EDISON EQUITY RESEARCH - TRANSATLANTIC PETROLEUM
April 08 2015 - 9:46AM
InvestorsHub NewsWire
EDISON EQUITY RESEARCH: TRANSATLANTIC PETROLEUM - RESILIENT
IN THE STORM
TransAtlantic (TAT) released solid FY14 results on 16 March, which
showed good operational momentum. TAT is making progress on the
integration of Stream’s Albanian assets and on its various
production growth initiatives in Turkey, notably horizontal
drilling and the waterflood pilot at Selmo, and drilling success at
Molla. The relatively short-cycle nature of TAT’s assets in Turkey
and Albania, low break-evens and capex flexibility mean its
business model is more resilient than for many E&Ps. Management
has reacted quickly to lower oil prices and is cutting capex by
two-thirds as it aims to operate within cash flow this year.
Despite lower spend, we expect broadly flat production in 2015 at c
6mboe/d, and see double-digit growth resuming in 2016 as the
Albanian fields ramp-up. Our unchanged core NAV of $11.2/share
offers considerable upside from the current share price.
TransAtlantic Petroleum is engaged in the acquisition, exploration
and production of oil and gas assets. It uses North American
horizontal drilling and fracking technology to enhance production.
Its main interests lie in Turkey, Albania and Bulgaria.
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