HAMILTON, Bermuda, April 4, 2014 (GLOBE NEWSWIRE) -- TransAtlantic Petroleum Ltd. (TSX:TNP) (NYSE-MKT:TAT) (the "Company" or "TransAtlantic") today provided an operational update on its current drilling program.
Operational Update
For the first quarter of 2014, TransAtlantic had average net sales of approximately 4,600 BOEPD, a 5% increase over average net sales in the fourth quarter of 2013. Average net sales for the first quarter of 2014 were comprised of approximately 2,900 BOPD of oil and approximately 10.2 MMCFPD of natural gas. Several wells were shut-in to prepare for sidetrack operations, conversion to waterflood injection and polymer injection. The Company currently has three active rigs in southeastern Turkey and one active completion unit in Bulgaria. TransAtlantic spudded seven wells and completed seven new wells in the first quarter of 2014. The Company plans to drill between 33 and 49 gross wells in 2014.
Southeastern Turkey – Şelmo Field Development
TransAtlantic recently spudded its sixth MSD horizontal well, the Şelmo-84H (100% working interest) which is expected to have a total measured depth of approximately 7,000 feet. The Company's fifth MSD horizontal well, the Şelmo-92H (100% working interest) experienced wellbore instability due to the presence of an unexpected shale stringer in the formation. TransAtlantic sidetracked the Şelmo-92H and stimulated 100 feet of its lateral length. The well had initial production of 250 BOPD gross. The Company's fourth MSD horizontal well, the Şelmo-86H (100% working interest), experienced wellbore instability in the Antak-MSD transition zone. As a result the well was sidetracked and is currently being drilled in the lateral portion of the well. TransAtlantic expects to spud six additional horizontal wells in the Şelmo field in 2014.
In the first quarter of 2014, TransAtlantic initiated a waterflood pilot test program in the Şelmo field. Two Şelmo wells were shut-in for conversion to injector wells. The first conversion was successfully completed and the Company has begun to inject water into the Şelmo field. TransAtlantic believes secondary recovery will increase production from the Şelmo field and intends to conduct at least two additional waterflood pilot tests in the field in 2014.
The Company also took six Şelmo wells offline in the first quarter of 2014 to conduct polymer injection for an expected net oil enhancement. Prior to being shut-in, the six wells in total were producing approximately 70 BOPD net.
Southeastern Turkey – Molla Drilling Program
TransAtlantic has completed shooting approximately 90% of its planned 800 km2 (300 square miles) Molla 3D seismic program. The remaining seismic is expected to be shot in the second quarter of 2014. The final phase of processed data is projected to be delivered in the third quarter of 2014.
The Company is drilling the Bahar-2ST well (100% working interest) to test the Bedinan formation west of the original bottom-hole location at a true vertical depth of approximately 10,500 feet. The well is currently drilling at a depth below 7,900 feet. Following the Bahar-2ST, TransAtlantic intends to drill the Bahar-3 (100% working interest), a vertical well planned to yield additional confirmation of the Bahar structure.
Southeastern Turkey – Arpatepe Drilling
TransAtlantic is drilling the Arpatepe-7 (non-operated, 50% working interest), a Bedinan appraisal well with expected total depth of 8,200 feet. The well is currently drilling at a depth below 5,700 feet. The Company plans to drill one additional appraisal well and initiate a waterflood pilot test on its Arpatepe license in 2014.
Northwestern Turkey – Thrace Basin Development
TransAtlantic recently completed its second horizontal well in the Mezardere siltstone, the TDR-11H (41.5% working interest) for a total cost of approximately $2.4 million gross. The well was completed with a ten-stage stimulation and had initial gross production of 2 MMCFPD while on restricted flow, but continues to improve as stimulation fluid is recovered. The Company's first horizontal well in the Mezardere siltstone, the BTD-2H (41.5% working interest) was drilled to a total measured depth of 4,050 feet and completed with an eight-stage stimulation for approximately $2.2 million gross. Current gross production for the BTD-2H is 2.3 MMCFPD. Production has increased 15% from its initial rate due to increased contributions from additional stages of the completion. TransAtlantic has budgeted between four and eight additional horizontal wells in the Mezerdere and Teslimkoy formations for 2014. The Company also expects to drill between eight and twelve conventional shallow wells in the Thrace Basin this year.
The seismic data from TransAtlantic's Osmanlı 3D seismic program of 234 km2 (90 square miles) in the Thrace Basin is approximately 75% processed. It is expected to be completed in the next several weeks. TransAtlantic's partners have elected to participate in evaluating the Osmanlı 3D seismic data.
Bulgaria
TransAtlantic achieved target depth on the Deventci-R2 (50% working interest) in January 2014. The Company moved a completion unit on location and is reconfiguring the bottom-hole equipment in order to properly test the open-hole interval and behind-pipe potential. The Deventci-R2 is a directional exploration well targeting the Dolni Lukovit zone at a depth of approximately 14,500 feet.
Poland
TransAtlantic's wholly owned subsidiary, TransAtlantic Worldwide, Ltd. ("TransAtlantic Worldwide"), signed a non-binding term sheet with San Leon Energy plc and Hutton Energy plc to acquire a 50% interest in and operatorship of nine Polish concessions containing approximately 1.9 million gross acres. The targets are conventional and unconventional, non-shale, oil and gas prospects in the Permian Basin of Poland. In exchange for the concessions, TransAtlantic Worldwide would fund $5.0 million of the partners' past expenses which would be repaid with 50% of the initial production of the partners' net interests. TransAtlantic Worldwide would also fund 100% of the cost to drill and complete two wells and re-enter and stimulate four wells. Upon realizing accumulated sales of 150,000 BOE, net to its 50% interest, TransAtlantic Worldwide would pay its partners a $5.0 million success fee.
The transaction is subject to the completion of satisfactory due diligence, definitive agreements and corporate, government, and regulatory approvals. A more detailed discussion of the proposed transaction is available on TransAtlantic's website at http://www.transatlanticpetroleum.com/news.aspx.
First Quarter 2014 Earnings Call
TransAtlantic will provide more detailed operational and financial results on its first quarter 2014 earnings call, which it expects to host in early May 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 acquisition and processing of seismic data, the hosting of an earnings conference call, 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.