HAMILTON, Bermuda, Oct. 2, 2014 (GLOBE NEWSWIRE) -- TransAtlantic Petroleum Ltd. (NYSE-MKT:TAT) (TSX: TNP ) (the "Company" or "TransAtlantic") today provided an operational update on its current drilling program and announced a 9% natural gas price increase in Turkey.
Operational Update
TransAtlantic's current 7-day average production rate is approximately 5,600 BOEPD, comprised of approximately 4,150 BOPD of oil and approximately 8.8 MMCFPD of natural gas. Average production for September 2014 was more than 5,400 BOEPD. The Company spudded eleven wells and completed six new wells in the third quarter of 2014. Year-to-date, TransAtlantic spudded 24 wells and completed 19 new wells. The Company currently has three active rigs in southeastern Turkey and one active rig in the Thrace Basin of northwestern Turkey.
With the addition of wells that have been drilled and tested, but not yet put on production, TransAtlantic expects to achieve its 2014 year-end exit rate guidance of 6,000 to 6,500 BOEPD before the impact of its previously announced acquisition of Stream Oil & Gas Ltd ("Stream").
For the third quarter of 2014, TransAtlantic had average net sales of approximately 5,000 BOEPD, which was equivalent to net sales in the second quarter of 2014 and a 23% increase over net sales in the third quarter of 2013. Net sales for the third quarter of 2014 were comprised of approximately 3,700 BOPD of oil and approximately 8.0 MMCFPD of natural gas. In the last week of July 2014, natural gas demand in Turkey was less than half of its typical level for four days due to a national holiday. In August 2014, the Company upgraded pumps on two Şelmo wells, which resulted in approximately 20 days of individual well downtime in the Şelmo field.
Southeastern Turkey – Şelmo Field Development
TransAtlantic continued its horizontal drilling campaign, which is focused on the southeastern portion of the Şelmo field. In August 2014, the Company completed the Şelmo-68H3 (100% working interest), which had initial average gross production of 250 BOPD. In late September 2014, TransAtlantic completed the Şelmo-94H1 (100% working interest), which had initial average gross production of 300 BOPD. The Company spudded three additional Şelmo MSD wells in the third quarter and expects to complete them by year-end 2014.
TransAtlantic also continued its implementation of secondary recovery in the Şelmo field. A third Şelmo well was converted to an injection well for the Company's waterflood of the field, and TransAtlantic expects to convert a fourth well to injection in the fourth quarter of 2014. The Company also expects to conduct a second phase of polymer injections in the fourth quarter of 2014.
Southeastern Turkey – Molla Drilling Program
TransAtlantic is currently drilling the Bahar-6 (100% working interest), at a depth of approximately 9,000 feet. A portion of the well from the current depth to 10,000 feet will be redrilled and the full cost of the redrilled portion will be assumed by the service provider. The Company has drilled four vertical and directional wells in the Bahar field this year and plans to monitor their performance before drilling additional Bahar wells in 2015.
TransAtlantic completed the Bahar-3 and Bahar-4 (100% working interest), in the third quarter of 2014 and both wells are currently flowing up casing. The Bahar-3 produced an average of approximately 400 BOPD during its initial 22 days of production, while the Bahar-4 produced 350 BOPD on average during its initial 27 days of production. The Company expects to install production tubing on both wells in October 2014. TransAtlantic is currently upgrading the pump on the Bahar-2ST (100% working interest), in the Hazro formation and assessing the well for Mardin formation potential.
Southeastern Turkey – Arpatepe Drilling
The Arpatepe-8 (non-operated, 50% working interest), Bedinan appraisal well was spudded in August 2014 and is currently drilling at approximately 7,500 feet. TransAtlantic expects the well to be completed in the fourth quarter of 2014. The Company also plans to initiate a waterflood pilot test to assess the effectiveness of secondary recovery in the Arpatepe field.
Southeastern Turkey – Idil Exploration
TransAtlantic is preparing to spud a vertical exploration well on its Idil license in October 2014. The Company's joint venture partner, Onshore Petroleum Company AS, has been assigned a 50% interest in the Idil license and will fund 100% of TransAtlantic's expected share of the well cost.
Northwestern Turkey – Thrace Basin Development
TransAtlantic is drilling a five-well campaign of shallow, conventional vertical wells (41.5% working interest) in the Osmanli area. The first three wells had an average cost of less than $1.0 million each and tested 1.5 MMCFPD gross, 2.0 MMCFPD gross and 4.0 MMCFPD gross. The Company expects to put the first three wells on production and complete the remaining two wells in the fourth quarter of 2014.
In September 2014, TransAtlantic successfully recompleted a discovery well in a new zone in the Göçerler field (50% working interest), which tested 4.0 MMCFPD and is expected to be put on production in the fourth quarter of 2014. The well is the Company's first completion in the Soğucak limestone reef reservoir. All of TransAtlantic's previous Thrace Basin completions were in sandstone reservoirs. The discovery has increased the Company's interest in developing the limestone reef trend in the central Thrace Basin.
Natural Gas Price Increase in Turkey
On October 1, 2014, the Turkish government increased its natural gas price by 9%. TransAtlantic expects its natural gas sales price will increase by 9% concurrently. The price increase is the first change in Turkey's natural gas price in 24 months and it will be effective through at least December 31, 2014.
Bulgaria
The country of Bulgaria is expected to hold a parliamentary election on October 5, 2014. TransAtlantic submitted a request to acidize the Deventci-R2 (50% working interest) in the second quarter of 2014, and expects the new government to consider its request. The Company conducted a long-term pressure build-up test on the Deventci-R2 in the second quarter of 2014 to evaluate its connectivity to the reservoir following the well's initial test of approximately 2.0 MMCFPD gross with condensates.
Stream Acquisition
TransAtlantic successfully completed its due diligence on Stream and intends to pursue its acquisition, as announced on September 3, 2014. The Company expects to close the acquisition in November 2014.
TransAtlantic anticipates that Stream will hold a special meeting of shareholders to approve the acquisition on November 12, 2014. Prior to Stream's special meeting of shareholders, TransAtlantic intends to host open houses in Vancouver, Calgary and Toronto, Canada to discuss the acquisition with Stream shareholders. The Company expects to announce the dates, times and locations of the open houses when they have been arranged. Certain of the directors and officers of Stream and certain other shareholders representing approximately 42.7% of Stream's 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.
Third Quarter 2014 Earnings Call
TransAtlantic will provide more detailed operational and financial results on its third quarter 2014 earnings call, which it expects to host in early November 2014.
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 drilling, completion and cost of wells, the production and sale of oil and natural gas, secondary recovery operations, the hosting of an earnings conference call, the timing of the closing of a transaction and the timing and receipt of applicable shareholder, court and third party approvals, 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.
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.
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
