TransGlobe Energy Corporation

Charter of Compensation Committee

GENERAL FUNCTIONS, AUTHORITY, AND ROLE

The Compensation Committee is a committee of the Board of Directors appointed to assist the Board in establishing and reviewing compensation arrangements for the Company's executive officers.

MEMBERSHIP

The membership of the Compensation Committee is as follows:

• The Compensation Committee consists of three members of the Board of Directors, appointed annually, each of whom is affirmatively confirmed as independent by the Board of Directors, with such affirmation disclosed in the Company's annual circular.
• The Board will elect, by a majority vote, one member as chairperson.
• A member of the Compensation Committee may not, other than in his or her capacity as a member of the Compensation Committee, the Board of Directors, or any other Board committee, accept any consulting, advisory, or other compensatory fee from the Company, and may not be an affiliated person of the Company or any subsidiary thereof.

RESPONSIBILITIES

The responsibilities of the Compensation Committee are as follows:

Meetings

• The Committee will meet at least once a year, on a day determined by the Chairman of the Committee, or as often as a majority of the Committee deem necessary to deal with the compensation issues of the Company's executive officers.

Reporting Responsibilities

• Provide to the Board proper Committee minutes.
• Report Committee actions to the Board of Directors with such recommendations as the Committee may deem appropriate.
• Deliver an annual report to the Company's shareholders on executive compensation.

Charter Evaluation

• Annually review and reassess the adequacy of this charter and recommend any proposed changes to the Board of Directors for approval.

Corporate Goals and Performance

• Review and recommend corporate goals and objectives relevant to the compensation of the Company's executive officers;

Independent Services

• If deemed necessary, upon the approval of the Board of Directors, engage independent services for the provision of appropriate industry compensation data and trends.

Compensation of Executive Officers & Board Members

• Determine the salary and benefits of the executive officers, subject to the terms of existing contractual arrangements. Review terms of new executive officer contracts, amendments or renewal of existing executive officer contracts and make recommendations for approval of contracts to the Board of Directors.
• Review the compensation of the Directors in light of time commitments, competitive fees, risks and responsibilities and make recommendations for approval of Directors fees to the Board of Directors.

General Compensation

• Based on recommendations of the Chief Executive Officer, determine the general compensation structure and policies and programs for the Company such that the Company is able to award, attract and hold key personnel.
• Administer the Company's stock option plan and determine its use, from time to time, as a form of incentive compensation for service providers.
• Determine and recommend any other incentive/compensation plan from time to time.
• Review and make recommendations to the Board of Directors on issues that arise in relation to any employment contract in force from time to time.
• Review and approve severance arrangements for executive officers.

Amendments to Compensation Committee Charter

• Annually review this charter and propose amendments to be ratified by a simple majority of the Board of Directors.