TransAtlantic Petroleum Issues Reserves Presentation and Provides Updates on Hedging, Core Analysis, Operations, and 2020 C...
March 09 2020 - 5:16PM
TransAtlantic Petroleum Ltd. (TSX: TNP) (NYSE
American: TAT) (the “Company” or “TransAtlantic”) today issued a
presentation on the Company’s 2019 reserves and provided an update
on the Company’s hedging program, the results of recent core
analysis, its recent operations, and its 2020 capital expenditure
program.
Hedging Update
Today, the Company unwound its three-way collar
contract with DenizBank, A.S. (“Denizbank”), which hedged
approximately 1,000 barrels of oil per day (“Bbl/d”) of the
Company’s oil production in Turkey. The three-way collar contract
had a Brent floor of $55.00, a Brent ceiling of $72.90, and a Brent
long call of $80.00, and was in place through April 30, 2020. The
Company also unwound its swap contract with Denizbank, which hedged
approximately 1,000 Bbl/d of the Company’s oil production in
Turkey. The swap contract had a Brent strike price of $60.30 and
was in place through December 31, 2020. In connection with these
transactions, the Company will receive approximately $6.5 million.
The Company intends to use these proceeds to pay down its term loan
with Denizbank, which will leave approximately $10.6 million
outstanding under the term loan. Following these transactions, the
Company does not have any commodity derivative contracts that hedge
the Company’s oil price risk.
Reserves Presentation
The Company has issued a presentation on the
Company’s 2019 reserves, which can be found on the Company’s
website under the Investor Relations section at
https://transatlanticpetroleum.gcs-web.com/events-and-presentations.
The presentation contains certain non-GAAP financial measures.
Please see the reconciliations for such non-GAAP financial measures
contained at the end of the presentation.
Results of Recent Core
Analysis
The Company has received partial results of the
core analysis on the Yeniev-4, Yeniev-5, and Bahar-12 wells. Based
on these partial results, the oil saturation in the Bedinan
formation in the Bahar field warrants several additional wells;
additional zones in the Hazro sands in the Bahar field have
comparable oil saturation to the productive Hazro F3 and F4 zones,
warranting further testing of such additional zones; and additional
lower permeability pay is present in the Bedinan formation in the
Yeniev field above the current perforated intervals, which will
likely require a fracture stimulation to produce commercially.
Additional core processing is ongoing, and the results of this
additional core processing will be factored into the Company’s
future development decisions.
Operations Update
The Company whipstocked the Goksu-4H well in
January 2020. The well was re-drilled to a total depth of 5,720
feet. Although the Company encountered high permeability in the
Mardin formation, tests did not indicate commercial quantities of
oil.
Update on 2020 Capital Expenditure
Program
The Company expects its net field capital
expenditures for 2020 to range between $7.5 million and $15
million. The Company expects net field capital expenditures during
2020 to include between $1.0 million and $9.0 million in drilling
and completion expense for between three and seven planned wells,
between $1.0 million and $3.0 million for recompletions, between
$1.0 and $2.0 million implementing a waterflood in the Bedinan
sandstone in the Arpatepe field, and approximately $1.0 million in
facilities upgrades to the Company’s natural gas power generation
infrastructure. The Company will continue to monitor oil prices to
keep its capital expenditure budget within the capacity of its cash
flow, cash balances, and debt retirement schedule. The Company’s
projected 2020 capital expenditure budget is subject to change.
About TransAtlantic
The Company 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 Company’s hedging program, its capital expenditure program, the
evaluation of the Company’s prospects, information on the Company’s
reserves, the use of future prospective capital in the Company’s
business, expectations of future funding and capital sources, the
drilling, completion, and cost of wells, and the production and
sale of oil and natural gas, as well as expectations, plans, goals,
objectives, assumptions, and information about future events,
conditions, exploration, production, results of operations, and
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.
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, well development
results; access to sufficient capital; market prices for natural
gas, natural gas liquids, and oil products, including price changes
resulting from coronavirus fears as well as oil oversupply
concerns; estimates of reserves and economic assumptions; the
ability to produce and transport natural gas, natural gas liquids,
and oil products; 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;
the unwinding of the Company’s hedges against a decline in the
price of oil; receipt of required approvals; increases in taxes;
legislative and regulatory initiatives relating to fracture
stimulation activities; changes in environmental and other
regulations; renegotiations of contracts; political uncertainty,
including sanctions, armed conflicts, and actions by insurgent
groups; outcomes of litigation; the negotiation and closing of
material contracts; and other risks described in the Company’s
filings with the Securities and Exchange Commission.
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.
Contact:
Tabitha T. BaileyVice President, General Counsel, and Corporate
Secretary(214) 265-4708
TransAtlantic Petroleum Ltd.16803 Dallas ParkwayAddison, Texas
75001http://www.transatlanticpetroleum.com
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