To date, the Company’s West Gharib production operations have not been affected by the recent political demonstrations in Egypt. The Company continues to the monitor the situation and has daily communication with our Cairo staff and our Joint Venture operating company. All employees are safe and accounted for. The Company will take all steps to adapt to the situation and will attempt to mitigate any adverse consequences.

Production
Production averaged 11,228 barrels of oil per day (“Bopd”) to TransGlobe during December (8,247 Bopd from Egypt and 2,981 Bopd from Yemen).

Production averaged 10,897 Bopd to TransGlobe during January (7,990 Bopd from Egypt and 2,907 Bopd from Yemen).

Production for the last week of January was approximately 11,300 Bopd (8,400 Bopd from Egypt and 2,900 Bopd from Yemen).

West Gharib (100% working interest, TransGlobe operated)
The Company drilled four wells in West Gharib since the Q4 mid-quarter update of December 13, 2010 resulting in two oil wells (Arta 25 and East Arta 11), one potential oil well (South Rahmi 8) and one dry well (East Arta 10). Two rigs are currently drilling development wells at Arta and East Arta. The rigs are scheduled to continue drilling development/appraisal Nukhul wells in the Arta and East Arta fields although future drilling will be dependent on continued access to services and drilling supplies from third-party suppliers.

The Company and Egyptian General Petroleum Corporation (“EGPC”) reviewed development lease continuations for the Arta, East Arta, East Hoshia, North Hoshia, West Hoshia and South Rahmi development leases in the fourth quarter of 2010. All of the Arta, East Arta and South Rahmi leases were continued. Approximately 50% of the West Hoshia development lease and 40% of the North Hoshia development lease were continued. The remainder of the West Hoshia and North Hoshia leases along with the East Hoshia development lease were relinquished. The relinquished lands were not considered prospective by the Company.

East Ghazalat Block (50% working interest)
The operator, Vegas Oil and Gas SA, filed a declaration of Commercial Discovery for the Safwa field and is finalizing the initial Safwa development lease and development plan. In addition, the operator has requested approval to start early production. The commencement of first production will also be contingent on the availability of supplies and services in Egypt. Two wells were drilled in November and December resulting in an oil well at Safwa #2 and a dry hole at Nakhil #1. The drilling rig was moved to TransGlobe’s Nuqra Block in January.

Nuqra Block 1 (71.43% working interest, TransGlobe operated)
TransGlobe contracted for one year the 1,200 HP drilling rig previously used at East Ghazalat. The rig was moved to Upper Egypt and commenced drilling the Selsella #1 exploration well on January 26. Drilling operations were temporarily suspended this week due to disruptions in the delivery of services and drilling supplies by third party contractors. Drilling will recommence as soon as deliveries are re-established. The rig is scheduled to drill two exploration wells (Selsella and Diwan) in Nuqra. The rig will be available for Nukhul development drilling at West Gharib following the Nuqra program.