Stock Quote:
TGL  $ 1.75  $ 0.03
TGA  $ 1.37  $ 0.03
BZG18  $ 64.74  $ 1.34

Release

Transglobe Energy Corporation Announces 2001 Third Quarter Results

CALGARY, ALBERTA--TransGlobe Energy Corporation ("TransGlobe" or 
the "Company") (TSE, symbol "TGL"; OTC-BB symbol "TGLEF") is 
pleased to announce its financial and operating results for the 
nine month period ended September 30, 2001. 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 10,000 cubic feet of natural gas to one 
barrel of oil. 

HIGHLIGHTS 

* Daily production of 1,306 barrels of oil equivalent for first 
nine months 

* Record cash flow of $4,811,090 and earnings of $2,724,872 for 
first nine months 

* 230 square km 3-D seismic acquisition program completed on Block
S-1, Yemen 

* Tasour 6 development well in Block 32, Yemen, commenced drilling
on November 10 

* Yemen seismic, drilling and production operations continuing 
without disruption  

* Pipeline work underway to tie in new gas wells in Canada 


/T/

FINANCIAL AND OPERATING UPDATE
------------------------------------------------------------------------
                        Three Months Ended           Nine Months Ended
                             Sept. 30                    Sept. 30
                       2001     2000 Change       2001     2000  Change
------------------------------------------------------------------------
Financial
Oil and gas
  revenue
   net of 
    royalties   1,928,521   415,792   364%  6,906,606    904,524   664%
Operating 
  expense         390,719    93,671   317%  1,168,551    272,840   328%
General and 
  administrative 
   expense        130,987   488,799   (73)%   451,177    950,670   (53)%
Depletion and
  depreciation    581,000   138,650   319%  2,070,000    310,650   566%
Income taxes      152,150         -     -     503,808          -     -
Cash flow from 
  operations    1,266,471    74,623 1,597%  4,811,090    (83,716)    -
 Basic per share     0.03      0.00     -        0.10       0.00     -
 Diluted per 
  share              0.02      0.00     -        0.09       0.00     -
Net income (loss) 685,471  (299,027)    -   2,724,872   (634,660)    -
 Basic and 
diluted per share    0.01     (0.01)    -        0.05      (0.02)    -
Capital
  expenditures  1,758,329 1,879,896    (6)% 3,506,270  2,911,386    20%
Working capital                             1,473,166  1,282,345    15%
Common shares 
  outstanding
 Basic (weighted
  average)                                 50,589,446 42,035,165    20%
 Diluted (weighted 
  average)                                 51,148,975 44,659,862    15%

------------------------------------------------------------------------
Production
Oil and liquids
 (Bpd)              1,067       125   754%      1,192        108 1,004%
 Average price
  ($ per barrel)    23.16     27.54   (16)%     23.41      26.01   (10)%
Gas (Mcfpd)         1,122       597    88%      1,143        438   161%
 Average price 
  ($ per Mcf)        2.24      3.69   (39)%      4.17       2.97    40%
Total (Boed) 
 (10 : 1)           1,179       185   537%      1,306        152   759%
Operating expense
 ($ per Boe)         3.61      5.85   (38)%      3.28       6.58   (50)%
------------------------------------------------------------------------

/T/

EXPLORATION UPDATE 

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

The 2001 seismic acquisition program, consisting of 120 kilometers
of 2-D seismic, was completed in early August. The primary focus 
of this year's seismic program is to further define the Tasour 
field and to refine drilling locations on several prospects 
located in the northwestern portion of the Block 32 development 
area. The new seismic acquired over the Tasour field and the 
production performance has supported the drilling of at least one 
additional development well (Tasour #6) to deplete the field 
efficiently. Depending on the results of Tasour #6, one additional
well may be drilled in the field in 2002. Drilling operations 
commenced on November 10 with the Tasour #6 development well. 
Tasour #6 is expected to be completed in December and will be 
followed by an exploration well in the northwest portion of the 
development block. The new seismic in the northwestern portion of 
the development area was shot to evaluate the trend mapped towards
Block 32 from the non-owned Sharyoof discovery on the adjacent 
Block 53. Two Qishn wells were drilled on Block 53 at Sharyoof 
with well tests of 5,000 and 16,500 barrels of oil per day 
("Bopd") respectively. The exploration prospect is called Asswairy
 #1 and is targeting a pool with a potential recovery of 20 
million barrels. Now that the Tasour facilities and pipeline are 
operational they can be used to develop any new discoveries 
quickly, which significantly enhances future investment in Block 
32. 

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

The field acquisition of a 230 square kilometer 3-D seismic and 
surface geo-chemistry program was completed in October 2001. The 
completion of the data processing is projected for December 2001. 
Interpretation of this data and a large amount of seismic data 
traded with Jannah Hunt and Occidental will occupy the first 
quarter of 2002. The new exploration drilling program, along with 
an appraisal well on the Harmel structure, is planned for 2002. 
The 2001 3-D seismic program is designed to evaluate a potential 
trend of the Alif and Lam formations identified on existing 2-D 
seismic. The trend extends from the adjacent Jannah Hunt, Dhahab 
and Al Nasr oil fields (currently producing in excess of 40,000 
Bopd) southeast to the discovery at An Nagyah drilled by the 
former licence holder, Shell. An exploration well is planned for 
this area in 2002. The proposed Harmel #2 appraisal well will be 
designed to test and evaluate the shallow oil zones encountered in
Harmel #1. Assuming Harmel #2 encounters similar oil reservoirs to
Harmel #1, a pilot project is planned to complete and equip both 
Harmel #1 and #2 for longer-term production to determine the 
feasibility of a full-scale commercial development. Although the 
production rates are low by Yemen standards, the Harmel 
structure's size and the shallow drilling depth enhance the 
economics of a potential development. The gas condensate discovery
at An Naeem #1 and #2 will be further evaluated during 2002 to 
determine if an oil rim does indeed exist down dip. TransGlobe's 
management continues to view Block S-1 as highly prospective for 
large oil accumulations and will focus a significant amount of 
exploration effort on the area. It will take several years to 
evaluate the potential of Block S-1 due to the size of the block 
and the numerous potential reservoir zones. 

Canada  

At Morningside, Alberta, the Company is proceeding with the 
pipeline tie-in of two gas wells which are expected to produce 
400-500 thousand cubic feet per day of natural gas ("Mcfpd") and 
10-20 barrels per day of liquids net to the Company. In addition, 
the Company acquired an additional section of land in July (75% 
working interest) and will re-enter an abandoned well on the 
section for Mannville gas production. It is anticipated that the 
Morningside wells will be tied in for production by late December 
2001. 

The Company acquired a suspended oil well in a new property at 
Morinville, Alberta. The well was successfully re-completed as a 
dual zone gas well that tested in excess of 1,000 Mcfd. It is 
expected that the gas well (32% working interest) will be tied in 
for production by year end. 

OPERATING UPDATE   

Production 

The production from the Tasour field in Block 32, Yemen, has 
exceeded our budgeted projections by 8% to date. The first full 
three quarters of production for the Tasour field yielded an 
average production rate of 1,136 Bopd to TransGlobe. The field 
commenced production in November 2000. The 2001 average production
estimate for the Tasour field was increased to 7,800 Bopd (1,077 
Bopd to TransGlobe), an 8% increase over the initial projection of
7,200 Bopd (994 Bopd to TransGlobe). 

Production from Canada averaged 170 barrels of oil equivalent per 
day ("Boed") in the first three quarters of 2001 compared to 103 
Boed in 2000 for the comparable period. The increase in production
is attributable to two new gas wells brought into production at 
the end of 2000 and the acquisition/tie-in of a gas well at Nevis 
in July 2000. With the sale of the United States properties and 
the addition of gas production from new wells drilled or 
recompleted in Canada, 67% of TransGlobe's Canadian production was
gas and 33% was oil and liquids in the first three quarters of 
2001. Production in the United States averaged 49 Boed in the 
first three quarters of 2000, primarily oil, from four wells in 
Montana. 

Operating Results 

Net income for the first nine months of 2001 was $2,724,872 ($0.05
per share) compared to a net loss of $634,660 in 2000 with cash 
flow from operations of $4,811,090 ($0.09 per share) compared to a
deficiency of $83,716 respectively. The increase in net income and
cash flow in 2001 is primarily a result of the addition of 
production from Block 32 in the Republic of Yemen. 

Revenue net of royalties was $6,906,606 for the first nine months 
of 2001 compared to $904,524 for the same period in 2000 
reflecting the impact of Yemen production on TransGlobe's 
operations. In 2001, revenues net of royalties were $5,556,696 and
$1,349,910 from Yemen and Canada respectively. In 2000, revenues 
net of royalties amounted to $645,057 in Canada and $259,467 in 
the United States. The properties in the United States were 
divested in 2000 to fund activity in Yemen. Revenue in Canada 
increased due to a 40% increase in gas prices and a 65% increase 
in production. Gas prices averaged $4.17 per Mcf in Canada in 2001
and $2.97 per Mcf in 2000. Oil and liquid prices in Canada 
averaged $23.41 per barrel in 2001 and $26.01 per barrel in 2000. 
The average oil price for the Company's production in Yemen for 
the first nine months of 2001 was $23.39 per barrel. The Tasour 
field oil production is marketed by Nexen Marketing International 
Ltd. and the oil price is based on a Brent price less a 
quality/transportation differential between the Brent blend and 
the Yemen Masila crude oil blend.  

The netback was $16.09 per Boe during the first nine months of 
2001. The comparable figure for the same period in 2000 was $15.22
per Boe. The increase in netbacks between periods is primarily due
to the addition of Yemen production, the increase in Canadian gas 
prices and a reduction in per unit operating costs from Yemen. 

Capital Expenditures 

Capital expenditures were $2,544,196 and $962,074 in Yemen and 
Canada respectively in 2001. Expenditures in Yemen were primarily 
for drilling and completing Tasour #5 and the seismic program on 
Block 32, costs for the Harmel long term production test and the 
3-D seismic program on Block S-1. Canadian capital expenditures in
2001 relate to several Crown land purchases, drilling wells at 
Morningside and Elk Island, and recompletion costs in the 
Morinville, Morningside and Thorsby areas. 

OUTLOOK 

The Company's growth strategy will continue to favor exploration 
and development on the Yemen properties. Field acquisition of 
seismic data is now complete on both our Yemen projects and a five
to seven well high-impact drilling program is planned for the 
balance of 2001 and 2002. The first well in this program, Tasour 
#6, started drilling a few days ago on November 10. Immediately 
following Tasour #6, an exciting test of a new prospect, Asswairy 
#1, will be drilled with completion expected in January 2002. If 
successful, the Tasour #6 well could be tied in immediately and 
Asswairy#1 could be tied in by the second half of 2002. In Block 
S-1 it is expected that the 230 square kilometer 3-D seismic 
program will be processed by the end of 2001, with a multi-well 
drilling program consisting of an appraisal well at Harmel and 
several new exploration wells in 2002. 

The Canadian focus will continue to be on the exploration and 
development of gas prospects in Central Alberta to capitalize on 
the strong North American natural gas prices.  In addition to the 
tie-in of gaswells in the Morningside and Morinville areas, the 
company has acquired new mineral leases over the past six months 
and anticipates drilling at least two new wells in the next sixty 
days.   

The recent world events have not disrupted our operations in the 
Republic of Yemen nor have they reduced our confidence in our 
ability to carry out future operations. The Company's management 
intends to continue with the successful business plan developed 
over the previous three years.  That strategy is to focus the 
majority of our capital and efforts on our highly prospective 
projects in Yemen. We will continue to grow our expanding 
production base in both Yemen and Canada to provide a strong 
financial and operating platform for our international endeavors. 
  

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. 

Ross G. Clarkson, President & C.E.O. 

-30-

TransGlobe Energy Corporation
Ross G. Clarkson
President & C.E.O.
(403) 264-9888
(403) 264-9898 (FAX)
Website: www.trans-globe.com
Email: trglobe@trans-globe.com

or

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

View Print Version