HispanicBusiness

Operations and Exploration

Five wells were drilled during the first quarter resulting in four (Arta/East Arta) Upper Nukhul oil wells and one (East Arta) dry well.

Subsequent to the quarter three additional oil wells have been drilled in the Arta/East Arta area which encountered Lower Nukhul. The East Arta well successfully appraised a Lower Nukhul pool on the north west edge of the East Arta block which had been discovered prior to the 2012 EGPC bid round. The new East Arta well encountered a Lower Nukhul reservoir with 90 feet of net pay. The original discovery well initially produced 550 Bopd and is currently producing 370 Bopd after 17 months of production. Based on 3-D seismic mapping the majority of the Lower Nukhul pool extends on to the NW Gharib block. The pool is estimated to contain between 10 and 40 million barrels of Petroleum-Initially-In-Place ("PIIP") (P90 to P10 respectively) based on internal estimates. Approximately 22 additional locations on 40 acre spacing will be required to define the extents of this Lower Nukhul pool.

One of the subsequent Arta wells that was drilled west of the main Arta field also discovered a new Lower Nukhul oil reservoir with 18 feet of net pay. The pool is estimated to contain between 2 and 10 million barrels of PIIP (P90 to P10 respectively) based on internal estimates. Approximately 10 appraisal locations will be required to define the pool which potentially extends on to the NW Gharib concession.

One drilling rig is currently drilling in the West Gharib concession.

Production

Production from West Gharib averaged 12,970 Bopd to TransGlobe during the first quarter, a 12% (1,407 Bopd) increase from the previous quarter. An illegal eight-day protest at the start of October 2012 resulted in approximately 1,000 Bopd of production being deferred in that quarter.

Production averaged 12,270 Bopd during January; 13,232 Bopd in February; 13,433 Bopd in March; and 13,798 Bopd in April. Production increases in February, March and April are attributed to new wells, production optimization and increased take-away capacity attributed to the West Bakr K station trucking terminal.

The Company commissioned a truck receiving terminal at the West Bakr K station to receive West Gharib production in late December. The new K station receiving terminal is designed to receive the majority of the Hana/Hana West production from West Gharib, which is then shipped via the West Bakr pipeline to the GPC receiving terminal. By diverting up to 2,500 Bopd of Hana/Hana West production through the West Bakr pipeline system, West Gharib is able to utilize a portion of the Hana/Hana West capacity at the Government-controlled ("GPC") truck terminal to deliver additional West Gharib production. Combined West Gharib and West Bakr delivered 18,650 Bopd into the GPC system in April and have successfully delivered over 21,000 Bopd on peak days. Additional unidentified constraints could be experienced in the GPC processing facilities when the combined production exceeds the 21,000 Bopd level. The Company continues to work with GPC to identify bottlenecks and optimize throughput.

Phase 2 expansions of the new Hoshia and Arta South multi-well batteries ("MWB") were completed in early 2013. In addition, a new MWB located in the northwest corner of East Arta was commissioned in early March 2013 and plans have been finalized for a new Arta Main MWB in the central part of Arta, targeting a Q4-2013 startup. The startup of new MWB's has contributed to better water separation in the field and increased oil delivery at the GPC terminal.