Montrusco Bolton Investments Inc. Invites Shareholders to Urge the Board of Directors of TransGlobe Energy Corporation to Take Action

Montreal (ots/PRNewswire) -

Letter Sent on December 15th, 2015

Mr. Robert G. Jennings Chairman TransGlobe Energy Corporation
Suite 2300, 250 - 5th Street S.W. Calgary, Alberta T2P 0R4

cc: The Board of Directors, TransGlobe Energy Corporation

Dear Mr. Jennings

As you are aware, Montrusco Bolton Investments Inc. ("MBI") has
been a significant shareholder of TransGlobe Energy Corporation
("TGL" or the "Company") for the past eight years. We were initially
attracted to TGL's stock after conducting significant due diligence
which supported our investment thesis. Key elements were: (i) low
operating costs, (ii) low finding and development costs, (iii)
rapidly growing reserves and production, (iv) attractive stock
valuation, and (v) a strong balance sheet.

While TGL's share price did outperform its peers in the first
three years following our initial investment, it has grossly
underperformed its peers over the last 5 years. TGL's shares now
trade at a significant "board/management discount" and the stock has
become a "show-me" story. We believe this discount is caused by what
we perceive as poor governance and apparent corporate missteps,
including: (i) the stalling and lack of exploration which have
delayed reserve and production growth, (ii) last year's major pump
failures which took longer than anticipated to resolve and impacted
production, and (iii) a failed merger attempt in March of 2014 which
would have resulted in a share exchange for a participation in a
company operating in one of the riskiest countries in the world. Even
more concerning to us is the agency issue at the Board level, with
the Chairman owning a larger investment in the Company's debt than in
its equity. We are also concerned by the fact that some board members
have a non-meaningful real share ownership in the Company. To our
disappointment you have decided to reject our request for setting
minimum "real share" ownership guidelines for executive officers and
board members (rather than DSUs).

We believe that TGL is a highly attractive acquisition target due
to its strong balance sheet and its unique position in Egypt where
the country risk has significantly declined in the last two years.
Additionally, we strongly believe that TGL's assets would garner a
significant premium from either a strategic buyer or a private equity
sponsor with a pre-existing portfolio of assets in the oil industry,
since TGL can export and market its oil production directly outside
of Egypt.

TGL's shares currently trade at 3.2 times 2016E Cash Flow, which
represents a material discount of 35% to the 2016E Cash Flow average
multiple of the FactSet Industry Energy Exploration & Producers peers
sub-index. Based on the current net cash position on TGL's balance
sheet, the valuation discount is even more dramatic and stands at 68%
(or 1.6X 2016E Cash Flow, based on consensus).

We believe that TGL's shares based on a 2P NAV should be worth
approximately CAD $3.07 per share, representing an upside of 36% to
the current market price based on the current forward strip. We
hereby urge the board of directors to take the following actions
immediately in order to unlock shareholder value:

(i) Deploy no less than half of the current net cash
position into a substantial issuer bid in order to buy back
up to 30% of outstanding shares (ii) Improve the Company's oil
reserves more aggressively and efficiently through an
acceleration of the Company's exploration program (iii) Introduce
a minimum "real share" ownership policy for board members and senior
executives (iv) Refresh the board of directors to
include individuals who can bring a fresh new perspective
on core actions that can enhance shareholder value. We also urge you
to eventually initiate a proper process to sell the Company

Montrusco Bolton Investments is committed to adding value by
engaging with the companies in which it invests.

Christian Godin, Senior Vice-President, Head of Equities,
Montrusco Bolton Investments Inc., +1-514-842-6464,
godinc@montrusco.com

ots Originaltext: Montrusco Bolton Investments Inc.
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