HAMILTON, Bermuda, Jan. 2, 2013 (GLOBE NEWSWIRE) -- TransAtlantic Petroleum Ltd. (TSX:TNP) (NYSE-AMEX:TAT) (the "Company" or "TransAtlantic") announces the Company's 2013 capital budget and production guidance, as approved by its Board of Directors, provides an operations update, and announces enhancements to the Company's organizational structure.
2013 Capital Expenditure Budget
TransAtlantic's Board of Directors has approved a capital expenditure budget for the twelve months ending December 31, 2013 of $131 million net to the Company. The budgeted spending includes $101 million of drilling and completion expense, $19 million of seismic and $11 million of infrastructure and other.
|Drilling and Completion||$101 million|
|Infrastructure & Other||$11 million|
Approximately 32% of the Company's spending is expected to be directed to the Thrace Basin, 40% toward activity on the Molla licenses, 19% at Selmo field, and 9% on exploration and other drilling.
|Thrace Basin||$42 million|
|Exploration & Other||$12 million|
Actual expenditures are likely to deviate from this initial plan according to drilling results, commodity prices, cash flow and capital availability (including the consummation of one or more joint ventures). The Company expects cash flow, available credit, and cash on hand will be sufficient to fund this spending program. TransAtlantic continues to work on forming a joint venture on several of the Company's licenses. The successful consummation of a joint venture may also provide cash for planned activities and necessitate increased drilling activity.
2013 Production Guidance
TransAtlantic currently expects production during 2013, excluding any impact from exploration drilling, to total 1.8 million to 2.1 million barrels of oil equivalent ("boe") or an average production rate of between 5,000 and 5,700 boe per day. Crude oil is expected to account for approximately 60% of production volumes.
Regional CapEx Detail and Operations Update
Production from the Goksu-3H has continued at an encouraging rate, averaging 425 bbls of oil per day over its first 30 days of production, 412 bbls of oil per day over its first 60 days of production, and 477 bbls of oil per day over a recent seven day period. To further evaluate the play concept, during 2013 TransAtlantic plans to target the Mardin formation with six horizontal and one vertical wells in the Molla licenses (100% working interest).
The Company is pleased to announce that TransAtlantic's first Bedinan test in the Molla licenses, the Bahar-1 exploration well, was successfully fracture stimulated on December 2, 2012. Sales volumes from the Bahar-1 started at a daily rate of 576 bbls of oil on December 5, 2012 and averaged 375 bbls of oil per day over the subsequent 20 days. In addition to the Bedinan oil flow test, the Hazro formation in Bahar-1 is also being tested. The Hazro exhibited oil and gas shows on the mud logs while drilling which was then corroborated by open hole log analysis and early test results are indicating productivity of approximately 150 bbls of oil per day. After the Hazro test, the Company will determine the appropriate production configuration to resume sales from the well.
In light of the Bahar-1 results, the Company plans to drill three wells targeting the Dadaş shale and/or Bedinan sandstone during 2013. TransAtlantic has recently spud the Bahar-2 exploration well, which will be drilled as a horizontal well in the Bedinan sandstone and is expected to be completed with a multi-stage frac.
TransAtlantic has allocated $15 million for seismic activities and infrastructure in the Molla area in order to appraise both the Mardin and Bedinan discoveries.
As a result of advanced modeling based on reinterpreted 3D seismic and well control, the Company believes that horizontal drilling can be of large benefit to Selmo's development. TransAtlantic's budget therefore includes plans to drill five horizontal and one deep vertical test wells in Selmo field during 2013. The Company also expects to fracture stimulate seven existing Selmo wells during the year.
During 2013 TransAtlantic plans to drill 17 wells in the Tekirdag Field area development program (41.5% working interest), eight wells testing the Hayrabolu structure area, and 11 wells in other licenses. Additionally, TransAtlantic has allocated $4 million for seismic activities and infrastructure.
During 2013 TransAtlantic plans to drill an appraisal well at Gaziantep and resume activity in Bulgaria. In the Gaziantep area, completion activity on the Alibey-1H exploration well (62.5% working interest) began in early December. Production during swabbing operations has indicated initial productivity of approximately 150 bbls of oil per day from the first stage of perforations. TransAtlantic and its partners have elected to temporarily suspend activity on the well as winter weather conditions have impeded equipment and personnel movement. The remaining prospective intervals will be completed and the well equipped for production when weather and completion tools dictate. The Company plans to drill a second well in its Gaziantep licenses to appraise the discovery and successful horizontal well test at the Alibey-1H well.
TransAtlantic is currently drilling below 9,300 feet at the Durokoy-1 well on the Idil license. The Konak-1 well on the Gurun license in central Turkey did not encounter economic levels of hydrocarbons.
As a result of the Company's successful initial results in several new plays in Southeastern Turkey, and continued activity in the Thrace Basin, TransAtlantic has advanced an ongoing process to increase internal exposure to resource development practices among management and evaluation personnel. As part of this strategy, TransAtlantic is evolving toward a hub-and-spoke structure, with a strong technical team based in Dallas, Texas and regional outposts staffed predominately with local experts and asset-focused, execution-minded, operating teams who rotate frequently to North America to facilitate exposure to resource play concepts and related technology.
N. Malone Mitchell, 3rd, TransAtlantic's Chairman and Chief Executive Officer stated, "I am encouraged by our recent successful activity in Southeastern Turkey. We are continuing to evolve our internal structure to most appropriately develop the resources we have identified. We have a good team in place to advance our 2013 strategy, and we will continue to bolster our team with targeted hires with skills appropriate for resource development. With some successful execution of development wells with horizontal multi-completions, I believe 2013 may prove to be an impactful year for TransAtlantic."
In facilitating this strategy, TransAtlantic's Board of Directors has appointed Ian Delahunty to the role of President. Mr. Delahunty joined TransAtlantic in 2008 and has worked with the Company's operations in Turkey, Romania and Morocco and has recently served as Vice President, Business Development and as Vice President, Engineering overseeing completions and workovers. Prior to working with TransAtlantic, Mr. Delahunty worked as a Senior Engineer with Schlumberger in Vietnam and the United States and as a Completions Engineer with Oxy in the United States. Mr. Delahunty will oversee all business and operational aspects of the Company and its subsidiaries and will continue leading TransAtlantic's Business Development efforts.
Justin R. Davis has been named Vice President, Engineering and will manage production operations. Mr. Davis' background includes significant tight reservoir experience, including previous roles serving as Operations Manager for Riata Energy's Piceance Basin project in Colorado and stimulation design and engineering for SandRidge Energy's West Texas assets. Mr. Davis was also previously employed in various management positions with Viking International, TransAtlantic's former oilfield services subsidiary. In his new role Mr. Davis is responsible for completions and production engineering, and operations.
The Company has recently hired Mitchell R. Whatley to serve as Drilling Manager. Mr. Whatley is expected to start with TransAtlantic in mid-January 2013 after serving the past two years with Pioneer Natural Resources with a particular emphasis on the Eagle Ford shale. Mr. Whatley also served two years with EnCana Oil and Gas in roles targeting the Deep Bossier and the Haynesville shale plays.
Mr. Mitchell and Mustafa Yavuz will continue in their existing roles as Chairman and Chief Executive Officer and Chief Operating Officer, respectively.
Ian Delahunty, TransAtlantic's President, stated, "As a result of the discovery of the Goksu field, the successful horizontal well test at Goksu-3H, the discovery and successful application of fracture stimulation at Bahar-1, the horizontal well discovery at Alibey-1H, and the ongoing activities in the Thrace basin, TransAtlantic has identified key organizational elements essential to advancing resource development expertise. A major part of our 2013 strategy will be to promote our technical leadership and asset team based structure."
TransAtlantic Petroleum Ltd. is an international energy company engaged in the acquisition, development, exploration and production of oil and natural gas. The Company holds interests in developed and undeveloped oil and natural gas properties in Turkey, Bulgaria and Romania.
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(NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.)
This news release contains statements regarding TransAtlantic's capital spending plans for the twelve months ending December 31, 2013, oil and natural gas production expectations during the twelve months ending December 31, 2013, planned drilling of vertical and horizontal wells, planned seismic and infrastructure construction, expected start date of Mitchell R. Whatley as Drilling Manager, and 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 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.
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, is derived by the Company by converting natural gas to oil in the ratio of six thousand cubic feet ("Mcf") of natural gas to one bbl of oil. A boe conversion ratio of 6 Mcf to 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. Boe may be misleading, particularly if used in isolation.
CONTACT: Chad Potter, VP, Financial and Investor Relations (214) 220-4323 http://www.transatlanticpetroleum.com 16803 Dallas Parkway Suite 200 Addison, Texas 75001
Source:TransAtlantic Petroleum Ltd.