NEWS RELEASE TRANSMITTED BY Marketwire



FOR: TRANSGLOBE ENERGY CORPORATION

TSX SYMBOL:
 TGL
NASDAQ SYMBOL:
 TGA

TransGlobe Energy Corporation Announces First Quarter 2009 Financial and Operating Results

May 07, 2009 - 07 00 ET

CALGARY, ALBERTA--(Marketwire - May 7, 2009) - TransGlobe Energy Corporation (TSX:TGL) (NASDAQ:TGA) ("TransGlobe" or the "Company") is pleased to announce its financial and operating results for the three-month period ended March 31, 2009. All dollar values are expressed in United States dollars unless otherwise stated. The conversion to barrels of oil equivalent ("Boe") of natural gas to oil is made on the basis of six thousand cubic feet of natural gas being equivalent to one barrel ("Bbl") of crude oil. With the sale of TransGlobe's Canadian assets having closed on April 30, 2008, the results from the Canadian segment of operations are being presented as "discontinued operations" in this document.

HIGHLIGHTS

- Increased production levels in Q1-09 by 27% to 8,788 barrels of oil per day ("Bopd") over Q4-2008;

- Achieved Q1-09 funds flow from operations of $8.6 million ($0.14/diluted share);

- Recorded a net loss of $5.0 million ($0.08 per share), mainly due to low oil prices;

- Completed a bought-deal financing for gross proceeds of approximately C$20.0 million in February;

- Balanced Q1-09 capital expenditures with funds flows from operations;

- Maintained $60.0 million lending facility;

- Increased production guidance for 2009 to 9,300 to 9,700 Bopd.

Corporate Summary

TransGlobe continued to build on its proven track record by growing production and reserves during the challenging economic period of early 2009. During the quarter, production averaged 8,788 Bopd, with just under 2,000 Bopd contributed by the new Hana West pool in the Arab Republic of Egypt ("Egypt"). Total average production during the month of April was 9,797 Bopd, which includes over 1,000 Bopd from the Hana West #5 well that was brought onstream on April 7. As a result, the Company's annual average production forecast was increased to a range of 9,300 to 9,700 Bopd on April 9, 2009.

TransGlobe has maintained a strong balance sheet in an environment that is marked by a severe global financial crisis and low commodity prices. The Company's banking syndicate recently re-determined TransGlobe's lending facility at $60.0 million (unchanged). Additionally, in February 2009 TransGlobe raised gross proceeds of C$20.0 million in a bought-deal equity issue to further strengthen the balance sheet. TransGlobe balanced capital outlays with funds flows from operations during the first quarter of 2009 and expects to maintain this approach throughout the year.

In summary, TransGlobe has a solid production base that continues to grow and has significant upside potential from its extensive interests in Egypt and Yemen. Management is committed to increase reserves and production and enhance shareholder value.

A conference call to discuss TransGlobe's first quarter results presented in this report will be held Thursday, May 7, 2009 at 2:30 PM Mountain Time (4:30 PM Eastern Time) and is accessible to all interested parties by dialing 1-416-641-6108 or toll-free 1-866-226-1792 (see also TransGlobe's news release dated April 30, 2009). The webcast may be accessed at http://events.onlinebroadcasting.com/transglobe/050709/index.php.

/T/
               
Annual General Meeting of Shareholders
Tuesday, May 12, 2009 at 3:00 PM Mountain Time
Calgary Petroleum Club, 319 - 5th Avenue S.W., Calgary, Alberta, Canada


FINANCIAL AND OPERATING RESULTS
($000s, except per share, price, volume amounts and % change)

                                                Three Months Ended March 31
Financial                                       2009       2008    % Change
----------------------------------------------------------------------------
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Oil and gas revenue                           28,379     60,419         (53)
Oil and gas revenue, net of royalties 
 and other                                    19,060     35,915         (47)
Derivative loss on commodity contracts          (200)    (3,911)        (95)
Operating expense                              5,206      5,780         (10)
General and administrative expense             2,506      2,272          10
Depletion, depreciation and accretion expense 12,017     10,713          12
Income taxes                                   3,174      7,150         (56)
Funds flow from operations(i)                  8,641     17,873         (52)
 Basic per share                                0.14       0.30    
 Diluted per share                              0.14       0.30
Net (loss) income                             (4,954)     4,458        (211)
 Basic per share                               (0.08)      0.07
 Diluted per share                             (0.08)      0.07
Capital expenditures                           8,926      7,405          21
Acquisitions                                       -     44,218        (100)
Long-term debt, including current portion     57,347     95,601         (40)
Common shares outstanding              
 Basic (weighted average)                     61,710     59,712           3
 Diluted (weighted average)                   61,710     60,567           2
Total assets                                 238,145    249,401          (5)
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(i) Funds flow from operations is a non-GAAP measure that represents cash
    generated from operating activities before changes in non-cash working
    capital.


Operating
----------------------------------------------------------------------------
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Average production volumes (Boepd) (6:1)       8,788      7,845          12
 Oil and liquids (Bopd)                        8,788      6,698          31
  Average price ($ per Bbl)                    35.88      90.32         (60)
 Gas (Mcfpd)                                       -      6,882        (100)
  Average price ($ per Mcf)                        -       8.46        (100)
Operating expense ($ per Boe)                   6.58       8.10         (19)
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Financial from Continuing Operations (excludes Canadian Operations)
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Oil revenue                                   28,379     52,064         (45)
Oil revenue, net of royalties and other       19,060     29,348         (35)
Operating expense                              5,206      3,923          33
Depletion and depreciation expense            12,017      8,026          50
Funds flow from continuing operations(i)       8,641     13,164         (34)
 Basic per share                                0.14       0.22
 Diluted per share                              0.14       0.22
Net (loss) income from continuing operations  (4,954)     2,353        (311)
 Basic per share                               (0.08)      0.04 
 Diluted per share                             (0.08)      0.04
Capital expenditures                           8,926      6,281          42
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(i) Funds flow from continuing operations is a non-GAAP measure that 
    represents cash generated from continuing operating activities before
    changes in non-cash working capital.


Operating from Continuing Operations (excludes Canadian Operations)
----------------------------------------------------------------------------
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Average production volumes (Bopd)              8,788      6,322          39
 Oil and liquids (Bopd)                        8,788      6,322          39
  Average price ($ per Bbl)                    35.88      90.49         (60)
Operating expense ($ per Bbl)                   6.58       6.82          (4)
----------------------------------------------------------------------------
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/T/

OPERATIONS UPDATE

ARAB REPUBLIC OF EGYPT

West Gharib, Arab Republic of Egypt (100% working interest, TransGlobe operated)

Operations and Exploration

Five wells were drilled during the first quarter, resulting in four oil wells at Hana West (#2, #3, #4 and #5) and one water source well at Hana for the Hana waterflood project.

Subsequent to quarter-end, Hana West #6 was drilled to a total depth of 6,900 feet, encountering minor oil shows in the targeted lower Rudeis C zones. The well was plugged back and suspended pending a review of a sidetrack location to encounter the Asl C in a higher structural position.

The drilling rig has moved to East Hoshia to drill two exploration targets at East Hoshia #3 and #4. East Hoshia #3 is programmed to reach a total depth of approximately 9,000 feet. The well is targeting a 25 million barrel (unrisked, oil in place) Nubia prospect.

East Hoshia #4 is programmed to reach a total depth of approximately 8,650 feet appraising the 50 million barrel (unrisked, oil in place) East Hoshia Thebes pool which was initially drilled at East Hoshia #2.  As previously disclosed (March 12, 2009), East Hoshia #2 encountered a 468-foot fractured carbonate with extensive oil shows in the Thebes formation. The well was initially completed with an un-cemented liner (800 foot interval) to minimize reservoir damage to the fractured carbonates. The extended production test produced water, with a skim of oil. It is suspected that a highly fractured formation just above the Thebes formation dominated the production test and therefore the Thebes remains untested. The Thebes test was subsequently suspended, and the well was re-completed in the Rudeis formation, which tested light 27 degrees API oil. The Rudeis formation was stimulated at the end of April.   It is expected to produce 20 to 50 barrels of oil per day.

The Company initiated extended water injection tests at Hana in July 2008 and at Hoshia in September 2008, to evaluate potential waterfloods for the respective fields. A positive pressure and oil production response was measured in the offsetting producers in the Hana field during the first quarter. Based on reservoir simulation work and positive field performance to date, the Company is moving forward with plans to design and implement full-field enhanced recovery projects at both Hana and Hoshia. It is expected that both projects should significantly increase the recoverable reserves. The Company is targeting 9.8 million barrels of recoverable oil from waterflood projects at Hana and Hoshia. In addition, successful ASP (Alkaline Surfactant Polymer) floods could recover an additional 8.0 million barrels of oil from the Hana and Hoshia projects.

TransGlobe completed a 360+ km2 3-D seismic acquisition program covering the East Hoshia, Hoshia, North Hoshia, Arta and East Arta development areas in October 2008. The processed data was received at year-end and interpretation is underway. The East Hoshia #3 and #4 prospects were mapped using the new 3-D.

Production

Production from West Gharib averaged 5,364 Bopd to TransGlobe during the quarter, up 1,959 Bopd over the previous quarter, representing a 58% increase in total field production. The production increase is primarily due to the successful appraisal drilling at Hana West (#2, #3, #4 and #5) and improved pump performance at Hana and Hoshia.

Production increased to 6,498 Bopd during April with the addition of 1,000+ Bopd from Hana West #5 on April 7, 2009.

/T/

Quarterly West Gharib Production (Bopd)

                                            2009              2008
----------------------------------------------------------------------------
                                             Q-1      Q-4      Q-3      Q-2
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Gross production rate                      5,364    3,405    3,278    3,758
TransGlobe working interest                5,364    3,405    3,096    3,352
TransGlobe net (after royalties)           3,491    2,228    1,872    1,907
TransGlobe net 
 (after royalties and tax)(i)              2,726    1,742    1,367    1,311
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(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.

/T/

Nuqra Block 1, Arab Republic of Egypt (71.43% working interest, TransGlobe operated)

Operations and Exploration

TransGlobe has identified a prospect that appears to be similar to the oil discovery announced by a nearby operator at Al Baraka #1 and #2 on the Kom Ombo Concession, located immediately west of the Nuqra Concession. The Company has discussed rig-sharing possibilities with the adjacent operators to facilitate a potential 2010 drilling program.

YEMEN EAST- Masila Basin

Block 32, Republic of Yemen (13.81% working interest)

Operations and Exploration

One development well was drilled during the quarter, resulting in an oil well at Tasour.

With the fuel-gas project operational in late 2008, total diesel consumption on Block 32 has been reduced by approximately 50% during the first quarter. The Block 32 diesel topping plant has sufficient capacity to meet the Block's reduced diesel requirements eliminating the need to purchase diesel. All the electricity for pumping and running the Central Production Facility was previously generated from diesel-fired generators, which cost in excess of $7.0 million (gross) in 2008.

Production

Production from Block 32 averaged 6,257 Bopd (864 Bopd to TransGlobe) during the quarter, representing a 5% increase from the previous quarter primarily due to the Tasour development well placed on production in January.

Production averaged approximately 6,430 Bopd (888 Bopd to TransGlobe) during April.

/T/

Quarterly Block 32 Production (Bopd)

                                            2009              2008
----------------------------------------------------------------------------
                                             Q-1      Q-4      Q-3      Q-2
----------------------------------------------------------------------------
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Gross production rate                      6,257    5,966    7,275    7,511
TransGlobe working interest                  864      824    1,005    1,037
TransGlobe net (after royalties)             606      477      514      521
TransGlobe net (after royalties and tax)(i)  523      382      378      377
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(i) Under the terms of the Block 32 PSA, royalties and taxes are paid out 
    of the government's share of production sharing oil.

/T/

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

Operations and Exploration

The Block 72 joint venture partnership entered the second 30-month exploration period in January which carries a commitment of one exploration well. Under the terms of the Block 72 Production Sharing Agreement ("PSA"), there was no acreage relinquishment at the end of the first exploration period.

Block 84, Republic of Yemen (33% working interest)

Operations and Exploration

The PSA for Block 84 was signed with the Ministry of Oil and Minerals ("MOM") on April 13, 2008. The PSA is awaiting final approval and ratification.

YEMEN WEST- Marib Basin

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

Operations and Exploration

The Operator has delayed development drilling planned for the An Nagyah field until the latter half of 2009. The drilling services are being re-tendered to capture the benefits expected from reduced demand for equipment in the upstream oil industry.

The operator of the Block S-1 joint venture group has continued discussions with MOM regarding a potential development project to produce and sell known deposits of gas at the An Naeem discovery on Block S-1.

A 3-D seismic program commenced in March 2009 to define additional exploration drilling locations on Block 75 and Block S-1.

Production

Production from Block S-1 averaged 10,240 Bopd (2,560 Bopd to TransGlobe) during the first quarter, representing a decrease of 4% over the prior quarter. Approximately 600 Bopd (150 Bopd to TransGlobe) of production was curtailed during the quarter due to a gas injection compressor failure which was repaired in late April.

Production averaged approximately 9,644 Bopd (2,411 Bopd to TransGlobe) during April.

/T/

Quarterly Block S-1 Production (Bopd)

                                            2009              2008
----------------------------------------------------------------------------
                                             Q-1      Q-4      Q-3      Q-2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gross field production rate               10,240   10,656   11,336   11,573
TransGlobe working interest                2,560    2,664    2,834    2,894
TransGlobe net (after royalties)           1,777    1,541    1,450    1,453
TransGlobe net 
 (after royalties and tax)(i)              1,603    1,236    1,067    1,051
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(i) Under the terms of the Block S-1 PSA royalties and taxes are paid out 
    of the government's share of production sharing oil.

/T/

Block 75, Republic of Yemen (25% working interest)

Operations and Exploration

The PSA for Block 75 was ratified and signed into law effective March 8, 2008. A joint (Block 75 and S-1) 340 km2 3-D seismic acquisition program primarily focused on Block 75, commenced in March 2009. It is expected that field acquisition will be completed by mid-year, to be followed by processing and interpretation.  Exploration drilling could occur in 2010.

Management's Discussion and Analysis

May 5, 2008

Management's discussion and analysis ("MD&A") should be read in conjunction with the unaudited interim financial statements for the three months ended March 31, 2009 and 2008 and the audited financial statements and MD&A for the year ended December 31, 2008 included in the Company's annual report. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada in the currency of the United States (except where otherwise noted). Additional information relating to the Company, including the Company's Annual Information Form, is on SEDAR at www.sedar.com. The Company's annual report on Form 40-F may be found in the Interactive Data Electronic Applications ("IDEA") system at http://idea.sec.gov.

READER ADVISORIES

Forward-Looking Statements

This 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. 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. 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. TransGlobe does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, 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 for further, more detailed information concerning these matters.

Use of Barrel of Oil Equivalents

The calculation of barrels of oil equivalent ("Boe") is based on a conversion rate of six thousand cubic feet of natural gas ("Mcf") to one barrel ("Bbl") of crude oil. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Non-GAAP Measures

Funds Flow from Operations

This document contains the term "funds flow from operations" and "funds flow from continuing operations", which should not be considered an alternative to, or more meaningful than "cash flow from operating activities" as determined in accordance with Generally Accepted Accounting Principles (GAAP). Funds flow from operations and funds flow from continuing operations are non-GAAP measures that represent 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 and funds flow from continuing operations may not be comparable to similar measures used by other companies.

/T/

Reconciliation of Funds Flow from Operations and Funds Flow from Continuing
Operations

                                                Three Months Ended March 31
----------------------------------------------------------------------------
($000s)                                               2009             2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flow from operating activities                  7,889           16,316
Changes in non-cash working capital from 
 continuing operations                                 539            1,645
Changes in non-cash working capital from 
 discontinued operations                               213              (88)
----------------------------------------------------------------------------
Funds flow from operations                           8,641           17,873
Less: Funds flow from discontinued operations            -            4,709
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Funds flow from continuing operations                8,641           13,164
----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

Netback

Netback is a non-GAAP 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, public company whose continuing activities are concentrated in two main geographic areas, the Arab Republic of Egypt ("Egypt") and the Republic of Yemen ("Yemen"). Egypt and Yemen include the Company's exploration, development and production of crude oil. TransGlobe disposed of its Canadian oil and gas operations in 2008 to reposition itself as a 100% oil, Middle East / North Africa growth company.

/T/

SELECTED QUARTERLY FINANCIAL INFORMATION

                                   2009                   2008
----------------------------------------------------------------------------

($000s, except per share, 
 price and volume amounts)          Q-1      Q-4      Q-3      Q-2      Q-1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total Operations
 Average sales volumes (Boepd)    8,788    6,893    6,935    7,706    7,845
 Average price ($/Boe)            35.88    46.18   104.55   110.21    84.63
 Oil and gas sales               28,379   29,285   66,707   77,283   60,419
 Oil and gas sales, net of 
  royalties and other            19,060   18,272   36,577   41,629   35,915

 Cash flow from operating 
  activities                      7,889   11,252   20,652    9,573   16,316
 Funds flow from operations(i)    8,641    6,134   16,775   18,485   17,873
 Funds flow from operations 
  per share   
  - Basic                          0.14     0.10     0.28     0.31     0.30
  - Diluted                        0.14     0.10     0.27     0.31     0.30

 Net (loss) income               (4,954)   7,640   24,790   (5,365)   4,458
 Net (loss) income per share
  - Basic                         (0.08)    0.14     0.41    (0.09)    0.07
  - Diluted                       (0.08)    0.13     0.41    (0.09)    0.07

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Continuing Operations
 Average sales volumes (Bopd)     8,788    6,893    6,935    7,283    6,322
 Average price from continuing 
  operations ($/Bbl)              35.88    45.97   104.55   112.59    90.49
 Oil sales                       28,379   29,151   66,707   74,616   52,064
 Oil sales, net of royalties 
  and other                      19,060   17,765   36,577   39,541   29,348

 Cash flow from operating 
  activities                      8,102   11,010   20,483    8,078   11,519
 Funds flow from continuing 
  operations(i)                   8,641    5,579   16,775   16,841   13,164

 Funds flow from continuing 
  operations per share            
  - Basic                          0.14     0.09     0.28     0.28     0.22
  - Diluted                        0.14     0.09     0.27     0.28     0.22

 Net (loss) income               (4,954)   7,482   24,787  (11,449)   2,353 
 Net (loss) income per share  
  - Basic                         (0.08)    0.13     0.41    (0.19)    0.04
  - Diluted                       (0.08)    0.12     0.41    (0.19)    0.04

----------------------------------------------------------------------------
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 Total assets                   238,145  228,238  234,501  205,535  249,401
 Cash and cash equivalents       22,041    7,634    8,593   11,673   11,935
 Total long-term debt, 
  including current portion      57,347   57,230   57,127   42,197   95,601
 Debt-to-funds flow ratio           1.1      1.0      0.9      0.7      1.6

----------------------------------------------------------------------------
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(i) Funds flow from operations and funds flow from continuing operations 
    are non-GAAP measures that represent cash generated from operating
    activities and continuing operating activities, respectively, before 
    changes in non-cash working capital.

/T/

During the first quarter of 2009, TransGlobe has:

- Maintained a strong financial position, with the ability to finance capital programs with funds flow from continuing operations and cash on hand;

- Raised C$20.0 million in February 2009 through the issuance of common shares;

- Achieved record production from continuing operations of 8,788 Bopd in Q1-2009 (Q1-2008 - 6,322 Bopd), as a result of drilling successes on the West Gharib Concession in Egypt;

- Reported a debt-to-funds flow ratio of 1.1 at March 31, 2009 (March 31, 2008 - 1.6);

- Hedged 10% of its expected production in the remaining nine months of 2009 at an average floor price of $53.33/Bbl and an average ceiling price of $74.40/Bbl, providing an increased level of certainty to its funds flows in order to manage capital programs;

- Reported a realized derivative gain of $0.8 million in Q1-2009 (Q1-2008 - loss of $1.5 million);

- Reported a funds flow from continuing operations decrease of 34% from Q1-2008 due to a 60% decrease in commodity prices, offset by a 39% increase in sales volumes from continuing operations; and

- Reported a net loss from continuing operations in Q1-2009 of $5.0 million ($2.4 million net income reported in Q1-2008) mainly as a result of lower commodity prices in the quarter and higher depletion and depreciation expense in Egypt resulting from higher production volumes.

/T/

2009 VARIANCES

                                     $000s  $ Per Share Diluted  % Variance
----------------------------------------------------------------------------
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Q1-2008 net income                   4,458                 0.07
----------------------------------------------------------------------------
Cash items
Volume variance                      7,732                 0.11         173
Price variance                     (31,417)               (0.50)       (705)
Royalties                           13,397                 0.21         301
Expenses:
 Operating                          (1,283)               (0.02)        (29)
 Realized derivative gain            2,275                 0.04          51
 Cash general and administrative       (58)                   -          (1)
 Current income taxes                4,058                 0.06          91
 Realized foreign exchange gain       (291)                   -          (7)
Interest on long-term debt           1,127                 0.02          25
Other income                           (63)                   -          (1)
----------------------------------------------------------------------------
Total cash items variance           (4,523)               (0.08)       (102)
----------------------------------------------------------------------------
Non-cash items
Unrealized derivative gain           1,436                 0.02          32
Depletion, depreciation and 
 accretion                          (3,991)               (0.06)        (90)
Stock-based compensation              (176)                   -          (4)
Amortization of deferred 
 financing costs                       (53)                   -          (1)
Non-cash income from discontinued 
 operations                         (2,105)               (0.03)        (46)
----------------------------------------------------------------------------
Total non-cash items variance       (4,889)               (0.07)       (109)
----------------------------------------------------------------------------

Q1-2009 net loss                    (4,954)               (0.08)       (211)

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----------------------------------------------------------------------------

/T/

Net income decreased by $9.4 million in Q1-2009 compared with Q1-2008 mainly as a result of lower commodity prices, increased depletion and depreciation and higher operating expenses, offset by higher production volumes, lower royalties and taxes and derivative gains.

BUSINESS ENVIRONMENT

The Company's financial results are significantly influenced by fluctuations in commodity prices, including price differentials. The following table shows select market benchmark prices and foreign exchange rates:

/T/

                                   2009                   2008
----------------------------------------------------------------------------
                                    Q-1      Q-4      Q-3      Q-2      Q-1
----------------------------------------------------------------------------
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Dated Brent average oil price 
 ($/Bbl)                          44.40    54.91   114.78   121.38    96.90
U.S./Canadian Dollar average 
 exchange rate                   1.2453   1.2125    1.042    1.010    1.004
----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

The price of Dated Brent oil averaged $44.40/Bbl in Q1-2009, a decrease of 54% from the Q1-2008 price of $96.90/Bbl. Financial market instability and a worldwide recession resulted in a steep decline in the price of Dated Brent oil in Q4-2008, with lower price levels continuing into 2009.
   
The current global financial crisis has reduced liquidity in financial markets, restricted access to capital and caused significant volatility in commodity prices. These issues are expected to negatively impact the economy for the remainder of 2009. TransGlobe's management believes the Company is well positioned to weather the current world-wide economic crisis because of its manageable debt levels, positive cash generation from operations, and the availability of cash and cash equivalents.

In light of the current economic environment, TransGlobe has reduced its capital spending in 2009 and is reviewing costs and efficiency opportunities in the organization. The Company designed its 2009 budget to be flexible, allowing spending to be adjusted as commodity prices change and forecasts are reviewed. To enhance the Company's liquidity and to fund capital projects in Egypt where a significant discovery in 2008 resulted in production increases throughout the first quarter of 2009, the Company raised C$20.0 million in gross proceeds by issuing 5,798,000 common shares in February.

SIGNIFICANT ACQUISITIONS AND DISPOSITIONS

Corporate Acquisition

On February 5, 2008, the Company acquired all the shares of GHP Exploration (West Gharib) Ltd. ("GHP") for total consideration of $40.2 million, plus transaction costs and working capital adjustments, effective September 30, 2007. This acquisition was funded by bank debt and cash on hand. GHP holds a 30% working interest in the West Gharib Concession area in the Arab Republic of Egypt ("Egypt"). With the acquisition of GHP, the Company holds 100% working interest in the West Gharib Production Sharing Concession ("PSC"), with working interest of 100% in the Hana development lease and an effective working interest of 75% in the eight non-Hana development leases. TransGlobe is the operator of the West Gharib Concession.

Property Acquisition

On August 18, 2008, TransGlobe completed an oil and gas property acquisition in Egypt for the remaining 25% financial interest in the eight non-Hana development leases in the West Gharib Concession. The total cost of the acquisition was $18.0 million. In addition, the Company could pay up to $7.0 million if incremental reserve thresholds are reached in the East Hoshia (up to $5.0 million) and in the South Rahmi (up to $2.0 million) development leases, to be evaluated annually. As at December 31, 2008, no additional fees are due in 2009. Following this acquisition, TransGlobe now holds 100% working interest in the West Gharib Concession in Egypt.

Discontinued Operations

TransGlobe sold its Canadian segment of operations on April 30, 2008 to allow the Company to focus on the development of its Middle East/North Africa assets. The sale price of the assets was C$56.7 million, subject to normal closing adjustments. Accordingly, the Canadian segment has been reclassified as discontinued operations in the Consolidated Financial Statements. This is further discussed in the MD&A section entitled "Operating Results From Discontinued Operations".

/T/

OPERATING RESULTS AND NETBACK

Daily Volumes, Working Interest Before Royalties and Other

                                               Three Months Ended
----------------------------------------------------------------------------
                                              March 31,    March 31,      %
                                                  2009       2008(i) Change
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Egypt - Oil sales             Bopd               5,364        2,432     121
Yemen - Oil sales             Bopd               3,424        3,890     (12)
----------------------------------------------------------------------------
Total continuing operations 
 - daily sales volumes        Bopd               8,788        6,322      39
----------------------------------------------------------------------------
Canada  - Oil and liquids     Bopd                   -          376    (100)
        - Gas sales          Mcfpd                   -        6,882    (100)
----------------------------------------------------------------------------
Canada                       Boepd                   -        1,523    (100)
----------------------------------------------------------------------------
Total Company 
 - daily sales volumes       Boepd               8,788        7,845      12

----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Egypt includes the operating results of GHP for the period February 5,
    2008 to March 31, 2008. In that period, production averaged 1,009 Bopd
    for a quarterly average of 621 Bopd.


Netback from Continuing Operations

Consolidated                                    Three Months Ended
----------------------------------------------------------------------------
                                       March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
(000s, except per Bbl amounts)         $        $/Bbl        $        $/Bbl
----------------------------------------------------------------------------
Oil sales                         28,379        35.88   52,064        90.49
Royalties and other                9,320        11.78   22,716        39.48
Current taxes                      3,174         4.01    7,232        12.57
Operating expenses                 5,206         6.58    3,923         6.82
----------------------------------------------------------------------------
Netback                           10,679        13.51   18,193        31.62

----------------------------------------------------------------------------
----------------------------------------------------------------------------


Egypt

                                                Three Months Ended
----------------------------------------------------------------------------
                                       March 31, 2009      March 31, 2008(i)
----------------------------------------------------------------------------
(000s, except per Bbl amounts)         $        $/Bbl       $         $/Bbl
----------------------------------------------------------------------------
Oil sales                         15,396        31.89  17,626         79.63
Royalties and other                5,377        11.14   7,561         34.16
Current taxes                      2,196         4.55   3,124         14.11
Operating expenses                 2,787         5.77     711          3.21
----------------------------------------------------------------------------
Netback                            5,036        10.43   6,230         28.15

----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) The netback for Egypt for Q1-2008 includes average quarterly production
    of 621 Bopd from the GHP acquisition that closed on February 5, 2008.

/T/

The netback per Bbl in Egypt decreased 63% in the first three months of 2009 compared with the same period of 2008, mainly as a result of the 60% drop in oil prices. The oil price decreases were partially offset by lower royalty and tax rates and a 121% increase in sales volumes over Q1-2008. The average selling price during the three months ended March 31, 2009 was $31.89/Bbl, which represents a gravity/quality adjustment of approximately $12.51/Bbl to an average dated Brent price for the period of $44.40/Bbl.

- Royalties and taxes as a percentage of revenue decreased to 49% in Q1-2009, compared with 61% in Q1-2008. Royalty and tax rates fluctuate in Egypt due to changes in the cost oil whereby the PSC allows for recovery of operating and capital costs through a reduction in government take.

- Operating costs for the three months ended March 31, 2009 increased 79% to $5.77/Bbl (Q1-2008 - $3.21/Bbl). The increased operating costs reflect a higher number of workovers on the West Gharib PSC and increased staffing levels over 2008.

/T/

Yemen

                                                Three Months Ended
----------------------------------------------------------------------------
                                       March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
(000s, except per Bbl amounts)         $        $/Bbl        $        $/Bbl
----------------------------------------------------------------------------
Oil sales                         12,983        42.13   34,438        97.29
Royalties and other                3,943        12.80   15,155        42.81
Current taxes                        978         3.17    4,108        11.60
Operating expenses                 2,419         7.85    3,212         9.07
----------------------------------------------------------------------------
Netback                            5,643        18.31   11,963        33.81

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

In Yemen, the netback per Bbl decreased 46% in the first three months of 2009 compared with the same period of 2008 primarily as a result of oil prices decreasing by 57%, partially offset by lower royalty and tax rates.

- Royalty and current income tax costs decreased 74% mainly as a result of lower commodity prices. Royalties and taxes as a percentage of revenue decreased to 38% in Q1-2008 compared with 56% in Q1-2007. Royalty and tax rates fluctuate in Yemen due to changes in the amount of cost sharing oil, whereby the Block 32 and Block S-1 Production Sharing Agreements ("PSAs") allow for the recovery of operating and capital costs through a reduction in Ministry of Oil and Minerals' take of oil production.

- Operating expenses on a Bbl basis decreased 13% to $7.85/Bbl in Q1-2009 compared with $9.07/Bbl in Q1-2008 due to lower costs on Block 32 associated with the utilization of solution gas to replace diesel for power generation.

DERIVATIVE COMMODITY CONTRACTS

TransGlobe uses hedging arrangements as part of its risk management strategy to manage commodity price fluctuations and stabilize cash flows for future exploration and development programs. The hedging program was expanded significantly in Q3-2007 due to a marked increase in debt levels and again in Q1-2009 to protect the cash flows from the added risk of commodity price exposure and in order to comply with the covenants set forth by the Company's lending institutions.

The estimated fair value of unrealized commodity contracts is reported on the Consolidated Balance Sheets, with any change in the unrealized positions recorded to income. The fair values of these transactions are based on an approximation of the amounts that would have been paid to, or received from, counter-parties to settle the transactions outstanding as at the Consolidated Balance Sheet date with reference to forward prices and market values provided by independent sources. The actual amounts realized may differ from these estimates.

From a corporate perspective, the weak oil prices in the first three months of 2009 had a negative impact on the Company's revenue; however, these prices resulted in $0.8 million of realized gains recorded on the derivative commodity contracts compared with $1.5 million of realized losses in the first three months of 2008. The mark-to-market valuation of TransGlobe's future derivative commodity contracts decreased from a $2.8 million asset at December 31, 2008 to a $1.8 million asset at March 31, 2009 due to the strengthening of commodity prices since December 31, 2008, thus resulting in a $1.0 million unrealized loss on future derivative commodity contracts being recorded in the period.

/T/

                                                 Three Months Ended
----------------------------------------------------------------------------
($000s)                                 March 31, 2009       March 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Realized cash gain (loss) 
 on commodity contracts(i)                         771               (1,504)
Unrealized loss on commodity contracts(ii)        (971)              (2,407)
----------------------------------------------------------------------------
Total derivative loss on commodity contracts      (200)              (3,911)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Realized cash gain (loss) represents actual cash settlements or 
    receipts under the respective contracts.
(ii) The unrealized loss on derivative commodity contracts represents the 
     change in fair value of the contracts during the period.

/T/

If the Dated Brent oil price remains at the level experienced at the end of Q1-2009, the derivative asset will be realized over the next two years. However, a 10% decrease in Dated Brent oil prices would result in a $1.5 million increase in the derivative commodity contract asset, thus increasing the unrealized gain by the same amount. Conversely, a 10% increase in Dated Brent oil prices would decrease the unrealized gain on commodity contracts by $1.5 million. The following commodity contracts are outstanding at March 31, 2009.

/T/

                                                              Dated Brent
                                                              Pricing 
Period                      Volume            Type            Put-Call
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Crude Oil
 April 1, 2009-             12,000 Bbls/      Financial 
  December 31, 2009          month             Collar         $60.00-$82.10
 April 1, 2009-             6,000 Bbls/       Financial
  December 31, 2009          month             Collar         $60.00-$86.10
 January 1, 2010-           12,000 Bbls/      Financial
  August 31, 2010            month             Collar         $60.00-$84.25
 April 1, 2009-             12,000 Bbls/      Financial
  December 31, 2009          month             Collar         $40.00-$55.00
 January 1, 2010-           9,000 Bbls/       Financial
  August 31, 2010            month             Collar         $40.00-$80.00
----------------------------------------------------------------------------
----------------------------------------------------------------------------


The total volumes hedged for the following years are:

                                                   Nine months
                                                          2009         2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Bbls                                                   270,000      168,000
Bopd                                                       982          460
----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

At March 31, 2009, $1.5 million of the derivative commodity contracts were classified as current assets and $0.3 million of the derivative commodity contracts were classified as long-term assets.

/T/

GENERAL AND ADMINISTRATIVE EXPENSES (G&A)
 
                                                  Three Months Ended
----------------------------------------------------------------------------
                                       March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
(000s, except per Boe amounts)         $        $/Boe        $        $/Boe
----------------------------------------------------------------------------
----------------------------------------------------------------------------
G&A (gross)                        2,899         3.67    2,509         3.51
Stock-based compensation             490         0.62      314         0.44
Capitalized G&A                     (877)       (1.11)    (508)       (0.71)
Overhead recoveries                   (6)       (0.01)     (43)       (0.06)
----------------------------------------------------------------------------
G&A (net)                          2,506         3.17    2,272         3.18

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

General and administrative expenses increased 10% (flat on a Boe basis) in the first three months of 2009 compared with the same period in 2008. The G&A per Boe is lower mainly as a result of increased production from the West Gharib acquisitions. Higher staffing levels and travel costs contributed to the rise in total G&A expense for the Company.

INTEREST ON LONG-TERM DEBT

Interest expense for the three months ended March 31, 2009 decreased to $0.6 million (2008 - $1.7 million). Interest expense includes interest on long-term debt and amortization of transaction costs associated with long-term debt. During the quarter, the Company expensed $0.1 million of transaction costs (2008 - $0.1 million). The Company had $58.0 million of debt outstanding at March 31, 2009 (March 31, 2008 - $98.0 million). The long-term debt bears interest at the Eurodollar Rate plus three percent.

/T/

DEPLETION AND DEPRECIATION ("DD&A")

                                                  Three Months Ended
----------------------------------------------------------------------------
                                       March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
(000s, except per Bbl amounts)         $        $/Bbl        $        $/Bbl
----------------------------------------------------------------------------
Egypt                              9,473        19.62    4,927        22.26
Yemen                              2,501         8.12    3,062         8.62
Corporate                             43            -       37            -
----------------------------------------------------------------------------
                                  12,017        15.19    8,026        13.95

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/
      
In Egypt, DD&A increased to $9.5 million in Q1-2009 (Q1-2008 - $4.9 million) due to DD&A charges on new production from the West Gharib PSC in Egypt. The high DD&A costs per Boe result from the fact that DD&A is depleted on proved reserves, while the purchase price for the Egypt acquisitions was based on proved plus probable reserves. This DD&A rate in Egypt per Boe will continue to decrease as the probable reserves are converted to proved reserves.

In Yemen, DD&A on a Boe basis remained essentially flat in Q1-2009 over Q1-2008, decreasing slightly due to reserve additions on Block S-1 and Block 32 at year end.

In Egypt, unproven properties of $10.0 million (2008 - $9.9 million) relating to Nuqra ($8.0 million) and West Gharib ($2.0 million) were excluded from the costs subject to depletion and depreciation in the quarter. In Yemen, unproven property costs of $7.5 million (2008 - $6.5 million) relating to Block 72, Block 75 and Block 84 were excluded from the costs subject to depletion and depreciation in the quarter.

/T/

CAPITAL EXPENDITURES

                                                  Three Months Ended
----------------------------------------------------------------------------
($000s)                                March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Egypt                                           7,309                 3,318
Yemen                                           1,545                 2,947
Corporate                                          72                    16
----------------------------------------------------------------------------
                                                8,926                 6,281
----------------------------------------------------------------------------
Acquisition                                         -                36,601
----------------------------------------------------------------------------
Total                                           8,926                42,882

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

In Egypt, total capital expenditures in Q1-2009 were $7.3 million. The Company drilled five wells in the quarter resulting in four oil wells at Hana West and one water source well at Hana.

In Yemen, total capital expenditures in Q1-2009 were $1.5 million. The Company drilled one oil well at the Tasour field on Block 32 during the quarter.

OUTSTANDING SHARE DATA

As at March 31, 2009, the Company had 65,327,839 common shares issued and outstanding.

In the first quarter of 2009, the Company issued 5,798,000 common shares at C$3.45 per common share for gross proceeds of C$20.0 million (net C$18.6 million).

The Company has received regulatory approval to purchase, from time to time, as it considers advisable, up to 5,558,322 common shares under a Normal Course Issuer Bid which commenced August 1, 2008 and will terminate July 31, 2009. During the quarter ended March 31, 2009, the Company did not repurchase any common shares. During the year ended December 31, 2008, the Company repurchased and cancelled 300,000 common shares at an average price of C$3.87 per share. The excess of the purchase price over the book value in the amount of $0.9 million was charged to retained earnings during the year.

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 proved 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 measure the Company's overall financial strength is debt-to-funds flow from operating activities (calculated on a 12-month rolling basis). TransGlobe's debt-to-funds flow from operating activities ratio, a key short-term leverage measure, remained strong at 1.1 times at March 31, 2009. This was within the Company's target range of no more than 2.0 times. At March 31, 2008, the Company's bank facility was re-determined at $60.0 million. The next review is scheduled for September 30, 2009.

The following table illustrates TransGlobe's sources and uses of cash during the periods ended March 31, 2009 and 2008:

/T/

Sources and Uses of Cash

                                                  Three Months Ended
----------------------------------------------------------------------------
($000s)                                March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash sourced
 Funds flow from continuing 
  operations(i)                                 8,641                13,164
 Increase in long-term debt                         -                40,000
 Exercise of options                               80                   402
 Issuance of common shares                     15,146                     -
 Other                                              -                     7
----------------------------------------------------------------------------
                                               23,867                53,573
Cash used
 Exploration and development expenditures       8,926                 6,265
 Acquisition                                        -                44,218
 Bank financing costs                               -                 1,148
 Options surrendered for cash payments              -                   256
----------------------------------------------------------------------------
                                                8,926                51,887
----------------------------------------------------------------------------
Net cash from continuing operations            14,941                 1,686
Net cash from discontinued operations            (213)                1,719
Changes in non-cash working capital              (321)               (4,199)
----------------------------------------------------------------------------
Increase (decrease) in cash and cash 
 equivalents                                   14,407                  (794)
Cash and cash equivalents - beginning 
 of period                                      7,634                12,729
----------------------------------------------------------------------------
Cash and cash equivalents - end of period      22,041                11,935

----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Funds flow from continuing operations is a non-GAAP measure that 
    represents cash generated from operating activities before changes in 
    non-cash working capital.

/T/

Working capital is the amount by which current assets exceed current liabilities. At March 31, 2009 the Company had working capital of $38.1 million (December 31, 2008 - $24.0 million) including discontinued operations. Cash and cash equivalents increased due to the share issuance in Q1-2009 of C$20.0 million, before expenses.

The Company expects to fund its approved 2009 exploration and development program of $35.2 million ($26.3 million remaining) and contractual commitments through the use of working capital and cash generated by operating activities. The use of new financing during 2009 may also be utilized to accelerate existing projects, retire existing debt or to finance new opportunities. Fluctuations in commodity prices, product demand, foreign exchange rates, interest rates and various other risks may impact capital resources.

At March 31, 2009, TransGlobe has a $60.0 million Revolving Credit Agreement of which $58.0 million is drawn.

/T/

($000s)                             March 31, 2009        December 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revolving Credit Agreement                  58,000                   58,000
Unamortized transaction costs                 (653)                    (770)
----------------------------------------------------------------------------
                                            57,347                   57,230
----------------------------------------------------------------------------

Current portion of long-term debt                -                        -
----------------------------------------------------------------------------
Long-term debt                              57,347                   57,230

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

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/

($000s)                              Payment Due by Period(1,2)
----------------------------------------------------------------------------
                  Recognized 
                          in  Contractual
                   Financial         Cash  Less than    1-3   4-5 More than
                  Statements        Flows     1 year  years years   5 years
----------------------------------------------------------------------------
Accounts payable 
 and accrued 
 liabilities   Yes-Liability       15,301     15,301      -     -         -
Long-term debt:
 Revolving 
  Credit 
  Agreement    Yes-Liability       58,000          - 58,000     -         -
Office and 
 equipment 
 leases                   No          685        243    442     -         -
Minimum work 
 commitments(3)           No       10,500      1,400  2,500 6,600         -
----------------------------------------------------------------------------
Total                              84,486     16,944 60,942 6,600         -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Payments exclude ongoing operating costs related to certain leases, 
    interest on long-term debt and payments made to settle derivatives.
(2) Payments denominated in foreign currencies have been translated at 
    March 31, 2009 exchange rates.
(3) Minimum work commitments include contracts awarded for capital projects
    and those commitments related to exploration and drilling obligations.

/T/

Pursuant to the East Hoshia Development Lease in Egypt, the Company has committed to drilling three exploration wells and submitted a letter of production guarantee for $4.0 million ($1.4 million remaining) as security (expiring June 1, 2009). One exploration well has been drilled and a second well is currently drilling.

Pursuant to the PSA for Block 72 in Yemen, the Contractor (Joint Venture Partners) has a minimum financial commitment of $2.0 million ($0.7 million to TransGlobe) during the second exploration period. The second, 30-month exploration period commenced on January 12, 2009.

Pursuant to the PSA for Block 75 in Yemen, the Contractor (Joint Venture Partners) has a minimum financial commitment of $7.0 million ($1.8 million to TransGlobe) for the signature bonus and first exploration period work program consisting of seismic acquisition and one exploration well. The first 36-month exploration period commenced March 8, 2008. The Company issued a $1.5 million letter of credit (expiring November 15, 2011) to guarantee the Company's performance under the first exploration period. The letter is secured by a guarantee granted by Export Development Canada.

Pursuant to the bid awarded for Block 84 in Yemen, the Contractor (Joint Venture Partners) has a minimum financial commitment of $20.1 million ($6.6 million to TransGlobe) for the signature bonus and first exploration period work program consisting of seismic acquisition and four exploration wells. The first 42-month exploration period will commence when the PSA has been approved and ratified by the government of Yemen, anticipated to occur in 2009.

Pursuant to the August 18, 2008 asset purchase agreement for a 25% financial interest in eight development leases on the West Gharib concession in Egypt, the Company has committed to paying the vendor a success fee to a maximum of $7.0 million if incremental reserve thresholds are reached in the East Hoshia (up to $5.0 million) and South Rahmi (up to $2.0 million) development leases, to be evaluated annually. As at December 31, 2008, no additional fees are due in 2009.

OPERATING RESULTS FROM DISCONTINUED OPERATIONS

The following applies to the Canadian operations only, the sale of which closed April 30, 2008. The Canadian operations and results have been accounted for as discontinued operations.

/T/

                                                 Three Months Ended
----------------------------------------------------------------------------
                                       March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
(000s, except per Boe amounts)         $        $/Boe        $        $/Boe
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net operating results
 Oil sales                             -            -    1,632        91.18
 Gas sales ($ per Mcf)                 -            -    5,300         8.46
 NGL sales                             -            -    1,362        83.65
 Other sales                           -            -       61            -
----------------------------------------------------------------------------
                                       -            -    8,355        60.30
 Royalties and other                   -            -    1,788        12.91
 Operating expenses                    -            -    1,857        13.40
----------------------------------------------------------------------------
 Netback                               -            -    4,710        33.99

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Depletion, depreciation and accretion  -            -    2,687        19.39

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Future income taxes                    -            -       82         0.59

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital expenditures                   -                 1,140

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

MANAGEMENT STRATEGY AND OUTLOOK FOR 2009

TransGlobe is committed to maintaining its strong financial position to support capital programs and provide shareholders with an enhanced return on investment during the current challenging economic environment. Management has taken action to preserve the Company's strong balance sheet through reduced capital spending, cost efficiency opportunities and raising 
$15.1 million (C$20.0 million), before expenses, in Q1-2009 through an issuance of common shares.

The 2009 outlook provides information as to management's expectation for results of operations for 2009. Readers are cautioned that the 2009 outlook may not be appropriate for other purposes. The Company's expected results are sensitive 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" outlined on the first page of this MD&A.

2009 Outlook Highlights

- Production is expected to average between 9,300 and 9,700 Bopd, a 29% increase over the 2008 average production;

- Exploration and development spending is budgeted to be $35.2 million, a 20% decrease from 2008 (allocated 60% to Egypt and 40% to Yemen) funded from funds flow from operations and cash on hand; and

- Using the mid-point of production expectations and an average oil price assumption for the final three quarters of 2009 of $45.00/Bbl for Dated Brent oil, funds flow from operations is expected to be $32.3 million for the year.

2009 Production Outlook

In Q1-2009, TransGlobe increased its production guidance for 2009 to 9,300 to 9,700 Bopd (original guidance - 8,500 to 9,000 Bopd) primarily due to recent success at Hana West. This represents a 27% to 32% increase over the 2008 average production of 7,342 Boepd. Production from the West Gharib fields in Egypt is expected to average approximately 6,000 to 6,400 Bopd during 2009, with the balance of approximately 3,300 Bopd coming from the Yemen properties.

/T/

Production Forecast            
                               2009 Guidance     2008 Actual     % Change(i)
----------------------------------------------------------------------------
Barrels of oil equivalent 
 per day                         9,300-9,700           7,342             29

----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) % growth based on mid-point of outlook.

/T/

2009 Funds Flow From Operations Outlook

This outlook was developed using the above production forecast and an average Dated Brent oil price of $45.00/Bbl for the final three quarters of 2009.

/T/

2009 Funds Flow From Operations Outlook

($ million)                    2009 Guidance     2008 Actual     % Change(i)
----------------------------------------------------------------------------
Funds flow from operations(ii)          32.3            59.3            (46)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) % growth based on mid-point of outlook.
(ii) Funds flow from operations is a non-GAAP measure that represents cash
     generated from operating activities before changes in non-cash working
     capital.

/T/

While production is forecast to grow by 29% year-over-year, funds flow from operations is expected to decrease by 46%, mainly as a result of lower oil prices. Variations in production and commodity prices during the last three quarters of 2009 could significantly change this outlook. An increase or decrease in the oil price of $1.00/Bbl would change anticipated funds flow by approximately $0.8 million for the year.

/T/

2009 Capital Budget

                                                    Q1-2009     2009 Annual
($ million)                                          Actual          Budget
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Egypt                                                   7.3            21.0
Yemen                                                   1.5            14.0
Corporate                                               0.1             0.2
----------------------------------------------------------------------------
Total                                                   8.9            35.2

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

In 2009, TransGlobe's capital strategy is to maximize the value of its assets in Egypt and Yemen. In Egypt, the Company will focus its efforts on the new Hana West discovery, East Hoshia and waterflood projects at Hana and Hoshia. The Company plans to drill between five and seven wells on the West Gharib PSC during the remaining nine months of 2009. In Yemen, the Company plans to drill between four and eight wells in the remaining nine months of 2009. The 2009 capital budget is expected to be funded from funds flow and working capital. In Q1-2009, TransGlobe funded 97% of its capital expenditures through funds flow from operations. The Company has designed its 2009 budget to be flexible allowing spending to be adjusted as commodity prices change and forecasts are reviewed.

CHANGES IN ACCOUNTING POLICIES

Goodwill and Intangible Assets

In February 2008, the Canadian Institute of Chartered Accountants ("CICA") issued Section 3064, Goodwill and intangible assets, replacing Section 3062, Goodwill and other intangible assets and Section 3450, Research and development costs. Various changes have been made to other sections of the CICA Handbook for consistency purposes. The new Section is applicable to financial statements relating to fiscal years beginning on or after October 1, 2008. Accordingly, the Company adopted the new standards for its fiscal year beginning January 1, 2009. It establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. The adoption of this Standard did not have an impact on the Consolidated Financial Statements.

Credit Risk and Fair Value of Financial Assets and Liabilities

In January 2009, the CICA issued EIC-173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities. The EIC provides guidance on how to take into account credit risk of an entity and counterparty when determining the fair value of financial assets and financial liabilities, including derivative instruments. This standard is effective for the Company's fiscal periods ending on or after January 20, 2009 with retrospect application. The application of this EIC did not have a material effect on the Company's financial statements.

New Accounting Standards

a) Business Combinations

In December 2008, the CICA issued Section 1582, Business Combinations, which will replace CICA Section 1581 of the same name. Section 1582 establishes principles and requirements of the acquisition method for business combinations and related disclosures. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 2011 with earlier application permitted. The Company is currently evaluating the impact of this changeover on its Consolidated Financial Statements.

b) Non-Controlling Interests

In December 2008, the CICA issued Sections 1601, Consolidated Financial Statements, and 1602, Non-Controlling Interests, which along with Section 1603 replace existing Section 1600. Section 1601 establishes standards for the preparation of consolidated financial statements. Section 1602 provides guidance on accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. These standards are effective on or after the beginning of the first annual reporting period beginning on or after January 2011 with earlier application permitted. These standards currently do not impact the Company as it has full controlling interest of all of its subsidiaries.

c) International Financial Reporting Standards

On February 13, 2008 the Canadian Accounting Standards Board has confirmed that effective for interim and annual financial statements related to fiscal years beginning on or after January 1, 2011, International Financial Reporting Standards ("IFRS") will replace Canada's current GAAP for all publicly accountable profit-oriented enterprises.

The Company commenced its IFRS transition project in 2008 and has completed the project awareness and engagement phase of the IFRS transition project. Corporate governance over the project has been established and a steering committee and project team have been formed. The steering committee is comprised of members of management and executive and is responsible for final approval of project recommendations and deliverables to the Audit Committee and Board. Communication, training and education are an important aspect of the Company's IFRS conversion project. Internal and external training and education sessions have been carried out and will continue throughout each phase of the project.

The Company is currently completing the diagnostic assessment phase by performing comparisons of the differences between Canadian GAAP and IFRS. The Company has determined that the most significant impact of IFRS conversion is to property and equipment. IFRS does not prescribe specific oil and gas accounting guidance other than for costs associated with the exploration and evaluation phase. The Company currently follows full cost accounting as prescribed in Accounting Guideline 16, Oil and Gas Accounting - Full Cost. Conversion to IFRS may have a significant impact on how the Company accounts for costs pertaining to oil and gas activities, in particular those related to the pre-exploration and development phases. In addition, the level at which impairment tests are performed and the impairment testing methodology will differ under IFRS. IFRS conversion will also result in other impacts, some of which may be significant in nature. The impact on the Company's Consolidated Financial Statements cannot reasonably be determined at this time.

In 2009, the Company will begin the design, planning and solution development phase. Project team members will work in conjunction with representatives from the various operational areas to evaluate the specific impacts of IFRS conversion to TransGlobe, including the Company's accounting policies, information and computer systems, internal and disclosure controls and financial reporting. The project team will develop recommendations and accounting policies, including the first-time adoption exemptions available upon initial transition to IFRS.

In addition, the Company is monitoring the International Accounting Standards Board's active projects and all changes to IFRS prior to January 1, 2011 will be incorporated as required.

DISCLOSURE CONTROLS AND PROCEDURES

As of March 31, 2009, an evaluation was carried out under the supervision, and with the participation, of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period, the design and operation of these disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in its annual filings is recorded, processed, summarized and reported within the specified time periods.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

TransGlobe's management has designed and implemented internal controls over financial reporting, as defined under Multilateral Instrument 52-109 of the Canadian Securities Administrators. 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 Canadian generally accepted accounting principles, including a reconciliation to U.S. generally accepted accounting principles, 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.

As at the date of this report, management is not aware of any change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

/T/

Consolidated Financial Statements

Consolidated Statements of Income (Loss) and Retained Earnings

(Unaudited - Expressed in thousands of U.S. Dollars, except per 
share amounts)

                                                Three Months Ended March 31
                                                  2009                 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------

REVENUE
 Oil sales, net of royalties and other        $ 19,060             $ 29,348
 Derivative loss on commodity contracts 
  (Note 14a)                                      (200)              (3,911)
 Other income                                        -                   63
----------------------------------------------------------------------------
                                                18,860               25,500
----------------------------------------------------------------------------

EXPENSES
 Operating                                       5,206                3,923
 General and administrative                      2,506                2,272
 Foreign exchange loss                             304                   13
 Interest on long-term debt                        607                1,681
 Depletion and depreciation (Note 4)            12,017                8,026
----------------------------------------------------------------------------
                                                20,640               15,915

----------------------------------------------------------------------------

Income (loss) before income taxes               (1,780)               9,585
----------------------------------------------------------------------------

Income taxes - current                           3,174                7,232
----------------------------------------------------------------------------

NET (LOSS) INCOME FROM CONTINUING OPERATIONS    (4,954)               2,353
NET INCOME FROM DISCONTINUED OPERATIONS (Note 5)     -                2,105
----------------------------------------------------------------------------
NET (LOSS) INCOME                               (4,954)               4,458

Retained earnings, beginning of period          88,430               57,787
----------------------------------------------------------------------------
RETAINED EARNINGS, END OF PERIOD              $ 83,476             $ 62,245

----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net (loss) income from continuing 
 operations per share (Note 12)
 Basic                                        $  (0.08)            $   0.04
 Diluted                                      $  (0.08)            $   0.04
Net income from discontinued operations 
 per share (Note 12)
 Basic                                        $      -             $   0.03
 Diluted                                      $      -             $   0.03
Net (loss) income per share (Note 12)
 Basic                                        $  (0.08)            $   0.07
 Diluted                                      $  (0.08)            $   0.07
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.


Consolidated Statements of Comprehensive Income (Loss)

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

                                                Three Months Ended March 31
                                                  2009                 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net (loss) income                             $ (4,954)             $ 4,458
Other comprehensive loss:
Foreign currency translation adjustment              -               (1,802)
----------------------------------------------------------------------------
COMPREHENSIVE (LOSS) INCOME                   $ (4,954)             $ 2,656

----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.


Consolidated Balance Sheets

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

                                                 As at                As at 
                                        March 31, 2009    December 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------

ASSETS
Current
 Cash and cash equivalents                   $  22,041            $   7,634
 Accounts receivable                            28,440               28,701
 Derivative commodity contracts (Note 14a)       1,523                2,336
 Prepaid expenses                                  735                  822
 Assets of discontinued operations (Note 5)        672                  764
----------------------------------------------------------------------------
                                                53,411               40,257

----------------------------------------------------------------------------

Derivative commodity contracts (Note 14a)          315                  472
Property and equipment (Note 4)                176,239              179,329
Goodwill (Note 6)                                8,180                8,180
----------------------------------------------------------------------------
                                             $ 238,145            $ 228,238

----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES
Current 
 Accounts payable and accrued liabilities    $  15,185            $  15,852
 Income taxes payable                               79                   79
 Liabilities of discontinued operations 
  (Note 5)                                          37                  342
----------------------------------------------------------------------------

                                                15,301               16,273

Long-term debt (Note 7)                         57,347               57,230
----------------------------------------------------------------------------
                                                72,648               73,503

----------------------------------------------------------------------------

Commitments and contingencies (Note 15)

SHAREHOLDERS' EQUITY
Share capital (Note 8)                          65,800               50,532
Contributed surplus (Note 10)                    5,341                4,893
Accumulated other comprehensive income 
 (Note 11)                                      10,880               10,880
Retained earnings                               83,476               88,430
----------------------------------------------------------------------------
                                               165,497              154,735

----------------------------------------------------------------------------
                                             $ 238,145            $ 228,238

----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.

Approved on behalf of the Board:

Ross G. Clarkson, Director                   Fred J. Dyment, Director

      
Consolidated Statements of Cash Flows

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

                                                Three Months Ended March 31
                                                  2009                 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------

CASH FLOWS RELATED TO THE FOLLOWING ACTIVITIES:

OPERATING
 Net (loss) income                            $ (4,954)             $ 4,458
 Net income from discontinued operations             -                2,105
----------------------------------------------------------------------------
 Net (loss) income from continuing operations   (4,954)               2,353
 Adjustments for:
  Depletion and depreciation                    12,017                8,026
  Amortization of deferred financing charges       117                   64
  Stock-based compensation (Note 9)                490                  314
  Unrealized loss on commodity contracts           971                2,407
 Changes in non-cash working capital              (539)              (1,645)
----------------------------------------------------------------------------
 Cash provided by continuing operations          8,102               11,519
 Cash (used) provided by discontinued operations  (213)               4,797
----------------------------------------------------------------------------
                                                 7,889               16,316

----------------------------------------------------------------------------

FINANCING
 Increase in long-term debt                          -               40,000
 Deferred financing costs                            -               (1,148)
 Options surrendered for cash payments (Note 8)      -                 (256)
 Issue of common shares for cash (Note 8)       16,392                  402
 Issue costs for common shares (Note 8)         (1,166)                   - 
 Changes in non-cash working capital            (1,086)                 274
----------------------------------------------------------------------------
                                                14,140               39,272

----------------------------------------------------------------------------

INVESTING
 Exploration and development expenditures       (8,926)              (6,281)
 Acquisition                                         -              (44,218)
 Changes in non-cash working capital             1,304               (2,828)
----------------------------------------------------------------------------
 Cash used by continuing operations             (7,622)             (53,327)
 Cash used by discontinued operations                -               (3,062)
----------------------------------------------------------------------------
                                                (7,622)             (56,389)

----------------------------------------------------------------------------

Effect of exchange rate changes on cash 
 and cash equivalents                                -                    7
----------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH 
 EQUIVALENTS                                    14,407                 (794)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   7,634               12,729
----------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD      $ 22,041             $ 11,935

----------------------------------------------------------------------------
----------------------------------------------------------------------------

Supplemental Disclosure of Cash Flow 
 Information
 Cash interest paid                           $    490              $ 1,617
 Cash taxes paid                                 3,174                7,232
 Cash is comprised of cash on hand 
  and balances with banks                       10,154               11,935
 Cash equivalents                               11,887                    -

----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.

/T/

Notes to Consolidated Financial Statements

March 31, 2009 and December 31, 2008 and for the periods ended March 31, 2009 and 2008

(Unaudited - Expressed in U.S. Dollars)

1. BASIS OF PRESENTATION

The interim consolidated financial statements include the accounts of TransGlobe Energy Corporation and its subsidiaries ("TransGlobe" or the "Company") as at March 31, 2009 and December 31, 2008 and for the three-month periods ended March 31, 2009 and 2008, and are presented in accordance with Canadian generally accepted accounting principles ("Canadian GAAP") on the same basis as the audited consolidated financial statements as at and for the year ended December 31, 2008, except as outlined in Note 2. These interim financial statements do not contain all the disclosures required for annual financial statements. Accordingly, 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, 2008. In these interim consolidated financial statements, unless otherwise indicated, all dollars are expressed in United States (U.S.) dollars. All references to US$ or to $ are to United States dollars and references to C$ are to Canadian dollars.

2. CHANGES IN ACCOUNTING POLICIES

Goodwill and Intangible Assets

In February 2008, the Canadian Institute of Chartered Accountants ("CICA") issued Section 3064, Goodwill and intangible assets, replacing Section 3062, Goodwill and other intangible assets and Section 3450, Research and development costs. Various changes have been made to other sections of the CICA Handbook for consistency purposes. The new Section is applicable to financial statements relating to fiscal years beginning on or after October 1, 2008. Accordingly, the Company adopted the new standards for its fiscal year beginning January 1, 2009. It establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. The adoption of this Standard did not have an impact on the Consolidated Financial Statements.

Credit Risk and Fair Value of Financial Assets and Liabilities

In January 2009, the CICA issued EIC-173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities. The EIC provides guidance on how to take into account credit risk of an entity and counterparty when determining the fair value of financial assets and financial liabilities, including derivative instruments. This standard is effective for the Company's fiscal periods ending on or after January 20, 2009 with retrospect application. The application of this EIC did not have a material effect on the Company's financial statements.

New Accounting Standards

a) Business Combinations

In December 2008, the CICA issued Section 1582, Business Combinations, which will replace CICA Section 1581 of the same name. Section 1582 establishes principles and requirements of the acquisition method for business combinations and related disclosures. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 2011 with earlier application permitted. The Company is currently evaluating the impact of this changeover on its Consolidated Financial Statements.

b) Non-Controlling Interests

In December 2008, the CICA issued Sections 1601, Consolidated Financial Statements, and 1602, Non-Controlling Interests, which along with Section 1603 replace existing Section 1600. Section 1601 establishes standards for the preparation of consolidated financial statements. Section 1602 provides guidance on accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. These standards are effective on or after the beginning of the first annual reporting period beginning on or after January 2011 with earlier application permitted. These standards currently do not impact the Company as it has full controlling interest of all of its subsidiaries.

c) International Financial Reporting Standards

On February 13, 2008 the Canadian Accounting Standards Board has confirmed that effective for interim and annual financial statements related to fiscal years beginning on or after January 1, 2011, International Financial Reporting Standards ("IFRS") will replace Canada's current GAAP for all publicly accountable profit-oriented enterprises.

The Company has determined that the most significant impact of IFRS conversion is to property and equipment. IFRS does not prescribe specific oil and gas accounting guidance other than for costs associated with the exploration and evaluation phase. The Company currently follows full cost accounting as prescribed in Accounting Guideline 16, Oil and Gas Accounting - Full Cost. Conversion to IFRS may have a significant impact on how the Company accounts for costs pertaining to oil and gas activities, in particular those related to the pre-exploration and development phases. In addition, the level at which impairment tests are performed and the impairment testing methodology will differ under IFRS. IFRS conversion will also result in other impacts, some of which may be significant in nature. The impact on the Company's Consolidated Financial Statements cannot be reasonably determined at this time.

3. ACQUISITIONS

Corporate Acquisitions

GHP Exploration (West Gharib) Ltd.

On February 5, 2008, TransGlobe acquired all of the common shares of GHP Exploration (West Gharib) Ltd. ("GHP") for cash consideration of $44.1 million, net of cash acquired. The results of GHP's operations have been included in the consolidated financial statements since that date. GHP holds a 30% interest in the West Gharib Concession area in Egypt. TransGlobe funded the acquisition from bank debt of $40.0 million and cash on hand.

The acquisition has been accounted for using the purchase method with TransGlobe as the acquirer, and the purchase price was allocated to the fair value of the assets acquired and the liabilities assumed as follows:

/T/

Cost of acquisition (000s)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash paid, net of cash acquired                                    $ 44,095
Transaction costs                                                        99
----------------------------------------------------------------------------
                                                                   $ 44,194

----------------------------------------------------------------------------
----------------------------------------------------------------------------

Allocation of purchase price (000s)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Property and equipment                                             $ 36,602
Goodwill                                                              3,602
Working capital, net of cash acquired                                 3,990
----------------------------------------------------------------------------
                                                                   $ 44,194

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

The above allocation of the purchase price is final and reflects the post-closing adjustments settled in the three-month period ended June 30, 2008.

Property Acquisition

On August 18, 2008, TransGlobe completed an oil and gas property acquisition in Egypt for the 25% financial interest in the eight non-Hana development leases on the West Gharib Concession. The total cost of the acquisition was $18.0 million, adjusted to the effective date of June 1, 2008. In addition, the Company could pay up to an additional $7.0 million if incremental reserve thresholds are reached in the East Hoshia (up to $5.0 million) and in South Rahmi (up to $2.0 million) development leases. As at December 31, 2008, no additional fees are due in 2009. The value of the net assets acquired has been assigned to property and equipment. Following this property acquisition, TransGlobe now holds a 100% working interest in the West Gharib Concession in Egypt.

4. PROPERTY AND EQUIPMENT

The Company capitalized overhead costs relating to exploration and development activities during the three months ended March 31, 2009 of $0.8 million in Egypt (2008 - $0.1 million) and $0.1 million in Yemen (2008 - $0.02 million).

Unproven property costs excluded from the costs subject to depletion and depreciation for the three months ended March 31, 2009 totalled $10.0 million in Egypt (2008 - $9.9 million) and $7.5 million in Yemen (2008 - $6.5 million).

Future development costs for proved reserves included in the depletion calculations for the three months ended March 31, 2009 totalled $2.1 million in Egypt (2008 - $3.2 million) and $11.1 million in Yemen (2008 - $6.9 million).

5. DISCONTINUED OPERATIONS

On April 30, 2008, the Company sold its Canadian oil and natural gas interests for C$56.7 million, subject to normal closing adjustments. The Canadian operations have been accounted for as discontinued operations in accordance with Canadian GAAP. Results of the Canadian operations have been included in the financial statements up to the closing date of the sale (the date control was transferred to the purchaser). The Company used the cash proceeds from the sale and cash on hand to repay $55.0 million of debt.

Discontinued operations as at March 31, 2009 included current assets of $0.4 million, property and equipment of $0.3 million and current liabilities of $0.04 million. Discontinued operations at December 31, 2008 included current assets of $0.5 million, property and equipment of $0.3 million, and current liabilities of $0.3 million. The Company recorded a gain on disposition of $4.0 million, net of tax, in the year ended December 31, 2008.

/T/

                                              Three Months Ended
(000s)                              March 31, 2009           March 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue
 Oil and gas sales, net of 
  royalties and other                         $  -                  $ 6,567

Expenses
 Operating                                       -                    1,857
 Depletion, depreciation and accretion           -                    2,687
----------------------------------------------------------------------------
                                                                      4,544
----------------------------------------------------------------------------
Income from discontinued operations 
 before taxes                                    -                    2,023
Future income tax recovery                       -                       82
----------------------------------------------------------------------------
Net income from discontinued operations       $  -                  $ 2,105

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

In Canada, the Company capitalized overhead costs relating to exploration and development activities during the three months ended March 31, 2008 of $0.4 million. Unproven property costs of $1.8 million were excluded from the costs subject to depletion and depreciation for 2008. Depletion, depreciation and accretion was not recorded while the assets were classified as held for sale.

6. GOODWILL

Changes in the carrying amount of the Company's goodwill, arising from acquisitions, are as follows:

/T/

                                      Three Months Ended         Year Ended
(000s)                                    March 31, 2009  December 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, beginning of period                     $ 8,180            $ 4,313
Changes during the period                              -              3,867
----------------------------------------------------------------------------
Balance, end of period                           $ 8,180            $ 8,180

----------------------------------------------------------------------------
----------------------------------------------------------------------------


7. LONG-TERM DEBT
 
                                                   As at              As at 
(000s)                                    March 31, 2009  December 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revolving Credit Agreement                      $ 58,000           $ 58,000
Unamortized transaction costs                       (653)              (770)
----------------------------------------------------------------------------
                                                  57,347             57,230

----------------------------------------------------------------------------

Current portion of long-term debt                      -                  -
----------------------------------------------------------------------------
                                                $ 57,347           $ 57,230

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

As at March 31, 2009, the Company has a $60.0 million Revolving Credit Agreement of which $58.0 million is drawn. The Revolving Credit Agreement expires on September 19, 2010 and is secured by a first floating charge debenture over all assets of the Company, a general assignment of book debts, security pledge of the Company's subsidiaries and certain covenants. The Revolving Credit Agreement bears interest at the Eurodollar Rate plus three percent. During the three months ended March 31, 2009, the average effective interest rate was 4.34% (March 31, 2008 - 6.64%). In the three months ended March 31, 2009, the Company incurred $Nil (2008 - $1.1 million) in fees to draw on its Revolving Credit Agreement.

The future debt payments on long-term debt, as of March 31, 2009, are as follows:

/T/

(000s)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2009                                                                   $  -
2010                                                                 58,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------


8. SHARE CAPITAL

Authorized

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

Issued

                                 Three Months Ended              Year Ended 
                                     March 31, 2009       December 31, 2008
----------------------------------------------------------------------------
(000s)                          Shares       Amount      Shares      Amount
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, beginning of period    59,500     $ 50,532      59,627    $ 50,128
Share issuance                   5,798       16,312           -           -
Stock options exercised             30           80         173         512
Stock options surrendered 
 for cash payments                   -            -           -        (256)
Stock-based compensation 
 on exercise                         -           42           -         403
Repurchase of common shares          -            -        (300)       (255)
Share issue costs                    -       (1,166)          -           -
----------------------------------------------------------------------------
Balance, end of period          65,328     $ 65,800      59,500    $ 50,532

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

In the first quarter of 2009, the Company issued 5,798,000 common shares at C$3.45 per common share for gross proceeds of C$20.0 million (net C$18.6 million).

The Company has received regulatory approval to purchase, from time to time, as it considers advisable, up to 5,558,322 common shares under a Normal Course Issuer Bid which commenced August 1, 2008 and will terminate July 31, 2009. During the quarter ended March 31, 2009, the Company did not repurchase any common shares. During the year ended December 31, 2008, the Company repurchased and cancelled 300,000 common shares at an average price of C$3.87 per share. The excess of the purchase price over the book value in the amount of $0.9 million was charged to retained earnings during the year.

/T/

9. STOCK OPTION PLAN

Stock options

                                 Three Months Ended              Year Ended 
                                     March 31, 2009       December 31, 2008
----------------------------------------------------------------------------
(000s, except per         Number Weighted-Average   Number Weighted-Average
 share amounts)               of         Exercise       of         Exercise 
                         Options            Price  Options            Price 
----------------------------------------------------------------------------
Options outstanding, 
 beginning of period       5,600           $ 3.73    2,936           $ 4.11
 Granted                      45           $ 2.29    3,457           $ 3.45
 Exercised for common 
  shares                     (30)          $ 2.44     (173)          $ 2.25
 Surrendered for cash 
  payments                     -           $    -     (150)          $ 2.66
 Forfeited                  (130)          $ 5.01     (470)          $ 4.93
----------------------------------------------------------------------------
Options outstanding, 
 end of period             5,485           $ 3.69    5,600           $ 3.73

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Options exercisable, 
 end of period             1,680           $ 4.17    1,758           $ 4.17

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

Stock-based compensation

Stock-based compensation expense of $0.5 million has been recorded in the Consolidated Statements of Income (Loss) and Retained Earnings for the three months ended March 31, 2009 (March 31, 2008 - $0.3 million). The fair value of all common stock options granted is estimated on the date of grant using the lattice-based binomial option pricing model. The weighted average fair value of the options granted during 2009 and the assumptions used in their determination are noted below:

/T/

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted average fair market value per option (C$)                     1.04
Risk-free interest rate (percent)                                      1.86
Expected volatility (percent)                                         44.81
Expected dividend yield (percent)                                         0
Expected forfeiture rate (non-executive employees) (percent)             12
Early exercise (Year 1/Year 2/Year 3/Year 4/Year 5)       0%/10%/20%/30%/40%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Options granted vest annually over a three-year period and expire five 
years after the grant date.

10. CONTRIBUTED SURPLUS

                                 Three Months Ended              Year Ended 
(000s)                               March 31, 2009       December 31, 2008
----------------------------------------------------------------------------
Contributed surplus, 
 beginning of period                        $ 4,893                $  3,562
Stock-based compensation expense                490                   1,734
Transfer to common shares on 
 exercise of options                            (42)                   (403)
----------------------------------------------------------------------------
Contributed surplus, end of period          $ 5,341                $  4,893

----------------------------------------------------------------------------
----------------------------------------------------------------------------

11. ACCUMULATED OTHER COMPREHENSIVE INCOME

The balance of accumulated other comprehensive income consists of the 
following:

                                 Three Months Ended              Year Ended 
(000s)                               March 31, 2009       December 31, 2008
----------------------------------------------------------------------------
Accumulated other comprehensive 
 income, beginning of period               $ 10,880                $ 11,766
Other comprehensive income (loss):    
Foreign currency translation adjustment           -                    (886)
----------------------------------------------------------------------------
Accumulated other comprehensive 
 income, end of period                     $ 10,880                $ 10,880

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

12. PER SHARE AMOUNTS

In calculating the net (loss) income per share, net (loss) income from continuing operations per share and net income from discontinued operations per share, basic and diluted, the following weighted average shares were used:

/T/

                                                Three Months Ended
(000s)                                 March 31, 2009        March 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted average number of 
 shares outstanding                            61,710                59,712
Dilution effect stock options                       -                   855
----------------------------------------------------------------------------
Weighted average number of diluted 
 shares outstanding                            61,710                60,567

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

The treasury stock method assumes that the proceeds received from the exercise of "in-the-money" stock options are used to repurchase common shares at the average market price. In calculating the weighted average number of diluted common shares outstanding for the three-month period ended March 31, 2009, the Company excluded all stock options outstanding as there was a net loss in the period. For the three months ended March 31, 2008, the Company excluded 1,406,000 options because their exercise price was greater than the period average common share market price in the period.

13. CAPITAL DISCLOSURES

The Company's objectives when managing capital are to ensure the Company will have the financial capacity, liquidity and flexibility to fund the ongoing exploration and development of its oil and gas assets. The Company relies on cash flow to fund its capital investments. However, due to long lead cycles of some of its developments and corporate acquisitions, the Company's capital requirements may exceed its cash flow generated in any one period. This requires the Company to maintain financial flexibility and liquidity. The Company sets the amount of capital in proportion to risk and manages to ensure that the total of the long-term debt is not greater than two times the Company's funds flow from operations for the trailing twelve months. For the purposes of measuring the Company's ability to meet the above stated criteria, funds flow from operations is defined as the net income (including net income from discontinued operations) before any deduction for depletion, depreciation and accretion, amortization of deferred financing charges, non-cash stock-based compensation, and non-cash derivative (gain) loss on commodity contracts.

/T/

The Company defines and computes its capital as follows:

                                                   As at              As at 
(000s)                                    March 31, 2009  December 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Shareholders' equity                           $ 165,497          $ 154,735
Long-term debt, including 
 the current portion                              57,347             57,230
Cash and cash equivalents                        (22,041)            (7,634)
----------------------------------------------------------------------------
Total capital                                  $ 200,803          $ 204,331

----------------------------------------------------------------------------
----------------------------------------------------------------------------

The Company's debt-to-funds flow ratio is computed as follows:

                                                  12 Months Trailing
----------------------------------------------------------------------------
(000s)                                    March 31, 2009  December 31, 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Long-term debt, including 
 the current portion                            $ 57,347           $ 57,230
----------------------------------------------------------------------------

Cash flow from operating activities             $ 49,366           $ 57,793
Changes in non-cash working capital                  669              1,474
----------------------------------------------------------------------------
Funds flow from operations                      $ 50,035           $ 59,267
----------------------------------------------------------------------------
Ratio                                                1.1                1.0

----------------------------------------------------------------------------
----------------------------------------------------------------------------

/T/

The Company's financial objectives and strategy as described above have remained substantially unchanged over the last two completed fiscal years. These objectives and strategy are reviewed on an annual basis. The Company believes that its ratios are within reasonable limits, in light of the relative size of the Company and its capital management objectives.

The Company is also subject to financial covenants in its revolving credit agreement. The key financial covenants are as follows:

- Interest coverage ratio of greater than 3.5 to 1.0, calculated as EBITDAX to interest expense, for the immediately preceding four consecutive fiscal quarters. For the purposes of the financial covenant calculations EBITDAX shall mean Consolidated Net Income before interest, income taxes, depreciation, depletion, amortization, and accretion, unrealized hedging losses and stock based compensation expense.

- Indebtedness to EBITDAX of less than 2.0 to 1.0. For the purposes of the financial covenant calculation, indebtedness shall mean the balance of the Revolving Credit Facility, letters of credit and any amounts payable in connection with a realized derivative loss.

- Current ratio (current assets to current liabilities, excluding the current portion of long-term debt) of greater than 1.0 to 1.0.

The Company is in compliance with all financial covenants at March 31, 2009.

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Carrying Values and Estimated Fair Values of Financial Assets and Liabilities
The Company has classified its cash and cash equivalents as assets held-for-trading and its derivative commodity contracts as financial assets or liabilities held-for-trading, which are both measured at fair value with changes being recognized in net income. Accounts receivable are classified as loans and receivables; accounts payable and accrued liabilities, income taxes payable, liabilities of discontinued operations, and long-term debt are classified as other liabilities, all of which are measured at amortized cost.

Carrying value and fair value of financial assets and liabilities are summarized as follows:

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                                                    March 31, 2009
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Classification (000s)                      Carrying Value        Fair Value
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Financial assets held-for-trading                $ 23,879          $ 23,879
Loans and receivables                              28,440            28,440
Financial liabilities held-for-trading                  -                 -
Other liabilities                                  72,648            73,301
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Credit Risk

Credit risk is the risk of loss if the counter parties do not fulfill their contractual obligations. The majority of the accounts receivable are in respect of oil and gas operations. The Company generally extends unsecured credit to these customers and therefore the collection of accounts receivable may be affected by changes in economic or other conditions. Management believes the risk is mitigated by the size and reputation of the companies to which they extend credit. The Company has not experienced any material credit loss in the collection of accounts receivable to date.

Trade and other receivables from continuing operations are analyzed in the table below. With respect to the trade and other receivables that are not impaired and past due, there are no indications as of the reporting date that the debtors will not meet their payment obligations.

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(000s)
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Trade and other receivables at March 31, 2009
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Neither impaired nor past due                                      $ 11,973
Impaired (net of valuation allowance)                                     -
Not impaired and past due in the following period:
 Within 30 days                                                       1,891
 31-60 days                                                           1,509
 61-90 days                                                           1,916
 Over 90 days                                                        11,151
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In Egypt, the Company sold all of its 2009 production to one purchaser. In Yemen, the Company sold all of its 2009 Block 32 production to one purchaser and all of its 2009 Block S-1 production to one purchaser.

Market Risk

Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future performance of a business. The market price movements that the Company is exposed to include oil prices (commodity price risk), foreign currency exchange rates and interest rates, all of which could adversely affect the value of the Company's financial assets, liabilities and financial results.

a) Commodity Price Risk

The Company's operational results and financial condition are partially dependent on the commodity prices received for its oil production. Commodity prices have fluctuated significantly during recent years.

Any movement in commodity prices would have an effect on the Company's financial condition. Therefore, the Company has entered into various financial derivative contracts to manage fluctuations in commodity prices in the normal course of operations. The following contracts are outstanding at March 31, 2009:

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                                                              Dated Brent
                                                              Pricing 
Period                      Volume            Type            Put-Call
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Crude Oil
 April 1, 2009-             12,000 Bbls/      Financial
  December 31, 2009          month             Collar         $60.00-$82.10
 April 1, 2009-             6,000 Bbls/       Financial
  December 31, 2009          month             Collar         $60.00-$86.10
 January 1, 2010-           12,000 Bbls/      Financial
  August 31, 2010            month             Collar         $60.00-$84.25
 April 1, 2009-             12,000 Bbls/      Financial
  December 31, 2009          month             Collar         $40.00-$55.00
 January 1, 2010-           9,000 Bbls/       Financial
  August 31, 2010            month             Collar         $40.00-$80.00
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The estimated fair value of unrealized commodity contracts is reported on the Consolidated Balance Sheet, with any change in the unrealized positions recorded to income. The fair values of these transactions are based on an approximation of the amounts that would have been paid to, or received from, counter-parties to settle the transactions outstanding as at the Consolidated Balance Sheet date with reference to forward prices and market values provided by independent sources. The actual amounts realized may differ from these estimates.

When assessing the potential impact of commodity price changes on its financial derivative commodity contracts, the Company believes 10% volatility is a reasonable measure. The effect of a 10% increase in commodity prices on the derivative commodity contracts would decrease the net (loss) income, for the three months ended March 31, 2009, by $1.5 million. The effect of a 10% decrease in commodity prices on the derivative commodity contracts would increase the net (loss) income, for the three months ended March 31, 2009, by $1.5 million.

b) Foreign Currency Exchange Risk

The Company's Canadian dollar transactions are exposed to fluctuations in foreign currency exchange rates. The Company manages its foreign currency exchange risk by maintaining foreign currency bank accounts and receivable accounts to offset foreign currency payables and planned expenditures.

As the Company's business is conducted primarily in U.S. dollars and its financial instruments are primarily denominated in U.S. dollars, the potential impact of fluctuations in foreign exchange rates on the Company's financial instruments would have a minimal impact on net income and other comprehensive income for the three months ended March 31, 2009.

c) Interest Rate Risk

Fluctuations in interest rates could result in a significant change in the amount the Company pays to service variable-interest, U.S.-dollar-denominated debt. No derivative contracts were entered into during 2009 to mitigate this risk. When assessing interest rate risk applicable to the Company's variable-interest, U.S.- dollar-denominated debt the Company believes 1% volatility is a reasonable measure. The effect of interest rates increasing by 1% would decrease the Company's net (loss) income, for the three months ended March 31, 2009, by $0.1 million. The effect of interest rates decreasing by 1% would increase the Company's net (loss) income, for the three months ended March 31, 2009, by $0.1 million.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. 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 proved reserves, to acquire strategic oil and gas assets and to repay debt.

The Company actively maintains credit facilities to ensure it has sufficient available funds to meet current and foreseeable financial requirements at a reasonable cost. The following are the contractual maturities of financial liabilities at March 31, 2009:

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($000s)                              Payment Due by Period(1,2)
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                  Recognized 
                          in  Contractual
                   Financial         Cash Less than     1-3    4-5 More than
                  Statements        Flows    1 year   years  years   5 years
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Accounts payable 
 and accrued 
 liabilities   Yes-Liability     $ 15,301  $ 15,301    $  -   $  -      $  -
Long-term debt:
 Revolving 
  Credit 
  Agreement    Yes-Liability       58,000         -  58,000      -         -
Office and 
 equipment 
 leases                   No          685       243     442      -         -
Minimum work 
 commitments(3)           No       10,500     1,400   2,500  6,600         -
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Total                            $ 84,486  $ 16,944 $60,942 $6,600      $  -
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(1) Payments exclude ongoing operating costs related to certain leases, 
    interest on long-term debt and payments made to settle derivatives.
(2) Payments denominated in foreign currencies have been translated at 
    March 31, 2009 exchange rates.
(3) Minimum work commitments include contracts awarded for capital projects
    and those commitments related to exploration and drilling obligations.

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The Company actively monitors its liquidity to ensure that its cash flows, credit facilities and working capital are adequate to support these financial liabilities, as well as the Company's capital programs. In addition, the Company raised gross proceeds of C$20.0 million in the quarter ended March 31, 2009 through a share issuance.

The existing banking arrangements at March 31, 2009 consist of a Revolving Credit Facility of $60.0 million of which $58.0 million is drawn.

The table below shows cash inflows for financial derivative instruments based on forward curves prices for Dated Brent oil of $46.52/Bbl at March 31, 2009:

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Less than 1 year                                                    $ 1,523
1-3 years                                                               315
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15. COMMITMENTS AND CONTINGENCIES

The Company is subject to certain office and equipment leases (Note 14).

Pursuant to the East Hoshia Development Lease in Egypt, the Company has committed to drilling three exploration wells and submitted a letter of production guarantee for $4.0 million ($1.4 million remaining) as security (expiring June 1, 2009). One exploration well has been drilled and one well is currently drilling.

Pursuant to the Production Sharing Agreement ("PSA") for Block 72 in Yemen, the Contractor (Joint Venture Partners) has a minimum financial commitment of $2.0 million ($0.7 million to TransGlobe) during the second exploration period. The second 30-month exploration period commenced on January 12, 2009.

Pursuant to the PSA for Block 75 in Yemen, the Contractor (Joint Venture Partners) has a minimum financial commitment of $7.0 million ($1.8 million to TransGlobe) for the signature bonus and first exploration period work program consisting of seismic acquisition and one exploration well. The first 36-month exploration period commenced March 8, 2008. The Company issued a $1.5 million letter of credit (expiring November 15, 2011) to guarantee the Company's performance under the first exploration period. The letter is secured by a guarantee granted by Export Development Canada.

Pursuant to the bid awarded for Block 84 in Yemen, the Contractor (Joint Venture Partners) has a minimum financial commitment of $20.1 million ($6.6 million to TransGlobe) for the signature bonus and first exploration period work program consisting of seismic acquisition and four exploration wells. The first 42-month exploration period will commence when the PSA has been approved and ratified by the government of Yemen, anticipated to occur in 2009.

Pursuant to the August 18, 2008 asset purchase agreement for a 25% financial interest in eight development leases on the West Gharib Concession in Egypt, the Company has committed to paying the vendor a success fee to a maximum of $7.0 million if incremental reserve thresholds are reached in the East Hoshia (up to $5.0 million) and South Rahmi (up to $2.0 million) development leases, to be evaluated annually. As at December 31, 2008, no additional fees are due in 2009.

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16. SEGMENTED INFORMATION

                          Egypt               Yemen               Total
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                                      Three Months Ended March 31
(000s)               2009      2008      2009      2008      2009      2008 
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Revenue
 Oil sales, net 
  of royalties 
  and other      $ 10,019  $ 10,065   $ 9,041  $ 19,283  $ 19,060  $ 29,348
 Other income           -        31         -         -         -        31
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Total revenue      10,019    10,096     9,041    19,283    19,060    29,379
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Segmented expenses
 Operating 
  expenses          2,787       711     2,419     3,212     5,206     3,923
 Depletion and 
  depreciation      9,473     4,927     2,501     3,062    11,974     7,989
 Income taxes       2,196     3,124       978     4,108     3,174     7,232
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Total segmented 
 expenses          14,456     8,762     5,898    10,382    20,354    19,144
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Segmented (loss) 
 income          $ (4,437)  $ 1,334   $ 3,143   $ 8,901    (1,294)   10,235
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Non-segmented 
 expenses
 Derivative loss 
  on commodity 
  contracts
  (Note 14a)                                                  200     3,911
 General and 
  administrative                                            2,506     2,272
 Interest on 
  long-term debt                                              607     1,681
 Depreciation                                                  43        37
 Foreign exchange 
  gain                                                        304        13
 Other expense 
  (income)                                                      -       (32)
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Total non-segmented 
 expenses                                                   3,660     7,882
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Net (loss) income 
 from continuing
 operations                                                (4,954)    2,353
Net income from 
 discontinued
 operations 
 (Note 5)                                                       -     2,105
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Net (loss) income                                        $ (4,954) $  4,458

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Capital 
 expenditures
 Exploration and 
  development    $  7,309  $  3,318   $ 1,545   $ 2,947  $  8,854  $  6,265
 Corporate 
  acquisitions                                                  -    36,601
 Corporate                                                     72        16
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Net capital 
 expenditures                                            $  8,926  $ 42,882

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             Mar. 31    Dec. 31    Mar. 31    Dec. 31    Mar. 31    Dec. 31
                2009       2008       2009       2008       2009       2008
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Property and 
 equipment $ 126,508  $ 128,672   $ 48,953   $ 49,909  $ 175,461  $ 178,581
Goodwill       8,180      8,180          -          -      8,180      8,180
Other         24,514     27,517     10,286      6,430     34,800     33,947
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Segmented 
 assets    $ 159,202  $ 164,369   $ 59,239   $ 56,339    218,441    220,708
Non-segmented 
 assets                                                   19,032      6,766
Discontinued 
 operations                                                  672        764
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Total 
 assets                                                $ 238,145  $ 228,238

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/T/

17. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform with current period presentation.



FOR FURTHER INFORMATION PLEASE CONTACT:

TransGlobe Energy Corporation
Anne-Marie Buchmuller
Manager, Investor Relations & Assistant Corporate Secretary
(403) 268-9868 or Cell: (403) 472-0053
Email: investor.relations@trans-globe.com
Website: www.trans-globe.com