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): February 25, 2015
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 2.02 |
Results of Operations and Financial Condition. |
Press Release
On February 25, 2015, TransAtlantic Petroleum Ltd. (the Company) issued a press release announcing preliminary reserves
results for the year ended December 31, 2014. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Investor Presentation
On
February 25, 2015, the Company posted an investor presentation on the Companys year-end 2014 reserves to its website 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 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 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 February 25, 2015. |
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99.2 |
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TransAtlantic Petroleum Ltd. Year-End 2014 Reserves Investor Presentation, dated February 25, 2015 |
- 2 -
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.
Date: February 26, 2015
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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 |
- 3 -
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 February 25, 2015. |
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99.2 |
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TransAtlantic Petroleum Ltd. Year-End 2014 Reserves Investor Presentation, dated February 25, 2015 |
- 4 -
Exhibit 99.1
TransAtlantic Petroleum Announces Year-End 2014 Reserves and Completion of $55.0 Million Convertible Note
Offering
Hamilton, Bermuda (February 25, 2015) TransAtlantic Petroleum Ltd. (NYSE-MKT: TAT) (TSX: TNP) (the Company or
TransAtlantic) today announced a summary of year-end 2014 reserves and the completion of its private placement of $55.0 million of convertible notes due 2017. A more detailed discussion of TransAtlantics year-end 2014 reserves are
available on its website at http://ir.transatlanticpetroleum.com/events.cfm.
Highlights
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Increased proved developed reserves 238% year-over-year to 22.3 MMBOE, added $264 million of PV-10 for $628 million total ($15.39/share) |
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Increased 1P reserves 168% year-over-year to 32.7 MMBOE, added $292 million of PV-10 for $885 million total ($21.69/share) |
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Increased 2P reserves 154% year-over-year to 61.5 MMBOE, added $484 million of PV-10 for $1.6 billion total |
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Increased 1P reserves in Turkey by 40% year-over-year on a stand-alone basis to 17.1 MMBOE, added $56 million of PV-10 for $649 million total |
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Completed private placement of $55.0 million of convertible notes due 2017 |
Reserves Summary
DeGolyer & MacNaughton evaluated the Companys reserves in Turkey as of December 31, 2014 and Deloitte evaluated the Companys reserves
in Albania as of December 31, 2014, both in accordance with the reserves definitions of Rule 4-10(a) (1)-(32) of Regulation S-X of the SEC.
TransAtlantic increased its annual reserves primarily due to the acquisition of Stream Oil & Gas Ltd. in Albania and the successful development of
its assets in southeastern Turkey.
1
The following is a summary of the Companys estimated reserves at December 31, 2014 and
December 31, 2013:
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Reserves at December 31, 2014 |
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Proved Developed |
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Total Proved (1P) |
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Proved + Probable (2P) |
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Proved + Probable + Possible (3P) |
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Oil and Condensate, Mbbls |
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20,757 |
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28,665 |
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50,111 |
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69,291 |
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Natural Gas, MMcf |
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9,553 |
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24,504 |
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68,261 |
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176,519 |
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Total Oil and Natural Gas, MBOE(1) |
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22,349 |
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32,749 |
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61,488 |
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98,711 |
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PV-10(2), $MM |
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$ |
628.2 |
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$ |
884.4 |
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$ |
1,597.6 |
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$ |
2,500.2 |
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Reserves at December 31, 2013 |
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Proved Developed |
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Total Proved (1P) |
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Proved + Probable (2P) |
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Proved + Probable + Possible (3P) |
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Oil and Condensate, Mbbls |
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4,874 |
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9,714 |
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17,834 |
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34,711 |
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Natural Gas, MMcf |
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10,480 |
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15,150 |
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38,285 |
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116,274 |
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Total Oil and Natural Gas, MBOE(1) |
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6,621 |
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12,239 |
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24,215 |
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54,090 |
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PV-10(2), $MM |
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$ |
364.3 |
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$ |
592.5 |
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$ |
1,113.9 |
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$ |
2,396.3 |
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(1) |
MBOE is not included in the DeGolyer & MacNaughton or Deloitte reserve reports and was derived by the Company by converting natural gas to oil in the ratio
of six Mcf of natural gas to one Bbl of oil. A BOE conversion ratio of six Mcf to one 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. PV-10
was calculated using an overall weighted average price of $94.53 per Bbl and $8.71 per Mcf for Turkey for December 31, 2014, $69.55 per Bbl and $10.00 per Mcf for Albania for December 31, 2014, and $102.07 per Bbl and $9.92 per Mcf for
Turkey for December 31, 2013. Albanian reserves were acquired from Stream Oil & Gas Ltd. on November 18, 2014. |
(2) |
The total proved PV-10 value of the estimated future net revenue are not intended to represent the current market value of the estimated oil and
natural gas reserves we own. Management believes that the presentation of PV-10, while not a financial measure in accordance with generally accepted accounting principles in the United States (GAAP), provides useful information to
investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. Because many factors that are unique to each individual company impact the amount of future income taxes estimated
to be paid, the use of a pre-tax measure is valuable when comparing companies based on reserves. PV-10 is not a measure of financial or operating performance under GAAP. PV-10 should not be considered as an alternative to the standardized measure as
defined under GAAP. PV-10 of probable or possible reserves represent the present value of estimated future revenues to be generated from the production of probable or possible reserves, calculated net of estimated lease operating expenses,
production taxes and future development costs, using costs as of the date of estimation without future escalation and using 12-month average prices, without giving effect to non-property related expenses such as general and
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2
administrative expenses, debt service, and depreciation, depletion, and amortization, or future income taxes and discounted using an annual discount rate of 10%. With respect to pre-tax PV-10
amounts for probable or possible reserves, there do not exist any directly comparable GAAP measures, and such amounts do not purport to present the fair value of our probable and possible reserves.
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. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus
possible reserves.
The following table provides a reconciliation of our proved reserves (1P) PV-10 to our standardized measure:
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U.S. dollars in millions |
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12/31/2014 |
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12/31/2013 |
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Total PV-10: |
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$ |
884.4 |
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$ |
592.5 |
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Future income taxes (1): |
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(394.4 |
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(122.9 |
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Discount of future income taxes at 10% per annum: |
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181.7 |
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30.9 |
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Standardized measure: |
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$ |
671.7 |
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$ |
500.5 |
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Note: Final PV-10 reconciliation will appear in the Companys annual report on Form 10-K.
(1) |
Neither DeGolyer & MacNaughtons nor Deloittes reserve reports contemplate income tax consequences. Future income taxes as displayed are estimated by TransAtlantic subsequent to DeGolyer &
MacNaughtons and Deloittes reserve assessments. |
Convertible Notes Due 2017
TransAtlantic completed its private placement of $55.0 million of convertible notes (the Notes) due 2017, as initially disclosed on
December 19, 2014. The Company completed the private placement and an exchange offer for substantially identical notes (the Exchange Notes) on February 20, 2015, pursuant to an indenture with U.S. Bank National Association as
trustee. TransAtlantic intends to file a shelf registration statement covering the resale of the Exchange Notes and common shares issued upon conversion no later than May 1, 2015.
3
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, Albania 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 year-end reserves, 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 ability of the Company to continue to develop and exploit attractive
foreign initiatives.
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, but are not limited to, 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 the Company carries 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; outcomes of litigation; the negotiation and closing of material contracts; shortages of drilling rigs, equipment or oilfield services.
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.
4
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
(214) 220-4323
http://www.transatlanticpetroleum.com
5
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Exhibit 99.2
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YEAR-END 2014 RESERVES
February 2015
FORWARD LOOKING STATEMENTS
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 own 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 includemarket prices for natural gas, natural gas liquidsand 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 our Annual Report on Form 10-K for the year ended December 31, 2013, which is available on our website at www.transatlanticpetroleum.com and on www.sec.gov. See also TransAtlantics
audited financial statements and the accompanying management discussion and analysis. 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 ofthe 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.
Cover Photo: Ebyat-2 well on the Idil license in
southeastern Turkey.
RESERVE CATEGORIES
Reserve Category Definition
Reserves that can be recovered by existing wells through the use of existing equipment and
Proved Developed (PD) operations or have been completed and tested, but are not yet producing or those currently
behind pipe in existing wells, which are expected to be productive
Reserves that can be expected to be recovered from new wells on undrilled, contiguous and
structurally equivalent acreage based upon adjacent existing production and available
Proved Undeveloped (PUD)
geoscience and engineering data. Also from existing wells where a relatively major
expenditure is required for completions
PD + PUD;
Reserves estimated with reasonable certainty to be recoverable from known
Total Proved / 1P Reserves
reservoirs
Reserves which have at least a 50% chance of being recoverable. Reserves from contiguous
Probable Reserves acreage which is higher or lower than known oil-gas-water contacts. Reserves may also be for
recovery factors greater than proved reserves
2P
Reserves 1P (Total Proved) + Probable
Reserves which have at least a 10% chance of being recoverable. Reserves
from directly
Possible Reserves adjacent portions of the reservoir, separated by faults smaller than the
reservoir thickness.
Reserves may also be for recovery factors greater than probable reserves
3P Reserves 2P (Total Proved + Probable) + Possible
Note: Please refer to previous engineering reports on Form 10-K for a more complete definition of reserves by category.
RESERVES GROWTH HISTORY
TransAtlantic Total
Company Reserves
120
100 98.7
80
MMBOE) 61.5
( 60
Reserves 54.2 54.1
40 32.7 [VALUE]
20 24.2
21.6
6.6 11.6 12.2
5.2 0
PD 1P 2P 3P
YE 2012 YE 2013 YE 2014
Photo: Gorisht field in Albania.
Note: Turkish
reserves are fully engineered by DeGolyer and MacNaughton. Albanian reserves are fully engineered by Deloitte and were acquired on 11/18/2014. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2014 Albanian
reserves are based on SEC prices of $69.55/barrel and
$10.00/Mcf. 12/31/2013 reserves are based on SEC prices
of $102.07/barrel and $9.92/Mcf. 12/31/2012 reserves are based on SEC prices of $108.30/barrel and $8.94/Mcf.
SIGNIFICANT RESERVES GROWTH IN 2014
Total
Reserves (MMBOE) PD 1P 2P 3P
12/31/2013 6.6 12.2 24.2 54.1
Turkey Additions 3.7 6.8 10.2 5.1
Albania Acquisition 13.9 15.6 29.0 41.4
Net
Production (1.9) (1.9) (1.9) (1.9)
12/31/2014 22.3 32.7 61.5 98.7
Change 238% 168% 154% 82%
Photo: Pinar-1 well in southeastern Turkey.
Note:
Turkish reserves are fully engineered by DeGolyer and MacNaughton. Albanian reserves are fully engineered by Deloitte and were acquired on 11/18/2014. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2014
Albanian reserves are based on SEC prices of $69.55/barrel and $10.00/Mcf. 12/31/2013 reserves are based on SEC prices of $102.07/barrel and $9.92/Mcf.
RESERVES VALUE
Total Value ($MM) PD 1P 2P 3P
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Increased value of PD, 1P |
and 2P reserves PV-10 12/31/2013 $364 $593 $1,114 $ 2,396
significantly in 2014 PV-10 12/31/2014 $628 $885 $ 1,598 $ 2,500
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TAT currently trades Change 73% 49% 43% 4% |
at a price that offers 300%+ Value Per TAT Share PD 1P 2P
upside to 1P PV-10 value PV-10 12/31/2014 $15.39 $21.69 $ 39.17
Photo: View from Bahar-6 well in the Molla area in southeastern Turkey.
Note: TransAtlantic had 40.8 MM shares outstanding as of 12/31/2014. Turkish reserves are fully engineered by DeGolyer and
MacNaughton. Albanian reserves are fully engineered by Deloitte and were acquired on 11/18/2014. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2014 Albanian reserves are based on SEC prices of
$69.55/barrel and $10.00/Mcf. 12/31/2013 reserves are based on SEC prices of $102.07/barrel and $9.92/Mcf.
2014 RESERVES SUMMARY
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More than doubled reserves: 1P +168%, 2P +154%, 3P +82% |
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Meaningfully increased the PV-10 reserve value: 1P +49%, 2P +43%, 3P +4% |
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Reserves growth driven primarily by Stream acquisition of Albanian assets and successful development of
Şelmo, Bahar fields in southeastern Turkey |
Crude Oil
28.7 MMBO Proved Reserves (88% YE 2014)
Natural Gas
24.5 BCF Proved Reserves (12% YE
2014)
Note: Turkish reserves are fully engineered by DeGolyer and MacNaughton. Albanian reserves are fully
engineered by Deloitte and were acquired on 11/18/2014. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2014 Albanian reserves are based on SEC prices of $69.55/barrel and $10.00/Mcf.
TURKISH RESERVES
THREE YEARS OF RESERVES GROWTH IN TURKEY
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Steady growth of reserves in Turkey, even with the effect of oil price declines |
Reserves in Turkey
70
60 57.3
54.2
54.1
50
BOE) (MM 40
32.5
eserves 30 R
24.2
20 17.1
21.6
8.4 12.2
10 11.6
5.2 6.6 0
PD 1P 2P 3P
YE 2012 YE 2013 YE 2014
Photo: Gurgen-3 well in
the Thrace Basin of northwestern Turkey.
Note: Turkish reserves are fully engineered by DeGolyer and
MacNaughton. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2013 Turkish reserves are based on SEC prices of $102.07/barrel and $9.92/Mcf. 12/31/2012 Turkish reserves are based on SEC prices of
$108.30/barrel and $8.94/Mcf.
9
INCREASED VALUE OF 1P, 2P TURKISH RESERVES IN SPITE OF PRICE DECLINES
Turkish Reserves (MMBOE) PD 1P 2P 3P SEC Prices ($) Oil Natural Gas
12/31/2013 6.6 12.2 24.2 54.1 12/31/2013 $102.07 $9.92
Additions includes price changes 3.7 6.8 10.2 5.1 12/31/2014 $94.53 $ 8.71
Net Production (1.9) (1.9) (1.9) (1.9) Change -7% -12%
12/31/2014 8.4 17.1 32.5 57.3
Change +27% +40%
+34% +6%
Replacement Ratio 195% 358% 537% 268%
Turkish Reserves by
PD 1P 2P 3P
Product at 12/31/2014
Oil (MMBO) 6.9 14.4 25.8 37.8
Natural Gas (BCF) 9.5 16.3 40.0 116.8
Total
Reserves (MMBOE) 8.4 17.1 32.5 57.3
Value of Turkish Reserves PD 1P 2P 3P
($ MM)
PV-10 12/31/2013 $ 364 $ 593 $1,114 $2,396
PV-10
12/31/2014 $ 418 $ 649 $ 1,167 $ 1,830
Change +15% +9% +5% -24%
Photo: Pinar-1 well in southeastern Turkey.
Note: Turkish reserves are fully engineered by DeGolyer and MacNaughton. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2013 Turkish reserves are
based on SEC prices of $102.07/barrel and $9.92/Mcf. Reserve replacement ratio is calculated as reserve additions divided by annual production.
10
TURKISH RESERVES GROWTH DRIVERS
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Increased proved reserves in Turkey by 40% year-over-year |
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Increased PV-10 value of 1P and 2P reserves, in spite of: |
7% decrease in Brent crude oil price (the result of falling market price in 2H 2014)
12% decrease in Turkish natural gas price (the result of currency fluctuations)
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PV-10 value of 3P reserves decreased as a result of fewer near-term oil projects |
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Reserves growth driven primarily by: |
Targeted vertical drilling in the Bahar field led to a significant increase of proved reserves, +2.2 MMBOE (+244%)
Horizontal drilling in underdeveloped portion of Şelmo field increased proved reserves by 1.9
MMBOE (+26%) and probable reserves by 3.2 MMBOE (+91%)
Photo: Pulling unit in the Şelmo field of
southeastern Turkey.
Note: Turkish reserves are fully engineered by DeGolyer and MacNaughton. 12/31/2014
Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2013 Turkish reserves are based on SEC prices of $102.07/barrel and $9.92/Mcf.
11
2014 SALES AND CAPITAL IN TURKEY
Gross
Production, Turkey Net Sales, Turkey
10,000 $20.0 8,000 $20.0
9,000 $18.0 $18.0 7,000
8,000 $16.0 $16.0 6,000 7,000 $14.0 $14.0
5,000
(BOEPD) 6,000 $12.0 $12.0
MM) MM)
$ ( ( $ l (BOEPD) l tion 5,000 $10.0
Sales 4,000 $10.0 Capita Produc 4,000 $8.0 Capita $8.0 Net Net 3,000 Net Gross 3,000 $6.0 $6.0
2,000
2,000 $4.0 $4.0
1,000
1,000 $2.0 $2.0
- $- 0 $-Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14
Note: Gross production is before the payment of royalties or any partner interests.
12
ŞELMO FIELD RESERVES GROWTH
|
|
Increased proved reserves by 26% with $51.6MM of capital in 2014; 290% replacement ratio
|
|
|
Increased 2P reserves by 47%, 3P reserves decreased by 21% |
|
|
Completed 14 horizontal wells, average 30-day IP ~300 BOPD |
|
|
Future reserve additions and conversions projected to result from improved well performance, improved targeting
of the LSD formation with 3D seismic, additional horizontal drilling and secondary recovery |
18.0
16.0
3.0 16.0
14.0
12.0 3.7
0.6
MBOE) 10.0 0.0 1.0
3.5
(M PUD 4.8
8.0
Reserves 6.0 PUD 3.4
PDNP 0.2
4.0 PDNP 0.2
PDP 3.8 PDP 4.3
2.0
0.0
Proved Additions by Price Changes Dry Holes 2014 Proved New Drill Decline Curve 2P Reserves Reserves at Discovery, Production Reserves at Wells Improvements (Proved + 12/31/2013 Extension
12/31/2014 Probable)
Note: Şelmo Field reserves are capped in 2025. Reserve replacement ratio is
calculated as proved reserve additions, including price changes, divided by annual production.
13
ŞELMO FIELD WATERFLOOD
|
|
Secondary recovery has begun to arrest natural decline in the Şelmo field |
|
|
Two wells with consistent injection for 12 months (Ş-19, Ş-39); two began injection in 1Q15
|
|
|
Early response seen in at least four producers to date; ~8,000 BO incremental recovery
|
|
|
Internal estimate potential of 400 MBO incremental EUR for East Şelmo pilot (cost: $1.5MM, discounted ROI:
5.66x, IRR: 47%, PV-10: $10MM, payout: 2.1 years) |
Şelmo Pilot Waterflood Incremental
Response
100%
98%
1000
96%
94%
92%
Cut
90%
BPD 100
88% Water
WF Response 86%
84% Pilot Waterflood Injection
82%
10 80%
6/1/2013 1/1/2014 8/3/2014 3/5/2015 Injectors Producers experiencing response
Oil (BPD) Water (BPD) Water Cut (%)
14
MOLLA AREA RESERVES GROWTH
|
|
Increased proved reserves by 88% with $36.5MM of capital in 2014; 1350% replacement ratio
|
|
|
Increased 2P reserves by 2%, 3P reserves decreased by 4% |
|
|
100% success with 3D seismic in the Bahar field, average 30-day IP ~510 BOPD |
|
|
Bahar-6 well produced ~50,000 BO in initial 90 days (comingled Bedinan/Dadaºformations)
|
|
|
Future reserve additions expected to result from targeted drilling of vertical and horizontal wells with
multi-stage stimulation completions |
9.0
8.0 0.9
84 .
7.0
3.3
6.0
BOE) 50 .
(MM 0.0
4.0 2.8 0.1 0.2 PUD 2.5
Reserves 3.0
2.0
PDNP 0.3 PUD 1.1
1.0
PDNP 0.0 PDP 1.4 PDP 0.5
0.0
Proved Additions by Price Changes Dry Holes
2014 Proved New Drill Decline Curve 2P Reserves Reserves at Discovery, Production Reserves at Wells Improvements (Proved + 12/31/2013 Extension 12/31/2014 Probable)
Note: Reserve replacement ratio is calculated as proved reserve additions, including price changes, divided by annual production. 15
MOLLA PROSPECT AREA
|
|
3P reserves constitute a small footprint in the Molla area |
Bahar
Molla
Goksu
Arpatepe1
TransAtlantic lease outline P1-P3 reserve area Prospect area
Note: Arpatepe reserves are not included in Molla area reserves. TransAtlantic licenses outlined above encompass 212,694 gross, 164,708 net acres. 16
THRACE BASIN RESERVES GROWTH
|
|
Proved reserves increased 9% with $10.5 MM of capital in 2014; 120% replacement ratio
|
|
|
Increased 2P reserves by 7%, 3P reserves by 1% |
|
|
Completed 9 conventional wells, average 30-day IP ~1.0 MMCFPD and 3 horizontal wells, average 30-day IP ~1.5
MMCFPD |
|
|
Expect to conduct seasonal drilling campaign Q2-Q4 2015 |
|
|
Future reserve additions anticipated from improved well performance, new drill wells
|
7.0
6.0 0.9 6.5
5.0 3.0
MBOE) 4.0 (M
3.0
0.8
0.2 0.0 0.5
Reserves 2.0 PUD 0.8 PUD 1.0 PDNP 0.5 PDNP 0.7
1.0
PDP 1.0
PDP 0.8
0.0
Proved Additions by Price Changes Dry Holes 2014 Proved New Drill Decline Curve 2P Reserves Reserves at Discovery, Production Reserves at Wells Improvements (Proved + 12/31/2013 Extension
12/31/2014 Probable)
Note: Reserve replacement ratio is calculated as proved reserve additions, including
price changes, divided by annual production. 17
THRACE BASIN FOCUS IN 2015
|
|
In 2015, TransAtlantic will focus on prospect and development locations in the Thrace Basin
|
Devecatagi
Karacaoglan N.Osmancik
Hamitabat G.Resisdere-1
Pelit
Umurca Incirlibayir
Alpullu
Gocerler
Temrez-2 B.Adatepe-1
Temrez
Avluobasi
Vakiflar Karatepe Yulafli
Sariyer-1
Yildirim
KITCHEN AREA Hayrabolu
Karacali
Copkoy Atakoy Degirmenkoy Fidanlik
Gurgen Derin-1
D.Gurgen-1
B.Kilavuzlu-2 Bekirler
North Marmara Osmanli Kilavuzlu Storage Field Kayi Koseilyas-2
Gazi Yagci Tekirdag Akcahalil
Aydede-3
Yuva
TekirdağDevelopment Well Prospect Location
18
YE 2014 TURKISH RESERVES ESTIMATED SENSITIVITY TO OIL PRICE FLUCTUATIONS
Turkey Reserves at 12/31/2014
100%
90%
80%
70%
% of SEC Reserves
0% 10% 20% 30% 40% 50% 60%
$80/BO $70/BO $60/BO
$50/BO $40/BO
PV-10 of Turkey Reserves at 12/31/2014
100% 90% 80%
70%
Value 60%10 PV 50%
SEC of 40% %
30% 20% 10% 0%
$80/BO $70/BO $60/BO $50/BO $40/BO
Brent Crude Oil Price Brent Crude Oil Price
1P Reserves 2P Reserves 3P Reserves
Note: Sensitivities reflect company estimates with the fluctuation of the price of crude oil only. The price of natural gas was held constant. Turkish reserves are fully engineered by
DeGolyer and MacNaughton. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf.
19
ALBANIAN RESERVES
20
ALBANIAN RESERVES
Albanian Reserves
PD 1P 2P 3P
at 12/31/2014
Oil (MMBO) 13.9 14.2 24.3 31.4
Gas (BCF)8.3 28.2 59.7
Total (MMBOE) 13.9 15.6 29.0 41.4
PV-10 ($MM)
$210 $236 $431 $671
SEC Prices $69.55/BO $10.00/MCF
Photo: Delvina-34H1 well site in Albania.
Note: Albanian reserves are fully engineered by Deloitte and were acquired on 11/18/2014. 12/31/2014 Albanian reserves are based on SEC prices of $69.55/barrel and $10.00/Mcf.
21
ALBANIAN DEVELOPMENT PLAN
|
|
Albanian acquisition in November 2014 added one gas field and three oil fields with structural traps in
carbonate reservoirs, similar to Şelmo field in Turkey, but significantly thicker |
|
|
Properties absent of North American technology and sufficient capital investment; substantial untapped resource
remains |
|
|
Oil development: revitalize fields with recompletions, reactivations, enlarging and lowering pumps and
expanding waterflood; deepen and core several Ballsh wells to better measure oil saturations, Oil Field which may lead to well deepenings, production and reserves growth Cakran |
Oil Field
|
|
Gas development: complete Delvina-34H1 well; workover two wells, drill one well on adjacent structure and
potentially shoot seismic |
22
BULGARIAN RESERVES
23
BULGARIAN RESERVES
Reserve Status in Bulgaria
|
|
No reserves established in Bulgaria |
|
|
Evaluating future program |
24
OUTSTANDING GROWTH IN 2014
|
|
More than doubled 1P and 2P reserves: 1P +168%, 2P +154% |
|
|
Meaningfully increased PV-10 reserve value: 1P +49%, 2P +43% |
|
|
Increased proved reserves in Turkey by 40% |
|
|
Boosted total net production by 40%; grew net production in Turkey by 20% |
|
|
Expanded knowledge of oil fields in southeast Turkey 100% well success with 3D seismic; Identified
prospects in the Molla area with larger reserve potential than Bahar field |
|
|
Albanian oil fields with 2,000-foot column potentially containing multiple pay zones and projected recoveries
of approximately 10% of original oil in place are expected to increase with production and facility improvements |
|
|
~$35MM of cash on hand and a portfolio of commodity derivative contracts with present value of ~$26MM (at
$60/BO); expect to utilize cash flow for capital expenditures, debt repayment and/or stock repurchases |
|
|
Ability to be a nimble operator with superior access to oilfield services |
25
CONTACT
Taylor Beach
Director of Investor Relations
(214) 265-4746
Taylor.Beach@tapcor.com
www.TransAtlanticPetroleum.com
26
APPENDIX
27
OPERATING COUNTRIES FISCAL TERMS
TURKEY
|
|
12.5% royalty, no production tax |
|
|
VAT exempt on exploration licenses, refunded on production leases |
|
|
Pro-business and respect for rule of law |
|
|
Produces <5% of oil and gas consumed |
ALBANIA
|
|
12% royalty until 100% cost recovery |
|
|
13-17% royalty and 50% net profit tax thereafter |
|
|
Produces <60% of oil consumed, consumes all available gas |
BULGARIA
|
|
2.5% royalty until 150% cost recovery; graduated royalty thereafter to 35% |
|
|
Produces <5% of oil and gas consumed |
Photo: Saranda, Albania
28
2014 CAPITAL ALLOCATION
Net Capital Proved
Probable Possible Exploration Facilities Seismic Total
($MM)
Şelmo 32.4 6.2 8.94.1$51.6
Molla 17.0 12.62.3 0.5 2.3 $34.7
Thrace 6.8
0.43.0 0.3 0.1 $10.6
Other 3.9 6.4 0.5 1.7 $12.5
Total Net Capital $60.1 $19.2 $8.9 $11.7 $5.4 $4.1 $109.4
New Wells Recompletions
Proved Probable Possible Exploration Proved Probable Possible Exploration
(Gross) (Gross)
Şelmo 9 2 3Şelmo
19 -
Molla 2 21 Molla 1 1
Thrace 5 7 Thrace 53 32
Other 2 4 Other 4 5
Total Wells 18
4 3 12 Total Wells 77 38
Note: New wells are comprised of all new wellbores on which capital was spent
in 2014 to spud, drill or complete a well. Recompletions contain only workover projects on preexisting wellbores and do not include original completions of drilled wells.
29
TURKISH RESERVES BY AREA
MMBOE 12/31/2013
12/31/2014 Y/Y Change F&D on Proved
1P Reserves Şelmo 7.4 9.3 26% Developed Reserves:
Şelmo: $24.99/BO
Molla 1.7 3.2 88%
Molla: $21.78/BO
Thrace 2.3 2.5 9% Thrace: $4.60/MCF
Other 0.8 2.1 163% Turkey: $24.11/BO
Total 1P Reserves 12.2 17.1 40%
2P Reserves
Şelmo 10.9 16.0 47%
Molla 5.5 5.6 2%
Thrace 6.1 6.5 7%
Other 1.7 4.5 165%
Total 2P Reserves 24.2 32.6
35%
3P Reserves Şelmo 25.8 20.3 -21%
Molla 7.2 6.9 -4%
Thrace 19.1 19.3 1%
Other 20. 10.8 440%
Total 3P Reserves 54.1 57.3 6%
Brent Crude Oil ($/BO) $102.07 $94.53 -7%
Natural
Gas ($/MCF) $9.92 $8.71 -12%
Photo: Gurgen-3 well in Northwestern Turkey
Note: Turkish reserves are fully engineered by DeGolyer and MacNaughton. 12/31/2014 reserves are based on SEC prices of
$94.53/barrel and $8.71/Mcf. 12/31/2013 reserves are based on SEC prices of $102.07/barrel and $9.92/Mcf.
30
TURKEY WELL ECONOMICS PRICE SENSITIVITY
Şelmo Horizontal Wells (Southeast, Oil, 100% WI) Bahar Vertical Wells (Southeast, Oil, 100% WI)
Benchmark Price $80/BO $70/BO $60/BO Benchmark Price $80/BO $70/BO $60/BO
Realized Price $103/BO $71/BO $60/BO $50/BO Realized Price $103/BO $70/BO $58/BO $48/BO
Investment ($MM) $2.9 $2.9 $2.9 $2.9 Investment ($MM) $5.3 $5.3 $5.3 $5.3
IP Rate 380 BOPD 380 BOPD 380 BOPD 380 BOPD IP Rate 450 BOPD 450 BOPD 450 BOPD 450 BOPD
EUR 202 MBO 202 MBO 202 MBO 200 MBO EUR 482 MBO 474 MBO 469 MBO 463 MBO
Payout 0.3 years 0.5 years 0.6 years 0.8 years Payout 0.4 years 0.7 years 0.9 years 1.1 years
IRR 272% 158% 118% 82% IRR 210% 125% 95% 69%
Discounted ROI 4.5x 3.0x 2.4x 2.0x Discounted ROI 5.4x 3.5x 2.8x 2.3x
Undiscounted ROI 5.5x 3.6x 2.9x 2.3x Undiscounted ROI 7.2x 4.6x 3.7x 2.9x
Gurgen Vertical Wells (Northwest, Gas, 41.5% WI)
Realized Price $9.19/MCF
Investment, gross ($MM) $1.3
IP Rate, gross 3.5
MMCFPD
EUR, gross 1,200 MMCF
Payout 0.3 years
IRR 572%
Discounted ROI 5.9x
Undiscounted ROI 6.5x
Note: Well costs are based
on average oilfield service costs for 2014. Oilfield service costs are expected to decrease in 2015. ROI of 1.0x equals payout. Bahar well economics exclude Bahar-6 well results.
31
TOTAL COMPANY RESERVES BY PRODUCT
Total Reserves
PD 1P 2P 3P
Oil (MMBO) 20.8 28.6 50.1 69.3
Gas (BCF) 9.6 24.6 68.2 176.5
Total (MMBOE) 22.3 32.7 61.5 98.7
Photo:
Şelmo-5 well in southeastern Turkey.
Note: Turkish reserves are fully engineered by DeGolyer and
MacNaughton. Albanian reserves are fully engineered by Deloitte and were acquired on 11/18/2014. 12/31/2014 Turkish reserves are based on SEC prices of $94.53/barrel and $8.71/Mcf. 12/31/2014 Albanian reserves are based on SEC prices of
$69.55/barrel and $10.00/Mcf. 12/31/2013 reserves are based on SEC prices of $102.07/barrel and $9.92/Mcf.
32
PV-10 RECONCILIATION
The PV-10 value of the
estimated future net revenue are not intended to represent the current market value of the estimated oil and natural gas reserves we own. Management believes that the presentation of PV-10, while not a financial measure in accordance with U.S. GAAP,
provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. Because many factors that are unique to each individual company impact the amount of
future income taxes estimated to be paid, the use of a pre-tax measure is valuable when comparing companies based on reserves. PV-10 is not a measure of financial or operating performance under U.S. GAAP.
PV-10 should not be considered as an alternative to the standardized measure as defined under U.S. GAAP.
The following table provides a reconciliation of our PV-10 to our standardized measure:
$US MM 12/31/2013 12/31/2014
Total P1 PV-10 $592.5 $884.4
Future income taxes
(122.9)1 (394.4)1 Discount of future income
30.91 181.71 taxes at 10% per annum
Standardized measure $500.5 $671.7
1 |
|
TransAtlantic Petroleum is not a U.S. domiciled corporation. |
Photo: Bahar Field in southeastern Turkey.
33
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