UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 2, 2014
TRANSATLANTIC PETROLEUM LTD.
(Exact name of registrant as specified in its charter)
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Bermuda |
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001-34574 |
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None |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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16803 Dallas Parkway
Addison, Texas |
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75001 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (214) 220-4323
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 |
Regulation FD Disclosure |
On September 2, 2014, TransAtlantic Petroleum Ltd. (the
Company) entered into an arrangement agreement (the Arrangement Agreement) to acquire Stream Oil & Gas Ltd. A copy of the press release announcing the Companys entry into the Arrangement Agreement is attached
as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
On September 2, 2014, the Company posted an investor
presentation to its website at www.transatlanticpetroleum.com. A copy of the investor presentation is attached as Exhibit 99.2 to this Current Report on Form 8-K.
The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not
be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), nor shall it be deemed incorporated by reference in any filing of the Company under the Securities Act
of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Current Report in such filing.
Item 9.01 |
Financial Statements and Exhibits. |
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Exhibit No. |
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Description of Exhibit |
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99.1 |
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Press release, dated September 2, 2014, issued by TransAtlantic Petroleum Ltd. |
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99.2 |
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TransAtlantic Petroleum Ltd. Investor Presentation dated September 2, 2014. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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Date: September 3, 2014 |
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TRANSATLANTIC PETROLEUM LTD. |
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By: |
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/s/ Matthew W. McCann |
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Matthew W. McCann |
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General Counsel and Corporate Secretary |
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EXHIBIT INDEX
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Exhibit No. |
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Description of Exhibit |
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99.1 |
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Press release, dated September 2, 2014, issued by TransAtlantic Petroleum Ltd. |
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99.2 |
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TransAtlantic Petroleum Ltd. Investor Presentation dated September 2, 2014. |
- 4 -
Exhibit 99.1
TransAtlantic Petroleum Announces Agreement to Acquire Stream Oil & Gas Ltd.
For US$41.2 Million in Stock
Hamilton,
Bermuda (September 2, 2014) TransAtlantic Petroleum Ltd. (NYSE-MKT: TAT) (TSX: TNP) (the Company or TransAtlantic) today announced that it has entered into an arrangement agreement to acquire Stream Oil &
Gas Ltd. (Stream) (TSX Venture: SKO) for US$41.2 million in common shares of TransAtlantic. The Boards of Directors of both companies have approved the transaction. The acquisition is expected to close in November 2014.
Stream is a publicly traded oil and gas company based in Calgary, Alberta. It owns 100% interests in three oil fields, one gas field and one exploration
license in Albania, which encompass approximately 75,000 net acres. For the three months ended May 31, 2014, Stream had gross production of 1,522 BO per day and net production of 973 BO per day. As of November 30, 2013, Stream reported net
proved reserves of 20.9 MMBOE under Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.
We are
adding a third source of production and cash flow growth to our company, commented N. Malone Mitchell 3rd, Chairman and CEO of TransAtlantic. This acquisition will provide us with
geologic and geographic diversification. The properties contain three fractured carbonate reservoirs with exploitation potential similar to our Şelmo field in Turkey, with a large volume of known oil in place. We plan to analyze and streamline
the oil field operations before implementing a growth plan with which we expect to predictably increase production.
The agreement provides that
TransAtlantic would acquire 100% of Streams 66,887,801 common shares for US$41.2 million of TransAtlantic common shares. On a per share basis, each common share of Stream would be exchanged for 0.05657 common shares of TransAtlantic, which
values each common share of Stream at C$0.67 per share based on TransAtlantics 10-day volume weighted average price (VWAP) of US$10.89 as of market close on Friday, August 29, 2014. The C$0.67 per share value represents a 43%
premium to Streams 10-day VWAP of C$0.47 as of market close on Friday, August 29, 2014. The agreement provides that C$0.57 per Stream common share, or 0.04812 common shares of TransAtlantic, would be issued at closing and an additional
C$0.10 per Stream common share, or 0.00845 common shares of TransAtlantic, would be issued in the event that certain amendments to Streams Albanian license agreements are received within nine months of the closing date. The transaction is
subject to the completion of due diligence by TransAtlantic to its sole satisfaction on or before September 26, 2014 and the receipt of corporate, government, regulatory and court approvals, among other customary closing conditions.
1
The acquisition will be implemented by way of a court-approved plan of arrangement under the Business
Corporations Act (British Columbia). The issuance of the common shares of TransAtlantic in the acquisition will be exempt from registration under the U.S. Securities Act of 1933. The acquisition is conditioned upon, among other things, the
affirmative vote of at least 66 2/3% of the Stream common shares that are voted at the shareholder meeting that will be held to consider the acquisition. Stream has agreed that it will not solicit or initiate discussions regarding any other business
combination or sale of material assets. Stream has also granted TransAtlantic a right to match any competing unsolicited proposals. The arrangement agreement contains, among other things, a termination fee of US$2.5 million payable to TransAtlantic
in certain circumstances, including if Stream accepts a superior proposal from a third party. Full details of the acquisition will be included in a management information circular to be mailed to Stream shareholders. Copies of the arrangement
agreement and the management information circular will be available under Streams profile at www.sedar.com.
The Board of Directors of Stream
has unanimously approved the acquisition and recommends that Stream shareholders vote in favor of the acquisition.
Troy Valuations Inc. delivered an
opinion to Streams Board of Directors to the effect that the purchase price for the Stream shares is fair, from a financial point of view, to the Stream shareholders.
Certain of the directors and officers of Stream and certain other shareholders representing approximately 42.7% of Streams outstanding common shares,
have entered into voting and support agreements pursuant to which they have agreed to vote their Stream shares in favor of the acquisition.
Stream
Acquisition Conference Call
TransAtlantic has scheduled a conference call for Wednesday, September 3, 2014 at 7:30 a.m. Central (8:30 a.m.
Eastern) to discuss the Stream acquisition.
Investors who would like to participate in the conference call should dial (877) 878-2762 or
(678) 809-1005 approximately 10 minutes prior to the scheduled start time and ask for the TransAtlantic conference call. The conference ID is 97253578. A replay will be available through September 10, 2014 and may be accessed by dialing
(855) 859-2056 or (404) 537-3406. The conference ID is 97253578.
An enhanced webcast of the conference call and replay will be available
through the Companys website at www.transatlanticpetroleum.com. To access the live webcast and replay, click on Investors, select Events & Presentations, and click on Listen to webcast under the
event listing. The webcast requires iOS, Microsoft Windows Media Player or RealOne Player.
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About TransAtlantic Petroleum Ltd.
TransAtlantic Petroleum Ltd. is an international oil and natural gas company engaged in the acquisition, exploration, development and production of oil and
natural gas. The Company holds interests in developed and undeveloped properties in Turkey and Bulgaria.
(NO STOCK EXCHANGE, SECURITIES COMMISSION OR
OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.)
Forward-Looking Statements
This news release contains statements concerning the timing of the closing of the transaction and the timing and receipt of applicable shareholder, court and
third party approvals, the completion to its sole satisfaction of the Companys due diligence investigation of Stream, as well as other expectations, plans, goals, objectives, assumptions or information about future events, conditions, results
of operations or performance that may constitute forward-looking statements or information under applicable securities legislation. Such forward-looking statements or information are based on a number of assumptions, which may prove to be incorrect.
In addition to other assumptions identified in this news release, assumptions have been made regarding, among other things, the completion of the Companys due diligence review, the timing of the closing of the acquisition and the receipt of
applicable shareholder, court and third party approvals.
Although the Company believes that the expectations reflected in such forward-looking statements
or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on
current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements or
information. These risks and uncertainties include the risks that the conditions to the acquisition will not be satisfied or the acquisition will not close on the terms expected.
The forward-looking statements or information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update
publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Oil and gas reserves reported under NI 51-101 may not be equivalent to net proved reserves disclosed under regulations of the U.S. Securities and Exchange
Commission.
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Note on BOE
Barrels of oil equivalent, or BOE, are derived by the Company by converting natural gas to oil in the ratio of six thousand cubic feet (MCF) of
natural gas to one barrel of oil. A BOE conversion ratio of 6 MCF to 1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. BOE may be
misleading, particularly if used in isolation.
Contact:
Taylor Beach
Director of Investor Relations
(214) 265-4746
TransAtlantic Petroleum Ltd.
16803 Dallas Parkway
Addison, Texas 75001
http://www.transatlanticpetroleum.com
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September 2, 2014
September 2, 2014
ALBANIA ACQUISITION
ARRANGEMENT AGREEMENT TO ACQUIRE STREAM OIL & GAS LTD.
ALBANIA ACQUISITION
ARRANGEMENT AGREEMENT TO ACQUIRE STREAM OIL & GAS LTD.
Exhibit 99.2 |
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FORWARD
LOOKING STATEMENTS 2
Cover Photo: Gorisht field in Albania.
Outlooks, projections, estimates, targets and business plans in this presentation or any
related subsequent discussions are forward-looking statements. Actual future
results, including TransAtlantic Petroleum Ltd.s or Stream Oil & Gas Ltd.s production growth and mix; financial results; the amount and mix of capital
expenditures; resource additions and recoveries; finding and development costs; project
and drilling plans, timing, costs, and capacities; revenue enhancements and cost
efficiencies; industry margins; margin enhancements and integration benefits; and the impact of technology could differ materially due to a number of
factors. These include market prices for natural gas, natural gas liquids and oil
products; estimates of reserves and economic assumptions; the ability to produce
and transport natural gas, natural gas liquids and oil; the results of exploration and
development drilling and related activities; economic conditions in the
countries and provinces in which we carry on business, especially economic slowdowns;
actions by governmental authorities, receipt of required approvals, increases in
taxes, legislative and regulatory initiatives relating to fracture stimulation activities, changes in environmental and other regulations, and
renegotiations of contracts; political uncertainty, including actions by insurgent
groups or other conflict; the negotiation and closing of material contracts;
shortages of drilling rigs, equipment or oilfield services; and other factors discussed
here and under the heading Risk Factors" in TransAtlantics Annual Report
on Form 10-K for the year ended December 31, 2013 which is available at
www.transatlanticpetroleum.com and www.sec.gov. See also TransAtlantics audited
financial statements and the accompanying management discussion and analysis. See
Streams financial statements and company profile at www.sedar.com.
Forward-looking statements are based on managements knowledge and reasonable
expectations on the date hereof, and we assume no duty to update these
statements as of any future date. The information
set forth in this presentation does not constitute an offer, solicitation or recommendation to sell or an offer to buy any securities of the Company.
The information published herein is provided for informational purposes only. The
Company makes no representation that the information and opinions expressed
herein are accurate, complete or current. The information contained herein is current as of the date hereof, but may become outdated or subsequently
may change. Nothing contained herein constitutes financial, legal, tax, or other
advice. The
SEC has generally permitted oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by
actual production or conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. We may use the
terms estimated ultimate recovery, EUR, probable,
possible, and non-proven reserves, prospective resources or upside or other descriptions of
volumes of resources or reserves potentially recoverable through additional drilling or
recovery techniques that the SECs guidelines may prohibit us from
including in filings with the SEC. These estimates are by their nature more speculative
than estimates of proved reserves and accordingly are subject to substantially
greater risk of actually being realized by the Company. There is no certainty that any portion of estimated prospective resources will be discovered.
If discovered, there is no certainty that it will be commercially viable to produce any
portion of the estimated prospective resources.
Note on Possible Reserves:
possible reserves are those additional reserves that are less certain to be recovered
than probably reserves. There is a 10% probability that the quantities
actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
Note on BOE: BOE (barrel of oil equivalent) is derived by converting natural gas to oil
in the ratio of six thousand cubic feet (MCF) of natural gas to one barrel (bbl)
of oil. BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value equivalency at
the wellhead. |
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ALBANIA
ACQUISITION OBJECTIVE 3
Albania To Be a Third Source of Production and Income
Growth; Provides Reservoir and Geographical
Diversification
Large oil in place; known location
Exploitation, not exploration
2015
analyze, resize, streamline operation, reactivate
wells, expand waterflood
2016+
focused horizontal development
Gas highly prospective, but markets need development
Photo: Gorisht field in Albania. |
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ALBANIA ACQUISITION SUMMARY
1
Reserves as of November 30, 2013, independent reserves evaluation by Deloitte LLP, in
accordance with the provisions of NI51-101 and the Canadian Oil & Gas Evaluation Handbook.
Ten
year
forward
prices
range
from
US$78.96
to
US$89.53
per
BO
and
US$9.70
to
US$11.82
per
MCF.
TransAtlantic
expects
to
finalize
purchased
reserves
at
year-end
2014.
2
Production is for the three months ended May 31, 2014.
TransAtlantic
to acquire 100% of Stream Oil & Gas Ltd. (Stream) (TSX Venture:
SKO) Albanian Assets
Three oil fields, one gas field, one exploration license
25 year prod. licenses with unlimited 5-yr extensions
Approximately 75,000 net acres
Streams
reported
net
proved
reserves:
20.9
MMBOE
1
Note: TransAtlantic
expects proved reserves to decrease at year-end
2014 due to unaccomplished 2014 work program.
Production: 1,522 BOPD gross, 973 BOPD net
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Prices: oil: 68-75% of Brent, gas: ~$9/MCF
Fiscal terms: 12% royalty until 100% cost
recovery;
13-16% royalty and 50% net profit tax
after
100% recovery; VAT exempt
Summary of Terms
US$41.2 million (C$0.67/US$0.62 per share) plus balance sheet assumption
To
be
paid
85%
upon
transaction
closing,
15%
upon
final
required
approvals
within
nine
months |
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THREE OIL
FIELDS IN ALBANIA Source: Albanian National Agency of Natural Resources.
Oil trapped in carbonate reservoirs
Cakran Field
Ballsh Field
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1
Fields contain other previously producing wells, some of which are no longer active.
The actual penetration of the reservoir, mechanical success and current
wellbore condition of these wells is uncertain. Structural Traps of Fractured
Carbonates Cretaceous-Paleocene Age
Gorisht Field (~800 BOPD gross, ~400 BOPD net)
Discovered
1965,
25,000
BOPD
at
peak
(15
o
API)
150
producing
wells
1
; 3,000 net acres; two pilot
waterfloods
have mitigated decline
Well depths: 1,300
4,100 feet (400
1,250 meters)
Cakran
Field (~625 BOPD gross, ~500 BOPD net)
Discovered 1977, 6,000 BOPD at peak
(25
o
API)
30 producing wells
1
; 6,000 net acres
Well depths: 8,600
12,200 feet (2,650
3,700 meters)
Ballsh
Field (~100 BOPD gross, ~75 BOPD net)
Discovered 1966, 7,500 BOPD at peak
(11
o
API)
15 producing wells
1
; 6,000 net acres; expect to take over
another 60+ wells in 2014 (~175 BOPD
gross)
Well depths: 1650
4,600 feet (500 1400 meters) |
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2014
Average Gross Production of Streams Three Oil Fields in Albania OIL FIELDS IN
ALBANIA ARE ON FLAT DECLINE Source: Stream Oil & Gas Ltd.
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0
500
1,000
1,500
2,000
1/1/2014
2/1/2014
3/1/2014
4/1/2014
5/1/2014
6/1/2014
7/1/2014
Daily Oil Production |
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ONE GAS FIELD IN ALBANIA
Photo:
Drilling
a
well
in
the
Delvina
field
in
southern
Albania,
2014.
Structural Trap of Fractured Carbonates
Cretaceous-Paleocene Age
Delvina
Field
Two existing vertical wells, third well spudded
March
2014;
well
depth:
9,200
11,500 feet
(2,800
3,500 meters)
Wells currently non-producing
Adjacent Exploration License
Holds the rights to 60,000 net acres adjacent to
Delvina
field
Three adjacent undrilled structures
Discovered
1987,
gas
condensate
(63
o
API) |
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DEVELOPMENT OPPORTUNITIES
Plan for Growth
Upgrade oilfield technology to optimize field recovery
and increase production levels
Drill infill and horizontal oil wells; reactivate wells;
expand waterflood infrastructure in the Gorisht field
Optimize wells with recompletions and workover
activity: upgrade pumps on existing wells, introduce
artificial lift systems, re-enter and clean out legacy
wells, introduce modern stimulation technology, utilize
casinghead gas for onsite power generation
Drill natural gas development wells in the Delvina field
and expand the monetization of condensates
Modify infrastructure and increase port storage
facilities to decrease transport costs, debottleneck
surface production facilities
Photo: Gorisht field in Albania, primary development area.
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PRECEDENT:
BANKERS PETROLEUM Average Historical Production in Patos-Marinza Field
Albpetrol
Bankers
AAP
20,000
16,000
12,000
8,000
4,000
9
Source: Bankers Petroleum, August 2014 corporate presentation.
1939 1944
1949 1954 1959 1964 1969
1974 1979
1984 1989 1994 1999 2004
2009 2014
Bankers Petroleum
Albanian Oil Assets
in 2004 and developed it from 400 BOD to more than
20,000 BOD over a ten year period
Field development included reactivations, optimizations,
horizontal drilling, secondary recovery, modernization of
surface facilities, field electrification, expansion of export
capabilities, preparing to initiate tertiary recovery (steam)
Same oil source, carbonate reservoir breached into
shallower sandstones
Bankers
signed
a
concession
for
the
Patos-Marinza
oil
field |
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Taylor C. Beach
Director of Investor Relations
(214) 265-4746
Taylor.Beach@tapcor.com
Matthew W. McCann
General Counsel & Corporate Secretary
(214) 220-4323
www.TransAtlanticPetroleum.com
CONTACTS |
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