Transmeridian Receives Key Approval for South Alibek Field

Transmeridian Exploration reports that the State Committee of Reserves (SCR) of the Republic of Kazakhstan has approved commercial reserves for development and exploitation of the South Alibek Field. This approval provides the Company with the basis to finalize the terms of a Production Contract relating to this portion of the field with the Ministry of Energy and Mineral Resources. The Company expects the production contract, which is subject to customary reviews by various governmental committees, to be completed within approximately three months. The Government has assessed a commercial bonus of $1.2 million based on the SCR reserves audit as provided under the country's Petroleum Code.

The reserve audit covered by the SCR approval defines an initial production area of about 3,500 acres, about 25% of the total area under license. This area can be extended based on the drilling of additional exploration wells pursuant to the Company's current Exploration Contract, which was recently extended for another 2 years until 2007.

"We are especially pleased that the SCR has concurred with our findings in defining such a large commercial area in this initial study of the field,'' commented Bruce Falkenstein, V.P. Exploration. "Even though our level of proved reserves is not affected by this study, the production area delineated by the SCR is more than twice the area previously used in our reserve studies. This study supports our aggressive approach to expand exploration drilling within our 14,111 acre License.''