Transglobe Energy Corporation Announces Second Quarter Results

Aug 22, 2000 - 05 44 ET

CALGARY, ALBERTA--TransGlobe Energy Corporation ("TransGlobe" or 
"the Company") (TSE, symbol "TGL"; NASD OTC-BB symbol "TGLEF") is 
pleased to announce its financial and operating results for the 
six months ended June, 2000. All dollar values are expressed in 
United States dollars unless otherwise stated.  


* Tasour field development proceeding on schedule for first oil in
fourth quarter 

* Two well development drilling program commenced on Block 32 

* Three exploratory wells drilled and cased on Block S-1 

* Fourth well added to Block S-1 drilling program 

* Prospectus offering over-subscribed 



DNO ASA, the operator of Block 32, advises that the Tasour field 
development work is proceeding on schedule and slightly under 
budget. Completion of the Tasour central production facility and 
the export pipeline connection is expected in September 2000 with 
first oil sales commencing in October 2000.  Tasour #1 and Tasour 
#3 wells were completed and equipped for production during August 
2000. In June the Block 32 partnership approved a two well 
development drilling program. The drilling rig moved to the first 
development well, Tasour #4, and commenced drilling on August 14, 
2000.  Depending on the results of the development wells, 
production could increase to 10,000 to 15,000 barrels of oil per 
day ("Bopd") (approximately 1,000 to 1,500 Bopd to TransGlobe) by 
early 2001.  


The operator of Block S-1, Vintage Petroleum Inc. ("Vintage"), has
finished drilling three exploration wells on Block S-1. The first 
well at An Naeem # 1, was drilled to a total depth of 1,612 meters
(5,288 feet) to evaluate a possible extension of the Halewah field
which produces from the Alif formation on the adjacent concession.
The Halewah field has produced 25,000 Bopd from an oil rim under a
significant gas cap. The well flow tested at a combined rate of 40
million cubic feet per day ("MMcfd") of gas and 1,020 barrels per 
day of condensate from the Alif zone. No water was recovered 
during the test period. The characteristics of the gas and 
condensate tested at An Naeem #1 are similar to the gas cap in the
Halewah field. Analysis of the test results strongly supports the 
existence of an oil rim structurally downdip from An Naeem #1.   A
fourth well has been added to the drilling program, An Naeem #2, 
which started drilling on August 8, 2000 to test for the existence
of an oil rim downdip of the gas and condensate tested in the Alif
formation in the An Naeem #1.  

The second location, Harmel #1, tested a separate Alif prospect 
identified on a 3-D seismic program shot in 1999. The Harmel #1 
well was drilled and cased to a depth of 1,900 meters (6,234 
feet). A completion rig was mobilized and production testing 
commenced on up to eight separate zones. Testing is expected to be
completed in September. The third exploration well, Fordus #1, 
tested a separate structure with multi-zone potential. The well 
was drilled and cased to a depth of 1,958 meters (6,422 feet) and 
production testing of several prospective zones is expected to 
commence following the testing of Harmel #1. 

The An Naeem #2 well was approved by the Yemen Minister of Oil and
Mineral Resources ("MOMR") as a commitment well for the Second 
Exploration Period of the Production Sharing Agreement. The MOMR 
also approved a six month extension of the First Exploration 
Period which will now expire on June 28, 2001. 


At Fort Kent, Alberta, the Company acquired a 100% working 
interest in a 640 acre shallow Colony gas prospect.  The well was 
drilled and cased as a potential gas well and will be completed 
and evaluated in August 2000. At Nevis, Alberta, the Company 
acquired and tied in a gas well with multi-zone potential.  The 
well commenced production in July at an initial rate of 500 
thousand cubic feet per day ("Mcfd") of gas plus liquids.  
TransGlobe's share of production will add approximately 50 barrels
of oil equivalent per day ("Boepd"). Recompletion of a Camao 
horizontal well added approximately 20 Boepd of new production in 
July 2000. 


                             Three Months Ended   Six Months Ended
                                   June 30              June 30   
PRODUCTION                      2000      1999      2000      1999
Oil and liquids (Bopd)            89       128        99       103
Gas (Mcfpd)                      297       516       357       273
Total (Boepd)                    119       180       135       130
Oil and gas revenue
 net of royalties          $ 221,917 $ 205,662 $ 488,732 $ 254,216
Cash flow from operations   (115,684)  (17,266) (158,339) (150,182)
Net loss                    (195,184) (102,766) (335,633) (256,682)
    Basic per share            (0.01)        -     (0.01)    (0.01)
Capital expenditures
 - Canada                    166,372     9,271   366,615    13,586
Capital expenditures
 - United States              14,419   (24,911)   16,184   (21,491)
  Capital expenditures
 - Yemen                   $ 428,901 $ 499,061 $ 648,691 $ 757,920

                                               As at         As at 
                                             June 30,  December 31,
                                                2000          1999
Debt                                   $           - $     748,405
Common shares outstanding
     Basic                                41,930,033    33,417,244
     Fully diluted                        46,461,350    38,977,558



Production from Canada and the United States averaged 119 Boepd 
for the second quarter of 2000 compared to 180 Boepd in the 
comparable period in 1999. Production in 2000 was lower than 
expected due to shut in production at Camao and Montana.  At Camao
approximately 30 Boepd was shut in due to increased gas gathering 
system pressures.  The operator has installed booster compression 
and production was restored in August. In Montana production was 
curtailed because the Prevost #1 well was flowing intermittently. 
During June the operator installed a rod pump and restored 
production to 120 Bopd (30 Bopd to TransGlobe). These production 
increases, combined with the new production at Nevis and Camao, 
have resulted in a production rate of 200 Boepd in August. 


Revenue net of royalties was $221,917 for the three months ended 
June 30, 2000, an increase from $205,662 in the comparable period.
Although there was a 33% decline in production from 1999, revenue 
net of royalties increased slightly from the previous period 
mainly due to the significant increases in both oil and gas 
prices. The average oil price for the second quarter of 2000 
increased to $26.50 per barrel as compared to $15.27 per barrel 
for the equivalent period in 1999. The average natural gas price 
for the second quarter in 2000 was $2.91 per Mcf compared to $1.74
per Mcf in the comparable period. 

The netback per barrel of oil equivalent ("Boe") was $12.08 during
the three months ended June 30, 2000. The comparable figure for 
the same period in 1999 was $8.89 per Boe. The increase in 
netbacks between periods is primarily due to the increase in oil 
and gas prices. 


In Yemen, the Company incurred $428,901 in capital expenditures 
for the three month period ended June 30, 2000. These costs 
related to the Tasour development program on Block 32. For the 
three month period ended June 30, 1999 the Company incurred 
$499,061 in capital expenditures in Yemen primarily related to 
drilling appraisal wells on Block 32.  Capital expenditures of 
$166,372 in Canada in the second quarter 2000 were mainly for 
seismic acquisition and interpretation in the Cherhill, Elk Island
and Fort Kent areas and recompletion costs on a horizontal well at
Camao. Canadian activity in the comparable period was primarily 
related to costs of the Moiibus acquisition. Capital expenditures 
in the United States were minimal in both periods, as the domestic
focus has shifted to Canada. Plans to divest of the United States 
properties are underway. It is anticipated that these properties 
will be sold before year end. 


In July, TransGlobe closed a prospectus offering of 4,477,612 
Units of the Company at Cdn$0.67 per Unit ("the Offering). The 
Offering was over-subscribed and the maximum offering amount of 
Canadian $3.0 million was sold.  Each Unit consisted of one common
share and one-half of a transferable Warrant. Each whole warrant 
entitles the holder to purchase one common share of the Company 
for Cdn$0.85 until January 27, 2001, and Cdn$1.15 until January 
27, 2002.  The proceeds from the financing will be used to fund 
the balance of the Company's share of the development program on 
Block 32 in Yemen, including the drilling of two additional wells 
on the Block.  

TransGlobe anticipates Vintage will fulfill its farm out 
commitment on Block S-1 upon completion of the production testing 
program on Harmel #1 and Fordus #1 at which time TransGlobe will 
be required to fund its 25% working interest share of future 
expenditures on the Block. The addition of the fourth well, An 
Naeem #2, is beyond the farm out commitment and TransGlobe is 
paying its 25% share of this well. Funding for the well will be 
provided from proceeds of 2,231,495 warrants, exercised prior to 
expiry on August 20, 2000, in the amount of Cdn$1,338,897. Future 
capital expenditures for Block S-1 will be dependent on the 
results of Harmel #1, Fordus #1 and An Naeem #2 and will be 
financed by cash flow from Block 32 and/or equity financing. 


Mr. Kusumoto retired from the Board in August 2000. On behalf of 
management and the Board of Directors, we would like to thank Mr. 
Kusumoto for his contributions to the Board and his continued 
support.  We are pleased to announce, subject to Toronto Stock 
Exchange approval, that Mr. Geoffrey Chase has joined the Board to
fill this vacancy. Mr. Chase brings 35 years of international and 
domestic oil and gas experience to the Board, most recently as 
Senior Vice President, Business Development, with Ranger Oil. 


A major milestone for the Company is first oil production from 
Block 32, anticipated in October 2000.  While this milestone will 
have practical effects, skyrocketing production by almost 500% and
providing the financial stability to support expansion of Yemen 
operations, its symbolic meaning is also of great importance to 
TransGlobe. Symbolically, this milestone establishes TransGlobe as
a credible and successful international exploration company, 
opening doors to new opportunities worldwide.  

The drilling results from the first three wells on Block S-1 are 
very encouraging.  To date all three exploration wells have been 
cased with indicated oil potential. The production testing of 
multiple zones of the last two wells should be complete in 
September. Each exploratory well is targeting large exploration 
prospects of 30 - 50 million barrels of recoverable oil. Each has 
the potential to significantly increase corporate reserves and 
could be developed on a stand alone or combined basis. 

Positive test results of An-Naeem #1 resulted in the expansion of 
the drilling program to test for the existence of a downdip oil 
rim.  Success at An Naeem #2 could lead to a development decision 
and early cash flow from Block S-1, following the same successful 
business plan as Block 32.  

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  


Ross G. Clarkson 

President & C.E.O. 



TransGlobe Energy Corporation
Ross G. Clarkson
President & C.E.O.
(403) 264-9888
(403) 264-9898 (FAX)


TransGlobe Energy Corporation
Lloyd W. Herrick
Vice President & C.O.O.
(403) 264-9888