Exhibit 10.4

EXECUTION VERSION

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of October 24, 2008,
is by and among each of the subsidiaries of Transmeridian Exploration
Incorporated (“Parent”) listed on the signature pages hereof (collectively, and
together with the Additional Pledgors (as defined in Section 23), the
“Pledgors”), The Bank of New York Mellon (formerly known as The Bank of New
York), in its capacity as Collateral Agent for the benefit of the Secured
Parties referred to below (in such capacity, the “Collateral Agent”), The Bank
of New York Mellon, in its capacity as trustee under the Original Indenture
referred to below (in such capacity, the “Original Trustee”), and The Bank of
New York Mellon, in its capacity as trustee under the New Indenture referred to
below (in such capacity, the “New Trustee”).

RECITALS

WHEREAS, pursuant to that certain Indenture, dated as of December 12, 2005, as
amended by the First, Second and Third Supplemental Indentures thereto, dated as
of December 22, 2005, May 24, 2006 and the date hereof, respectively, by and
among each Pledgor, Transmeridian Exploration Inc. (“Issuer”), the Original
Trustee and the other Guarantors from time to time party thereto (as further
amended, restated, supplemented or otherwise modified from time to time, the
“Original Indenture”), Issuer has issued an aggregate $290 million principal
amount of its senior secured notes due 2010 (the “Original Notes”);

WHEREAS, pursuant to that certain Indenture, dated as of the date hereof, by and
among each Pledgor, Issuer, the New Trustee and the other Guarantors from time
to time party thereto (as amended, restated, supplemented or otherwise modified
from time to time, the “New Indenture” and, together with the Original
Indenture, the “Indentures”), Issuer will issue its senior secured notes due
2010 (the “New Notes” and, together with the Original Notes, the “Notes”) in
exchange for all or a portion of the Original Notes;

WHEREAS, pursuant to the terms of the Original Indenture, the Original Notes and
each Pledgor’s payment obligations under the Original Indenture, including
obligations to the Original Trustee, will be secured, in part, by a full and
unconditional guarantee by such Pledgor (with respect to each Pledgor, the
“Original Guarantee”) and, in turn, the Original Guarantee will be secured by,
in part, a pledge of all existing and future intercompany indebtedness owed to
each such Pledgor by Parent, Issuer or any other Restricted Subsidiary;

WHEREAS, pursuant to the terms of the New Indenture, the New Notes and each
Pledgor’s payment obligations under the New Indenture, including obligations to
the New Trustee, will be secured, in part, by a full and unconditional guarantee
by such Pledgor (with respect to each Pledgor, the “New Guarantee”) and, in
turn, the New Guarantee will be secured by, in part, a pledge of all existing
and future intercompany indebtedness owed to each such Pledgor by Parent, Issuer
or any other Restricted Subsidiary;

WHEREAS, pursuant to the terms of the Original Indenture and the New Indenture,
each Pledgor shall have granted the security interests in the Pledged Collateral
(as defined below) contemplated under this Pledge Agreement in favor of the
Collateral Agent for the ratable benefit of the holders of the Original Notes,
the holders of the New Notes, the Original Trustee, the New Trustee and the
Collateral Agent (collectively, the “Secured Parties”) to secure the Secured
Obligations (as defined below); and

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WHEREAS, each Pledgor, the Collateral Agent, the Original Trustee and the New
Trustee have each agreed to enter into this Pledge Agreement pursuant to the
terms of the Original Indenture and the New Indenture to provide that the
security interests granted by each Pledgor in the Pledged Collateral in favor of
the Collateral Agent shall be granted for the ratable benefit of the Secured
Parties, to secure, among other things, the obligations of each Pledgor under
each of the Indentures.

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1. Definitions. The following terms that are defined in the Uniform Commercial
Code from time to time in effect in the State of New York (the “UCC”) are used
herein as so defined: Certificated Security, Control, Entitlement Order,
Financial Asset, Instrument (as defined in Section 9-102(47) of the UCC),
Investment Company Security, Securities Account, Security, Security Entitlement,
Securities Intermediary and Uncertificated Security. As used herein, the
following terms shall have the meanings ascribed to such terms in each of the
Indentures (and for greater certainty, shall be inclusive of all such meanings):
“Guarantor”, “Lien”, “Permitted Lien”, “Person” and “Restricted Subsidiary”.

2. Pledge and Grant of Security Interest. Subject to the terms and conditions of
this Pledge Agreement and to secure the performance of the Secured Obligations,
each Pledgor hereby pledges and grants to the Collateral Agent, for the ratable
benefit of the Secured Parties, a continuing security interest in any and all
right, title and interest of such Pledgor in and to the following, whether now
owned or existing or owned, acquired, or arising hereafter (collectively, the
“Pledged Collateral”):

(a) Pledged Debt. All of the existing and future indebtedness owed to such
Pledgor by Parent, Issuer or any Restricted Subsidiary, including all
indebtedness listed on Schedule 2(a) hereto and issued by the obligors named
therein, and any future indebtedness owed to such Pledgor by any obligor listed
on Schedule 2(a) hereto (collectively, together with the other interests
described in clauses (A) and (B) of this Section 2(a), the “Pledged Debt”),
including, but not limited to, the following:

(A) the instruments, if any, evidencing the Pledged Debt, and all interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Debt; and

(B) all additional indebtedness from time to time owed to such Pledgor by any
obligor listed on Schedule 2(a) or any other Restricted Subsidiary and the
instruments, if any, evidencing such indebtedness, and all interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness, in each case whether or not reflected on Schedule 2(a) and whether
or not Schedule 2(a) is amended to refer to such additional indebtedness.

(b) Proceeds. All proceeds and products of the foregoing, however and whenever
acquired and in whatever form, subject to Section 10(d).

Without limiting the generality of the foregoing, it is hereby specifically
understood and agreed that each Pledgor may from time to time hereafter pledge
and deliver additional indebtedness or instruments evidencing indebtedness, to
the Collateral Agent as collateral security for the Secured Obligations. Upon
such pledge and delivery to the Collateral Agent, such additional indebtedness
or debt instruments, as the case may be, shall be deemed to be part of the
Pledged Collateral and shall be subject to the terms of this Pledge Agreement
whether or not Schedule 2(a) is amended to refer to such additional indebtedness
or instruments.

3. Security for Secured Obligations. In the case of each Pledgor, the security
interest created hereby in the Pledged Collateral of such Pledgor constitutes
continuing collateral security for all of the following, whether now existing or
hereafter incurred (the “Secured Obligations”): (a) the

 

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Original Guarantee of such Pledgor and the payment and performance by such
Pledgor of all of its obligations under the Original Guarantee; (b) the New
Guarantee of such Pledgor and the payment and performance by such Pledgor of all
of its obligations under the New Guarantee; (c) all expenses and charges, legal
and otherwise, incurred by the Collateral Agent, the Original Trustee and/or the
holders of the Original Notes in enforcing such Pledgor’s obligations under the
Original Guarantee or in realizing on or protecting any security therefor,
including without limitation the security granted hereunder; and (d) all
expenses and charges, legal and otherwise, incurred by the Collateral Agent, the
New Trustee and/or the holders of the New Notes in enforcing such Pledgor’s
obligations under the New Guarantee or in realizing on or protecting any
security therefor, including without limitation the security granted hereunder.

4. Delivery of the Pledged Collateral; Perfection of Security Interest. Each
Pledgor hereby agrees that:

(a) Delivery of Instruments. Such Pledgor shall deliver as security to the
Collateral Agent, (i) simultaneously with or prior to this Pledge Agreement
becoming effective, all instruments representing or evidencing the Pledged Debt
owned by such Pledgor (excluding, unless an Event of Default (as defined below)
has occurred and is continuing and the Collateral Agent has requested such
delivery, Pledged Debt in an aggregate principal amount not in excess of
$100,000), in each case together with the delivery of signed, undated
instruments of transfer for the Pledged Debt to the Collateral Agent or its
designee; and (ii) promptly upon the receipt thereof by or on behalf of such
Pledgor, all other instruments constituting Pledged Debt owned by such Pledgor
(except, unless an Event of Default has occurred and is continuing and the
Collateral Agent has requested such delivery, instruments representing Pledged
Debt in an aggregate principal amount not in excess of $100,000). Prior to
delivery to the Collateral Agent, all such instruments constituting Pledged Debt
of each Pledgor shall be held in trust by each such Pledgor for the benefit of
the Collateral Agent pursuant hereto. All such instruments shall be delivered in
suitable form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, in forms reasonably acceptable
to the Collateral Agent.

(b) Financing Statements; Other Perfection Actions. Such Pledgor hereby agrees
to prepare and file such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other instruments as
are necessary or appropriate in order to perfect and maintain the security
interests granted hereunder in accordance with the UCC that specifically
describes the Pledged Collateral in such manner as is necessary or advisable.
Each Pledgor shall also execute and deliver to the Collateral Agent and/or file
such agreements, assignments or instruments (including affidavits, notices,
reaffirmations, amendments and restatements of existing documents and, subject
to the terms of each Indenture, any documents as may be necessary if the law of
any jurisdiction other than New York becomes or is applicable to the Pledged
Collateral or any portion thereof, in each case, including as the Collateral
Agent may reasonably request) and do all such other things as are necessary or
appropriate (i) to assure to the Collateral Agent its security interests
hereunder are perfected, including such financing statements (including
continuation statements) or amendments thereof or supplements thereto or other
instruments, including as the Collateral Agent may from time to time reasonably
request in order to perfect and maintain the security interests granted
hereunder in accordance with the UCC and any other personal property security
legislation in the appropriate jurisdictions, (ii) to consummate the
transactions contemplated hereby and (iii) to otherwise protect and assure the
Collateral Agent of its rights and interests hereunder.

5. Representations and Warranties. Each Pledgor hereby represents and warrants
to the Collateral Agent for the benefit of the Secured Parties that:

(a) Authorization of Pledged Collateral. The Pledged Debt pledged by such
Pledgor hereunder has been duly authorized, authenticated or issued and
delivered, is the legal, valid and binding obligation of the issuers thereof, is
evidenced by one or more promissory notes (which promissory notes, to the extent
required hereunder, have been delivered to the Collateral Agent) and is not in
default.

 

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(b) Title. Such Pledgor has good and indefeasible title to the Pledged
Collateral pledged by such Pledgor hereunder and will at all times be the legal
and beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens.

(c) Exercising of Rights. The exercise by the Collateral Agent of its rights and
remedies hereunder will not violate any law or governmental regulation or any
material contractual restriction binding on or affecting such Pledgor or any of
its property.

(d) Pledgors’ Authority. No authorization, approval or action by, and no notice
or filing with any governmental authority, the obligor of any Pledged Debt or
third party is required either (i) for the pledge made by such Pledgor or for
the granting of the security interest by such Pledgor pursuant to this Pledge
Agreement or (ii) for the exercise by any Secured Party of its rights and
remedies hereunder (except as may be required by laws affecting the offering and
sale of securities) in respect of the Pledged Collateral pledged by such Pledgor
hereunder.

(e) Security Interest/Priority. This Pledge Agreement creates a valid security
interest in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, in the Pledged Collateral pledged by such Pledgor hereunder.
The taking of possession by the Collateral Agent of the instruments (if any)
representing the Pledged Collateral of such Pledgor and the relevant instruments
of transfer and all other instruments constituting Pledged Collateral of such
Pledgor will perfect and establish the first priority of the Collateral Agent’s
security interest in all such Pledged Collateral consisting of Instruments. Upon
the filing of a UCC financing statement describing the Pledged Collateral in the
applicable filing office in the State of Texas or the District of Columbia, as
applicable, and the filing of such other documents and/or the taking by such
Pledgor of such other actions as may be required in such Pledgor’s jurisdiction
of organization and/or in the jurisdiction of organization of any applicable
obligor, issuer, partnership or limited liability company in order to perfect
such security interest, the Collateral Agent shall have a first priority
perfected security interest in all Pledged Debt of such Pledgor not evidenced by
an Instrument. Except as set forth in this Section 5(e), no action is necessary
to perfect the Collateral Agent’s security interest in respect of the Pledged
Collateral pledged by such Pledgor hereunder.

6. Covenants. Each Pledgor hereby covenants and agrees with the Collateral Agent
that it shall:

(a) Defense of Title. Warrant and defend title to and ownership of the Pledged
Collateral of such Pledgor at its own expense against the claims and demands of
all other parties claiming an interest therein; keep such Pledged Collateral
free from all Liens, other than Permitted Liens; and not sell, exchange,
transfer, assign, lease or otherwise dispose of such Pledged Collateral or any
interest therein, except as permitted under the Indentures.

(b) Further Assurances. Subject to the terms of the Indentures, promptly execute
and deliver at its expense all further instruments and documents and take all
further action that may be necessary and desirable or that the Collateral Agent
may request in order to (i) perfect and protect the security interest created
hereby in the Pledged Collateral of such Pledgor (including, without limitation,
filing of UCC financing statements and any and all other actions reasonably
necessary to satisfy the Collateral Agent that the Collateral Agent has obtained
a first priority perfected security interest in all such Pledged Collateral) and
(ii) enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral pledged by such Pledgor
hereunder.

(c) Amendments. Not make or consent to any amendment or other modification or
waiver with respect to any of the Pledged Collateral of such Pledgor or enter
into any agreement or allow to exist any restriction with respect to any of such
Pledged Collateral other than pursuant hereto or as may be permitted under the
Indentures.

 

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(d) Compliance with Securities Laws. File all reports and other information now
or hereafter required to be filed by such Pledgor with the United States
Securities and Exchange Commission and any other state, federal or foreign
agency in connection with the ownership of the Pledged Collateral of such
Pledgor.

7. Performance of Obligations; Advances by Collateral Agent. (a) On failure of
any Pledgor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its sole discretion, but shall
not be required to, perform or cause to be performed the same and in so doing
may expend such sums as the Collateral Agent may reasonably deem advisable in
the performance thereof, including, without limitation, the payment of any
insurance premiums, the payment of any taxes, a payment to obtain a release of a
Lien or potential Lien (other than in either case a Permitted Lien),
expenditures made in defending against any adverse claim and all other
expenditures which the Collateral Agent may make for the protection of the
security interest hereof or may be compelled to make by operation of law. All
such sums and amounts so expended shall be repayable by the applicable Pledgor
promptly upon timely notice thereof and demand therefor and shall constitute
additional Secured Obligations. No such performance of any covenant or agreement
by the Collateral Agent on behalf of any Pledgor, and no such advance or
expenditure therefor, shall relieve any Pledgor of any default under the terms
of this Pledge Agreement or either Indenture. The Collateral Agent may make any
payment hereby authorized in accordance with any bill, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by the
applicable Pledgor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with generally accepted accounting
principles in the United States of America, as in effect from time to time.

(b) Each Pledgor covenants and agrees to indemnify the Collateral Agent to the
same extent as each of the Original Trustee and the New Trustee is indemnified
under the terms of the applicable Indenture by Issuer, for any claims, costs,
liabilities or expense of any kind (including the fees and expenses of counsel)
arising out of or in connection with performance of its duties hereunder or with
respect to the Escrow Agreement, dated as of December 12, 2005, among Issuer,
the Original Trustee and The Bank of New York, as escrow agent (as amended,
restated, supplemented or otherwise modified from time to time), and such
expenses shall, until paid in full, constitute additional Secured Obligations.

8. Events of Default. The occurrence of an event which under the Original
Indenture would constitute an “Event of Default” (as defined in the Original
Indenture), or the occurrence of an event which under the New Indenture would
constitute an “Event of Default” (as defined in the New Indenture), in each case
shall be an event of default hereunder (each such event, an “Event of Default”).

9. Remedies.

(a) General Remedies. Upon the occurrence of an Event of Default and during the
continuation thereof, the Collateral Agent shall have, in respect of the Pledged
Collateral, in addition to the rights and remedies provided herein and in the
applicable Indenture, the rights and remedies of a secured party under the UCC
or any other applicable law.

(b) Sale of Pledged Collateral. Upon the occurrence of an Event of Default and
during the continuation thereof, without limiting the generality of this
Section 9 and without notice, the Collateral Agent may, in its sole discretion,
sell or otherwise dispose of or realize upon the Pledged Collateral, or any part
thereof, in one or more parcels, at public or private sale, at any exchange or
broker’s board or elsewhere, at such price or prices and on such other terms as
the Collateral Agent may deem commercially reasonable, for cash, credit or for
future delivery or otherwise in accordance with applicable law. To the extent
permitted by law, any holder of a Note may, in such event, bid for

 

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the purchase of such Pledged Collateral. Each Pledgor agrees that, to the extent
notice of sale shall be required by law and has not been waived by such Pledgor,
any requirement of reasonable notice shall be met if notice, specifying the
place of any public sale or the time after which any private sale is to be made,
is personally served on or mailed, postage prepaid, to such Pledgor, in
accordance with Section 16 at least ten (10) days before the time of such sale.
The Collateral Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.

(c) Private Sale. Upon the occurrence of an Event of Default and during the
continuation thereof, each Pledgor recognizes that the Collateral Agent may deem
it impracticable to effect a public sale of all or any part of the Pledged
Collateral and that the Collateral Agent may, therefore, determine to make one
or more private sales of any such Pledged Collateral to a restricted group of
purchasers. Each Pledgor acknowledges that any such private sale may be at
prices and on terms less favorable to the seller than the prices and other terms
which might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall be deemed to have been made in a
commercially reasonable manner. Each Pledgor further acknowledges and agrees
that any offer to sell such Pledged Collateral which has been (i) publicly
advertised on a bona fide basis in a newspaper or other publication of general
circulation in the financial community of New York, New York, or (ii) made
privately in the manner described above, shall be deemed to involve a “public
sale” under the UCC, and the Collateral Agent or any holder of the Notes may, in
such event, bid for the purchase of such Pledged Collateral, in each case except
to the extent limited or prohibited by applicable law.

(d) Retention of Pledged Collateral. In addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default and during the
continuation thereof, the Collateral Agent may, after providing the notices
required by Sections 9-620 and 9-621 of the UCC (or any successor sections of
the UCC) or otherwise complying with the notice requirements of applicable law
of the relevant jurisdiction, accept or retain all or any portion of the Pledged
Collateral in satisfaction of the Secured Obligations. Unless and until the
Collateral Agent shall have provided such notices, however, the Collateral Agent
shall not be deemed to have retained any Pledged Collateral in satisfaction of
any Secured Obligations for any reason.

(e) Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Collateral Agent or
any other Secured Party are legally entitled, each applicable Pledgor shall be
liable for the deficiency, together with the costs of collection and the
reasonable fees of any attorneys employed by the Collateral Agent to collect
such deficiency. Any surplus remaining after the full payment and satisfaction
of the Secured Obligations shall be returned to each applicable Pledgor or to
whomsoever a court of competent jurisdiction shall determine to be entitled
thereto.

(f) Other Security. To the extent that any of the Secured Obligations are now or
hereafter secured by property other than the Pledged Collateral (including,
without limitation, real and other personal property owned by any Pledgor), or
by a guarantee, endorsement or property of any other Person, then the Collateral
Agent shall have the right to proceed against such other property, guarantee or
endorsement upon the occurrence and during the continuation of any Event of
Default, and the Collateral Agent shall have the right, in its sole discretion,
to determine which rights, security, Liens, security interests or remedies the
Collateral Agent shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of
them, any of the Collateral Agent’s rights or the Secured Obligations under this
Pledge Agreement or under either Indenture.

 

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(g) Enforcement Not Limited. It is understood and agreed that (i) upon the
occurrence and during the continuation of an “Event of Default” (as defined in
the Original Indenture), the Original Trustee may take and continue, and direct
the Collateral Agent to take and continue, in each case to the extent permitted
by the Original Indenture and applicable law, any enforcement action with
respect to the Note Obligations (as defined in the Original Indenture) and the
Pledged Collateral in such order and manner as it may determine in its sole
discretion and (ii) upon the occurrence and during the continuation of an “Event
of Default” (as defined in the New Indenture), the New Trustee may take and
continue, and direct the Collateral Agent to take and continue, in each case to
the extent permitted by the New Indenture and applicable law, any enforcement
action with respect to the Note Obligations (as defined in the New Indenture)
and the Pledged Collateral in such order and manner as it may determine in its
sole discretion; provided that, (i) the Original Trustee and the New Trustee
shall cooperate in good faith with the Collateral Agent in the orderly
administration of the Pledged Collateral in connection with an exercise of
remedies hereunder or under the applicable Indentures and (ii) all proceeds of
the Pledged Collateral (howsoever realized and whomsoever realizing the same)
shall in any event be applied ratably to the Secured Obligations in accordance
with Section 11 hereof.

10. Rights of the Collateral Agent.

(a) Power of Attorney. Each Pledgor hereby designates and appoints the
Collateral Agent, on behalf of the Secured Parties, and each of its designees or
agents as attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default:

(i) to demand, collect, settle, compromise, adjust and give discharges and
releases concerning the Pledged Collateral of such Pledgor, all as the
Collateral Agent may reasonably determine in respect of the Pledged Collateral;

(ii) to commence and prosecute any actions at any court for the purposes of
collecting any of the Pledged Collateral and enforcing any other right in
respect thereof;

(iii) to defend, settle, adjust or compromise any action, suit or proceeding
brought with respect to the Pledged Collateral and, in connection therewith,
give such discharge or release as the Collateral Agent may deem to be reasonably
appropriate;

(iv) to pay or discharge taxes, Liens, security interests, or other encumbrances
levied or placed on or threatened against the Pledged Collateral;

(v) to direct any parties liable for any payment under any of the Pledged
Collateral to make payment of any and all monies due and to become due
thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct;

(vi) to receive payment of and receipt for any and all monies, claims, and other
amounts due and to become due at any time in respect of or arising out of any of
the Pledged Collateral;

(vii) to sign and endorse any drafts, assignments, verifications, notices and
other documents relating to the Pledged Collateral;

(viii) to execute and deliver and/or file all assignments, conveyances,
statements, financing statements, continuation statements, pledge agreements,
affidavits, notices and other agreements, instruments and documents that the
Collateral Agent may determine necessary in order to perfect and maintain the
security interests and Liens granted in this Pledge Agreement and in order to
fully consummate all of the transactions contemplated herein;

 

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(ix) to exchange any of the Pledged Collateral or other property upon any
merger, consolidation, reorganization, recapitalization or other readjustment of
the obligor thereof and, in connection therewith, deposit any of the Pledged
Collateral with any committee, depository, transfer agent, registrar or other
designated agency upon such terms as the Collateral Agent may determine;

(x) to sign an instrument in writing, sanctioning the transfer of any or all of
the Pledged Collateral into the name of the Collateral Agent or into the name of
any transferee to whom the Pledged Collateral or any part thereof may be sold
pursuant to Section 9 hereof; and

(xi) to do and perform all such other acts and things as the Collateral Agent
may reasonably deem to be necessary, proper or convenient in connection with the
Pledged Collateral.

This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations (other than contingent
indemnity obligations that survive termination of the applicable Indenture
pursuant to the stated terms thereof) remain outstanding. The Collateral Agent
shall be under no duty to exercise or withhold the exercise of any of the
rights, powers, privileges and options expressly or implicitly granted to the
Collateral Agent in this Pledge Agreement, and shall not be liable for any
failure to do so or any delay in doing so. The Collateral Agent shall not be
liable for any act or omission or for any error of judgment or any mistake of
fact or law in its individual capacity or its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Collateral Agent solely
to perfect, protect, preserve and realize upon its security interest in the
Pledged Collateral.

(b) Assignment by the Collateral Agent. The Collateral Agent may from time to
time assign the Secured Obligations or any portion thereof and/or the Pledged
Collateral or any portion thereof to a successor Collateral Agent, and the
assignee shall be entitled to all of the rights and remedies of the Collateral
Agent under this Pledge Agreement in relation thereto.

(c) The Collateral Agent’s Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while being held by
the Collateral Agent hereunder, the Collateral Agent shall have no duty or
liability to preserve rights pertaining thereto, it being understood and agreed
that the Pledgors shall be responsible for preservation of all rights in the
Pledged Collateral, and the Collateral Agent shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or tendering the
surrender of it to any Pledgor. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
which shall be no less than the treatment employed by a reasonable agent in the
industry, it being understood that the Collateral Agent shall not have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities or other matters relating to any Pledged
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.

(d) Distribution Rights in Respect of the Pledged Collateral.

(i) So long as no Event of Default shall have occurred and be continuing, each
Pledgor may receive and retain any and all distributions or interest paid in
respect of the Pledged Collateral of such Pledgor to the extent they are allowed
under the Indentures.

 

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(ii) Upon the occurrence and during the continuation of an Event of Default:

(A) all rights of each Pledgor to receive the distributions and interest
payments which it would otherwise be authorized to receive and retain pursuant
to paragraph (i) of this subsection (d) shall cease and all such rights shall
thereupon be vested in the Collateral Agent, which shall then have the sole
right to receive and hold as Pledged Collateral such distributions and interest
payments; and

(B) all distributions and interest payments which are received by any Pledgor
contrary to the provisions of clause (A) of this subsection (ii) shall be
received in trust for the benefit of the Collateral Agent, shall be segregated
from other property or funds of such Pledgor, and shall be forthwith paid over
to the Collateral Agent as Pledged Collateral in the exact form received, to be
held by the Collateral Agent as Pledged Collateral and as further collateral
security for the Secured Obligations.

(e) Release of Pledged Collateral. The Collateral Agent may release any of the
Pledged Collateral from this Pledge Agreement or may substitute any of the
Pledged Collateral for other Pledged Collateral without altering, varying or
diminishing in any way the force, effect, Lien, pledge or security interest of
this Pledge Agreement as to any Pledged Collateral not expressly released or
substituted, and this Pledge Agreement shall continue as a first priority Lien
on all Pledged Collateral not expressly released or substituted.

11. Application of Proceeds.

(a) After the exercise of remedies by (i) the Collateral Agent, (ii) the
Original Trustee (or the holders of the Original Notes under Section 6.5 of the
Original Indenture), or (iii) the New Trustee (or the holders of the New Notes
under Section 6.5 of the New Indenture), any proceeds of the Pledged Collateral,
when received by the Collateral Agent or any other Secured Party in cash or its
equivalent, will be applied ratably in reduction of the outstanding Secured
Obligations (and, as to the Secured Obligations in respect of the Original
Indenture, in the order of priority set forth in the Original Indenture and, as
to the Secured Obligations in respect of the New Indenture, in the order of
priority set forth in the New Indenture), and each Pledgor irrevocably waives
the right to direct the application of such payments and proceeds and
acknowledges and agrees that the Collateral Agent shall have the continuing and
exclusive right to apply and reapply any and all such proceeds in the Collateral
Agent’s sole discretion, notwithstanding any entry to the contrary upon any of
its books and records.

(b) In the event that the Collateral Agent receives the proceeds of any Pledged
Collateral pursuant to any exercise of remedies hereunder or under the
Indentures or the Security Documents, and any outstanding Secured Obligations
with respect to which such proceeds are to be applied are not yet due and
payable under the applicable Indenture, the Collateral Agent shall hold such
proceeds as additional Pledged Collateral security and will deposit such
proceeds in a segregated non-interest bearing account, to be applied in
reduction of such Secured Obligations as such Secured Obligations become due and
payable in accordance with the terms of the applicable Indenture.

(c) Any Pledged Collateral, including without limitation any such Pledged
Collateral constituting proceeds, that may be received by the Original Trustee
or holders of the Original Notes in violation of this Pledge Agreement or the
Indentures shall be segregated and held in trust and promptly paid over to the
Collateral Agent, for the ratable benefit of the Secured Parties entitled
thereto, in the same form as received, with any necessary endorsements, and the
Original Trustee hereby authorizes the Collateral Agent to make any such
endorsements as agent for the Original Trustee and the holders of the Original
Notes (which authorization, being coupled with an interest, is irrevocable until
such time as this Pledge Agreement is terminated in accordance with its terms).
Any Pledged Collateral, including without limitation any such Pledged Collateral
constituting proceeds, that may be received by the New Trustee or holders of the
New Notes in violation of this Pledge Agreement or the Indentures shall be
segregated and held in trust and promptly paid over to the

 

9

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Collateral Agent, for the ratable benefit of the Secured Parties entitled
thereto, in the same form as received, with any necessary endorsements, and the
New Trustee hereby authorizes the Collateral Agent to make any such endorsements
as agent for the New Trustee and the holders of the New Notes (which
authorization, being coupled with an interest, is irrevocable until such time as
this Pledge Agreement is terminated in accordance with its terms).

12. Costs of Counsel. If at any time hereafter, whether upon the occurrence of
an Event of Default or not, the Collateral Agent employs counsel to prepare or
consider amendments, waivers or consents with respect to this Pledge Agreement,
or to take action or make a response in or with respect to any legal or arbitral
proceeding relating to this Pledge Agreement or relating to the Pledged
Collateral, or to protect the Pledged Collateral or exercise any rights or
remedies under this Pledge Agreement or with respect to the Pledged Collateral,
then each Pledgor agrees to promptly pay the costs and expenses of the
Collateral Agent in accordance with the terms of the Indentures, all of which
costs and expenses shall constitute Secured Obligations hereunder.

13. Continuing Agreement.

(a) This Pledge Agreement shall be a continuing agreement in every respect and
shall remain in full force and effect so long as any of the Secured Obligations
(other than contingent indemnity obligations that survive termination of the
applicable Indenture pursuant to the stated terms thereof) remain outstanding.
Upon such payment and termination, this Pledge Agreement shall be automatically
terminated and the Collateral Agent shall, upon the request and at the expense
of the Pledgors, forthwith release all of the Liens and security interests
granted hereunder and shall deliver all UCC termination statements and/or other
documents prepared by and reasonably requested by Pledgors evidencing such
termination. Upon any sale, lease, transfer or other disposition of any item of
Pledged Collateral of any Pledgor in accordance with the terms of the
Indentures, the Collateral Agent will, at such Pledgor’s expense, execute and
deliver to such Pledgor such documents as such Pledgor shall reasonably request
to evidence the release of such item of Pledged Collateral from the assignment
and security interest granted hereby. Notwithstanding the foregoing, all
releases and indemnities provided hereunder shall survive termination of this
Pledge Agreement.

(b) This Pledge Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of
any of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Collateral Agent or any other Secured Party as a preference,
fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar
law, all as though such payment had not been made; provided that in the event
payment of all or any part of the Secured Obligations is rescinded or must be
restored or returned, all reasonable costs and expenses (including, without
limitation, any reasonable legal fees and disbursements) incurred by the
Collateral Agent or any other Secured Party in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Secured
Obligations.

(c) Upon the payment in full of the Secured Obligations in respect of the
Original Indenture, the Collateral Agent and the Original Trustee, on behalf of
itself and the holders of the Original Notes, shall promptly execute and deliver
such customary release documents and instruments and shall take such further
actions (including any amendments hereto) as the Pledgors shall reasonably
request to evidence the release of the Liens hereunder in favor of the Original
Trustee and the holders of the Original Notes.

(d) Upon the payment in full of the Secured Obligations in respect of the New
Indenture, the Collateral Agent and the New Trustee, on behalf of itself and the
holders of the New Notes, shall promptly execute and deliver such customary
release documents and instruments and shall take such further actions (including
any amendments hereto) as the Pledgors shall reasonably request to evidence the
release of the Liens hereunder in favor of the New Trustee and the holders of
the New Notes.

 

10

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14. Amendments; Waivers; Modifications. This Pledge Agreement and the provisions
hereof may be amended, waived, modified, changed, discharged or terminated only
by a written instrument signed by the parties hereto.

15. Successors in Interest. This Pledge Agreement shall create a continuing
security interest in the Pledged Collateral and shall be binding upon each
Pledgor and its successors and assigns and shall inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent and the other Secured Parties and their respective successors and
permitted assigns; provided, however, that no Pledgor may assign its rights or
delegate its duties hereunder without the prior written consent of the
Collateral Agent.

16. Notices. Any notice, consent, or other communication required or permitted
to be given under this Pledge Agreement to the Collateral Agent or any Pledgor
must be in writing in the English language and delivered in person, by facsimile
or by registered or certified mail, return receipt requested, postage prepaid,
as follows:

 

To Collateral Agent:    The Bank of New York Mellon    101 Barclay Street – 4
East    New York, NY 10286    Fax No.: 212-815-5802 (or 5803)    Attention:
Global Structured Finance To any Pledgor:    c/o Transmeridian Exploration
Incorporated    5847 San Felipe, Suite 4300    Houston, Texas 77057   
Telephone: 713-458-1100    Fax No.: 713-781-6593    Attention: Chief Financial
Officer with a copy to:    Akin Gump Strauss Hauer & Feld LLP    1111 Louisiana
Street, 44th Floor    Houston, Texas 77002-5200    Telephone: 713-220-5800   
Fax No.: 713-236-0822    Attention: James L. Rice III

Any such notice, consent, or other communication shall be deemed to have been
given when delivered in person, sent by confirmed fax or, if given by mail, five
(5) days after such communication is deposited in the mail, certified or
registered with return receipt requested.

17. Counterparts. This Pledge Agreement and any Pledge Agreement Supplement may
be executed in counterparts, each of which where so executed and delivered shall
be an original, but all of which shall constitute one and the same instrument.
It shall not be necessary in making proof of this Pledge Agreement or any Pledge
Agreement Supplement to produce or account for more than one such counterpart.
Delivery of executed counterparts of this Pledge Agreement or any Pledge
Agreement Supplement by telecopy or in “pdf” or similar format by electronic
mail shall be effective as an original and shall constitute a representation
that an original shall be delivered upon the request of the Collateral Agent.

18. Headings. The headings of the sections and subsections hereof are provided
for convenience only and shall not in any way affect the meaning, construction
or interpretation of any provision of this Pledge Agreement.

 

11

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19. Governing Law. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

20. Severability. If any provision of this Pledge Agreement is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

21. Entirety. This Pledge Agreement and the Indentures represent the entire
agreement of the parties hereto and thereto with respect to the subject matter
herein, and supersede all prior agreements and understandings, oral or written,
if any, including any correspondence relating to this Pledge Agreement or either
Indenture or the transactions contemplated herein and therein; provided that the
Original Trustee shall not be charged with knowledge of any provisions of the
New Indenture or any “Security Documents” (as defined in the New Indenture) and
the New Trustee shall not be charged with knowledge of any provisions of the
Original Indenture or any “Security Documents” (as defined in the Original
Indenture).

22. Rights of Note Holders. All rights of the Collateral Agent hereunder, if not
exercised by the Collateral Agent, may be exercised by the Original Trustee or
(subject to the terms of Section 6.5 of the Original Indenture) the holders of
the Original Notes or by the New Trustee or (subject to the terms of Section 6.5
of the New Indenture) the holders of the New Notes, subject in any such case to
the proviso to Section 9(g) hereof.

23. Additional Pledgors. Upon the execution and delivery by any Person of a
pledge agreement supplement in substantially the form of Exhibit A hereto (each
a “Pledge Agreement Supplement”), such Person shall be referred to as an
“Additional Pledgor” and shall be and become a Pledgor hereunder, and each
reference in this Pledge Agreement to a “Pledgor” shall also mean and be a
reference to such Additional Pledgor, each reference in this Pledge Agreement
and the Indentures to the “Collateral” or the “Pledged Collateral” shall also
mean and be a reference to the Pledged Collateral granted by such Additional
Pledgor and each reference in this Pledge Agreement to a Schedule shall also
mean and be a reference to the schedules attached to such Pledge Agreement
Supplement.

24. Effective Time. This Pledge Agreement will not become effective until
(i) this Pledge Agreement has been executed and delivered by the parties hereto
and (ii) the Original Notes are accepted for payment and exchange in the
exchange offer described in the Offering Memorandum and Consent Solicitation
Statement dated July 23, 2008, as supplemented by the supplement thereto dated
September 23, 2008.

[Remainder of Page Intentionally Blank]

 

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Each of the parties hereto has caused a counterpart of this Pledge Agreement to
be duly executed and delivered as of the date first above written.

 

PLEDGOR:

BRAMEX MANAGEMENT, INC.,

a British Virgin Islands company

By:   /s/ Earl W. McNiel Name:   Earl W. McNiel Title:   Vice President PLEDGOR:

TRANSMERIDIAN (KAZAKHSTAN) INCORPORATED,

a British Virgin Islands company

By:   /s/ Earl W. McNiel Name:   Earl W. McNiel Title:   Vice President PLEDGOR:

JSC CASPI NEFT TME,

a Kazakhstan joint stock company

By:   /s/ Anatole Kunevich Name:   Anatole Kunevich Title:   President PLEDGOR:

TMEI OPERATING INC.,

a Texas corporation

By:   /s/ Earl W. McNiel Name:   Earl W. McNiel Title:   Vice President

[Signature Page to Subsidiary Pledge Agreement]

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Accepted and agreed to as of the date first above written. COLLATERAL AGENT: THE
BANK OF NEW YORK MELLON By:   /s/ Vanessa Mack Name:   Vanessa Mack Title:  
Vice President ORIGINAL TRUSTEE: THE BANK OF NEW YORK MELLON By:   /s/ Vanessa
Mack Name:   Vanessa Mack Title:   Vice President NEW TRUSTEE: THE BANK OF NEW
YORK MELLON By:   /s/ Vanessa Mack Name:   Vanessa Mack Title:   Vice President

[Signature Page to Subsidiary Pledge Agreement]

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Schedule 2(a)

None.

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Exhibit A

FORM OF PLEDGE AGREEMENT SUPPLEMENT

[Date of Pledge Agreement Supplement]

The Bank of New York Mellon, as the Collateral Agent for the

Secured Parties referred to in the Pledge Agreement referred to below

The Bank of New York Mellon

101 Barclay Street – 4 East

New York, NY 10286

Attention: Global Structured Finance

[Name of Borrower]

Ladies and Gentlemen:

Reference is made to (a) the Indenture, dated as of December 12, 2005, as
amended by the First, Second and Third Supplemental Indentures thereto, dated as
of December 22, 2005, May 24, 2006 and October 24, 2008, respectively, by and
among Transmeridian Exploration Inc. (“Issuer”), The Bank of New York Mellon, as
Original Trustee, and the Guarantors from time to time party thereto (as further
amended, restated, supplemented or otherwise modified from time to time, the
“Original Indenture”), (b) the Indenture, dated as of October 24, 2008, by and
among Issuer, The Bank of New York Mellon, as the New Trustee, and the
Guarantors from time to time party thereto (as amended, restated, supplemented
or otherwise modified from time to time, the “New Indenture” and, together with
the Original Indenture, the “Indentures”) and (c) the Pledge Agreement, dated as
of October 24, 2008, by and among the Pledgors from time to time party thereto,
The Bank of New York Mellon, as Original Trustee, The Bank of New York Mellon,
as New Trustee, and The Bank of New York Mellon, as Collateral Agent for the
Secured Parties (as amended, restated, supplemented or otherwise modified from
time to time, the “Pledge Agreement”). Terms defined in the Pledge Agreement and
not otherwise defined herein are used herein as defined in the Pledge Agreement.

1. Grant of Security. The undersigned hereby pledges and grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a continuing
security interest in any and all right, title and interest of the undersigned in
and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the undersigned’s “Collateral”): all Pledged
Debt (including, without limitation, the indebtedness set forth on Part I of
Schedule I hereto) and all proceeds and products of the foregoing, however and
whenever acquired and in whatever form.

2. Security for Obligations. The grant of a security interest in the Collateral
by the undersigned under this Pledge Agreement Supplement and the Pledge
Agreement secures the payment of all Secured Obligations of the undersigned now
or hereafter existing under or in respect of the Indentures, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise. Without limiting the generality
of the foregoing, this Pledge Agreement Supplement and the Pledge Agreement
secure the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by the undersigned to any Secured Party under
the Indentures but for the fact that such Secured Obligations are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Pledgor.

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3. Representations and Warranties. The undersigned hereby makes each
representation and warranty set forth in Section 5 of the Pledge Agreement with
respect to itself and the Collateral granted by it.

4. Obligations Under the Pledge Agreement. The undersigned hereby agrees, as of
the date first above written, to be bound as a Pledgor by all of the terms and
provisions of the Pledge Agreement to the same extent as each of the other
Pledgors. The undersigned further agrees, as of the date first above written,
that each reference in the Pledge Agreement to an “Additional Pledgor” or a
“Pledgor” shall also mean and be a reference to the undersigned, that each
reference in the Pledge Agreement and the Indentures to the “Pledged Collateral”
or the “Collateral”, or any part thereof, shall also mean and be a reference to
the undersigned’s Collateral or part thereof, as the case may be, and that each
reference in the Pledge Agreement to a Schedule shall also mean and be a
reference to the schedules attached hereto.

5. Governing Law. This Pledge Agreement Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

Very truly yours, [NAME OF ADDITIONAL PLEDGOR] By:       Title:    
Address for notices:     c/o Transmeridian Exploration Incorporated   5847 San
Felipe, Suite 4300   Houston, Texas 77057   Telephone: 713-458-1100   Fax No.:
713-781-6593   Attention: Chief Financial Officer