TRANSGLOBE ENERGY AGM PRESENTATION MAY 11, 2017 TSX:TGL/NASDAQ:TGA - - PowerPoint PPT Presentation

SLIDE 1

TRANSGLOBE ENERGY AGM PRESENTATION

MAY 11, 2017

TSX:TGL/NASDAQ:TGA

SLIDE 2

CAUTIONARY STATEMENT

2 The information provided in this presentation is provided as of January 31, 2017 for informational purposes only, is not complete, is based (in part) on information prepared for internal evaluation purposes and may not contain certain material information about TransGlobe Energy Corporation ("TransGlobe", "TGL" or the "Company"), including important disclosures and risk factors associated with the information disclosed in this presentation. This presentation does not constitute an offer to sell

• r a solicitation of an offer to buy any security in Canada, the United States or any other jurisdiction. The content of this

presentation has not been approved or disapproved by any securities commission or regulatory authority in Canada, the United States or any other jurisdiction, and TransGlobe expressly disclaims any duty to make disclosure or any filings with any securities commission or regulatory authority, beyond that imposed by applicable laws. See "Cautionary Statements" beginning on slide 21 for other important disclosures regarding forward looking information, future orientated financial information and other financial matters, oil and gas information and other important information.

SLIDE 3

2016 FINANCIAL HIGHLIGHTS

3

• Production down 17% Vs 7% sales volume

decrease

• 30% lower oil prices in Egypt and a 0.3 million bbl

build in inventoried entitlement crude oil negatively impacted revenue

• Sold three full cargos and one partial cargo
• f entitlement oil in 2016
• Continued focus on cutting costs led to decreased
• pex and G&A costs on a gross and per barrel

basis

• Developed a strategy to repay the convertible

debenture (03/31/17) without dilution and at a reasonable cost

• Acquired ~3,000 Boepd* (~57% oil and NGLs) in

Canada for ~$60 million, which have now been fully integrated

• Disappointing exploration results in both SE and

SW Gharib resulted in a $33.4 million investment write-down, contributing to a total loss of $87.7 million

2016 2015 Change % Production and Sales (1) Egypt Oil Sold

Bpd

11,075 11,935

• 7%

Egypt Oil Produced

Bpd

12,015 14,466

• 17%

Canada Oil

Bpd

18 n/a n/a Natural Gas

Mcfd

230 n/a n/a NGLs

Bpd

34 n/a n/a Revenue Egypt Oil

$/Bbl

$30.03 $42.94

• 30%

Canada Oil

$/Bbl

$40.38 n/a n/a Natural Gas

$/Mcf

$1.81 n/a n/a NGLs

$/Bbl

$17.20 n/a n/a Operating and Selling Expenses Gross

$MM

$41.2 $52.6

• 22%

Egypt Sales

$/Bbl

$10.10 $12.08

• 16%

Canada Sales

$/Boe (2)

$8.14 n/a n/a G&A Expenses Gross

$MM

$17.6 $21.3

• 18%

Per Barrel

$/Bbl

$4.29 $4.88

• 12%

Egypt Crude Oil Inventory Ending Balance

MMBbls

1.27 0.92 37% Equivalent Months (3)

Months

7.1 4.9 45% Funds Flow from Operations

$MM

• $8.4
• $8.9

Net Income

$MM

• $87.7
• $105.6

(1) Oil production, revenues and expenses from Yemen in 2015 are excluded (2) Mcf converted at a ratio of 6:1 for purposes of calculating Boe (3) Months production is calculated based on last month in period.

* 6 Mcf to 1 Boe

SLIDE 4

2017 Q1 FINANCIAL HIGHLIGHTS

4

• Sales volumes averaged 13,826 boepd* and

production volumes averaged 16,731 boepd*

• Inventoried entitlement oil increased ~0.3 MM

Bbls to 1.5 MM Bbls from year-end

• Produced 567,032 Bbls of entitlement oil

in Egypt and sold 303,817 Bbls

• Egypt oil sales averaged $41.82/Bbl – up

from an average of $30.03/Bbl in 2016

• Funds flow from operations of $2.5 million

($0.03/share),

• Net loss of $12.9 million (-$0.18/share),
• Achieved an operating expense of $8.60/Bbl in

Egypt – a decrease of 16% over Q1 of 2016,

• Ended quarter with $37.8 million in cash and

cash equivalents (includes restricted cash) and $42.7 million in working capital

• Spent $10.7 million on capital expenditures.

* 6 Mcf to 1 Boe

Q1 '17 Q1 '16 Change % Production and Sales Egypt Oil Sold

Bpd

11,044 14,126

• 22%

Egypt Oil Produced

Bpd

13,948 12,058 16% Canada Oil

Bpd

566 n/a n/a Natural Gas

Mcfd

7,075 n/a n/a NGLs

Bpd

1,037 n/a n/a Revenue Egypt Oil

$/Bbl

$41.29 $22.58 83% Canada Oil

$/Bbl

$48.82 n/a n/a Natural Gas

$/Mcf

$1.96 n/a n/a NGLs

$/Bbl

$19.08 n/a n/a Operating Expenses Egypt

$/Bbl

$8.60 $10.21

• 16%

Canada (1)

$/Boe (2)

$7.09 n/a n/a G&A Expenses Gross

$MM

$4.4 $3.5 26% Sold Boe

$/Boe

$3.57 $2.74 30% Produced Boe

$/Boe

$2.95 $3.25

• 9%

Egypt Crude Oil Inventory Ending Balance

MMBbls

1.53 0.73 108% Equivalent Months (3)

Months

8.0 4.3 86% Funds Flow from Operations

$MM

$2.5

• $2.8

Net Income

$MM

• $12.9
• $16.2

(1) Includes transportation costs (2) Mcf converted at a ratio of 6:1 for purposes of calculating Boe (3) Months production is calculated based on last month in period.

SLIDE 5

2017 KEY FINANCIAL FOCUS AREAS AND GUIDANCE

5

• Capital Budget of up to $56 million
• Production target of 15,500 to 18,500 Boepd* – an increase of up to ~50% over

2016

• Continued focus on increasing frequency of selling our entitlement barrels in Egypt
• Three cargo liftings currently scheduled (June, September and December)
• Since January TG has also been making monthly sales of ~100,000 bbls to

EGPC to provide funding for Egypt based expenditures

• Currently expect inventory to decrease by year end from 12/31/16
• Entered into Prepayment and Marketing agreements with Mercuria Energy Trading

S.A.

• Prepayment provided funding to repay the Convertible Debenture
• Barrels marketed will receive current market pricing – marketer incented to

deliver best pricing to increase marketing fee

* 6 Mcf to 1 Boe

SLIDE 6

2017 OPERATIONAL PLAN1

6 EGYPT  Completed Eastern Desert Exploration program – Q1  Acquired 600 Km2 of 3D seismic at NW Sitra in Western Desert – Q1

• Appraise/Develop 2016 discoveries adjacent to NWG 3/38 development lease (NWG 3/38 development lease approved

December 2016 with first production prior to YE-2016 @ 1,000 Bopd from NWG 3) – Q1/Q2

• Re-entry and test of Boraq 2 discovery and drill offset appraisal well evaluating Boraq ridge in South Alamein – Q2
• West Bakr and West Gharib optimization and infill/ development drilling opportunities - 2017

CANADA  Integration and optimization of Harmattan operations – Q1

• Execute 2H-2017 Cardium oil drilling program consisting of 4 to 8 horizontal (multi-stage frac) wells - Q3/Q4
• Develop multi-year development plans representing stable and predictable production growth

Firm Firm & Contingent

(Contingent on commodity prices, cargo sales & drilling results)

2017 Capital $MM Canada $9.4 $16.2 Egypt $25.8 $40.2 Total $35.2 $56.4 Wells Canada 4 8 Egypt 9 18 Total 13 26

1. See Cautionary Statements – "Forward –Looking Information and Statements" and "FOFI and Other Financial Measures".

SLIDE 7

5,000 10,000 15,000 20,000 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Production (boepd)

TRANSGLOBE TOTAL DAILY

Canada NWG West Bakr West Gharib

DAILY PRODUCTION1

7

Q1-2017 APRIL 2017 2017 GUIDANCE1 Egypt 13,941 Bopd 14,269 Bopd ~13.0 – 15.5 MBopd Canada 2,731* Boepd 2,670* Boepd ~2.5 – 3.0 MBoepd Total Company 16,671* Boepd 16,939* Boepd ~15.5 – 18.5 MBoepd

* 6 Mcf to 1 Boe

2017

1. See Cautionary Statements – "Forward-Looking Information and Statements" and "Oil and Gas Information".

SLIDE 8

2016 YEAR-END RESERVES SUMMARY1

8

Total proved plus probable (“2P”) gross reserves increased 74% from year-end 2015 to 50.0 MMboe noting the following:

• Canadian acquisition added 20.7

MMboe of gross 2P reserves net of production including 46 BCF 2P of conventional natural gas

• Positive technical additions of 5.0

MMbbls of gross 2P reserves primarily attributed to the Arta Red Bed pool performance/simulation results and performance at West Gharib, West Bakr

• Replaced 114% of 2016 production

(~4.4 MMboe), pre Canadian acquisition

• At year-end 2016, 2P reserves were

comprised of 59% Egypt medium/ heavy oil, 15% Canada conventional natural gas, 16% Canada natural gas liquids and 10% Canada light oil 2016 Reserves Summary 1P 2P 3P

2015 Year End Reserves (MMbbl) 17.5 28.7 39.9 2016 Adds/Revisions 5.1 5.0 4.6 Canadian Acquisition (MMBoe) 11.7 20.7 25.8 2016 Production (4.4) 2016 Year End Reserves (MMBoe)

2

29.9 50.0 65.9 Change vs Year End 2015 (%) 71% 74% 65% Production Replacement Ratio (%) – pre acquisition 116% 114% 105%

10 20 30 40 50 60 70 1P 2P 3P

Reserve Category

2015 Year End Reserves (mmbbl) 2016 Year End Reserves (mmbbl)

1. Based on D&M evaluations effective 12/31/15 and 12/31/16. See Cautionary Statements – "Oil and Gas Information". 2. 6:1 BOE – MCF.

SLIDE 9

TRANSGLOBE CANADIAN ASSET PORTFOLIO

9

Canadian Lands

• Land Position:

>95,000 net acres

(>110,000 gross acres)

• Production:

2,782 Boepd1 (Q1/17) (58% liquids-weighted)

• 2P Reserves:

20.7 MMBoe2,3 (41% liquids-weighted)

1. Average production for January 2017. 2. See Cautionary Statements – “Oil and Gas Information”; All reserves and net present value estimates in respect of the Canadian acquisition based on D&M evaluation effective 12/31/16. 3. See Cautionary Statements – "Forward-Looking Information and Statements". 4. Booked drilling locations based on D&M evaluation effective 12/31/16. Potential unbooked drilling opportunities based on TransGlobe internal estimate prepared in accordance with the COGE Handbook by a non-independent qualified reserves evaluator. See Cautionary Statements – "Oil and Gas Information".

Historic Production

• Zero wells drilled on acquired lands over

past 3 years

• Last Cardium HZ drilled in 2013
• Existing production declining at ~12% in

2016

• Production can be increased materially

through development of existing locations3

Producing Gross Locations4 Wells Boepd 2P Unbooked Cardium 37 751 22 46 Ellerslie/Mannville 61 1,419 25 54 Other 22 612 2 Total 120* 2,782 49 100 *Of which 82 are HZ wells

30 60 90 120 150 180

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000

Producing Well Count Working Interest Production (boe/d)

Oil (bbl/d) Gas (boe/d) Natural Gas Liquids (bbl/d) Producing Well Count (Gross)

SLIDE 10

CARDIUM LOCATIONS – HARMATTAN CORE AREA

10

• 39 Cardium (mile-long) HZ

wells on TransGlobe lands

• 36 drilled in 2012-2013
• Average fracs = 18 per well
• Industry standard is

now 30 per well

• 17 proved1 locations, 5

probable1 locations assigned

• Future drilling, with

improved frac density and technology may unlock additional bookable locations

• 8 Cardium HZ wells planned

for 2H-2017

1. See Cautionary Statements – “Oil and Gas Information”; Booked drilling locations based on D&M 12/31/2016 evaluation.

Crown Rights Freehold Rights 2017 Locations Proved Locations Probable Locations 5m Net Pay

SLIDE 11

INVESTMENT HIGHLIGHTS - EGYPT

11

CAIRO

South Alamein (100%) West Gharib (100%) West Bakr (100%) South Ghazalat (100%) Exploration NW Sitra (100%) Exploration

• 1.06 Million gross acres of land
• 6 PSCs in Egypt (100% WI)
• Q1-2017 production 13,949 Bopd
• Gross 2P reserves of 29.3 mmbbl (12/31/16)1
• AT NPV10 of 2P reserves of $260.2 million1
• New developments in NWG
• 2017 Exploration & Development focus
• In Eastern Desert, complete NWG exploration

program and develop NWG discoveries

• In Western Desert, acquired 600km2 3-D

seismic in North West Sitra, develop South Alamein Boraq discovery

1. See Cautionary Statements – “Oil and Gas Information”; Based on D&M evaluation effective 12/21/16.

Exploration & Development Near Term Potential NW Gharib (100%) Appraisal Development Growth Underway

SLIDE 12

WEST GHARIB/WEST BAKR/NWG: 100% WI - OPERATED

12

Eastern Desert Production

• Q1-2017 average rate 13,949 Bopd
• April average rate 14,269 Bopd with

the addition of NWG 3/38 development lease production

2017 Plan1

• Develop/appraise NWG discoveries
• WB K-South development (K-47)

drilled April with 23 meters oil pay

• Integrate NW Gharib operations into

established Joint Venture leveraging

• perating best practices and utilizing

existing infrastructure

• Submitted 3 additional development

licenses for NWG 1, NWG 5, NWG 26/27 areas

• WB facility optimization and

production growth

1. See Cautionary Statements – "Forward-Looking Information and Statements"

SLIDE 13

NW GHARIB – EXPLORATION & DEVELOPMENT

13

• First oil production from NWG 3

~1,000 Bopd flowing – Dec/16

• NWG-38A – oil discovery in Red Bed

(21.8 API) sandy conglomerate, 750 Bopd Feb/2017

• NWG-27A – oil discovery in Red Bed

(23 API) tight conglomerates and sands

• NWG-26ST – oil discovery in the

Red Bed tight conglomerates

SLIDE 14

NWG DL - 2 & NWG DL - 3

14

• NWG 1 & 5 - Fracced and

recovered oil

• DL 2 & 3 - pending approval –

expected Q3

• Production in Q4
• 400m boundary exclusion area

can now be accessed for additional drilling

SLIDE 15

EGYPT ASSETS: WESTERN DESERT

15

• Three operated 100% WI concessions (1.03 million acres)
• Map & evaluate the South Ghazalat 3-D (400 km2)
• NW Sitra 3-D seismic acquisition program completed Q1-2017 (600 km2)
• Finalize prospect inventory for 2017/18 drilling @ NW Sitra, S. Ghazalat and S. Alamein
• S. Alamein access approvals granted, initial Boraq area drilling in May 2017

SLIDE 16

SOUTH ALAMEIN – WESTERN DESERT

16

• Acquired 2012 with Boraq discovery (included ~$80 million
• f cost pools), suspended in 2014 pending resolution of

access

• Military access approval received September 2016, ending

the suspension of this concession (20 month access period)

• The Boraq ridge contains discovered light oil (Boraq 2) in 2

zones, and could contain significant oil volume that will be tested with 3 of the anticipated drilling permits.

• Boraq 2 tested a total of ~1,600 Bopd of light oil from 2

zones1

• 2017 - Drill Boraq 5 (spud early May) and re-enter Boraq 2

in Q2

• Targeting Exploration drilling in late 17 early 18- multiple

prospects defined, Cretaceous & Jurassic

1. Boraq 2X discovery tested approximately 1,600 Bopd from two zones. The primary Cretaceous zone tested at a rate of 800 to 1,323 Bopd of 34 API oil with no water and a 13% pressure drawdown during a 28 hour drill stem test (DST). A secondary Cretaceous zone tested at a rate of 274 Bopd of 32-35 API

• il and 4% water during a 23 hour DST. Test rates are not necessarily indicative of long-term

performance but it is anticipated that the well should be capable of producing approximately 1,600 Bopd.

SLIDE 17

2017 NETBACK GUIDANCE

17 Egypt Assumptions:

• Using anticipated 2017 Egypt production profile
• Ras Gharib price differential estimate of $10.00 per bbl

applied consistently at all price points

• Opex estimated at ~$9.30/bbl
• Maximum cost recovery resulting from accumulated cost

pools Canada Assumptions:

• Using anticipated 2017 Canada production profile
• Edmonton Light to Harmattan discount = C$2.83/bbl
• Opex estimated at C$8.00/boe
• Aeco gas price C$2.00/mmbtu for $40 WTI and increases

C$0.50/mmbtu for every $10/bbl WTI

• Edmonton Light = $3.25 off of WTI
• NGL mixture price = 40% of Edm. Light
• Takes into consideration Canadian tax pools

$4.18 $8.67 $13.16 $17.65 $22.14 $0 $5 $10 $15 $20 $25 $40 $50 $60 $70 $80 Netback ($/bbl) Brent

Egypt (US$)

$6.89 $10.45 $14.00 $17.57 $21.12 $0 $5 $10 $15 $20 $25 $40 $50 $60 $70 $80

Netback ($/boe) WTI

Canada (US$)

SLIDE 18

VALUE PROPOSITION AND GO-FORWARD PLAN2

18

• Very attractive valuation, with 2P reserves (NPV10) of $346MM or ~$4.79/share

($3.88/share on NPV 15 basis)1,2

• Diversified and growing production base - >17,000 boe/d guidance mid-point
• $73.4MM (C$98.7MM) Convertible Debentures repaid in cash March 31st, 2017
• High working interest, oil-focused operated assets torqued to commodity price

recovery

Egypt

Near Term Catalysts (2017)

• WB K Field development/acceleration
• WG optimization/development
• NWG appraisal/development
• SA (Boraq) appraisal/development

Medium Term Catalysts (2018+)

• WB acceleration
• NWG full development
• SA development
• Western Desert exploration in SA, NWS and

SG

Canada

Near Term Catalysts (2017)

• Cash flow and growth of Canadian Assets
• Initial drilling of up to 8 horizontal oil wells

Medium Term Catalysts (2018+)

• Expand Cardium resource footprint through

synergistic acquisitions

• Ramp-up Cardium HZ drilling program
• Unlock and develop Ellerslie HZ potential

Focused on building a diversified, profitable and growth oriented International Portfolio

1. Based on D&M evaluation effective 12/31/16. 2. See Cautionary Statements – "Forward-Looking Statements and Information".

SLIDE 19

SUMMARY

19

Well Positioned to Grow

• Current post transaction corporate

production over ~16,672 boepd* in Q1-17, and extensive inventory of low- risk development growth in Canada and Egypt, plus high-impact exploration in Egypt

• High working interest in largely
• perated assets
• Scalable growth in a rising commodity

price environment

• Dilution overhang removed
• Share price has lagged oil price

recovery

* 6 Mcf to 1 Boe

SLIDE 20

20

TRANSGLOBE ENERGY AGM PRESENTATION

MAY 11, 2017

TSX:TGL/NASDAQ:TGA