NEWS RELEASE TRANSMITTED BY Marketwire



FOR: TRANSGLOBE ENERGY CORPORATION

TSX SYMBOL:
 TGL
NASDAQ SYMBOL:
 TGA

TransGlobe Energy Corporation Second Interim Report for the Three and Six Months Ended June 30, 2004

Jul 29, 2004 - 02 29 ET

CALGARY, ALBERTA--(CCNMatthews - July 29, 2004) - TransGlobe 
Energy Corporation ("TransGlobe" or the "Company") is pleased to 
announce its financial and operating results for the three and 
six months ended June 30, 2004. All dollar values are expressed 
in United States dollars unless otherwise stated. Conversion of 
natural gas to oil is made on the basis of 6,000 cubic feet of 
natural gas being equivalent to one barrel of oil. 

HIGHLIGHTS 

Record production at 3,103 Boed for Q-2; July production to 
average 4,200 Boed 

Block 32, Yemen 

 - Tasour #12 completed at 6,100 Bopd (842 Bopd to TransGlobe) 

 - 3-D seismic completed 

Block S-1, Yemen 

 - Development oil wells completed at An Nagyah #6, #7 & #8 

 - An Nagyah #9 drilling 

 - Harmel #2 appraisal well completed 

 - Trucking production increased 

 - Facilities and pipeline project on target for early 2005 start 
up 

Canada 

 - Tied in wells at Morningside, Twining and Nevis 

 - Drilled two oil wells, two gas wells, one D&A 

Award of new exploration blocks: 

 - Block 72 in Yemen 

 - Nuqra Block in Egypt 

OUTLOOK 

At mid year 2004 TransGlobe is on track to meet or exceed 
management's targets for the year. Total Company production has 
increased to 4,200 Boed for July due to excellent field 
performance at Tasour, increased trucking rates from An Nagyah, 
and the recent tie-ins of additional production in Canada. The 
2004 production target of an average 3,400 Boed, is now increased 
to an average of 3,600 Boed for the year. 

On the financial front, the Company is reporting higher cash 
flow, both quarterly and semi-annually compared to the same 
period in 2003, and anticipates the increased production levels 
for the next six months will also reflect significant increases 
in cash flow. The cash flow target of $13.0 million for 2004 will 
be increased to $14.5 million due to higher production levels and 
higher product prices (assumptions: 3,600 Boed average for the 
year, $32.00 oil price and Cdn$6.00 gas price). 

Profits are higher for the six month period and lower for the 
quarter as a result of the new accounting policy of expensing 
stock options which decreased quarterly profit by almost one cent 
per share. This non-cash expense impacts earnings but has no 
effect on the Company's cash flow. In addition there was an 
increase in oil inventory on Block S-1 that resulted in lower oil 
sales for the quarter of approximately $1.0 million. This oil 
will be sold in July. 

TransGlobe has experienced a high rate of production growth, 38% 
per year over the past three years, due primarily to success 
internationally. Endeavoring to support continued high growth we 
have added two new international projects. International projects 
take a long time to develop, so we have chosen one project with a 
medium term to development (Block 72, Yemen) and one with a long 
term to development (Nuqra Block, Egypt). Both projects have 
excellent exploration potential. Significant advancements are: 
each project has a higher working interest than that of previous 
projects; TransGlobe is operator of one (Nuqra Block in Egypt). 
These projects are in keeping with our philosophy of growing the 
Company in manageable increments while maintaining focus on good 
exploration potential and a conservative financial position. 


/T/

FINANCIAL AND OPERATING UPDATE

(Expressed in thousands of U.S. Dollars)
                        Three Months Ended          Six Months Ended
                                   June 30                   June 30
                      ----------------------------------------------
Financial              2004   2003  Change      2004   2003   Change
--------------------------------------------------------------------
Oil and gas revenue
 net of royalties     5,779  4,139      40%   11,647  8,515      37%
Operating expense     1,352    981      38%    2,479  1,757      41%
General and
 administrative
 expense                808    341     137%    1,237    615     101%
Depletion,
 depreciation and
 accretion expense    1,934  1,593      21%    3,548  3,059      16%
Income taxes          1,220    438     179%    1,779    867     105%
Cash flow from
 operations           2,749  2,369      16%    6,636  5,260      26%
  Basic and diluted
   per share           0.05   0.05              0.12   0.10
Net income              447    776     (42)%   2,610  2,201      19%
  Basic and diluted
   per share           0.01   0.01              0.05   0.04
Capital expenditures  5,591  3,503      60%    7,651  6,774      13%
Working capital                                1,780  3,390     (47)%
Common shares
 outstanding
  Basic
   (weighted average)                         54,072 51,778       4%
  Diluted
   (weighted average)                         56,519 52,690       7%

Production
--------------------------------------------------------------------
Oil and liquids (Bopd) 2,751  2,330      18%    2,588  2,343      10%
 Average price
 ($ per barrel)       34.64  25.67      35%    33.12  27.69      20%
Gas (Mcfpd)           2,114  1,017     108%    2,061    992     108%
 Average price
 ($ per Mcf)           5.09   5.63     (10)%    5.18   5.60      (8)%
Total (Boed) (6 : 1)  3,103  2,499      24%    2,931  2,509      17%
Operating expense
($ per Boe)            4.79   4.31      11%     4.65   3.87      20%

/T/



EXPLORATION UPDATE 

Block 32, Republic of Yemen (13.81087% working interest) 

The Tasour #12 infill well was drilled in the central area of the 
Tasour pool. The Tasour #12 development well was completed as an 
oil well and placed on production at an initial rate of 
approximately 6,100 barrels of oil per day with 6,600 barrels of 
water per day, from the main producing zone the Qishn S1-A. A 
second oil zone in the Qishn S1-C zone was also encountered which 
may be completed in the future. 

With the addition of Tasour #12 the Tasour field is producing an 
average 2,730 Bopd to TransGlobe during July. It is expected that 
production from the Tasour field will average approximately 
18,000+ Bopd (2,485 Bopd to TransGlobe) for the remainder of 
2004, which is consistent with the 2004 development drilling 
plans and predicted natural declines for the field. 

The 100 square kilometer 3-D seismic acquisition survey over the 
greater Tasour area was completed in May and the processing was 
completed in Calgary in June. The seismic is currently being 
interpreted to define future drilling locations. Further 
development/appraisal drilling of three to four wells in the 
western and potential eastern extension is planned to commence in 
September 2004 with the Tasour #13 well (western extension). 

Block S-1, Republic of Yemen (25% working interest) 

During the quarter, three development wells (An Nagyah #6, #7 and 
#8) were completed on the An Nagyah field and placed on 
production. The An Nagyah field boundaries are now defined by the 
3-D seismic and development wells drilled to date. Future plans 
include infill development drilling on the field for the 
remainder of the year and in 2005 to coincide with the completion 
of the pipeline and central production facilities. Also, two 
exploratory wells are planned for Block S-1 in 2004. 

The early production (trucking) facilities at the An Nagyah field 
were installed during the first quarter of 2004 and field 
production operations now include the An Nagyah #4, #5, #6, #7 
and #8 wells. During July production was increased to 
approximately 3,600 Bopd (900 Bopd to TransGlobe). The oil 
production is being trucked 18 miles to the Jannah Hunt facility 
where it enters the pipeline to the Ras Isa loading terminal on 
the Red Sea. 

The construction of a central production facility ("CPF") at An 
Nagyah and a 28 kilometer (18 mile) pipeline to the Jannah Hunt 
Halewah export pipeline is planned during 2004, with an 
anticipated completion by early 2005. A 10 inch pipeline with an 
ultimate capacity of 80,000 Bopd is being constructed to allow 
future discoveries to be placed on stream quickly. The CPF is 
designed for an initial capacity of 10,000 Bopd (2,500 Bopd to 
TransGlobe), with expansion capabilities. The detailed 
engineering contract was awarded in May and long lead time major 
equipment contracts were awarded during the second quarter of 
2004. 

Harmel #2 was drilled in June to appraise the shallow depth, 
medium gravity oil discovered in Harmel #1. The Harmel #2 well 
was drilled to a total depth of 856 meters and cased as a 
potential oil well. The Harmel #2 well is located 1.2 kilometers 
from the Harmel #1 discovery well. Full diameter cores were cut 
over three separate oil zones. Open hole well logs and cores 
indicate the three oil zones encountered in Harmel #1 also extend 
to Harmel #2. The Harmel #2 cores will be analysed to determine 
the best completion and stimulation methods to optimize recovery 
and flow rates. A pilot production test is planned for Harmel #1 
and #2 for the future. 

Block 72, Republic of Yemen (33% working interest) 

DNO ASA (operator at 34%), TG Holdings Yemen Inc. (33%) and Ansan 
Wikfs (Hadramaut) Limited (33%) were selected as the successful 
bidders for Block 72 in the Yemen International Bid Round for 
Exploration and Production of Hydrocarbons. TG Holdings Yemen 
Inc. is a wholly owned subsidiary of TransGlobe Energy 
Corporation. The signing of the Block 72 Production Sharing 
Agreement is anticipated to take place in September and 
ratification by parliament is expected before the end of 2004. 

Block 72 encompasses 1,822 square kilometers (approximately 
450,234 acres) and is located in the western Masila Basin 
adjacent to the billion barrel Canadian Nexen Masila Block. The 
Block 72 Joint Venture Group plans to carry out a seismic 
acquisition program and the drilling of two exploration wells 
during the first exploration period of thirty months. 

Nuqra Block 1, Arab Republic of Egypt (50% working interest, 
Operator) 

In July TransGlobe Petroleum Egypt Inc. ("TransGlobe Egypt"), a 
wholly owned subsidiary of TransGlobe Energy Corporation, entered 
into a Farmout Agreement with Quadra Egypt Limited ("QEL"), a 
subsidiary of Quadra Resources Corp. headquartered in Calgary, 
and Rampex Petroleum International ("Rampex") headquartered in 
Cairo, Egypt. This agreement provides TransGlobe Egypt the 
opportunity to participate and earn a 50% working interest in the 
Nuqra Concession. 

Under the terms of this agreement TransGlobe Egypt will earn 50% 
of the Nuqra Concession by paying 100% of the initial US$6.0 
million of expenditures in the Stage 1 and the Stage 2 work 
programs. TransGlobe Egypt will hold a 50% working interest in 
the Nuqra Concession, subject to the approval of the Egyptian 
government. The assignment documents were submitted for approval 
on July 20. QEL will hold a 30% working interest in the 
Concession and Rampex will hold a 20% working interest. After 
earning, costs will be shared 60% TransGlobe Egypt, 40% QEL and 
Rampex will be carried until first production. The cost of the 
Rampex carry will be recovered by TransGlobe Egypt and QEL from 
100% of the Rampex cost oil and 50% of the Rampex production 
sharing oil. TransGlobe Egypt will become Operator of the Nuqra 
Block. 

The Nuqra Concession is located in Upper Egypt near of the city 
of Luxor on the east bank of the Nile River. The concession 
encompasses over two-thirds of the Kom Ombo Basin, a rift basin 
analogous to the Gulf of Suez Basin, the Marib Basin in the 
Republic of Yemen, and the Muglad Basin in Sudan, all of which 
contain major reserves. The Nuqra Concession contains more than 
30,000 square kilometers or 7,500,000 acres of exploration lands 
with 13 seismically defined leads identified from over 4,000 km 
of existing 2D seismic. Seismic and well data have confirmed the 
existence of Jurassic and Cretaceous sediments and the presence 
of a petroleum system which could potentially hold significant 
oil reserves. The Concession fiscal terms allow for the recovery 
of costs from 40% of production. The remaining balance of 60% of 
production is then shared on a 70:30 basis between the government 
and the contractor, respectively. Production sharing above 25,000 
Bopd is shared on an 80:20 basis. 

The Nuqra Concession Agreement Stage 1 work program requires 
expenditure of $2.0 million to reprocess existing seismic and to 
shoot new seismic within the first two years. Upon expiry of the 
Stage 1 term, there is an option to proceed to the Stage 2 work 
program. Stage 2 requires completion of a two well drilling 
program, with a minimum expenditure of $4.0 million, over a 
period of three years. Upon expiry of the Stage 2 term there is 
an option to proceed to the Stage 3 work program. Stage 3 
requires completion of a two well drilling program, with a 
minimum expenditure of $5.0 million, over a final three year 
term. Exploitation of discovered commercial fields will continue 
under a Development Lease for a further 20 years. 

Canada 

During the first quarter, the Company participated in drilling 
one (0.2 net) gas well at Nevis. In the second quarter the 
drilling program continued with five wells drilled (3.9 net) 
resulting in two oil wells, two gas wells and one D&A well. 
Overall success for the 2004 drilling program to date is 83%. An 
additional six well licenses are issued and are expected to be 
drilled in the next sixty days. TransGlobe has increased its 2004 
Canadian drilling program to fifteen wells for 2004. All of the 
prospects are natural gas focused and are located in Central 
Alberta, which generally affords year round access. 

Installation of pipelines and facilities at Nevis, Twining and 
Morningside were completed during June and July. This has 
resulted in an increase in Canadian production to 1,000 Boed at 
the end of July. 

MANAGEMENT'S DISCUSSION AND ANALYSIS 

Management's discussion and analysis ("MD&A") should be read in 
conjunction with the unaudited interim financial statements for 
the three and six months ended June 30, 2004 and 2003, the 
audited financial statements and MD&A for the year ended December 
31, 2003 included in the Company's annual report. Additional 
information relating to the Company, including the Company's 
Annual Information Form, is on SEDAR at www.sedar.com. All dollar 
values are expressed in U.S. dollars, unless otherwise stated. 
The calculations of barrels of oil equivalent ("Boe") are based 
on a conversion rate of six thousand cubic feet of natural gas to 
one barrel of crude oil. 

This Management's Discussion and Analysis (MD&A) 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. All statements in this interim 
report, 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, but are not limited to, oil and gas prices, 
exploitation and exploration successes, continued availability of 
capital and financing, and general economic, market or business 
conditions. 


/T/

SELECTED QUARTERLY FINANCIAL INFORMATION

(US$000's, except        June 30  Mar. 31  Dec. 31  Sept. 30  June 30
 per share amounts)         2004     2004     2003      2003     2003
---------------------------------------------------------------------
Oil and gas sales,
 net of royalties          5,779    5,868    4,488     4,159    4,139

Cash flow from operations  2,749    3,887    1,894     2,193    2,369
Cash flow from
 operations per share
 - Basic and diluted        0.05     0.07     0.04      0.04     0.05

Net income                   447    2,163    3,414       291      776
Net income per share
 - Basic and diluted        0.01     0.04     0.06      0.01     0.01

Total assets              38,798   35,753   35,601    29,212   28,024
---------------------------------------------------------------------

/T/

Cash flow from operations is a non-GAAP measure that represents 
cash generated from operating activities before changes in 
non-cash working capital. We consider this a key measure as it 
demonstrates our ability to generate the cash flow necessary to 
fund future growth through capital investment. Cash flow from 
operations may not be comparable to similar measures used by 
other companies. 

Cash flow from operations decreased by $1,138,000 (29%) in Q2 
compared to Q1-2004 and net income decreased by $1,716,000 (79%) 
in Q2 compared to Q1-2004 mainly as a result of expected declines 
in production sharing on Block 32 in Yemen, whereby the joint 
venture group's share of production declined from 65% in Q1 to 
41% in Q2. The high production sharing in Q1 is a result of 
recovering 50% of 2003 capital expenditures in Q1-2004. The 
Company's net back on Block 32 after royalties, taxes and 
operating costs was $1,272,000 lower in Q2 compared to Q1-2004. 

RESULTS OF OPERATIONS 

Net income for the three months ended June 30, 2004 was $447,000 
($0.01 per share, basic and diluted) compared to a net income of 
$776,000 ($0.01 per share, basic and diluted) in the comparable 
period 2003. Cash flow from operations for the three months ended 
June 30, 2004 was $2,749,000 ($0.05 per share, basic and diluted) 
compared to $2,369,000 ($0.05 per share, basic and diluted) in 
the comparable period in 2003. 

Net income decreased 42% and cash flow from operations increased 
16%. The following is a brief summary of the primary changes that 
occurred during Q2-2004 that will be discussed in more detail 
throughout this MD&A: 

- Sales volumes increased 24% in the three months ended June 30, 
2004 compared to the same period 2003. 

- Commodity prices increased 30% in the three months ended June 
30, 2004 compared to the same period 2003. 

- Royalty costs increased 68% on a Boe basis, mainly as a result 
of historical costs being recovered on Block 32 for part of the 
second quarter in 2003 and higher commodity prices. 

- Stock compensation expense amounted to $368,000 in the quarter 
without a corresponding amount in the same quarter 2003. 


/T/

OPERATING RESULTS

Daily Production, Working Interest Before Royalties

                                         Three Months      Six Months
                                                Ended           Ended
                                              June 30         June 30
                                         ------------    ------------
                                          2004   2003     2004   2003
---------------------------------------------------------------------
Yemen - Oil                        Bopd  2,618  2,280    2,454  2,293
Canada - Oil and liquids           Bopd    133     50      134     50
       - Gas                      Mcfpd  2,114  1,017    2,061    992
---------------------------------------------------------------------
Barrels of oil equivalent (6 : 1) Boepd  3,103  2,499    2,931  2,509
---------------------------------------------------------------------


The Company has set an average production target of 3,600 Boepd for
2004 representing a 37% increase over 2003.


Consolidated Net Operating Results
                                            Consolidated
                               --------------------------------------
                                 Six Months Ended    Six Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Oil and gas sales                  17,567   32.93     12,819    28.23
Royalties                           5,920   11.10      4,305     9.48
Operating expenses                  2,479    4.65      1,757     3.87
---------------------------------------------------------------------
Net operating income (1)            9,168   17.18      6,757    14.88
---------------------------------------------------------------------
---------------------------------------------------------------------


                                            Consolidated
                               --------------------------------------
                               Three Months Ended  Three Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Oil and gas sales                   9,670   34.25      6,002    26.39
Royalties                           3,891   13.78      1,863     8.19
Operating expenses                  1,352    4.79        981     4.31
---------------------------------------------------------------------
Net operating income (1)            4,427   15.68      3,158    13.89
---------------------------------------------------------------------
---------------------------------------------------------------------

(1) Net operating income amounts do not reflect Yemen income tax
    expense which is paid through oil allocations with the Ministry
    of Oil and Minerals ("MOM") in the Republic of Yemen (Q2-2004 -
    $1,208,000, $4.28/Boe; Q2-2003, - $438,000, $1.93/Boe), (Q1 and
    Q2-2004 - $1,767,000, $3.31/Boe; Q1 and Q2-2003 - $867,000,
    $1.91/Boe).

/T/

Segmented Net Operating Results 

In 2004 the Company operated in two geographic areas, segmented 
as the Republic of Yemen and Canada. MD&A will follow under each 
of these segments. 


/T/

Republic of Yemen

                                 Six Months Ended    Six Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Oil sales                          14,867   33.29     11,508    27.72
Royalties                           5,459   12.22      4,099     9.87
Operating expenses                  1,915    4.29      1,480     3.56
---------------------------------------------------------------------
Net operating income (1)            7,493   16.78      5,929    14.29
---------------------------------------------------------------------
---------------------------------------------------------------------


                               Three Months Ended  Three Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Oil sales                           8,290   34.81      5,334    25.71
Royalties                           3,648   15.32      1,755     8.46
Operating expenses                  1,053    4.42        841     4.05
---------------------------------------------------------------------
Net operating income (1)            3,589   15.07      2,738    13.20
---------------------------------------------------------------------
---------------------------------------------------------------------

(1) Net operating income amounts do not reflect Yemen income tax
    expense which is paid through oil allocations with MOM in the
    Republic of Yemen (Q2-2004 - $1,208,000, $5.07/Boe; Q2-2003 -
    $438,000, $2.11/Boe), (Q1 and Q2-2004 - $1,767,000, $3.96/Boe; Q1
    and Q2-2003 - $867,000, $2.09/Boe).

/T/

Net operating income in Yemen increased 26% in the first six 
months of 2004 and 31% in the three months ended June 30 compared 
to the same periods of 2003 primarily as a result of the 
following: 

- Sales volumes increased 7% for the six months and 15% for the 
three months ended June 30 compared to the same periods of 2003 
primarily as a result of Block S-1 production commencing at the 
end of the first quarter 2004. During the second quarter sales 
volumes for Block S-1 and Block 32 were 279 Bopd and 2,339 Bopd, 
respectively. Production volumes for Block S-1 were higher than 
sales volumes, averaging 569 Bopd during the second quarter. The 
difference is carried in oil inventory of 26,385 barrels which 
will be sold in the third quarter. 

- Oil prices increased 20% for the six months and 35% for the 
three months ended June 30 compared to the same periods of 2003. 

- Operating expenses increased 21% on a Boe basis for the six 
months and 9% on a Boe basis for the three months ended June 30 
compared to the same periods of 2003, mainly as a result of 
increased export pipeline tariff on Block 32 for all of 2004 and 
only part of 2003 following recovery of all historical costs in 
2003. Also, Block S-1 has significantly higher operating costs 
during the initial phase averaging $9.35 per barrel. This is a 
reflection of higher costs associated with trucking and higher 
fixed costs per Boe until volumes are increased when full scale 
production commences in 2005. Block 32 operating expenses 
averaged $3.83 per barrel during the second quarter. 

The Block 32 Production Sharing agreement allows for the recovery 
of operating costs and capital costs from oil production. 
Operating costs are recovered in the quarter expended. The 
capital costs are amortized over two years with 50% recovered in 
the quarter expended and the remaining 50% recovered in the first 
quarter of the following calendar year. The Company will receive 
a larger share of production in the first quarter of each year as 
50% of the previous year's historical costs are recovered. The 
amount of oil required to recover capital and operating costs 
will vary depending upon the prevailing oil prices. The Company 
received 41% of its working interest share of production (after 
royalty and tax) in the second quarter of 2004 compared to 65% in 
the first quarter of 2004. The Company expects to receive between 
40% to 48% of its working interest share of production in the 
balance of the year depending upon production volumes, oil 
prices, operating costs and eligible capital expenditures. 


/T/

Canada

                                 Six Months Ended    Six Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Oil sales                             394   34.17        157    27.47
Gas sales (6 : 1)                   1,942    5.18      1,005     5.60
NGL sales                             338   26.13         80    24.15
Other sales                            26       -         69        -
---------------------------------------------------------------------
                                    2,700   31.05      1,311    33.67
Royalties                             462    5.31        206     5.29
Operating expense                     564    6.49        277     7.12
---------------------------------------------------------------------
Net operating income                1,674   19.25        828    21.26
---------------------------------------------------------------------
---------------------------------------------------------------------



                               Three Months Ended  Three Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Oil sales                             206   37.49         73    25.23
Gas sales (6 : 1)                     979    5.09        521     5.63
NGL sales                             177   26.49         36    21.68
Other sales                            18       -         38        -
---------------------------------------------------------------------
                                    1,380   31.23        668    33.47
Royalties                             243    5.50        108     5.43
Operating expense                     299    6.79        140     7.00
---------------------------------------------------------------------
Net operating income                  838   18.94        420    21.04
---------------------------------------------------------------------
---------------------------------------------------------------------

/T/

Net operating income in Canada increased 100% in the three months 
ended June 30, 2004 compared to the same period of 2003 primarily 
as a result of the following: 

- Sales volumes increased 122% as a direct result of the 2003 
drilling program. 

- Commodity prices decreased 7% on a Boe basis. 

- Operating costs decreased 3% on a Boe basis. 




/T/

GENERAL AND ADMINISTRATIVE EXPENSES (G&A)

                                 Six Months Ended    Six Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
G&A (gross)                         1,652    3.09        838     1.84
Capitalized G&A                      (366)  (0.68)      (214)   (0.47)
Overhead recoveries                   (49)  (0.09)        (9)   (0.02)
---------------------------------------------------------------------
G&A (net)                           1,237    2.32        615     1.35
---------------------------------------------------------------------
---------------------------------------------------------------------


                               Three Months Ended  Three Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
G&A (gross)                         1,044    3.70        466     2.05
Capitalized G&A                      (202)  (0.72)      (121)   (0.53)
Overhead recoveries                   (34)  (0.12)        (4)   (0.02)
---------------------------------------------------------------------
G&A (net)                             808    2.86        341     1.50
---------------------------------------------------------------------
---------------------------------------------------------------------

/T/

General and administrative expenses increased 137% and increased 
91% on a Boe basis in the three months ended June 30, 2004 
compared to the same period of 2003 as a result of the following: 


- Effective January 1, 2004 the Company adopted the 
recommendations of CICA section 3870, "Stock-based Compensation 
and Other Stock-based Payments", retroactively without 
restatement of prior periods. The recommendations require the 
Company to record a compensation expense over the vesting period 
based on the fair value of options granted to employees and 
directors since January 1, 2002. Stock compensation expense is 
included in general and administrative expenses. Non-cash stock 
compensation expense amounted to $368,000 for the three months 
ended June 30, 2004 ($1.30/Boe). 

- Other increases were experienced in costs associated with 
public company administration and listing expenses of $86,000 
($0.30/Boe) and in salaries and benefits of $73,000 ($0.26/Boe). 

Based on stock option grants subsequent to January 1, 2002 that 
will affect 2004 and stock option grants to date in 2004, it is 
expected that the effect on 2004 earnings will be approximately 
$1.2 million with no effect on cash flow from operations. 


/T/

DEPLETION, DEPRECIATION AND ACCRETION EXPENSE (DD&A)

                                 Six Months Ended    Six Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Republic of Yemen                   2,672    5.98      2,800     6.75
Canada                                876   10.07        259     6.65
---------------------------------------------------------------------
                                    3,548    6.65      3,059     6.74
---------------------------------------------------------------------
---------------------------------------------------------------------


                               Three Months Ended  Three Months Ended
                               ------------------  ------------------
                                    June 30, 2004       June 30, 2003
(US$000's, except              ------------------  ------------------
 per Boe amounts)                       $   $/Boe          $    $/Boe
---------------------------------------------------------------------
---------------------------------------------------------------------
Republic of Yemen                   1,534    6.44      1,447     6.97
Canada                                400    9.04        146     7.31
---------------------------------------------------------------------
                                    1,934    6.85      1,593     7.00
---------------------------------------------------------------------
---------------------------------------------------------------------

/T/

In Yemen unproven properties in the amount of $8,612,000 were 
excluded from costs subject to depletion and depreciation. This 
represents a portion of the costs incurred in Block S-1. These 
costs will be included in the depletable base as Block S-1 is 
developed or as impairment is determined. 

In Yemen, DD&A on a Boe basis decreased 11% and 8% per Boe in the 
six month and three month periods ended June 30, 2004 compared to 
the comparable period of 2003 primarily as a result of the 
following: 

- Increase in Yemen proved reserves resulted in a lower depletion 
rate. 

In Canada, DD&A on a Boe basis increased 24% to $9.04 per Boe in 
Q2-2004 from $7.31 in Q2-2003 primarily as a result of the 
following: 

- Increase in production resulted in a higher depletion rate. 

INCOME TAXES 

Current income tax expense in Q2-2004 of $1,220,000 represents 
income taxes of $1,208,000 (Q2-2003 - $438,000) incurred and paid 
under the laws of the Republic of Yemen pursuant to the PSA on 
Block 32 and Block S-1 and $12,000 paid in Canada. The increase 
in Yemen is primarily the result of the following: 

- Increased volumes mainly as a result of production start up on 
Block S-1. 

- Increase in oil prices. 

-An increase in the Yemen government's share of production 
sharing oil as a result of recovery of all historical costs 
during Q2-2003. The Yemen government's share of production 
sharing oil includes royalties and taxes. 

The Company has unrecognized future tax benefits in Canada in the 
amount of $1,492,000 which may be recognized in the future with 
continued drilling successes in Canada. 


/T/

CAPITAL EXPENDITURES/DISPOSITIONS

Capital Expenditures
                             Three Months Ended    Six Months Ended
                                        June 30             June 30
                             ------------------    ----------------
(US$000's)                       2004      2003      2004      2003
-------------------------------------------------------------------
-------------------------------------------------------------------
Republic of Yemen               2,941     2,523     4,201     5,492
Canada                          2,650       980     3,450     1,282
-------------------------------------------------------------------
Total capital expenditures      5,591     3,503     7,651     6,774
-------------------------------------------------------------------
-------------------------------------------------------------------

/T/

Capital expenditures in 2004 are mainly comprised of the 
following: 

Block 32, Yemen ($1,423,000) 

- 3-D seismic program at Tasour, Tasour facility upgrades and 
drilling one well at Tasour #12. 

Block S-1, Yemen ($2,747,000) 

- Drilling and completing of four wells at An Nagyah, drilling 
one well at Harmel and costs associated with commercial 
development of An Nagyah. 

Other, Yemen ($31,000) 

- Mainly costs associated with obtaining Block 72 in Yemen. 

Canada ($3,450,000) 

- Costs mainly related to the drilling of six wells and tie-in of 
two other wells as part of the 2004 exploration and development 
program. 

- Other costs related to oil and gas lease acquisitions for 
future drilling associated with the 2004 exploration and 
development program. 

OUTSTANDING SHARE DATA 

Common Shares issued and outstanding as at June 30, 2004 are 
54,096,439. 

LIQUIDITY AND CAPITAL RESOURCES 

Funding for the Company's capital expenditures in the second 
quarter of 2004 was provided by cash flow from operations and 
working capital. 

At June 30, 2004 the Company had working capital of $1,780,000, 
zero debt and a revolving credit facility of Cdn$5,000,000, an 
acquisition/development credit facility of Cdn$2,000,000 and a 
letter of credit facility of Cdn$2,000,000. 

The Company expects to fund the balance of its 2004 exploration 
and development program (remaining budget of $14 million firm and 
contingent) through the use of working capital, cash flow, and 
debt. Equity financing is not required for the current and 
planned operations for 2004 but may be utilised in the future. 
The use of our credit facilities during 2004 is expected to 
remain within conservative guidelines of a debt to cash flow 
ratio of less than 1:1. 



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: 


/T/

                            Six Months        Twelve Months
                                          ----------------------
(US$000's)                        2004     2005     2006    2007
----------------------------------------------------------------
----------------------------------------------------------------

Office and equipment leases       $ 75    $ 139    $ 139    $ 46
----------------------------------------------------------------
----------------------------------------------------------------

/T/

In February 2004, the Company entered into a contract to sell 
1,500 gigajoules (GJ) per day (approximately 1,500 Mcfpd) of 
natural gas in Canada from April 1 to October 31, 2004 for 
Cdn$5.795/GJ. 

In June 2004, the Company entered into a one year fixed price 
contract to sell 10,000 barrels of oil per month in Block 32 
commencing July 1, 2004 at $33.90 per barrel for Dated Brent plus 
or minus the Yemen Government's official selling price 
differential. 

In December 2003, the Company issued flow through shares with 
terms providing that the Company renounce Canadian tax deductions 
in the amount of Cdn$3,000,000 to subscribers with the entire 
amount to be expended by the Company by December 31, 2004. 

Pursuant to the Company's farmin agreement on the Nuqra 
Concession in Egypt, the Company is committed to spend $6 million 
over the next 5 years to earn its 50% working interest. As part 
of this commitment the Company issued a $2 million letter of 
credit on July 8, 2004 to Ganoub Wadi Holding Petroleum Company 
which expires on February 14, 2007. 


/T/

Consolidated Statements Of Income and Deficit

(Unaudited - Expressed in thousands of U.S. Dollars)

                                  Three Months            Six Months
                                 Ended June 30         Ended June 30
                               2004       2003        2004      2003
--------------------------------------------------------------------
                                     (Restated             (Restated
                                         Notes                 Notes
                                         2 & 3)                2 & 3)
REVENUE
Oil and gas sales net
 of royalties              $  5,779   $  4,139    $ 11,647  $  8,515
Other income                      -          5           3         5
--------------------------------------------------------------------
                              5,779      4,144      11,650     8,520
--------------------------------------------------------------------

EXPENSES
Operating                     1,352        981       2,479     1,757
General and
 administrative                 808        341       1,237       615
 Foreign exchange
  (gain) loss                    18         15          (3)       21
Depletion, depreciation
 and accretion                1,934      1,593       3,548     3,059
--------------------------------------------------------------------
                              4,112      2,930       7,261     5,452
--------------------------------------------------------------------

Net income before
 income taxes                 1,667      1,214       4,389     3,068
Income taxes                  1,220        438       1,779       867
--------------------------------------------------------------------
NET INCOME                      447        776       2,610     2,201
Deficit, beginning of
 period                      (4,441)   (10,801)     (6,393)  (12,298)
Retroactive application
 of changes in
 accounting policies
 (Notes 2 and 3)                  -          -        (211)       72
--------------------------------------------------------------------
Deficit, beginning of
 period, as restated         (4,441)   (10,801)     (6,604)  (12,226)
--------------------------------------------------------------------
DEFICIT, END OF PERIOD     $ (3,994)  $(10,025)   $ (3,994) $(10,025)
--------------------------------------------------------------------
--------------------------------------------------------------------

Net income per basic
 and diluted share         $   0.01   $   0.01    $   0.05  $   0.04
 (Note 5)
--------------------------------------------------------------------
--------------------------------------------------------------------


Consolidated Balance Sheets

(Unaudited - Expressed in thousands of U.S. Dollars)

                                            June 30,     December 31,
                                               2004             2003
--------------------------------------------------------------------
                                                     (Restated Notes
                                                             2 and 3)
ASSETS
Current
Cash and cash
 equivalents                               $  3,374         $  4,452
Accounts receivable                           2,277            2,383
Oil inventory                                   416                -
Prepaid expenses                                114              161
--------------------------------------------------------------------
                                              6,181            6,996
--------------------------------------------------------------------
Property and equipment
Republic of Yemen                            19,922           18,563
Canada                                       11,123            8,470
--------------------------------------------------------------------
                                             31,045           27,033
Future income tax asset                       1,572            1,572
--------------------------------------------------------------------
                                           $ 38,798         $ 35,601
--------------------------------------------------------------------

LIABILITIES
Current
 Accounts payable and
  accrued liabilities                      $  4,401         $  4,459
Asset retirement obligations (Note 3)           547              467
--------------------------------------------------------------------
                                              4,948            4,926
--------------------------------------------------------------------

SHAREHOLDERS' EQUITY
Share capital (Note 4)                       37,083           36,996
Contributed surplus (Note 2)                    761                -
Deficit (Notes 2 and 3)                      (3,994)          (6,321)
--------------------------------------------------------------------
                                             33,850           30,675
--------------------------------------------------------------------

                                           $ 38,798         $ 35,601
--------------------------------------------------------------------
--------------------------------------------------------------------


Consolidated Statements Of Cash Flows

(Unaudited - Expressed in thousands of U.S. Dollars)


                                  Three Months            Six Months
                                 Ended June 30         Ended June 30
                               2004       2003        2004      2003
--------------------------------------------------------------------
CASH FLOWS RELATED TO
 THE FOLLOWING ACTIVITIES:

OPERATING
Net income                  $   447    $   776     $ 2,610   $ 2,201
Adjustments for
Depletion, depreciation
 and accretion                1,934      1,593       3,548     3,059
Stock-based
 compensation (Note 2)          368          -         478         -
--------------------------------------------------------------------
Cash flow from
 operations                   2,749      2,369       6,636     5,260
Change in non-cash
 working capital                (67)      (107)     (1,576)    2,080
--------------------------------------------------------------------
                              2,682      2,262       5,060     7,340
--------------------------------------------------------------------

FINANCING
Issue of share capital            2        157          87       196
Repurchase of share capital       -          -           -       (41)
--------------------------------------------------------------------
                                  2        157          87       155
--------------------------------------------------------------------

INVESTING
Exploration and
 development
 expenditures
Republic of Yemen            (2,941)    (2,523)     (4,201)   (5,492)
Canada                       (2,650)      (980)     (3,450)   (1,282)
Changes in non-cash
 working capital              1,429        147       1,426       227
--------------------------------------------------------------------
                             (4,162)    (3,356)     (6,225)   (6,547)
--------------------------------------------------------------------

NET INCREASE (DECREASE)
 IN CASH AND CASH
 EQUIVALENTS                 (1,478)      (937)     (1,078)      948
CASH AND CASH
 EQUIVALENTS, BEGINNING
 OF PERIOD                    4,852      4,480       4,452     2,595
--------------------------------------------------------------------
CASH AND CASH
 EQUIVALENTS, END OF
 PERIOD                     $ 3,374    $ 3,543     $ 3,374   $ 3,543
--------------------------------------------------------------------
--------------------------------------------------------------------

Supplemental Disclosure:
Cash interest paid          $     -     $    -     $     -   $     -
Cash taxes paid             $ 1,220     $  438     $ 1,779   $   867
--------------------------------------------------------------------
--------------------------------------------------------------------

/T/

Notes To The Consolidated Financial Statements 

(Unaudited) 

1. Basis of presentation 

The interim consolidated financial statements of TransGlobe 
Energy Corporation ("TransGlobe" or the "Company") for the three 
month and the six month periods ended June 30, 2004 and 2003 have 
been prepared by management in accordance with accounting 
principles generally accepted in Canada on the same basis as the 
audited consolidated financial statements as at and for the year 
ended December 31, 2003, except as outlined in Note 2. These 
interim consolidated financial statements should be read in 
conjunction with the consolidated financial statements and the 
notes thereto in TransGlobe's annual report for the year ended 
December 31, 2003. 

2. Changes in accounting policies 

(a) Asset retirement obligations 

Effective January 1, 2004 the Company retroactively adopted the 
Canadian Institute of Chartered Accountants ("CICA") section 
3110, "Asset Retirement Obligations". The new recommendations 
require the recognition of the fair value of obligations 
associated with the retirement of tangible long-lived assets be 
recorded in the period the asset is put into use, with a 
corresponding increase to the carrying amount of the related 
asset. The obligations recognized are statutory, contractual or 
legal obligations. The liability is accreted over time for 
changes in the fair value of the liability through charges to 
accretion expense which is included in depletion, depreciation 
and accretion expense. The costs capitalized to the related 
assets are amortized to earnings in a manner consistent with the 
depletion and depreciation of the underlying asset. Note 3 
discloses the impact of the adoption of CICA section 3110 on the 
financial statements. 

(b) Stock-based compensation 

Effective January 1, 2004 the Company adopted the recommendations 
of CICA section 3870, "Stock-based Compensation and Other 
Stock-based Payments", retroactively without restatement of prior 
periods. The recommendations require the Company to record a 
compensation expense over the vesting period based on the fair 
value of options granted to employees and directors on or after 
January 1, 2002. Stock-based compensation expense is included in 
general and administrative expenses. This change resulted in an 
increase to opening deficit of $283,000, an increase to opening 
contributed surplus of $283,000 and an expense for the six months 
ended June 30, 2004 of $478,000. 

(c) Property and equipment - oil and gas 

Effective January 1, 2004 the Company adopted Accounting 
Guideline 16, "Oil and Gas Accounting - Full Cost" ("AcG-16"), 
which replaces Accounting Guideline 5, "Full Cost Accounting in 
the Oil and Gas Industry". AcG-16 modifies how the ceiling test 
is performed and is consistent with CICA section 3063, 
"Impairment of Long-lived Assets". The recoverability of a cost 
centre is tested by comparing the carrying value of the cost 
centre to the sum of the undiscounted cash flows expected from 
the cost centre's use and eventual disposition. If the carrying 
value is unrecoverable the cost centre is written down to its 
fair value. This approach incorporates risks and uncertainties in 
the expected future cash flows which are discounted using a risk 
free rate. The adoption of AcG-16 had no effect on the Company's 
financial results. 

(d) Impairment of long-lived assets 

Effective January 1, 2004 the Company adopted CICA section 3063, 
"Impairment of Long-lived Assets", which had no effect on the 
consolidated financial statements. 

3. Asset retirement obligations 

The Company retroactively adopted the new recommendations on the 
recognition of the obligations to retire long-lived tangible 
assets. The change was effective January 1, 2004 and the new 
accounting policy was applied retroactively. The impact was as 
follows: 


/T/

Consolidated Balance Sheet - as at December 31, 2003

--------------------------------------------------------------------
(000's)                         As Reported     Change   As Restated
--------------------------------------------------------------------
Assets
 Net property and equipment        $ 26,646      $ 387      $ 27,033
Liabilities and
 shareholders' equity
  Asset retirement obligations            -        467           467
  Provision for site restoration
   and abandonment                      153       (153)            -
  Deficit                            (6,393)        72        (6,321)
--------------------------------------------------------------------

Consolidated Statement of Income and Deficit

                                      Six Months Ended June 30, 2003
                             ---------------------------------------
(000's)                         As Reported     Change   As Restated
--------------------------------------------------------------------
Depletion, depreciation
 and accretion                      $ 3,059     $    -       $ 3,059
Net income                            2,201          -         2,201
--------------------------------------------------------------------


                                    Three Months Ended June 30, 2003
                             ---------------------------------------
(000's)                         As Reported     Change   As Restated
--------------------------------------------------------------------
Depletion, depreciation
 and accretion                      $ 1,593     $      -     $ 1,593
Net income                              776            -         776
--------------------------------------------------------------------
--------------------------------------------------------------------

/T/

At June 30, 2004, the estimated total undiscounted amount 
required to settle the asset retirement obligations was $874,000. 
These obligations will be settled at the end of the useful lives 
of the underlying assets, which currently extend up to 10 years 
into the future. This amount has been discounted using a 
credit-adjusted risk-free interest rate of 6.5%. 


/T/

Changes to asset retirement obligations were as follows:
--------------------------------------------------------------------
                                                    Six months ended
 (000's)                                               June 30, 2004
--------------------------------------------------------------------
Asset retirement obligations, December 31, 2003                $ 467
Liabilities incurred during period                                63
Liabilities settled during period                                  -
Accretion                                                         17
--------------------------------------------------------------------
Asset retirement obligations, June 30, 2004                    $ 547
--------------------------------------------------------------------
--------------------------------------------------------------------

4. Share capital

The Company is authorized to issue an unlimited number of common
shares with no par value.

Continuity of common shares (000's)                     2004
--------------------------------------------------------------------
                                                Shares        Amount
--------------------------------------------------------------------
Balance, December 31, 2003                      53,743      $ 36,996
Share options exercised                            353            87
--------------------------------------------------------------------
Balance, June 30, 2004                          54,096      $ 37,083
--------------------------------------------------------------------
--------------------------------------------------------------------


                                                            Weighted
Continuity of stock options               Number of          Average
 (000's, except per share amounts)          Options   Exercise Price
--------------------------------------------------------------------
Balance, December 31, 2003                    2,759           $ 0.36
Granted                                       1,100             2.48
Exercised                                      (353)            0.24
--------------------------------------------------------------------
Balance, June 30, 2004                        3,506           $ 1.04
--------------------------------------------------------------------
--------------------------------------------------------------------

/T/

Stock-based compensation 

The fair values of all common share options granted are estimated 
on the date of grant using the Black-Scholes option-pricing 
model. The weighted average fair market value of options granted 
during the second quarter and the assumptions used in their 
determination are as noted below: 


/T/

                                Three months Ended  Six months Ended
                                     June 30, 2004     June 30, 2004
--------------------------------------------------------------------
Weighted average fair market
 value per option (Cdn$)                    $ 1.73            $ 1.81
Risk-free interest rate (percent)             4.07              5.30
Expected life (years)                         4.00              4.00
Volatility (percent)                         61.65             66.64
Expected annual dividend per share            0.00              0.00
--------------------------------------------------------------------
--------------------------------------------------------------------

/T/

5. Per share amounts 

The weighted average number of common shares and diluted common 
shares outstanding during the six months ended June 30, 2004 was 
54,072,000 (2003 - 51,778,000) and 56,519,000 (2003 - 
52,690,000), respectively and during the three months ended June 
30, 2004 was 54,096,000 (2003 - 52,038,000) and 56,554,000 (2003 
- 52,830,000), respectively. 


/T/

6. Segmented information

                                  Three Months            Six Months
                                 Ended June 30         Ended June 30
(000's)                        2004       2003        2004      2003
--------------------------------------------------------------------
Oil and gas sales,
 net of royalties
 Republic of Yemen            4,642      3,579       9,408     7,410
 Canada                       1,137        560       2,239     1,105
--------------------------------------------------------------------
                              5,779      4,139      11,647     8,515
Operating expenses
 Republic of Yemen            1,053        841       1,915     1,480
 Canada                         299        140         564       277
--------------------------------------------------------------------
                              1,352        981       2,479     1,757
Depletion, depreciation
 and accretion
 Republic of Yemen            1,534      1,447       2,672     2,800
 Canada                         400        146         876       259
--------------------------------------------------------------------
                              1,934      1,593       3,548     3,059
--------------------------------------------------------------------
Segmented operations          2,493      1,565       5,620     3,699
Other income                      -          5           3         5
General and administrative      808        341       1,237       615
Foreign exchange (gain) loss     18         15          (3)       21
Income taxes                  1,220        438       1,779       867
--------------------------------------------------------------------
Net income                      447        776       2,610     2,201
--------------------------------------------------------------------
--------------------------------------------------------------------

/T/

7. Commitments 

In June 2004, the Company entered into a one year fixed price 
contract to sell 10,000 barrels of oil per month in Block 32 
commencing July 1, 2004 at $33.90 per barrel for Dated Brent plus 
or minus the Yemen Government's official selling price 
differential. 

8. Subsequent events 

TransGlobe Petroleum Egypt Inc. ("TransGlobe Egypt"), a wholly 
owned subsidiary of TransGlobe Energy corporation, has entered 
into a Farmout Agreement with Quadra Egypt Limited ("QEL"), a 
subsidiary of Quadra Resources Corp. headquartered in Calgary, 
and Rampex Petroleum International ("Rampex") headquartered in 
Cairo, Egypt. This Agreement provides TransGlobe Egypt the 
opportunity to participate and earn a 50% working interest in the 
Nuqra Concession upon incurring $6 million of expenditures. As 
part of this agreement, the Company issued a $2.0 million letter 
of credit on July 8, 2004 to guarantee the Company's performance 
under the Stage 1 work program to Ganoub Wadi Holding Petroleum 
Company that expires on February 14, 2007. 

The Nuqra Concession Agreement, Stage 1 work program requires 
expenditures of $2.0 million to reprocess existing seismic and to 
shoot new seismic within the first two years. Upon expiry of the 
Stage 1 term, there is an option to proceed to the Stage 2 work 
program. Stage 2 requires completion of a two well drilling 
program, with a minimum expenditure of $4.0 million, over a 
period of three years. Upon expiry of the Stage 2 term there is 
an option to proceed to the Stage 3 work program. Stage 3 
requires completion of a two well drilling program, with a 
minimum expenditure of $5.0 million, over a final three year 
term. Exploitation of discovered commercial fields will continue 
under a Development Lease for a further 20 years. 

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. 


/T/

TRANSGLOBE ENERGY CORPORATION

s/s Ross Clarkson

Ross G. Clarkson,
President & C.E.O.

Executive Offices:
#2900, 330 - 5th Avenue, S.W.,
Calgary, AB T2P 0L4

/T/

-30-


FOR FURTHER INFORMATION PLEASE CONTACT:

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

or

TransGlobe Energy Corporation
Lloyd W. Herrick
Vice President & C.O.O.
(403) 264-9888
(403) 264-9898 (FAX)
Email: trglobe@trans-globe.com
Website: www.trans-globe.com