Horizon Partners ("Horizon"), a privately-owned firm that manages the Horizon Absolute Return Fund Limited (“HARF”), which is a shareholder of TransGlobe Energy Corporation ("TransGlobe" or the "Company") (TSX: TGL), is thanking shareholders of TransGlobe for the overwhelming support received so far in its efforts to VOTE AGAINST the proposed plan of arrangement pursuant to which Vaalco Energy, Inc. ("Vaalco") would acquire all of the issued and outstanding common shares of TransGlobe in a stock-for-stock business combination transaction (the "Proposed Transaction"). The Proposed Transaction will be considered at a special meeting of the Company currently scheduled to take place on September 29, 2022 (the "Meeting").  

Juan Argento, Managing Partner of Horizon, said, "Horizon’s belief that the Proposed Transaction severely undervalues the Company, and is not fair to or in the best interests of the Company or its shareholders is widely shared among its fellow TransGlobe shareholders. In the short period since we expressed our concerns with the Proposed Transaction we have received support from approximately 20% of the shares of TransGlobe who have or intend to VOTE AGAINST the Proposed Transaction. However, in order to ensure that this value destroying transaction does not proceed we urge more shareholders to VOTE AGAINST the Proposed Transaction AS SOON AS POSSIBLE. We appreciate the momentum so far but we need more of you to take immediate action. Even if you have voted in favour of the Proposed Transaction it is not too late to change your vote." 

As stated previously, Horizon believes that TransGlobe shareholders should VOTE AGAINST the Proposed Transaction so that the Company can instead pursue certain alternatives that we currently anticipate would result in greater long-term value to all shareholders of CAD 9.11 to CAD 9.73 per share as compared with the CAD 4.10 per share shareholders will be forced to accept if the Proposed Transaction is approved at the Meeting. These alternatives include (i) securing the effective date adjustment payment from the Egyptian government, valued in the Company’s balance sheet at USD 67.5 million, (ii) pursuing a sale of the Company’s Canadian business, which Horizon estimates has a value of USD 85 million to USD 120 million and rationalizing Canadian CAPEX to maximize free cash flow; (iii) payment of a distribution to shareholders in an amount equal to at least 75% of the sum of (a) the net proceeds from the above alternatives (i) and (ii), and (b) the Company’s 2022 free cash flow which the Company estimates at USD 70 million, (iv) continuing to operate and grow the Company’s Egyptian business, which is expected to generate USD 64.4 million of free cash flow in calendar year 2023, as per Capital IQ, and (v) considering other potential transactions identified in the future.

Consistent with such course of action, Horizon currently estimates that the Company is in a position to generate approximately CAD 5.09 to CAD 5.71 per share in cash within the next 12 months, while maintaining its full stake in its core Egypt assets, which Horizon estimates are worth at least 1.0x its 12/31/2021 reported after-tax NPV10 of P1 reserves of USD 226.9 million or an additional CAD 4.02 per share.  

We believe that if shareholders of TransGlobe VOTE AGAINST the Proposed Transaction, the Company will be in a position to pursue this action plan which could result in the monetization of value for shareholders of CAD 9.11 to CAD 9.73 per share as compared to CAD 4.10 per share they will be forced to accept if the Proposed Transaction is approved at the Meeting.

We thank shareholders for the support we have received to date, and we urge all TransGlobe shareholders who have not done so already to VOTE AGAINST the Proposed Transaction AS SOON AS POSSIBLE

Information in Support of Public Broadcast Solicitation:The following information is provided in accordance with Canadian corporate and securities laws applicable to public broadcast solicitations. Horizon is relying on the exemption under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102") to make this public broadcast solicitation. This solicitation is being made by Horizon and not by or on behalf of the management of TransGlobe. The registered office address of TransGlobe is 900, 444 - 5th Street SW., Calgary, Alberta T2P 2T8.Horizon has filed this press release containing the information required by section 9.2(4)(c) of NI 51-102 on TransGlobe's company profile on SEDAR at www.sedar.com.Horizon may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws. All costs incurred for the solicitation will be borne by Horizon.A TransGlobe shareholder who has given a proxy has the power to revoke it. If a TransGlobe shareholder who has given a proxy attends the Meeting at which the proxy is to be voted, such TransGlobe shareholder, may revoke the proxy and vote at the Meeting. In addition to revocation in any other manner permitted by law, a proxy may be revoked by an instrument in writing signed by the TransGlobe shareholder or his or her attorney authorized in writing, or, if the TransGlobe shareholder is a corporation, under its corporate seal and signed by a duly authorized officer or attorney for the corporation, and deposited at the registered office of TransGlobe at any time up to and including the last day (other than Saturdays, Sundays and statutory holidays in the Province of Alberta) preceding the day of the Meeting at which the proxy is to be used, or any adjournments or postponements thereof. If a TransGlobe shareholder uses a 12-digit control number to login to the Meeting online and accepts the terms and conditions, by doing so such TransGlobe shareholder will be revoking any and all previously submitted proxies; however, in such a case, the TransGlobe shareholder will be provided the opportunity to vote by ballot on the matters put forth at the Meeting. If a TransGlobe shareholder DOES NOT wish to revoke all previously submitted proxies, the TransGlobe shareholder should not accept the terms and conditions, in which case the TransGlobe shareholder can only attend the Meeting as a guest.

Horizon Absolute Return Fund Limited, an affiliate of Horizon, is a shareholder of TransGlobe. With the exception of the foregoing, to the knowledge of Horizon, neither Horizon nor any associates or affiliates of Horizon, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in the Proposed Transaction or any other matter to be acted upon at the Meeting.


Juan ArgentoHorizon PartnersCalle 53E, Urbanización Marbella, MMG Tower, Piso 16, Panamá, República de PanamáTel: +1 347 759 6074E-mail: jpa@horizon-partners.com

Juan Pablo SchulmanHorizon PartnersCalle 53E, Urbanización Marbella, MMG Tower, Piso 16, Panamá, República de PanamáTel: +54 911 6252 4736E-mail: jps@horizon-partners.com

AdvisorsGoodmans LLP is acting as legal counsel.


Horizon is a privately-owned business with advisory and principal investment activities and with substantial focus on the energy industry. Horizon Capital Management, Inc., part of Horizon, manages Horizon Absolute Return Fund Limited, a British Virgin Islands Approved Fund, that primarily invests in listed international oil and gas companies and is a shareholder of TransGlobe.

Cautionary Statement Regarding Forward Looking Information All statements, other than statements of historical fact, included in this news release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation.  Forward-looking information can generally be identified by the use of forward-looking language such as "will", “would”, “could”, "expect", "intend", "plan", "estimate", "anticipate", “may”, "believe" or "continue" (and grammatical variations and the negatives thereof) and include statements concerning Horizon's intentions and strategies regarding the Company, Horizon’s views on potential alternatives to monetize value for the Company and its shareholders instead of pursuing the Proposed Transaction (and the potential timeframe for such monetization) and the impact on the financial condition, operation, business, strategies and competitive position of the Company and its future management if the Proposed Transaction is not approved by the shareholders.  Such forward-looking information is based on certain understandings, assumptions, beliefs, opinions and expectations of Horizon, including, without limitation, the Company's future growth potential, results of operations, future cash flows, ability to monetize assets, the future performance and business prospects and opportunities of the Company, the regulatory environment and economic and market conditions that the Company faces and those assumptions noted above in this news release.  Shareholders should not place undue reliance on such forward-looking information, which is not a guarantee that any particular outcome, event, result, performance or other achievement will occur.  Many risks, uncertainties and other factors could cause the actual outcomes, events, results, performance or achievements expressed or implied by such forward-looking information to vary materially from those described herein should any of those risks, uncertainties or other factors materialize.  Such risks, uncertainties and other factors include, without limitation, the impact of legislative, regulatory, competitive and technological changes; the state of the economy; credit and equity markets; availability of credit and other financing; the financial markets in general; the ability of the Company to retain and hire key personnel and maintain relationships with customers, suppliers or other business partners; and all other risks and uncertainties detailed in the Company's filings with applicable Canadian securities commissions, copies of which are available on SEDAR at www.sedar.com.  Accordingly, readers of this news release are cautioned not to place undue reliance on any forward-looking information contained in this news release.  All forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.  All forward-looking information contained herein is made as of this news release and Horizon undertakes no obligation to publicly update or revise any such forward-looking information, except as required by law.

SOURCE: Horizon Partners

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