FIELD ACTIVITIES / TransGlobe Announces Terms of Joint Venture
in S-1 Block, Republic of Yemen
ASE, TSE SYMBOL: TGL
ASE SYMBOL: TGL.S
NASDAQ SYMBOL: TGLEF
FEBRUARY 12, 1998
CALGARY, ALBERTA--TRANSGLOBE ENERGY CORPORATION (ASE, symbols
"TGL" and "TGL.S", TSE symbol "TGL", NASDAQ symbol "TGLEF")
announced that it has signed a farm out agreement with a large
U.S. independent exploration and production company to finance
TransGlobe's exploration commitments on the S-1 Damis Block in the
Republic of Yemen. The agreement will allow the farminee to earn a
75 percent working interest in the S-1 Block by funding all of the
initial work commitments under the Production Sharing Agreement
("PSA") consisting of 150 square kilometers of 3-D seismic and the
drilling of three exploration wells over the 2.5 year First
Exploration Period. TransGlobe will pay 25 percent of the
signature bonus, agents fees and finders fees required to be paid
and the farminee will pay 75 percent. The identity of the
farminee will be released after disclosure to the Ministry of Oil
and Mineral Resources ("MOMR") of the Republic of Yemen.
TransGlobe has forwarded a US$2.0 million letter of credit to the
Yemen MOMR as the signature bonus under the PSA. The letter of
credit will be drawn down by MOMR upon ratification of the PSA by
the Yemen Parliament. The PSA has been forwarded to the Yemen
Parliament for ratification which is expected to take ninety days.
TransGlobe completed two private placements to arms' length
investors yesterday to fund a portion of the letter of credit.
One is a private placement of 92,819 units at CDN$1.45 per unit
(each unit consists of one common share and a warrant to purchase
three-quarters of an additional share for CDN$1.70 expiring in two
years), the other is a private placement of a CDN$700,000
debenture, due September 1, 1998 at Canadian prime rate plus 1
percent (presently 7.5 percent) and warrants to purchase 257,350
additional shares for CDN$1.70 expiring in two years. The
remainder of the letter of credit was funded from working capital.
The securities have not been registered under the US Securities
Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements.
On behalf of the Board of Directors of
TRANSGLOBE ENERGY CORPORATION
"Ross G. Clarkson"
President & CEO |
