Vice President, Finance & CFO
(403) 264-9888
(403) 264-9898 (FAX)