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TransGlobe Energy Corporation Announces 2003 First Quarter Results

CALGARY, ALBERTA--TransGlobe Energy Corporation ("TransGlobe" or 
the "Company") is pleased to announce its financial and operating 
results for the three month period ended March 31, 2003. All 
dollar values are expressed in United States dollars unless 
otherwise stated. Conversion of natural gas to oil is made on the 
basis of 6,000 cubic feet of natural gas being equivalent to one 
barrel of oil. 



- Record production volumes of 2,517 Boed during the quarter
- Successful development wells at Tasour #8 and Tasour #9
- Successful appraisal wells at An Nagyah #3 and An Nagyah # 4
- Acquired 7,200 net acres on new gas prospects in Canada


                                         Three Months Ended March 31
Financial                                2003         2002    Change
Oil and gas revenue net of
 royalties                          4,375,493    1,971,072       122%
Operating expense                     775,555      412,406        88%
General and administrative
 expense                              274,462      194,886        41%
Depletion and depreciation          1,466,000      878,000        67%
Income taxes                          428,877      171,664       150%
Cash flow from operations           2,891,258    1,266,633       128%
 Basic and diluted per share             0.06         0.02           
Net income                          1,425,258      315,003       352%
 Basic and diluted per share             0.03         0.01           
Capital expenditures                3,270,724    1,369,537       139%
Working capital                     4,366,700    1,279,135       241%
Common shares outstanding                                            
 Basic (weighted average)           51,514,801  51,311,468           
 Diluted (weighted average)         52,539,422  51,867,390           
Oil and liquids (Bpd)                   2,356        1,338        76%
 Average price ($ per barrel)           29.73        21.03        41%
Gas (Mcfpd)                               966          895         8%
 Average price ($ per Mcf)               5.69         2.28       150%
Total (Boed) (6 : 1)                    2,517        1,487        69%
Operating expense ($ per Boe)            3.44         3.08        12%



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

The 2003 Block 32 Joint Venture budget and work program includes 
drilling two development/appraisal wells, two exploration wells 
and one contingency well. Three wells have been drilled to date 
resulting in an exploratory dry hole at Haibish and two producing 
oil wells (Tasour #8 and Tasour #9). The Tasour #8 development 
well was successfully completed in January 2003 at an initial 
rate of 9,000 Bopd. The Tasour #9 development well commenced 
production in April 2003 at an initial rate of 1,500 Bopd. The 
Tasour #7 (drilled September 2002), Tasour #8 and Tasour #9 wells 
have changed the structural mapping of the field. The revised 
structural picture of this field has set up a number of potential 
exploration prospects to the west and the east of the Tasour 
field along the southern, bounding fault. Additional seismic 
reprocessing and remapping work is underway to select new 
exploration drilling locations for the future. It is anticipated 
the first of these locations, Tasour #10, will commence drilling 
in June 2003 as a potential western extension of the Tasour 
field. Another contingent well could be drilled in the fourth 
quarter of 2003. 

In addition to the exciting new potential in the Tasour area, the 
Block 32 Joint Venture Group shot a 120 kilometer 2-D seismic 
program over year end 2002 to further delineate prospects on the 
eastern portion of the block. The data was processed in Q-1 2003 
and is being interpreted. It is expected that some of these 
prospects will be ready to drill in the future. The eastern 
prospects will not be drilled until at least 2004, depending upon 
the results in and around the Tasour field. 

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

The drilling program commenced in September 2002 was expanded and 
has continued into 2003. To date the Block S-1 Joint Venture 
group has drilled three wells in 2003, resulting in one gas 
condensate and two oil wells. 

The first well, An Naeem #3, was drilled to a total depth of 
1,623 meters to evaluate a potential oil rim on the An Naeem 
structure. The An Naeem #3 well tested gas and condensate from 
the Alif zone and did not encounter the anticipated oil rim. The 
next well, An Nagyah #3, commenced drilling in February 2003 to 
appraise the light oil discovery made at An Nagyah #2 (1,100 Bopd 
announced December 10, 2002). The well was drilled to a total 
depth of 1,292 meters and encountered the Upper Lam sandstones in 
a structurally higher position than the An Nagyah #2 well. 
Although the Upper Lam sandstones had a thicker gross reservoir 
section and better indicated porosity and permeability than found 
at An Nagyah #2, the Upper Lam was not flow tested as it was 
entirely above the gas/oil contact found in the An Nagyah #2 
well. The An Nagyah #3 well did test 240 Bopd of light 42 degree 
oil from a new pool in the Lower Lam. The core and test data 
indicate the Lower Lam reservoir has less porosity and 
permeability than the Upper Lam reservoir and therefore may 
require stimulation to enhance production. The discovery of a new 
productive horizon in the Lower Lam should augment development 
economics. The next well in the program, An Nagyah #4, was 
drilled to a total depth of 1,547 meters and tested 1,320 barrels 
of light oil (45 degrees API) from the Upper Lam reservoir. The 
An Nagyah #4 well encountered a much thicker gross sand package 
and defined a 60 meter (197 feet) total oil column in the Nagyah 
pool. The successful appraisal well at An Nagyah #4 is 
anticipated to lead to development of the field. 

The An Nagyah structural closure is mapped by 3-D seismic data 
and the four wells drilled on the structure to date. An estimate 
of reserves can be calculated for the pool now that the gas/oil 
and the oil/water contacts are defined by the wells.  TransGlobe 
management has mapped the Upper Lam oil pool over an area of 15 
square kilometers (6 square miles). An independent reservoir 
engineering firm has been contracted to determine proven and 
probable reserves. TransGlobe has also contracted an engineering 
firm with experience in Yemen oil development projects to prepare 
a facility design and preliminary cost estimate for the 
development of the An Nagyah field. The reserves estimates and 
development cost estimates will determine if sufficient reserves 
have been discovered to declare commerciality and proceed with 

The primary focus for 2003 will be the evaluation of the An 
Nagyah light oil discovery which could lead to the declaration of 
a commercial oil project prior to year end. The Lam reservoir 
encountered at An Nagyah is a new producing horizon in Yemen. Its 
discovery opens up a new exploration focus for Block S-1. In 
addition to the An Nagyah development evaluation, the current 
drilling program results are being integrated into the Company's 
extensive seismic database to define future exploration drilling 


With record cash flow from Yemen in 2002 and early 2003, the 
Company expanded the Canadian budget to focus on natural gas 
projects. To date, the Company acquired mineral rights on 7,200 
net acres in 2003 and farmed-in on an additional 4,480 (2,240 
net) acres. The Company plans to acquire additional mineral 
rights and is negotiating several farm-in proposals. The majority 
of the land is located in Central Alberta on three main 
prospects, of which two are new focus areas for the Company. 

It is anticipated that the Company will drill a minimum of four 
to six wells, with contingency for an additional six to eight 
wells. All the prospects are focused towards natural gas. It is 
expected that drilling will commence in June. Successful wells 
could be on production by late 2003 as all the prospects are near 
existing infrastructure and can be accessed year round.  



Production from Tasour averaged 16,700 Bopd (2,307 Bopd to 
TransGlobe) during the first quarter of 2003. With the completion 
of Tasour #8 in January 2003 the production potential of the six 
wells exceeded the facility capacity. Tasour field production was 
restricted to approximately 16,000 Bopd (2,210 Bopd to 
TransGlobe) during January and February 2003 due to limited 
export pump capacity. In March production averaged 17,870 Bopd 
(2,468 Bopd to TransGlobe) as shut in wells were returned to 
production and two wells were worked over to replace submersible 
pumps. The Tasour central production facility ("CPF") was 
modified to increase export pumping capacity to greater than 
20,000 Bopd in late February 2003.  

Production from Canada averaged 210 Boepd during the first 
quarter of 2003 compared to 191 Boepd during the first quarter of 
2002. Two wells at Nevis were tied in and commenced production in 
February 2003. The Morinville 5-19 well was placed on production 
during March 2003. Canadian production for the month of March 
averaged 247 Boepd. 


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, 2003 and 2002, the audited 
financial statements and MD&A for the year ended December 31, 
2002 included in the Company's annual report and the operating 
update in this report. All dollar values are expressed in United 
States dollars unless otherwise stated. 

Operating Results 

Net income for the first quarter 2003 was $1,425,258 ($0.03 per 
share) compared to a net income of $315,003 ($0.01 per share) in 
2002 with cash flow from operations of $2,891,258 ($0.06 per 
share) compared to $1,266,633 ($0.02 per share) respectively. The 
increase in net income and cash flow in 2003 is primarily a 
result of increased production volumes and increased commodity 

Revenue net of royalties was $4,375,493 for the first quarter 
2003 compared to $1,971,072 for the same period in 2002. In 2003, 
revenues net of royalties were $3,829,993 and $545,500 from Yemen 
and Canada respectively. In 2002, revenues net of royalties were 
$1,773,072 and $198,000 from Yemen and Canada respectively. 
Revenues net of royalties in Yemen increased 116% due to a 78% 
increase in production, a 40% increase in oil prices. Revenues 
net of royalties were offset by an increase in royalty costs, due 
to TransGlobe having a lower share for a portion of the 
historical cost pools recovered during this quarter of 
approximately 8.8% versus a working interest share of 13.8%. This 
resulted in approximately $902,000 reduction in revenues net of 
royalties in Yemen. The average oil price for the Company's 
production in Yemen for the first quarter 2003 was $29.74 per 
barrel compared to $21.19 in 2002. Oil produced from the Tasour 
field in Yemen is marketed 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. Revenue in Canada increased 
due to a 150% increase in gas prices, an 82% increase in oil and 
liquids price and a 10% increase in production. Gas prices 
averaged $5.69 per Mcf in Canada for the first quarter in 2003 
and $2.28 per Mcf for the same period in 2002. Oil and liquids 
prices in Canada averaged $29.24 per barrel for the first quarter 
of 2003 and $16.11 per barrel for the same period in 2002. 

The Company will experience further reductions in revenues net of 
royalties in Yemen (assuming constant production levels) as 
TransGlobe and its partners shift from maximum cost oil recovery 
to production sharing oil in the second quarter of this year. The 
Block 32  Joint Venture Group share of the oil produced will 
reduce from approximately 71% after royalty and taxes during 
maximum cost oil recovery to a range of approximately 40% to 50% 
after royalty and taxes depending on commodity prices, operating 
costs and future capital expenditures. 

Operating costs of $775,555 averaged $3.44 per Boe in the first 
quarter of 2003 compared to $412,406 ($3.08 per Boe) in 2002. The 
increase is mainly a result of workover expenses incurred in 

The netback per Boe was $15.93 during the first quarter 2003. The 
comparable figure for the same period in 2002 was $11.65 per Boe. 
The increase in netbacks between periods is primarily due to 
increased commodity prices offset by increased royalty costs in 
Yemen associated to reallocation of historical cost pools with 

General and administrative expenses were $274,462 ($1.21 per Boe) 
for the three month period ended March 31, 2003 as compared to 
$194,886 ($1.46 per Boe) in the comparable period in 2002. The 
increase is attributed to increases in travel, rent, insurance 
and professional costs. 

Depletion and depreciation was $1,466,000 for the first quarter 
2003 compared to $878,000 in 2002. The increase is attributable 
to significantly higher costs in the depletable base in Yemen. In 
Yemen, unproven properties in the amount of $8,932,273 were 
excluded from costs subject to depletion and depreciation. This 
represents a portion of the costs incurred in Block S-1. These 
costs will be included in the depletable base as Block S-1 is 
developed or as impairment is determined. 

Current income tax in the amount of $428,877 ($171,664 in 2002) 
represents income taxes incurred and paid under the laws of the 
Republic of Yemen pursuant to the Production Sharing Agreement on 
Block 32. The increase is a result of increased production and 
oil prices. 

Capital Expenditures 

Capital expenditures were $2,968,798 and $301,926 in Yemen and 
Canada respectively in 2003. Expenditures of $1,064,820 in Yemen 
on Block 32 were primarily for drilling Tasour #8 (drilling over 
December year end), Haibish #1, and Tasour #9 (drilling over 
March quarter end), a 98 kilometer 2-D seismic program and an 
additional payment for the Block 32 acquisition purchased in 
2000. Expenditures of $1,875,100 in Yemen on Block S-1 were 
primarily for drilling An Naeem #3 (drilling over December year 
end) and An Nagyah #3. 

Canadian capital expenditures in 2003 relate mainly to the 
acquisition of several oil and gas lease rights and well 
equipment and tie in costs for two wells in the Nevis area. 

Liquidity and Capital Resources 

Funding for the Company's capital expenditures in the first 
quarter 2003 was provided by cash flow from operations and 
working capital. 

At March 31, 2003 the Company had working capital of $4,366,700, 
no debt, a revolving credit facility of Cdn$2,500,000 and an 
acquisition/development credit facility of Cdn$2,000,000. 

The Company expects to fund its 2003 exploration and development 
program (budgeted at $10 million firm and contingent of which 
$3.3 million was incurred in the first quarter of 2003) through 
the use of working capital, cash flow and debt as required. 
Should cash flow be negatively impacted by reduction in 
production volumes or commodity prices, the Company has 
significant flexibility to adjust its Canadian capital budget of 
$2.7 million. 

Commitments and Contingencies 

The Company has a future contingent liability on Block 32 
relating to additional working interest acquired in 2000 which is 
based on future production performance of the Block. The Company 
made one payment ($160,000) during the quarter ended, one payment 
($160,000) subsequent to the quarter and expects to make the 
balance of payments during 2003 ($480,000 remains outstanding). 

Block S-1 second exploration period letter of credit issued in 
2002 in the amount of $1,500,000 was fully released during the 
quarter ended. 

The Company has entered into a fixed price natural gas sales 
contract for 500 GJ/day (approximately 500 Mcfpd, or less than 
50% of current production) at a price of Cdn$7.65/GJ for the 
period March 1, 2003 to November 1, 2003. 


Consolidated Statements of Income and Deficit 

(Unaudited - Expressed in U.S. Dollars)                            

                                          Three Months Ended March 31
                                              2003               2002
Oil and gas sales, net of
 royalties                           $   4,375,493      $   1,971,072
Other income                                   926                400
                                         4,376,419          1,971,472
Operating                                  775,555            412,406
General and administrative                 274,462            194,886
Foreign exchange (gain) loss                 6,255             (1,983)
Interest                                        12              1,496
Depletion and depreciation               1,466,000            878,000
                                         2,522,284          1,484,805
Net income before income taxes           1,854,135            486,667
Income taxes                               428,877            171,664
NET INCOME                               1,425,258            315,003
DEFICIT, BEGINNING OF PERIOD           (12,298,309)       (17,724,698)
DEFICIT, END OF PERIOD               $ (10,873,051)     $ (17,409,695)
Net income per basic and
 diluted share                              $ 0.03             $ 0.01

Consolidated Balance Sheets 
(Expressed in U.S. Dollars)
                                    March 31, 2003  December 31,2002
Cash                                   $ 4,479,987       $ 2,595,170
Accounts receivable                      1,438,801         2,984,000
Prepaid expenses                            76,379            88,837
                                         5,995,167         5,668,007
Capital assets                                                       
Republic of Yemen                       16,682,633        15,066,835
Canada                                   3,845,231         3,651,305
                                       $26,523,031       $24,386,147
 Accounts payable and accrued
  liabilities                          $ 1,628,467       $   919,074
Provision for site restoration
 and abandonment                           127,209           122,209
                                         1,755,676         1,041,283
SHAREHOLDERS' EQUITY                                                 
Share capital                           35,640,406        35,643,173
Deficit                                (10,873,051)      (12,298,309)
                                        24,767,355        23,344,864
                                       $26,523,031       $24,386,147

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

                                         Three Months Ended March 31
                                             2003               2002
 FOLLOWING ACTIVITIES:                                              

Net income                            $ 1,425,258        $   315,003
Adjustments for                                                     
 Depletion and depreciation             1,466,000            878,000
 Performance bonus expense paid
  in shares                                     -             73,630
Cash flow from operations               2,891,258          1,266,633
Changes in non-cash working
 capital                                2,187,306           (166,151)
                                        5,078,564          1,100,482
Issue of share capital                     38,500               (308)
Repurchase of share capital               (41,267)                 -
                                           (2,767)              (308)
Purchase of capital assets                                          
 Republic of Yemen                     (2,968,798)        (1,059,633)
 Canada                                  (301,926)          (309,904)
Change in non-cash working
 capital                                   79,744           (100,809)
                                       (3,190,980)        (1,470,346)
                                        1,884,817           (370,172)
NET INCREASE (DECREASE) IN CASH                                     
CASH, BEGINNING OF PERIOD               2,595,170          1,174,846
CASH, END OF PERIOD                   $ 4,479,987        $   804,674


Supplemental Disclosure of Cash Flow                                

 Cash interest paid                   $        12        $     1,496

 Cash taxes paid - Yemen              $   428,877        $   171,664

Notes to the Consolidated Financial Statements

1. Basis of presentation

The interim consolidated financial statements of TransGlobe Energy 
Corporation ("TransGlobe" or the "Company") for the three month 
periods ended March 31, 2003 and 2002 have been prepared by 
management in accordance with accounting principles generally 
accepted in Canada on the same basis as the audited consolidated 
financial statements as at and for the year ended December 31, 
2002. 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, 2002.

2. Share capital

The Company is authorized to issue 500,000,000 common shares with 
no par value.

Continuity of common shares                            2003
                                              Shares          Amount
Balance, December 31, 2002                51,494,801    $ 35,643,173
Share options exercised                      175,000          38,500
Share repurchase                            (100,000)        (41,267)
Balance, March 31, 2003                   51,569,801    $ 35,640,406

In December 2002, the Company announced the approval of a Normal 
Course Issuer Bid to acquire up to 4,855,435 common shares over a 12 
month period expiring December 8, 2003. In 2003 the Company acquired 
100,000 common shares at a price of Cdn$0.60/share. The acquired 
shares have been returned to treasury and cancelled.

Continuity of stock options                                     2003
Balance, December 31, 2002                                 3,624,500
Granted                                                            -
Exercised                                                   (175,000)
Expired                                                            -
Balance, March 31, 2003                                    3,449,500

The Company accounts for its stock-based compensation plans using 
the intrinsic-value of the options granted whereby no costs have 
been recognized in the financial statements for stock options 
granted to employees and directors at market values. Effective 
January 1, 2002 under Canadian generally accepted accounting 
principles, the impact of using the fair value method on 
compensation costs and recorded net earnings must be disclosed. 
If the fair value method had been used, the Company's net earnings 
per share would approximate the following pro forma amounts (the 
pro forma amounts shown do not include the compensation costs 
associated with stock options granted prior to January 1, 2002):

                            Three Months Ended     Three Months Ended 
                                March 31, 2003         March 31, 2002
Compensation costs               $      68,000             $        -
Net earnings:
 As reported                     $   1,425,258             $  315,003
 Pro forma                       $   1,357,258             $  315,003

Net earnings per common share
 Basic and diluted
  As reported                    $        0.03             $     0.01
  Pro forma                      $        0.03             $     0.01

The fair value of each option granted on the date of grant using the 
Black-Scholes option-pricing model with weighted average assumptions 
for grants is as follows:

Risk free interest rate (%)                                      5.05
Expected lives (years)                                           5.00
Expected volatility (%)                                         66.35
Dividend per share                                               0.00

3. Per share amounts

The weighted average number of common shares and diluted common 
shares outstanding during the three months ended March 31, 2003 was 
51,514,801 (2002 - 51,311,468) and 52,539,422 (2002 - 51,867,390), 

4.  Segmented information

                                         Three Months Ended March 31
                                             2003               2002
Oil and gas revenue net of royalties                                
 Yemen                                 $ 3,829,993       $ 1,773,072
 Canada                                    545,500           198,000
                                         4,375,493         1,971,072
 Yemen                                     638,010           297,277
 Canada                                    137,545           115,129
                                           775,555           412,406
Depletion and depreciation                                          
 Yemen                                   1,353,000           803,000
 Canada                                    113,000            75,000
                                         1,466,000           878,000
Segmented operations                     2,133,938           680,666
Other income                                   926               400
General and administrative                 274,462           194,886
Foreign exchange (gain) loss                 6,255            (1,983)
Interest                                        12             1,496
Income taxes                               428,877           171,664
Net income                             $ 1,425,258         $ 315,003


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


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

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