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Release

TransGlobe Energy Corporation Announces 2004 Year End and Fourth Quarter Results

CALGARY, ALBERTA--(CCNMatthews - March 10, 2005) - TransGlobe Energy 
Corporation (TSX:TGL) (AMEX:TGA) ("TransGlobe" or the "Company") is 
pleased to announce its financial and operating results for the three 
and twelve month periods ended December 31, 2004. All dollar values are 
expressed in United States dollars unless otherwise stated. Per barrel 
of oil equivalent ("Boe") amounts have been calculated using a 
conversion of 6,000 cubic feet of natural gas to one barrel of oil.

FOURTH QUARTER 2004 HIGHLIGHTS:

- Record average sales volumes of 5,384 Boepd for the quarter and 3,796 
Boepd for the year.

- Record cash flow of $6,326,000 and $17,325,000 for the quarter and 
year, respectively.

- An Nagyah #12 horizontal well tested 4,800 Bopd.

- Bought deal financing completed, $9.8 million net.

- New bank facility completed, $7.0 million (undrawn).

- Assignment of interest and approval of TransGlobe as operator of Nuqra 
Block, Egypt.

/T/

FINANCIAL AND OPERATING UPDATE
(Expressed in thousands of U.S. Dollars, except per share amounts)
---------------------------------------------------------------------
                                Three Months           Twelve Months
                               Ended Dec. 31           Ended Dec. 31
Financial (000's      -----------------------------------------------
US $'s, except per                         %                       %
share amounts)          2004    2003  Change    2004    2003  Change
---------------------------------------------------------------------
Oil and gas sales     18,548   7,495     147  49,495  27,336      81
Oil and gas sales
 net of royalties     11,756   4,489     162  31,630  17,162      84
Operating expense      2,814   1,121     151   7,064   3,706      91
General and
 administrative
 expense                 680     423      61   1,664   1,207      38
Stock-based
 compensation            452       -           1,310       -     
Depletion,
 depreciation and
 accretion             4,197   1,292     225  10,346   6,253      65
Income taxes           2,799  (1,489)    288   4,995     307    1527
Cash flow from
 operations            6,326   1,895     234  17,325   9,347      85
 Basic per share        0.12    0.04            0.32    0.18
 Diluted per share      0.11    0.03            0.31    0.17
Net income               768   3,414     (77)  5,919   5,905       0
 Basic per share        0.01    0.06            0.11    0.11
 Diluted per share      0.01    0.06            0.10    0.11
Capital expenditures  11,075   4,011     176  26,367  14,229      85
Working capital                                2,839   2,537      12
Common shares
 outstanding
 Basic (weighted
  average)                                    54,388  52,071       4
 Diluted (weighted
  average)                                    56,719  53,779       5
---------------------------------------------------------------------
Reserves (MBoe)
---------------------------------------------------------------------
Total Proven (6 : 1)                           6,664   3,746      78
Total Proven 
 + Probable (6 : 1)                           10,427   7,038      48
---------------------------------------------------------------------
Sales Volumes
---------------------------------------------------------------------
Oil and liquids
 (Bpd)                 4,726   2,535      86   3,298   2,435      35
 Average price
  (US$ per barrel)     38.01   28.83      32   36.24   28.06      29
Gas (Mcfpd)            3,942   1,704     131   2,987   1,200     149
 Average price
  (US$ per Mcf)         5.47    4.82      13    5.19    5.24      (1)
Total (Boepd) (6:1)    5,384   2,819      91   3,796   2,635      44
Operating expense
 (US$ per Boe)          5.68    4.32      31    5.09    3.85      32
---------------------------------------------------------------------

/T/

EXPLORATION UPDATE

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

The Tasour #14 well was drilled and placed on production with initial 
production of 2,820 barrels of oil per day (389 barrels of oil per day 
to TransGlobe) and 1,330 barrels of water per day. 

In January 2005 the drilling rig returned to Block 32 to drill Tasour 
#15, #16 and #17. Tasour #15 was drilled as a water injector near the 
central production facility and found a 2.5 meter oil column, which 
indicates the Tasour field could extend eastward. The Tasour #16 well 
was temporarily suspended after encountering 6.0 meters of oil pay 
overlying 3.0 meters of water bearing sandstone. The dip meter indicates 
a structurally higher location can be reached by sidetracking the well 
to the south of the current bottom hole location. The sidetrack drilling 
is planned after Tasour #17. The rig is currently drilling Tasour #17 
approximately 2.0 kilometers east of Tasour #15 to test a possible 
eastern extension of the Tasour field. The eastern extension was 
identified on the recent 3-D seismic survey and by the Tasour #15 water 
injection well. 

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

During the quarter, one producing horizontal oil well (An Nagyah #12) 
was drilled. One appraisal/exploratory oil well (An Nagyah #14) was 
drilling over year end. 

The An Nagyah #12 well was drilled to a total depth of 2,070 meters and 
completed as a producing Upper Lam oil well. The An Nagyah #12 well was 
tested from an 836 meter horizontal Upper Lam sandstone section at a 
rate of 4,801 barrels of light (43 degree API) oil per day and 2.6 
million cubic feet of natural gas per day on a 64/64 inch choke at 389 
psi flowing pressure. An Nagyah #12 was the second successful horizontal 
well drilled in the An Nagyah field and confirmed that horizontal 
drilling is the preferred development strategy for the pool. 

The An Nagyah #14 well was drilled to a total depth of 1,365 meters and 
suspended as a Lam 'B' oil well in early January 2005. The An Nagyah #14 
well encountered a 19 meter oil column in the Lam 'B' (lower Lam) 
sandstone. The well was swab tested at a rate of approximately 80 
barrels of light (40 degree API) oil per day. No water was produced 
during the test period. This discovery is located south of the An Nagyah 
field in a separate fault block. The An Nagyah #14 oil test has 
identified a new exploration fairway south of the main An Nagyah field. 
Additional work will be required to incorporate the well results and 
remap the seismic in this area to identify future drilling locations. 

Following An Nagyah #14, the drilling rig was moved to the Malaki 
exploration prospect approximately nine kilometers south east of the An 
Nagyah pool. The Malaki #1 exploration well was drilled to a total depth 
of 2,315 meters. The well was plugged and abandoned after encountering 
minor hydrocarbon shows. The Lam 'A' sandstone reservoirs were 
encountered structurally lower than the oil/water contact in the An 
Nagyah field and were water saturated. The drilling rig has moved to the 
next drilling location at An Nagyah #15. The An Nagyah #15 well is 
planned as an 800 meter horizontal well in the northwest area of the An 
Nagyah field, adjacent to An Nagyah #12.

In addition to the An Nagyah drilling activities, a workover rig was 
mobilized in the fourth quarter. The An Nagyah #2 well was successfully 
recompleted as a producing Lam 'A' oil well. The workover rig also 
re-completed the An Nagyah #3 well as a Lam 'A' gas injector. Natural 
gas from the An Nagyah pool is now being injected into An Nagyah #3 to 
conserve the gas and to maintain reservoir pressure thereby enhancing 
oil recovery.

Subsequent to the An Nagyah workovers, the Harmel #2 appraisal well was 
completed as a multizone oil well. The Harmel #2 was drilled in June 
2004 to appraise the shallow oil reservoirs found in the discovery well, 
Harmel #1. The Harmel #1 and #2 wells are being equipped with pumps and 
production testing equipment which are expected to be operational by the 
end of the March. It is expected that both Harmel wells will be 
production tested for three to six months. Production and test data 
obtained from the Harmel #1 and #2 wells will help to determine the 
commerciality of the medium gravity oil (22 degree API). The Harmel 
structure identified on 3-D seismic could require 80 to 90 shallow wells 
(700 to 800 meters in depth) to be fully developed.

Early production (trucking) facilities were installed at An Nagyah 
during the first quarter of 2004 with an initial capacity of 2,500 Bopd 
(625 Bopd to TransGlobe). The oil production is currently being trucked 
18 miles to the Jannah Hunt facility where it enters the pipeline to the 
Ras Isa loading terminal on the Red Sea. Trucking operations will be 
phased out following the construction of a central production facility 
("CPF") at An Nagyah and a 28 kilometer (18 mile) pipeline to the Jannah 
Hunt export pipeline 

After commencing production the trucking facilities were steadily 
expanded to the current capacity of approximately 7,600 Bopd (1,900 Bopd 
to TransGlobe). After drilling An Nagyah #12 the field productive well 
capacity is in excess 12,000 Bopd.

The pipeline and facility construction for the An Nagyah field is on 
schedule with a planned start up in June 2005. The An Nagyah field 
production is anticipated to increase to over 10,000 Bopd (2,500 Bopd to 
TransGlobe) when the facilities and pipeline are operational. The CPF is 
designed for an initial capacity of 10,000 to 12,000 Bopd (2,500 to 
3,000 Bopd to TransGlobe), with expansion capabilities. The 10 inch 
pipeline has an ultimate design capacity of 80,000 Bopd to provide 
expansion capabilities for future developments. 

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

DNO ASA (operator at 34%), TG Holdings Yemen Inc. (33%) and Ansan Wikfs 
(Hadramaut) Limited (33%) ("Block 72 Joint Venture Group") were selected 
as the successful bidders for Block 72 in the Yemen International Bid 
Round for Exploration and Production of Hydrocarbons. TG Holdings Yemen 
Inc. is a wholly owned subsidiary of TransGlobe Energy Corporation. The 
Block 72 Production Sharing Agreement has been approved by the Cabinet 
and is currently before the Yemen parliament for final approval. 

Block 72 encompasses 1,822 square kilometers (approximately 450,234 
acres) and is located in the western Masila Basin adjacent to the 
billion barrel Canadian Nexen Masila Block. The Block 72 Joint Venture 
Group plans to carry out a seismic acquisition program and the drilling 
of two exploration wells during the first exploration period of thirty 
months. It is anticipated that 3-D seismic will be acquired during 2005, 
with drilling commencing in late 2005 or early 2006. Any discoveries 
made on Block 72 would follow a similar development program to Block 
32's whereby a separate oil processing facility and a pipeline would be 
constructed to connect to the Nexen export pipeline.

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

As announced in the second quarter, TransGlobe Petroleum Egypt Inc. 
("TransGlobe Egypt"), a wholly owned subsidiary of TransGlobe Energy 
Corporation, entered into a Farmout Agreement with Quadra Egypt Limited 
("QEL"), a subsidiary of Quadra Resources Corp. headquartered in 
Calgary, and Rampex Petroleum International ("Rampex") headquartered in 
Cairo, Egypt. This agreement provides TransGlobe Egypt the opportunity 
to participate and earn a 50% working interest in the Nuqra Concession 
by paying 100% of the initial $6.0 million of expenditures in the Stage 
1 and Stage 2 work programs. TransGlobe Egypt is the operator of the 
Nuqra Block.

TransGlobe Petroleum Egypt Inc. was assigned a 50% interest in the 
project and approved as operator by the Egyptian Government in October 
2004.

The Nuqra Concession is located in Upper Egypt near the city of Luxor on 
the east bank of the Nile River. The concession encompasses over 
two-thirds of the Kom Ombo Basin, a rift basin analogous to the Gulf of 
Suez Basin, the Marib Basin in the Republic of Yemen, and the Muglad 
Basin in Sudan, all of which contain major reserves. The Nuqra 
Concession contains more than 30,000 square kilometers or 7,500,000 
acres of exploration lands with 13 seismically defined leads identified 
from over 4,000 km of existing 2-D seismic. Seismic and well data have 
confirmed the existence of Jurassic and Cretaceous sediments and the 
presence of a petroleum system which could potentially hold significant 
oil reserves. 

TransGlobe has obtained the existing seismic data on the Nuqra Block and 
is currently reprocessing the data to improve the resolution. A new 
seismic acquisition program is anticipated to commence in the fourth 
quarter 2005. A field geological survey is also underway to investigate 
surface outcrops and oil seeps in the Nuqra area. It is expected that a 
two well drilling program will commence in late 2006. This would 
complete all the first period and second period PSA commitments ahead of 
schedule.

Canada 

During the quarter, the Company drilled 3 gas wells (1.4 net) located in 
central Alberta (Nevis, Three Hills Creek and Thorsby). 

For the year 2004, the Company drilled 15 wells (11.2 net) resulting in 
10 gas wells, 2 oil wells, 3 dry holes. The wells were all drilled in 
central Alberta with the primary focus in the core areas of Nevis (5 
Gas, 1 Oil) and Twining (2 Gas). Two wells were abandoned at Cynthia 
after testing non-commercial gas and the remainder of the wells were 
drilled at Morningside (Oil), Gadsby (Gas), Three Hills Creek (Gas), 
Thorsby (Gas) and Lone Pine Creek (Dry). Seven of the 2004 wells were 
placed on production by year end and contribute approximately 350 Boepd 
or 39% of Canadian production. Subsequent to year end two (0.9 net) 
additional wells (50 Boepd) were tied in and placed on production. 
Negotiations are currently underway to tie in two (1.5 net) additional 
wells in 2005 which should initially contribute an additional 70 Boepd. 
The remaining Nevis well of the 2004 program will undergo additional 
testing and evaluation prior to initiating tie in negotiations.

Production in the fourth quarter averaged 900 Boepd. Production was 
partially curtailed due to natural gas compression capacity limitations 
at third party operated facilities in the Nevis and Twining areas 
(approximately 150 Boepd for the quarter). It is anticipated that 
additional compression will be installed by early 2005 to increase 
production.

The Canadian 2005 drilling program is expected to commence in April or 
May after spring break-up to take advantage of lower equipment and 
service prices during the summer months. The Company plans to drill 10 
to 15 wells in Canada during 2005. The majority of the wells will be 
drilled in the Nevis area, targeting natural gas. 

/T/

OUTLOOK 
2005 Production Outlook                        2005    2004  % Change(a)
------------------------------------------------------------------------
Barrels of oil equivalent (6 : 1)  Boepd      5,800   3,796          58
                                           to 6,200
------------------------------------------------------------------------
(a) % growth based on mid point of guidance 


2005 Cash Flow From Operations Outlook 
($000's)                                     2005(b)   2004  % Change(b)
------------------------------------------------------------------------

Cash Flow From Operations                    32,000  17,325         85%
------------------------------------------------------------------------
(b) Based on 6,000 Boepd, a dated Brent oil price of $38.00/Bbl and an
    AECO gas price of Cdn$6.00/Mcf.
 

2005 Sensitivity ($000's)            Cash Flow from Operations Increase 
------------------------------------------------------------------------
$1.00 per barrel increased                                          815
 in Dated Brent  
$0.10 per Mcf increase in AECO                                      120 
------------------------------------------------------------------------

/T/

SUMMARY OF OPERATING AND FINANCIAL RESULTS

Summary of Operating and Financial Results should be read in conjunction 
with the unaudited interim financial statements for the three months and 
twelve months ended December 31, 2004 and 2003 and the audited financial 
statements and management's discussion and analysis for the year ended 
December 31, 2004 included in the Company's annual report. All dollar 
values are expressed in United States dollars unless otherwise stated.

Operating Results

Production

In the Republic of Yemen, sales volumes increased 84% in the fourth 
quarter of 2004 to 4,483 Bopd from 2,443 Bopd in the fourth quarter of 
2003 primarily due to Block S-1 commencing production at the end of the 
first quarter of 2004. Block 32 averaged 2,631 Bopd during the fourth 
quarter of 2004 compared to 2,443 Bopd during the fourth quarter of 2003 
and Block S-1 averaged 1,852 Bopd in the fourth quarter of 2004. 

In Canada, sales volumes from Canada averaged 900 Boepd (73% natural 
gas) during the fourth quarter of 2004 compared to 376 Boepd during the 
fourth quarter of 2003. 

Financial

Cash flow from operations for the twelve months 2004 increased 85% to 
$17,325,000 compared to $9,347,000 in 2003 primarily due to:

- Oil and gas sales, net of royalties, increasing $14,468,000 (84%) as a 
direct result of sales volumes increasing 44% and commodity prices 
increasing 25%; 

- Operating costs increasing $3,358,000 (32% on a Boe basis) in 2004 
compared to 2003 as a result of increased volumes and Block S-1 having a 
higher cost per Boe during the trucking phase.

- Current income tax increasing $2,525,000 in 2004 compared to 2003 as a 
result of higher volumes with Block S-1 production commencing in 2004.

Net income was unchanged in 2004 with 2003 at $5,919,000 due the above 
items which were offset by the following non-cash items:

- Depletion, depreciation and accretion, a non-cash expense, increased 
$4,093,000 (15% on a Boe basis) in 2004 compared to 2003.

- Future income tax recovery, a non-cash recovery, decreased $2,163,000 
in 2004 compared to 2003.

- Stock compensation expense, a non-cash expense, amounted to $1,310,000 
in 2004 without a corresponding amount in the same period in 2003.

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

Revenue net of royalties increased 162% to $11,756,000 for the fourth 
quarter 2004 compared to $4,489,000 for the same period in 2003. 
Revenues net of royalties from the Republic of Yemen were $9,358,000 in 
the fourth quarter 2004 compared to $3,656,000 in the same of 2003 and 
from Canada were $2,398,000 in the fourth quarter of 2004 compared to 
$833,000 in the same period of 2003. 

In the Republic of Yemen, revenues net of royalties in the fourth 
quarter 2004 increased 156% compared to the fourth quarter 2003 
primarily as a result of sales volumes increasing 84% and oil prices 
increased 31%. The increase in sales volumes is a result of the An 
Nagyah field on Block S-1 commencing production at the end of the first 
quarter of 2004. 

The average oil price for the Company's production in the Republic of 
Yemen for the fourth quarter 2004 was $37.97 per barrel compared to 
$28.97 in the fourth quarter 2003. Oil production from the Tasour field 
in the Republic of Yemen is purchased by Nexen Marketing International 
Ltd. and the oil price is based on an average dated Brent price less a 
quality/transportation differential between the dated Brent blend and 
the Yemen Masila crude oil blend. Oil production from the An Nagyah 
field in Yemen is purchased by ExxonMobil Sales & Supply Corporation and 
the oil price is based on an average dated Brent price less a 
quality/transportation differential between the dated Brent blend and 
the Yemen Marib crude oil blend. 

In Canada, revenue net of royalties in the fourth quarter increased 188% 
due to a 13% increase in gas prices, a 55% increase in oil and liquids 
prices and a 139% increase in production compared to the fourth quarter 
2003. Gas prices averaged $5.47 per Mcf in Canada for the fourth quarter 
in 2004 and $4.82 per Mcf for the same period in 2003. Oil and liquids 
prices in Canada averaged $38.72 per barrel for the fourth quarter of 
2004 and $24.96 per barrel for the same period 2003.

Operating costs were $2,814,000 ($5.68 per Boe) in the fourth quarter 
2004 compared to $1,121,000 ($4.32 per Boe) in the fourth quarter 2003. 
In Yemen, operating costs increased 37% to average $5.29 per barrel in 
the fourth quarter 2004 compared to $3.87 per barrel in the fourth 
quarter 2003 primarily as a result of Block S-1 commencing production in 
2004 and having significantly higher operating costs during the initial 
trucking phase, averaging $7.00 per barrel. This is a reflection of 
higher costs associated with trucking and higher fixed costs per barrel 
until volumes are increased when full scale production commences in 
2005. In Canada, operating costs increased 5% to average $7.64 per Boe 
in the fourth quarter of 2004 compared to $7.29 per Boe in the fourth 
quarter of 2003 due primarily to higher foreign exchange rates when 
converting Canadian dollars to US dollars.

General and administrative expense ("G&A") was $680,000 ($1.37 per Boe) 
for the fourth quarter 2004 as compared to $423,000 ($1.63 per Boe) in 
the comparable period 2003. During the twelve months 2004, general and 
administrative expenses increased to $1,664,000 ($1.20 per Boe) from 
$1,207,000 ($1.25 per Boe) in the comparable period in 2003. 

A new Canadian accounting standard was adopted in 2004 that requires the 
Company to record a compensation expense for the fair value of stock 
options over the vesting period granted to employees and directors since 
January 1, 2002. The non-cash stock-based compensation expense was 
$452,000 ($0.91 per Boe) in the fourth quarter of 2004 and $1,310,000 
($0.94 per Boe) for the twelve months 2004.

Depletion, depreciation and accretion was $4,197,000 ($8.47 per Boe) for 
the fourth quarter 2004 compared to $1,292,000 ($4.98 per Boe) in the 
same period 2003. Depletion, depreciation and accretion increased to 
$10,346,000 ($7.45 per Boe) for the twelve months 2004 compared to 
$6,253,000 ($6.50 per Boe) for the twelve months 2003, reflecting the 
increase in the depletable costs in the Republic of Yemen and Canada, 
and higher foreign exchange rates when converting Canadian dollars to US 
dollars in Canada. 

Current income tax expense in the amount of $1,925,000 in the fourth 
quarter 2004 represents income taxes incurred and paid under the laws of 
the Republic of Yemen pursuant to the Production Sharing Agreement's on 
Block 32 and Block S-1 compared to $959,105 in the same period 2003. The 
current income tax increase is due to increased production volumes on 
Block S-1 due to the An Nagyah field commencing production in the first 
quarter of 2005 and Block 32 of which the Yemen government's share has 
increased due to recovery of all historical costs. The government's 
share of production sharing oil includes royalties and income taxes. The 
future income tax expense of $874,000 in the fourth quarter of 2004 is a 
result of recognizing future income tax assets of $1,160,000 in the 
third quarter of 2004 and $2,448,085 in 2003 which were utilized in the 
fourth quarter. The recording of these future tax benefits in Canada is 
a direct result of the successful drilling program carried out in 2003 
and 2004 in Canada.

/T/

Finding and Development Costs
                                      2004               2003 
                               --------------------------------------
                                         Proved +           Proved + 
(000's, except per Boe amounts)  Proved  Probable   Proved  Probable 
---------------------------------------------------------------------
Total capital expenditure      $ 26,367  $ 26,367 $ 14,229  $ 14,229 
Net change from previous
 year's future capital            8,796       597    2,159    11,303 
---------------------------------------------------------------------
                               $ 35,163  $ 26,964 $ 16,388  $ 25,532 
---------------------------------------------------------------------
Reserve additions
 and revisions (MBoe)             4,332     4,804    2,360     4,872
Average cost per Boe           $   8.12  $   5.61 $   6.94  $   5.24
Three year average
 cost per Boe                  $   7.42  $   5.37 $   6.40  $   5.47
---------------------------------------------------------------------

/T/

The finding and development costs shown above have been calculated in 
accordance with Canadian National Instrument 51-101, Standards of 
Disclosure for Oil and Gas Activities introduced in 2003.

The aggregate of the exploration and development costs incurred in the 
most recent financial year and the change during that year in estimated 
future development costs generally will not reflect total finding and 
development costs related to reserves additions for that year.

Liquidity and Capital Resources

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

At December 31, 2004 the Company had working capital of $2,839,000, zero 
debt and an unutilized loan facility of $7,000,000.

The Company expects to fund its 2005 exploration and development program 
(budgeted at $32 million firm and contingent) through the use of working 
capital, cash flow and debt. The use of our credit facilities during 
2005 is expected to remain within conservative guidelines of a debt to 
cash flow ratio of less than 0.5 : 1. The Company raised $9.8 million 
(net after costs) on a bought deal equity financing in November and 
December 2004 to partially fund the Egyptian, Yemen and Canadian 
exploration program. This amount is included in the working capital at 
December 31, 2004. Equity financing may be utilized in the future to 
accelerate existing projects or to finance new opportunities. 
Fluctuations in commodity prices, product demand, foreign exchange 
rates, interest rates and various other risks may impact capital 
resources.

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

Commitments and Contingencies

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

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

Upon the determination that proven recoverable reserves are 40 million 
barrels or greater for Block S-1, Yemen, the Company will be required to 
pay a finders' fee to third parties in the amount of $281,000.

/T/

Consolidated Statements of Income and Deficit
(Unaudited - Expressed in thousands of U.S. Dollars)

                          Three Months Ended     Twelve Months Ended
                                     Dec. 31                 Dec. 31
                             2004       2003        2004        2003
---------------------------------------------------------------------
                                   (Restated)              (Restated)

REVENUE
 Oil and gas sales,
  net of royalties       $ 11,756    $ 4,489    $ 31,630    $ 17,162
 Other income                   4        364          13         374
---------------------------------------------------------------------
                           11,760      4,853      31,643      17,536
---------------------------------------------------------------------

EXPENSES
 Operating                  2,814      1,121       7,064       3,706
 General and
  administrative              680        423       1,664       1,207
 Stock-based compensation     452          -       1,310           -
 Foreign exchange loss         15         91         289         157
 Interest                      35          1          56           1
 Depletion, depreciation
  and accretion             4,197      1,292      10,346       6,253
---------------------------------------------------------------------
                            8,193      2,928      20,729      11,324
---------------------------------------------------------------------

Income before income
 taxes                      3,567      1,925      10,914       6,212

Income taxes
 - future                     874     (2,448)       (285)     (2,448)
 - current                  1,925        959       5,280       2,755
---------------------------------------------------------------------
                            2,799     (1,489)      4,995         307
---------------------------------------------------------------------
NET INCOME                    768      3,414       5,919       5,905

Deficit, beginning
 of period                 (1,453)    (9,735)     (6,393)    (12,298)
Retroactive application
 of changes in accounting
 policies applied with
 restatement                    -          -          72          72
---------------------------------------------------------------------
Deficit, beginning of year,
 as restated                                      (6,321)    (12,226)
---------------------------------------------------------------------
Retroactive application of
 changes in accounting
 policies applied without
 restatement                    -          -        (283)          -
---------------------------------------------------------------------
Deficit, end of period   $   (685)   $(6,321)   $   (685)   $ (6,321)
---------------------------------------------------------------------
---------------------------------------------------------------------

Net income per share
Basic                     $  0.01    $  0.06     $  0.11    $   0.11
Diluted                   $  0.01    $  0.06     $  0.10    $   0.11
---------------------------------------------------------------------
---------------------------------------------------------------------


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

                                          December 31,   December 31,
                                                 2004           2003
---------------------------------------------------------------------
                                                           (Restated)
ASSETS
Current
 Cash and cash equivalents                   $  4,988       $  4,452
 Accounts receivable                            6,029          2,383
 Oil inventory                                    389              -
 Prepaid expenses                                 274            161
---------------------------------------------------------------------
                                               11,680          6,996
---------------------------------------------------------------------
Property and equipment
 Republic of Yemen                             26,054         18,563
 Canada                                        19,111          8,470
 Arab Republic of Egypt                           992              -
---------------------------------------------------------------------
                                               46,157         27,033
---------------------------------------------------------------------
Future income tax asset                         2,299          1,572
Deferred financing costs                          386              -
---------------------------------------------------------------------
                                             $ 60,522       $ 35,601
---------------------------------------------------------------------
---------------------------------------------------------------------

LIABILITIES
Current
 Accounts payable and accrued liabilities    $  8,841       $  4,459

Asset retirement obligations                      902            467

---------------------------------------------------------------------
                                                9,743          4,926
---------------------------------------------------------------------

SHAREHOLDERS' EQUITY
Share capital                                  47,296         36,996
Contributed surplus                             1,593              -
Cumulative currency translation adjustment      2,575              -
Deficit                                          (685)        (6,321)
---------------------------------------------------------------------
                                               50,779         30,675
---------------------------------------------------------------------

                                             $ 60,522       $ 35,601
---------------------------------------------------------------------
---------------------------------------------------------------------


Consolidated Statements of Cash Flows 
(Unaudited - Expressed in thousands U.S. Dollars) 

                          Three Months Ended     Twelve Months Ended 
                                     Dec. 31                 Dec. 31
                             2004       2003        2004        2003
---------------------------------------------------------------------
                                   (Restated)              (Restated)
CASH FLOWS RELATED TO THE 
FOLLOWING ACTIVITIES: 

OPERATING 
Net income                  $ 768    $ 3,414     $ 5,919     $ 5,905
Adjustments for: 
 Depletion, depreciation
  and accretion             4,197      1,292      10,346       6,253
 Gain on sale of property
  and equipment                 -       (363)          -        (363)
 Amortization of deferred
  financing costs              35          -          35           -
 Future income taxes          874     (2,448)       (285)     (2,448)
 Stock-based compensation     452          -       1,310           -
---------------------------------------------------------------------
Cash flow from operations   6,326      1,895      17,325       9,347
Changes in non-cash
 working capital           (2,050)       535      (4,259)      3,117
---------------------------------------------------------------------
                            4,276      2,430      13,066      12,464
---------------------------------------------------------------------

FINANCING 
 Issue of share capital     9,919      2,074      10,006       2,270
 Repurchase of
  share capital                 -          -           -         (41)
 Deferred financing costs    (421)         -        (421)          -
 Changes in non-cash
  working capital              13          -          24           -
---------------------------------------------------------------------
                            9,511      2,074       9,609       2,229
---------------------------------------------------------------------

INVESTING 
 Exploration and
  development expenditures 
  Republic of Yemen        (7,900)    (1,709)    (15,275)     (9,012)
  Canada                   (2,893)    (2,302)    (10,100)     (5,217)
  Arab Republic of Egypt     (282)         -        (992)          -
 Proceeds on disposal of
  property and equipment        -        442           -         442
 Changes in non-cash
  working capital           1,271       (415)      4,678         951
---------------------------------------------------------------------
                           (9,804)    (3,984)    (21,689)    (12,836)
---------------------------------------------------------------------

Effect of exchange
 rate changes on cash 
 and cash equivalents        (450)         -        (450)          -
---------------------------------------------------------------------

NET INCREASE IN CASH AND
 CASH EQUIVALENTS           3,533        520         536       1,857

CASH AND CASH EQUIVALENTS, 
 BEGINNING OF PERIOD        1,455      3,932       4,452       2,595
---------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, 
 END OF PERIOD            $ 4,988    $ 4,452     $ 4,988     $ 4,452
---------------------------------------------------------------------
---------------------------------------------------------------------


Segmented information 
                          Three Months Ended     Twelve Months Ended 
                                     Dec. 31                 Dec. 31
(000's)                      2004       2003        2004        2003
---------------------------------------------------------------------
                                   (Restated)              (Restated)
Oil and gas sales,
 net of royalties 
 Republic of Yemen        $ 9,358    $ 3,656    $ 24,966    $ 14,625 
 Canada                     2,398        833       6,664       2,537
---------------------------------------------------------------------
                           11,756      4,489      31,630      17,162
---------------------------------------------------------------------
Operating 
 Republic of Yemen          2,181        869       5,449       3,012
 Canada                       633        252       1,615         694
---------------------------------------------------------------------
                            2,814      1,121       7,064       3,706
---------------------------------------------------------------------
Depletion, depreciation
 and accretion 
 Republic of Yemen          3,391      1,025       8,162       5,516
 Canada                       806        267       2,184         737
---------------------------------------------------------------------
                            4,197      1,292      10,346       6,253
---------------------------------------------------------------------
Segmented operations        4,745      2,076      14,220       7,203
Other income, includes
 a gain on sale of 
 property and equipment
 in the United States
 of $363,000 in 2003            4        364          13         374
---------------------------------------------------------------------
                            4,749      2,440      14,233       7,577
General and administrative    680        423       1,664       1,207
Stock-based compensation      452          -       1,310           -
Foreign exchange loss          15         91         289         157
Interest                       35          1          56           1
Income taxes                2,799     (1,489)      4,995         307
---------------------------------------------------------------------
Net income                $   768    $ 3,414    $  5,919    $  5,905
---------------------------------------------------------------------
---------------------------------------------------------------------

/T/

The above includes certain statements that may be deemed to be 
"forward-looking statements" within the meaning of the US Private 
Securities Litigation Reform Act of 1995. All statements in this 
release, other than statements of historical facts, that address future 
production, reserve potential, exploration drilling, exploitation 
activities and events or developments that the company expects are 
forward-looking statements. Although TransGlobe believes the 
expectations expressed in such forward-looking statements are based on 
reasonable assumptions, such statements are not guarantees of future 
performance and actual results or developments may differ materially 
from those in the forward-looking statements. Factors that could cause 
actual results to differ materially from those in forward-looking 
statements include oil and gas prices, exploitation and exploration 
successes, continued availability of capital and financing, and general 
economic, market or business conditions.

TRANSGLOBE ENERGY CORPORATION

s/s Lloyd Herrick

Lloyd W. Herrick

Vice President & C.O.O.


-30-

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

or

TransGlobe Energy Corporation
Lloyd W. Herrick
Vice President & C.O.O.
(403) 264-9888
(403) 264-9898 (FAX)

or

TransGlobe Energy Corporation
Suite 2500, 605 - 5th Avenue, S.W.
Calgary, Alberta T2P 3H5
Email: trglobe@trans-globe.com
Website: www.trans-globe.com

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