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TRANSGLOBE ENERGY CORPORATION announces execution of prepayment agreement and marketing contract

Calgary, Alberta, February [9], 2017 – TransGlobe Energy Corporation (“TransGlobe” or the “Company”) is pleased to announce the signing of a US$75 million crude oil prepayment agreement between its wholly owned subsidiary, TransGlobe Petroleum International Inc. (“TPI”) and Mercuria Energy Trading SA (“Mercuria”) of Geneva, Switzerland.

The initial advance under the prepayment agreement will be used to refinance the 6.00% convertible debentures of the Company maturing on March 31, 2017 and thereafter for working capital purposes of the Company and its subsidiaries.  The Company expects to provide further details on the timing of the redemption of the convertible debentures prior to the end of February.

TPI's obligations under the prepayment agreement will be guaranteed by the Company and the subsidiaries of TPI (the “Guarantors”).  The obligations of TPI and the Guarantors will be supported by, among other things, a pledge of equity held by the Company in TPI and a pledge of equity held by TPI in its subsidiaries.  This funding arrangement has a term of four years, maturing March 31, 2021 and advances bear interest at a substantially similar rate as the Company's outstanding convertible debentures at current Libor rates.  The funding arrangement is revolving with advances to be satisfied through the delivery of crude oil to Mercuria.  In conjunction with the prepayment agreement, TPI has also entered into a marketing contract with Mercuria to market nine million barrels of TPI’s Egypt entitlement production.  The pricing of the crude oil sales will be based on indexed market prices at the time of sale. 

The funding arrangement will be available for utilization on the fulfillment of certain conditions, which the Company expects to complete in the next couple of weeks.

As a leading energy and commodities group, Mercuria is primarily focused on energy, and is present all along the commodity value chain with activities forming a balanced combination of commodity flows and strategic assets. More than 1,000 people are operating from offices worldwide to sustain the Group's extensive business reach with their market knowledge, diversity, and experience.

TransGlobe Energy Corporation is a Calgary-based, growth-oriented oil and gas exploration and development company whose current activities are concentrated in the Arab Republic of Egypt and Canada. TransGlobe's common shares trade on the Toronto Stock Exchange under the symbol TGL and on the NASDAQ Exchange under the symbol TGA. TransGlobe's convertible debentures trade on the Toronto Stock Exchange under the symbol TGL.DB.

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