TransGlobe Energy Corporation

Reserves

RESERVES AND ESTIMATED FUTURE NET REVENUES

In 2007 and 2008, DeGolyer and MacNaughton Canada Limited ("DeGolyer") of Calgary, Alberta, independent petroleum engineering consultants based in Calgary and part of the DeGolyer and MacNaughton Worldwide Petroleum Consulting group headquartered in Dallas, Texas, were retained by the Company's Reserve Committee, to independently evaluate 100 percent of TransGlobe's reserves as at December 31, 2007 and December 31, 2008.

Total Proved reserves for the Company increased six percent from 11,866 MBoe ("MBoe" = thousand barrels of oil equivalent at 6:1) at December 31, 2007 to 12,605 MBoe at December 31, 2008 replacing 129 percent of the 2,571 MBoe produced during 2008.

Total Proved plus Probable reserves for the Company increased by 21 percent from 16,389 MBoe at December 31, 2007 to 19,790 MBoe at December 31, 2008 replacing 232 percent of 2008 production.

The Company's Reserves Committee, comprised of independent directors, has reviewed and recommended acceptance of the 2008 year end reserve evaluations prepared by DeGolyer.

The 2007 and 2008 year end reserves were prepared by the Company's independent reserve evaluators in accordance with the Canadian National Instrument (NI) 51-101 policy.

Disclosure provided herein in respect of Boe may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The recovery and reserve estimates of crude oil, NGL and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, NGL and natural gas reserves may be greater than, or less than, the estimates provided herein. Note that columns may not add due to rounding.

All reserves (gross and net) presented are based on Forecast Pricing.

 

RESERVES

	2008						2007
	Light & Medium Crude Oil		Heavy Oil		Total Bbls		Total Boe
Company	Gross*	Net**	Gross*	Net**	Gross*	Net**	Gross*	Net**
By Category	(MBbls)	(MBbls)	(MBbls)	(MBbls)	(MBbls)	(MBbls)	(MBoe)	(MBoe)
Proved
Producing	4,235	2,281	4,632	2,892	8,868	5,173	8,020	4,718
Non-producing	-	-	1,050	569	1,050	569	817	581
Undeveloped	2,556	1,416	132	82	2,688	1,498	3,029	1,719
Total Proved	6,791	3,697	5,814	3,543	12,605	7,240	11,866	7,018
Probable	1,005	522	6,180	3,065	7,184	3,587	4,523	2,777
Proved plus Probable	7,796	4,219	11,994	6,608	19,790	10,827	16,389	9,795
Possible	76	40	8,175	4,582	8,251	4,622	Not Reported
Proved plus Probable plus Possible	7,872	4,259	20,169	11,190	28,041	15,449
* Gross reserves are the Company's working interest share before the deduction of royalties. ** Net reserves are the Company's working interest share after the deduction of royalties. Net reserves in Egypt and Yemen include the company's share of future cost recovery and production sharing oil after the Government's royalty interest but before reserves relating to income taxes payable. Under this method, a portion of the reported reserves will increase as oil prices decrease (and vice versa) as the barrels necessary to achieve cost recovery change with prevailing oil prices.

 

	2008						2007
	Light & Medium Crude Oil		Heavy Oil		Total Bbls		Total Boe
Company	Gross	Net	Gross	Net	Gross	Net	Gross	Net
By Area	(MBbls)	(MBbls)	(MBbls)	(MBbls)	(MBbls)	(MBbls)	(MBoe)	(MBoe)
Proved
Egypt	-	-	5,814	3,543	5,814	3,543	2,795	1,566
Yemen	6,791	3,697	-	-	6,791	3,697	6,567	3,362
Canada	-	-	-	-	-	-	2,504	2,089
Total Proved	6,791	3,697	5,814	3,543	12,605	7,240	11,866	7,018
Proved plus Probable
Egypt	-	-	11,994	6,608	11,994	6,608	7,048	2,816
Yemen	7,796	4,219	-	-	7,769	4,219	7,470	3,819
Canada	-	-	-	-	-	-	3,813	3,160
Total Proved plus Probable	7,796	4,219	11,994	6,608	19,790	10.827	16.389	9,795
Proved plus Probable plus Possible
Egypt	-	-	20,169	11,190	20,169	11,190	Not Reported
Yemen	7,872	4,259	-	-	7,872	4,259
Canada	-	-	-	-	-	-
Total Proved plus Probable plus Possible	7,782	4,259	20,169	11,190	28,041	15,449

 

ESTIMATED FUTURE NET REVENUES

All evaluations and reviews of future net cash flow are stated prior to any provision for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimated future net cash flow shown below is representative of the fair market value of the Company's properties. There is no assurance that such price and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of crude oil, NGL and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, NGL and natural gas reserves may be greater than or less than the estimates provided herein.

The estimated future net revenues presented below are calculated using the average price received December 31 of the respective reporting periods. The prices were held constant for the life of the reserves.

 

	Present Value of Future Net Revenues, Before Income Tax* Constant Pricing
	December 31, 2008 Discounted at					December 31, 2007 Discounted at
($MM)	Undis-Counted	5%	10%	15%	20%	Undis-Counted	5%	10%	15%	20%
Proved
Egypt *	39.2	35.5	32.3	29.6	27.3	60.6	52.5	46.0	40.9	36.7
Yemen *	35.9	31.4	27.7	24.7	22.1	144.6	122.5	105.8	92.8	82.6
Canada **	-	-	-	-	-	74.4	62.6	53.7	46.9	41.5
Total Proved	75.1	66.9	60.1	54.3	49.3	279.6	237.5	205.6	180.7	160.7
Proved plus Probable
Egypt *	84.8	75.8	68.1	61.5	55.9	104.4	86.9	73.8	63.8	56.0
Yemen *	44.5	38.4	33.5	29.5	26.1	166.8	139.6	119.3	103.8	91.7
Canada **	-	-	-	-	-	120.5	95.3	78.3	66.0	56.8
Total Proved plus Probable	129.3	114.2	101.6	91.0	82.1	391.7	321.7	271.4	233.7	204.4
Proved plus Probable plus Possible
Egypt *	92.3	83.2	75.4	68.6	62.6	Not Reported
Yemen *	45.2	39.1	34.1	30.0	26.6
Canada **	-	-	-	-	-
Total Proved plus Probable plus Possible	137.4	122.3	109.5	95.6	89.2
* Egypt and Yemen future net revenues presented are after Egypt and Yemen income tax, respectively. ** Canadian values converted at the December 31, 2007 exchange rates of 1.0 $US/$C.

 

The following table summarizes the constant pricing used to estimate future net revenues.

 

	Present Value of Future Net Revenues, Before Income Tax* Independent Evaluator's Price Forecast
	December 31, 2008 Discounted at					December 31, 2007 Discounted at
($MM)	Undis-Counted	5%	10%	15%	20%	Undis-Counted	5%	10%	15%	20%
Proved
Egypt *	119.6	104.5	92.6	83.0	75.0	53.5	46.6	41.4	36.6	32.9
Yemen *	109.5	90.0	75.4	64.3	55.5	125.4	107.4	93.6	82.7	74.0
Canada **	-	-	-	-	-	68.0	57.7	49.9	43.8	38.9
Total Proved	229.0	194.5	168.0	147.2	130.6	246.9	211.7	184.6	163.1	145.8
Proved plus Probable
Egypt *	219.6	188.7	165.0	146.1	130.7	91.4	76.3	65.0	56.4	49.6
Yemen *	131.0	106.4	88.2	74.4	63.8	142.8	120.8	104.2	91.4	81.2
Canada **	-	-	-	-	-	108.7	87.4	72.5	61.6	53.3
Total Proved plus Probable	350.6	295.0	253.1	220.5	194.5	343.0	284.5	241.8	209.4	184.1
Proved plus Probable plus Possible
Egypt *	365.9	298.9	249.3	211.5	182.1	Not Reported
Yemen *	132.9	108.0	89.6	75.7	64.9
Canada **	-	-	-	-	-
Total Proved plus Probable plus Possible	498.8	406.9	338.9	287.2	247.0
* Egypt and Yemen future net revenues presented are after Egypt and Yemen income tax, respectively. ** Canadian values converted at the December 31, 2007 exchange rates of 1.0 $US/$C.

 

The following table summarizes the constant pricing used to estimate future net revenues.

 

	December 31, 2008		December 31, 2007
	Oil $/Bbl	Natural Gas $/MCF	Oil $/Bbl	Natural Gas $/MCF
Egypt *	25.64	-	69.60	-
Yemen **	38.39	-	92.62	-
Canada **	-	-	79.41	7.97

* Egypt prices are based on prices received for production from West Gharib.
** Yemen prices are based on prices received for production from Block 32 and Block S-1.
*** Canadian values converted at the December 31, 2007 exchange rates of 1.0 $US/$C.

 

The following table summarizes the independent evaluator's price forecast used to estimate future net revenues.

 

	Egypt		Yemen		Canada*
	Oil $/Bbl		Oil $/Bbl		Oil $/Bbl	Gas $/Mcf	Condensate $/Bbl
Year	2008	2007	2008	2007	2007	2007	2007
2009	45.23	62.29	55.22	84.80	80.62	8.04	87.41
2010	55.44	61.08	67.77	83.23	78.94	7.93	85.47
2011	61.02	59.93	74.65	81.83	77.30	7.89	83.64
2012	69.67	59.53	85.27	81.30	76.58	7.99	83.01
2013	75.98	59.10	93.24	80.72	75.85	8.01	82.23
Thereafter**	2.5%	2%	2.5%	2%	2%	2%	2%

* Canadian values converted at the December 31, 2007 exchange rates of 1.0 $US/$C. Canadian price forecast is not applicable for 2008 due to the sale of the Canadian operations in April 2008.
** Percentage change represents the increase in each year after 2013 to the end of the reserve life.