Transmeridian Exploration To Seek Additional Capital

Transmeridian Exploration Incorporated announced that its previously disclosed efforts to seek a buyer have not produced a satisfactory transaction. As a result, while the company remains willing to entertain unsolicited proposals from qualified persons for an acquisition of the company, it is now seeking to raise additional capital with which to further develop its primary asset, the South Alibek field in western Kazakhstan. As part of this effort, the company is in preliminary discussions with interested parties regarding a substantial investment of equity capital into the company.

Based on current field production levels of approximately 2,200 barrels of oil per day (bopd), management believes that the company can continue to generate sufficient cash flow to fund its ongoing operating costs, overhead and cash interest requirements. The company continues to have a working capital deficit and does not generate sufficient excess cash to re-activate a multi-rig drilling and workover program in order to increase field production. The company experienced production levels in excess of 4,000 bopd prior to field curtailments in 2007. If the company is successful in raising additional capital, management believes that by investing the net proceeds in an effort to restore field production to levels previously experienced, and to further develop the field, the company will be better positioned to maintain and expand its reserve base in South Alibek or complete a strategic transaction.

Significant obstacles to raising additional capital include, among other factors, the company's high debt level relative to cash flow and potential dilution from existing convertible preferred securities, and there can be no assurance that current discussions will result in any agreement or transaction.


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