TransGlobe Energy Says Yemen Pipeline Operational

TransGlobe Energy has successfully started up the Block S-1 export oil pipeline and suspension of the Wadi Markhah #1 well on S-1 in the Republic of Yemen.

The 30 kilometer (18 mile) 25.4 centimeter (10 inch) pipeline connecting the producing An Nagyah field with the Jannah Hunt operated Halewah production facility and export pipeline was completed June 30, 2005. Startup and commissioning commenced on July 1 with oil arriving at the Halewah facilities on July 5. The current production from the An Nagyah field is approximately 8,700 Bopd and is being increased as wells are gradually opened up. Prior to the startup of the pipeline approximately 8,300 Bopd were being trucked to the Halewah facility. Production from the An Nagyah field is expected to be increased to the 10,000 Bopd level (2,500 Bopd to TransGlobe) during July, with further increases planned over the remainder of the year. It is expected that per barrel operating costs will be reduced by $1.50 to $2.00 per barrel now that the pipeline is operational and trucking operations have ceased.

The exploration well, Wadi Markhah #1, which commenced drilling on April 26, 2005, was sidetracked and drilled to a total depth of 1,884 meters. The bottom hole location was approximately 574 meters to the northeast where it was expected to evaluate the upper Lam sandstone potential on the flank of the Markhah structure. Additional Lam sands were encountered however the logs indicated they did not warrant testing. The lower portion of the well has been plugged and abandoned with the upper portion of the well over the Azal formation suspended.

The light 38-degree API oil and gas shows observed in the upper Azal formation are expected to be tested at a later date utilizing a workover completion rig. The drilling rig is preparing to move to the An Nagyah field to drill a development horizontal well at An Nagyah #16. Several additional horizontal development wells will be required to fully develop the An Nagyah field.

TransGlobe Energy has a 25% working interest in Block S-1 in Yemen.