TGA

[par_putt]

Expert Analysis
Toby Pierce, GMP Securities (11/9/11) "TransGlobe Energy Corp. announced total Q311 record quarterly average production of 13,406 bbl/d (13% quarter-over-quarter increase), net earnings of $26.1M and guidance for 2011 funds flow is expected to be ~$120M based on production guidance of 12,000–12,300 bbl/d. The company is in a solid financial position, having exited the quarter with working capital of $164M and net long-term debt of $57.3M. . .if the two pending acquisitions of West Bakr and South Alamein are approved, total production could reach 20 Mbbl/d in 2012."

David Popowich, Macquarie Capital Markets (11/9/11) "TransGlobe Energy Corp. delivered a characteristically solid quarter, achieving record production and cash flow, while improving netbacks quarter over quarter. The company is also well capitalized, sitting on US$105M in cash and equivalents, before the pending West Bakr acquisition (which is expected to cost US$60M before closing adjustments)."

Oil and Gas Journal (11/9/11) "TransGlobe Energy Corp. plans to appraise the Boraq oil and gas discovery and further explore the 558,120 acre South Alamein concession in Egypt's Western Desert. . .the Boraq-2X well tested a combined 1,700 bbl/d. . .the concession, which covers parts of the Alamein and Tiba basins, is fully covered by 3D seismic from which a number of well-defined prospects have been identified."

Frederick Kozak, Canaccord Genuity (10/17/11) "With Transglobe Energy Corp.'s success in Egypt, we maintain our Buy rating and 12-month CA$21 target price; the company continues developing the West Gharib area, has added to this with the West Bakr acquisition and has announced a second acquisition in Egypt's Western Desert, acquiring a 50% interest and operatorship of South Alamein. We believe the ongoing market unrest presents investors with a unique opportunity to buy TransGlobe's stock at a very attractive price; this remains a growth company, fuelled by exploration with an increasing inventory of future drilling prospects."

Warren Verbonac, Union Securities (10/17/11) "TransGlobe Energy Corp.'s reserves and production, all of which are oil, are located in Egypt and Yemen. . .the stock is currently trading at a 5.6x multiple of this year's estimate. Closing of an acquisition of 4,000 bpd is anticipated before year-end and continuous drilling in Egypt will continue to provide growth in production and cash flow; we are maintaining our Strong Buy recommendation."

[dan_s]

In my discussions with Ross Clarkson after our luncheon in Houston it is clear that he expects TGA's production to quickly ramp up to over 20,000 BOPD soon after they close on the West Bakr acquisition. I believe TGA will be a big winner for us in 2012.

[par_putt]

will it take both West Bakr and South Alamein to reach 20000 BOPD quickly??

[dan_s]

West Bakr will probably do it. You may have noticed in TGA's press release that they have some West Gharib oil production shut-in due to facility limitations. Those go away as soon as they close on West Bakr.

Plus, Ross indicated to me that the West Bakr properties have been neglected. He believes there are several "Quick Hits" that will bring production up to 6,000 bopd at West Bakr within a few months. He also sees several undrilled proven locations. He was very bullish on both West Bakr and South Alamein.

Both acquisitions should close soon.

TGA is very conservative on what they put in their press releases. If they say 2012 production will be over 20,000 bopd, then I believe it will.