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South Alamein, Arab Republic of Egypt (100% working interest, operated)

Operations and Exploration

The Company has approved a budget for 2013 which includes an initial eight-well drilling program and the development of the Boraq 2 oil discovery. The 2013 drilling program includes two Boraq appraisal wells with the balance of the program focused on exploration prospects in South Alamein.

The Company is waiting for military surface access approvals, which have been delayed. The Company is encouraged by the continued support from EGPC and the Ministry of Oil and is cautiously optimistic that the necessary approvals will be forthcoming over the next quarter or two.

It is difficult to provide a timeline for first oil production from the Boraq discovery. The Company had assumed a Q4-2013 startup of production for budget purposes with an average production rate of 460 Bopd for 2013.

South Mariut, Arab Republic of Egypt (60% working interest, operated)

Operations and Exploration

The Company drilled two exploration wells (Al Azayem #1 and Al Nahda #1) during the quarter which were dry and abandoned.

The Al Azayem #1 well commenced drilling in the fourth quarter of 2012 and reached a total depth of 16,391 feet in January 2013. The well was plugged and abandoned. The primary Cretaceous reservoirs did not contain hydrocarbons. The Jurassic section of the well encountered a gross section of approximately 4,000 feet of Jurassic shale and tight carbonates. The Jurassic shale had good hydrocarbon indicators recorded while drilling. Analysis of the drill cuttings will be carried out to determine source rock properties. The total well cost of approximately $9 million ($5.4 million to TransGlobe) was lower than the budgeted $9.6 million cost for a 14,500 foot test.

The Al Nahda #1 well was drilled to a total depth of 10,750 feet and subsequently plugged and abandoned. The Al Nahda #1 well tested an independent Cretaceous structure (four stacked zones) defined on 3-D seismic which did not contain hydrocarbons. The total well cost was approximately $3.3 million ($2.0 million to TransGlobe).

Subsequent to the quarter, the third exploration well Al Hammam #1 was drilled to a total depth of 8,322 feet and subsequently plugged and abandoned. The Al Hammam #1 tested a Cretaceous horst block defined on 2-D seismic data which did not contain hydrocarbons. The total well cost was approximately $2.7 million ($1.6 million to TransGlobe).

With the abandonment of Al Hammam #1, the partners have fulfilled their commitments under the terms of the Concession Agreement and are evaluating whether to commit to the second and final two-year extension period. Based on the recent drilling results it is unlikely that TransGlobe will proceed to the next extension period and therefore will likely relinquish its interest in the South Mariut Concession.

EGPC BID ROUND RESULTS

EGPC announced that TransGlobe was the successful bidder on four concessions (100% working interest) in the 2011 EGPC bid round which closed on March 29, 2012. It is expected that the new concessions will be awarded in late 2013 following the ratification process which culminates when each concession is passed into law by the People's Assembly (Parliament).

North West Gharib (100% WI)

The Company's primary objective was obtaining the 655 square kilometer (162,000 acre) North West Gharib concession which surrounds and immediately offsets the Company's core West Gharib/West Bakr producing concessions (approx. 45,000 acres). At North West Gharib the Company expects to commence drilling shortly after ratification and final approval of the concession into law. The Company has identified more than 79 drilling locations based on existing well and seismic data for the area. The Company would also acquire 3-D seismic data on portions of the concession not covered by 3-D seismic, to develop additional exploration targets.