TransGlobe Energy Corporation announces an increased Capital Budget, estimated production and funds flow from operations Guidance for 2011. All dollar values are expressed in United States dollars unless otherwise stated.

2011 Capital Budget TransGlobe has set its initial 2011 Capital Budget at $90.0 million (firm plus contingent) representing a 28% increase over the 2010 Capital Budget. The majority of the Capital Budget is dedicated to the Arta/East Arta development project.

It is anticipated the Company will fund its 2011 Capital Budget from funds flow from operations and working capital. Funds flow from operations is a non-GAAP measure that represents cash generated from operating activities before changes in non-cash working capital.

2011 Guidance - Production and Funds Flow from Operations TransGlobe is forecasting base production guidance for 2011 at 13,000 to 13,500 barrels of oil per day ("Bopd"). The mid-point of 13,250 Bopd represents a 33% increase over the estimated 2010 production of 10,000 Bopd. This forecast excludes any production contribution from the East Ghazalat project.

The East Ghazalat project could contribute an additional 600 to 1,000 Bopd in 2011 based on internal estimates. The operator, Vegas Oil and Gas SA, has indicated it plans to file for an early production approval by the first quarter of 2011. TransGlobe will update production guidance following approval by the Egyptian Government.

Base Assumptions: - West Gharib Production: 10,350 Bopd. - West Yemen Production: 2,400 Bopd. - East Yemen Production: 500 Bopd. - No production assumed from East Ghazalat, pending government approval. - No production assumed from Exploration wells. - Average Nukhul development well initial rate of 220 Bopd with an approximate decline of 60% in the first year.

Although several scenarios exist which could improve the current estimate, the Base forecast has been used to provide 2011 guidance until longer production histories and additional well results support a revised forecast.

Funds flow from operations is forecast to be $101 million ($1.43/share) based on an average Dated Brent oil price of $75.00/Bbl using the mid-point of production guidance of 13,250 Bopd. The 2011 funds flow from operations sensitivity to a change in oil price is approximately $13 million per $10.00 change in Dated Brent. Funds flow from operations would be $114 million ($1.62/share) at $85.00/Bbl Dated Brent and $88 million ($1.25/share) at $65.00/Bbl.

The East Ghazalat development could add an additional $7 million ($0.10/share) of funds flow from operations in 2011, assuming it proceeds as planned.

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