EXHIBIT 4.4

STOCK OPTION PLAN
  Effective as of May 29, 2003

The Board of Directors of TransGlobe Energy Corporation ("TransGlobe"
  or the "Corporation") has established a stock option plan (the "Plan")
  governing the issuance of stock options (the "Stock Options") to directors,
  officers and employees of the Corporation or subsidiaries of the Corporation
  and persons or corporations who provide services to the Corporation or its subsidiaries
  on an on-going basis, or have provided or are expected to provide a service
  or services of considerable value to the Corporation or its subsidiaries.

The terms and conditions of the Plan for issuance of Stock Options are as follows:

|1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Purposes               
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|The principal purposes of the Plan are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (a)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (b)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (c)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (d)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Shares subject to Plan.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|Subject to adjustment under
        the provisions of Section 13 of the Plan, the number of common shares
        of the Corporation ("Common Shares") reserved from time to time
        for issuance to Eligible Optionees (as hereinafter defined) pursuant to
        Stock Options under the Plan subject to the receipt of the approval of
        the principal stock exchange on which the Common Shares are listed (the
        "Exchange") and the approval of the shareholders of the Corporation,
        shall be as set out in the attached Schedule "A". In addition,
        unless otherwise approved by the Exchange and the shareholders of the
        Corporation, the number of Common Shares reserved for issuance upon the
        exercise of Stock Options shall not at any time exceed 10% of the aggregate
        number of issued and outstanding Common Shares of the Corporation ("Total
        Common Shares") and:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (a)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (b)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (c)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                        
|If any option granted under
        the Plan expires, terminates or is cancelled without having been exercised
        in full, the number of Common Shares unpurchased as to which such option
        was not exercised will be available for future grants within the limits
        set forth in Schedule "A" attached.
      No fractional Common Shares will be issued under this
        Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



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|3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Eligibility                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|Stock Options shall be granted only to persons,
      firms or corporations ("Eligible Optionees"):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (a)                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (b)                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (c)                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|Stock Options may also be
        granted to corporations which are controlled by an Eligible Optionee.
        Unless the context otherwise requires, the term Eligible Optionee as used
        herein, shall include any such corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Granting of Stock Options     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|The Board of Directors of
        the Corporation may from time to time grant Stock Options to Eligible
        Optionees. At the time a Stock Option is granted, the Board of Directors
        shall determine the number of Common Shares of the Corporation purchasable
        under the Stock Option, the date when the Stock Option is to become effective
        and, subject to the other provisions of this Plan, all other terms and
        conditions of the Stock Option. An Eligible Optionee may hold more than
        one Stock Option at any time; however, no one Eligible Optionee can receive
        Stock Options entitling the Eligible Optionee to purchase more than 5%
        of the outstanding Common Shares of the Corporation, calculated on an
        undiluted basis. Any Stock Options granted to a corporation referred to
        in Section 3 hereof shall be included in the calculation of the Stock
        Options held by an Eligible Optionee.                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Exercise Price                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|The exercise price of each
        Stock Option shall be determined in the discretion of the Board of Directors
        of the Corporation at the time of the granting of the Stock Option, provided
        that the exercise price shall not be lower than the "Market Price". "Market
        Price" shall mean the closing price of the Common Shares on the Exchange
        on the day immediately prior to the date the Stock Option is granted or,
        if there are no trades of Common Shares of the Corporation on the Exchange
        on such day, the average of the bid price and ask price of the Common
        Shares on the day immediately prior to the date the Stock Option is granted;
        provided that in the event the Common Shares are not listed on the Exchange
        but are listed on another stock exchange or stock exchanges, the foregoing
        references to the Toronto Stock Exchange shall be deemed to be references
        to such other stock exchange, or if more than one, to such one as shall
        be designated by the Board of Directors of the Corporation and to the
        extent that the Common Shares of the Corporation are not listed on any
        exchange, the Market Price shall be such price as is determined by the
        Board of Directors, in good faith.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Term and Conditions or Options
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|The following general provisions
        shall apply to all Stock Options granted by the Corporation (subject to
        such additional limitations as may be determined by the Board and set
        forth in the definitive option agreement between the Corporation and the
        Eligible Optionee):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (a)                           



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|                                                                                                                                      | (b) | Except in the case of options
        granted to Investors as such, 50% of the options granted to each optionee
        under the Plan will become vested and exercisable on the six-month anniversary
        of the grant date, or at such other time as may be established by the
        Board at the time of the grant, and the balance on the first anniversary
        of the grant date or such other time or times as determined by the Board
        at the time of grant.                                                                                                                                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------- | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (c) | Any exercise of an option
        must be in writing, signed by the proper person and delivered or mailed
        to TransGlobe, accompanied by any documents required by the Board and
        payment in full as provided below for the number of Common Shares for
        which the option is exercised.                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (d) | An optionee will have no
        rights as a shareholder of TransGlobe with respect to any Common Shares
        covered by any option until such time as and to the extent only that such
        option has been exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (e) | If any optionee ceases to
        be eligible for a grant of options under this plan for any reason (a "Termination"),
        except the death of an optionee or by reason of retirement pursuant to
        an established retirement policy of the Board and except in the case of
        options granted to Investors as such, all options granted to the optionee
        under the Plan and then held by the optionee will, to the extent such
        options were exercisable immediately prior to Termination, continue to
        be exercisable by the optionee for a period of 30 days following Termination
        or until the expiration date of the option if earlier.
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (f) | If Termination is by reason of retirement
        pursuant to an established retirement policy of the Board, all options
        held by the retiring optionee will become vested and exercisable, to the
        extent not already vested and exercisable, immediately prior to retirement,
        and they continue to be exercisable until their original expiration date.                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (g) | Except in the case of options
        granted to Investors as such, in the event of the death of an optionee
        all options granted to the optionee under the Plan and held by the optionee
        immediately before death will, to the extent such options were exercisable
        at that time, continue to be exercisable by the legal representative of
        the optionee for a period of 6 months following the death of the optionee
        or until the expiration date of the option if earlier. After such time,
        the options will terminate.                                                                                                               
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (h) | The Corporation's retirement
        policy for directors is that if a director either resigns or agrees not
        to be re-nominated by management for election at the next annual general
        meeting, then so long as the director has served as director of the Corporation
        or of one of its subsidiaries for at least two years, then such director's
        Stock Options shall not terminate thirty days following the time such
        director ceases to be a director but, rather, shall continue until the
        earlier of the expiration date of the option and one year following the
        time such director ceases to be a director.               
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|In addition, but limiting the generality of the
      foregoing or the discretion of the Board, the Board of Directors may determine:
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (a) | that a Stock Option is exercisable only
        during the term of employment of the Eligible Optionee receiving it or
        during such term and for a limited period of time after termination of
        employment;                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (b) | that a Stock Option can be exercisable for a period of time
      or for its remaining term after the death, disability or incapacity of an
      Eligible Optionee;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (c) | that only a portion of a Stock Option is exercisable in a
      specified period;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                      |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                      | (d) | that the unexercised portion of a Stock
        Option is "cumulative" so that any portion of a Stock Option exercisable
        (but not exercised) in a specified period may be exercised in subsequent
        periods until the Stock Option terminates; or                                                                                                                                                                                                                                                                                                                                                                                                                         



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (e)                                             | that a Stock Option may provide for early
        exercise and/or termination or other adjustment in the event of a death
        of a person;                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                 |                                                                                                                                                                                                                                                                                                                                                                                             
|and other appropriate terms
        in other circumstances, such as if the Corporation shall resolve to sell
        all or substantially all of its assets, to liquidate or dissolve, or to
        merge, amalgamate, consolidate or be absorbed with or into any other corporation,
        if a take-over bid is made for Common Shares of the Corporation, or if
        any change of control of the Corporation occurs, subject to the provisions
        of Section 12 with respect to Unsolicited Offers (as hereinafter defined).
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                 |                                                                                                                                                                                                                                                                                                                                                                                             
|7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Additional Provisions Concerning U.S. Optionees
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                 |                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (a)                                             | Options granted to an Employee subject
        to personal income tax under the United States Internal Revenue Code (the
        "Code"), (such Employee referred to in this Section as a "U.S.
        Employee") will be Incentive Stock Options as that term is defined
        in the Code.                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                 |                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (b)                                             | Options granted to an optionee who is
        subject to personal income tax under the Code who is not an Employee will
        not be Incentive Stock Options, and any written agreement with such an
        optionee for a grant of options under the Plan will state that the options
        granted thereunder are Non-Qualifying Stock Options for U. S. income tax
        purposes.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                 |                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (c)                                             | In addition to the terms and conditions of options granted
      under the Plan listed in Section 6 above, options granted to a U.S., Employee
      will be subject to the following terms and conditions:                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                 |                                                                                                                                                                                                                                                                                                                                                                                             

| |     | (i)                                                                                                                                                                                                                                                                                                                                                                     | options will be designated
        in the written option agreement between the U.S. Employee and TransGlobe
        as Incentive Stock Options; and                                                                                                                                                                                                                                                              
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                    | if the U.S. Employee is
        directly or indirectly the beneficial owner of 10% or more of the combined
        voting power of all classes of shares in the capital of TransGlobe or
        a Subsidiary at the time an option is granted to the U.S. Employee, the
        exercise price of such option will be equal to at least 110% of the Market
        Price of TransGlobe's Common Shares.         
| |     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (d) | If a U.S. Employee is granted
        options under the Plan, the written option agreement with the U.S. Employee
        will contain acknowledgements by the U.S. Employee that:                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                     | notwithstanding a designation
        of options granted to a U.S. Employee as Incentive Stock Options, to the
        extent that the aggregate Market Price of the Common Shares subject to
        options which are exercisable for the first time by any U.S. Employee
        during any calendar year exceeds US $100,000, such excess options will
        not be treated as Incentive Stock Options; and
| |     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                    | in order for options granted under the Plan to
      be treated as Incentive Stock Options:                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                         | (A)                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                         | (B)                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (e) | The acknowledgement of
        the U. S. Employee in (d)(ii)B above does not confer upon the U.S. Employee
        any right with respect to continuation of his employment relationship
        with TransGlobe, nor will it interfere in any way with TransGlobe's right
        to terminate his employment relationship at any time, with or without
        cause.
| |     |                                                                                                                                                                                                                                                                                                                                                                        

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8.          Non-Assignability

Stock Options shall not be assignable or transferable by the
  Eligible Optionees, except for a limited right of assignment to allow the exercise
  of Stock Options by an Eligible Optionee's legal representative in the event
  of death or incapacity, subject to the terms upon which the Stock Option is
  granted.

9.          Payment of Exercise
  Price

Except as provided in Section 10, all Common Shares issued
  pursuant to the exercise of a Stock Option shall be paid for in full by cash,
  bank draft or money order at the time of exercise of the Stock Option and prior
  to the issue of the shares. All Common Shares of the Corporation issued in accordance
  with the foregoing shall be issued as fully paid and non-assessable Common Shares.

10.         Surrender of Stock Options
  in Lieu of Exercise

Where the Common Shares are listed and posted for trading
  on the Toronto Stock Exchange, the Board of Directors may from time to time
  in its sole discretion, permit Stock Options to be surrendered, unexercised
  to the Corporation in consideration of the receipt by the holder of such Stock
  Options of an amount (the "Settlement Amount") equal to the excess, if
  any, of the aggregate fair market value of the shares (based on the Market Price
  (as hereinafter defined) of the Common Shares on the Toronto Stock Exchange
  on the trading day immediately preceding the Surrender Date as herein defined)
  able to be purchased pursuant to the vested and exercisable portion of such
  Stock Options on the date of surrender (the "Surrender Date"), over the
  aggregate Exercise Price for those Common Shares pursuant to those Stock Options.
  The Settlement Amount is payable in cash, Common Shares or a combination thereof,
  as the Board of Directors may from time to time in its discretion determine.
  For greater certainty, those Common Shares underlying the unexercised Stock
  Options that are the subject of retirement in consideration for a Settlement
  Amount, are deemed to be included in the definition of Total Common Shares for
  which Stock Options may be granted under the Plan.

11.         Non-Exercise

If any Stock Option granted pursuant to the Plan is not exercised
  for any reason whatsoever, the shares reserved and authorized for issuance pursuant
  to such Stock Option shall revert to the Plan and shall be available for other
  Stock Options, however, at no time shall there by outstanding Stock Options
  exceeding in the aggregate the number of Common Shares of the Corporation reserved
  for issuance pursuant to Stock Options under this Plan.

12.         Change of Control

Notwithstanding the terms of this Plan, where an Unsolicited
  Offer for the Common Shares is made, all unexercised and unvested outstanding
  Stock Options granted under the Plan shall vest and become immediately exercisable
  in respect of any and all Common Shares for which the holder of Stock Options
  has not exercised the Stock Options (notwithstanding that an agreement relating
  to the grant of Stock Options states that those Stock Options are exercisable
  only during a later period or year).

For the purposes hereof, an "Unsolicited Offer" means an Offer
  in respect of which neither the Board of Directors of the Corporation nor management
  of the Corporation solicited, sought out, or otherwise arranged for the offeror
  party to make such Offer. For the purposes hereof, "Offer" means an offer made
  generally to the holders of Common Shares in one or more jurisdictions to acquire,
  directly or indirectly, the Common Shares and which is in the nature of a "takeover
  bid" as defined in the Securities Act (Alberta) and, where the Common
  Shares are listed and posted for trading on a stock exchange, not exempt from
  the formal bid requirements of the Securities Act (Alberta). Any Stock
  Option remaining unexercised following the earlier of the withdrawal of such
  Unsolicited Offer and the expiry of such Unsolicited Offer in accordance with
  its terms again becomes subject to the original terms of the agreement relating
  to the grant of Stock Options as if the Unsolicited Offer had not been made.

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|13.           | Adjustment in Certain Circumstances
|------------- | -----------------------------------
|              |                                    
|In the event:
|              |                                    
|              | (a)                                
|              |                                    
|              | (b)                                
|              |                                    
|              | (c)                                
|              |                                    
|              | (d)                                

then in any such case the Board of Directors of the Corporation
  may make such adjustment in the Plan and in the Stock Options granted under
  the Plan as the Board of Directors of the Corporation may in its sole discretion
  deem appropriate to prevent substantial dilution or enlargement of the rights
  granted to, or available for, holders of Stock Options, and such adjustments
  may be included in the Stock Options.

14.         Expenses

All expenses in connection with the Plan shall be borne by
  the Corporation.

15.         Compliance with Laws

The Corporation shall not be obliged to issue any shares upon
  exercise of Stock Options if the issue would violate any law or regulation or
  any rule of any governmental authority or stock exchange. The Corporation shall
  not be required to issue, register or qualify for resale any shares issuable
  upon exercise of Stock Options pursuant to the provisions of a prospectus or
  similar document, provided that the Corporation shall notify The Toronto Stock
  Exchange or any other stock exchange on which the shares of the Corporation
  are listed and any other appropriate regulatory bodies in Canada of the existence
  of the Plan and the issuance and exercise of Stock Options.

Transactions under the plan are intended to comply with all
  relevant provisions of law, including, without limitation, the United States
  Securities Act of 1933 and the regulations thereunder, all applicable conditions
  of Rule 16b-3 or its successors under Section 16 of the United States Securities
  Exchange Act of 1934, the Securities Act and the regulations thereunder of the
  province in which TransGlobe is resident and the provinces in which optionees
  may reside, and the requirements of The Toronto Stock Exchange, the Nasdaq Stock
  Market, Inc. ("NASDAQ"), and any other stock exchange or market upon which the
  Common Shares may then be listed or quoted (together, the "Applicable Laws").
  To the extent any provision of the Plan or action by the Board fails to so comply,
  it will be deemed null and void, to the extent permitted by law and deemed advisable
  by the Board.

TransGlobe will not be obligated to issue and deliver any
  Common Shares pursuant to the exercise of any option until, in the opinion of
  TransGlobe's counsel, all Applicable Laws have been complied with. Without limiting
  the generality of the foregoing, TransGlobe may require from the person exercising
  the option such investment representation, undertaking or agreement, if any,
  as counsel for TransGlobe may consider necessary in order to comply with the
  Applicable Laws.

16.         Form of Stock Option Agreement

All Stock Options shall be issued by the Corporation in a
  form which meets the general requirements and conditions set forth in this Plan
  and the requirements of the Exchange or such other exchange on which the shares
  of the Corporation are listed from time to time.

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17.         Amendments and Termination
  of Plan

The Corporation shall retain the right to amend from time
  to time or to terminate the terms and conditions of the Plan by resolution of
  the Board of Directors of the Corporation. Any amendments shall be subject to
  the prior consent of any applicable regulatory bodies, including any stock exchange
  on which the Corporation's shares are listed. Amendments and termination shall
  take effect only with respect to Stock Options issued thereafter, provided that
  they may apply to any Stock Options previously issued with the mutual consent
  of the Corporation and the Eligible Optionees holding such Stock Options.

18.         Administration of the
  Plan and Regulation

The Plan will be administered by the Board of Directors of
  TransGlobe (the "Board"). The Board may delegate the administration of
  the Plan to a committee, in which case all references to the "Board" hereunder
  will refer to the committee, except only the Board of Directors may allot shares
  and specify the price at which they are to be issued. The Board will have authority,
  consistent with the Plan:

| | (a) | to issue options priced
        in accordance with the formula set forth in this Plan;                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | to prescribe the form of
        certificate evidencing grants of options to Canadian optionees and the
        form of agreement evidencing grants of options to US optionees and the
        form of certificate evidencing grants of options to Investors (as defined
        hereafter) as such (which may be in the form of a warrant) and any other
        instruments required under the Plan and to change such forms from time
        to time;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (c) | to adopt, amend and rescind
        rules and regulations for the administration of the Plan, provided however,
        that except as specified in Section 13, no amendment which would increase
        the maximum number of Common Shares for which options may be granted will
        be made by the Board without the approval of shareholders and regulatory
        authorities under Applicable Laws; and                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | to interpret and administer
        the Plan and to decide all questions and settle all controversies that
        may arise in connection with the Plan, all of which decisions of the Board
        will be final and conclusive.                                                                                                                                                                                                                      

19.         Tax Consequences of Plan

Notwithstanding Section 7, TransGlobe does not assume responsibility
  for the income or other tax consequences for optionees or persons eligible under
  the Plan and they are advised to consult with their own tax advisors.

20.         Applicable Law

This Plan shall be governed by and construed in accordance
  with the laws in force in the Province of Alberta.

21.         Stock Exchange

To the extent applicable, the issuance of any shares of the
  Corporation pursuant to Stock Options issued pursuant to this Plan is subject
  to approval of the Plan by the Toronto Stock Exchange or other stock exchange
  upon which the Corporation's Common Shares are listed, and the Plan shall be
  subject to the ongoing requirements of such exchange.

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SCHEDULE "A"





The maximum number of Common Shares reserved for issuance
  under the Plan (and any prior plans) is revised from time to time to increase
  the maximum number of Common Shares reserved for issuance, as Common Shares
  are issued on exercise of outstanding options, and, effective May 29, 2003,
  the maximum number of Common Shares reserved for issuance under the Plan is
  an aggregate of 7,103,580 Common Shares.







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