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TRANSATLANTIC PETROLEUM LTD $
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TransAtlantic Petroleum Announces Third Quarter 2012 Financial Results

2012-11-30 13:43 ET - News Release

HAMILTON, Bermuda, Nov. 30, 2012 (GLOBE NEWSWIRE) -- TransAtlantic Petroleum Ltd. (TSX:TNP)(NYSE-MKT:TAT) (the "Company" or "TransAtlantic") announces financial results for the quarter ended September 30, 2012.

Selected Highlights

  • Adjusted EBITDAX from continuing operations for the third quarter of 2012 totaled $22.9 million (Adjusted EBITDAX is a non-GAAP financial measure that is defined and reconciled to net income later in this press release);
  • Third quarter of 2012 results were impacted by $6.3 million of unrealized mark-to-market derivative losses, $0.1 million of foreign exchange losses, $6.5 million of net income from discontinued operations, and other expenses or deductions totaling $0.8 million.

Third Quarter 2012 Results

Total revenues increased to $33.0 million for the three months ended September 30, 2012 compared to $32.0 million realized in the same period in 2011 and $32.5 million for the three months ended June 30, 2012. Net income from continuing operations for the three months ended September 30, 2012 was $0.5 million, or $0.00 per share (basic and diluted), compared to a net loss of $4.8 million, or $0.01 per share (basic and diluted), for the three months ended September 30, 2011 and $8.6 million, or $0.02 per share (basic and diluted) for the three months ended June 30, 2012. Reported net income for the third quarter of 2012 included $6.3 million of unrealized mark-to-market derivative losses, $0.1 million of foreign exchange loss, $6.5 million of net income from discontinued operations, and other expenses or deductions totaling $0.8 million.

Adjusted EBITDAX from continuing operations for the three months ended September 30, 2012 was $22.9 million compared to $19.7 million for the three months ended September 30, 2011 and $22.5 million for the quarter ended June 30, 2012.

For the three months ended September 30, 2012, total net sales decreased to approximately 384 thousand barrels of oil equivalent ("Mboe"), compared to net sales of approximately 460 Mboe for the same period last year and approximately 413 Mboe in the second quarter of 2012. During the three months ended September 30, 2012, the Company sold an average of 4,168 boe per day. Total net sales were comprised of approximately 229 thousand net barrels ("bbls") of oil at an average rate of approximately 2,492 net bbls per day and approximately 928 net million cubic feet ("MMcf") of natural gas at an average rate of approximately 10.1 net MMcf of natural gas per day.

For the quarter ended September 30, 2012, the Company's average realized price (unhedged) was $105.81 per bbl of oil and $8.14 per thousand cubic feet ("Mcf") of natural gas, compared to an average realized price of $104.43 per bbl and $6.53 per Mcf in the quarter ended September 30, 2011 and $97.45 per bbl and $8.48 per Mcf in the quarter ended June 30, 2012.

 
TransAtlantic Petroleum Ltd.
Consolidated Statements of Operations
(unaudited) 
 For the Three Months Ended Sept. 30, For the Nine Months Ended Sept. 30,
U.S. dollars and shares in thousands, except per share amounts 2012201120122011
         
Revenues:        
Oil and natural gas sales  $31,786 $31,621 $98,323 $91,052
Other  1,167 417 2,093 1,586
Total revenues  32,953 32,038 100,416 92,638
Costs and expenses:        
Production  4,542 3,329 12,470 12,036
Exploration, abandonment and impairment  2,104 3,944 11,783 15,787
Seismic and other exploration  1,725 3,174 2,401 7,799
Contingent consideration and contingency changes  -- -- -- 1,250
General and administrative  6,744 8,949 25,301 27,514
Depreciation, depletion and amortization  8,147 11,368 26,698 22,613
Accretion of asset retirement obligation  164 341 579 893
Total costs and expenses  23,426 31,105 79,232 87,892
Operating income  9,527 933 21,184 4,746
Other (expense) income:        
Interest and other expense  (1,086) (3,314) (6,363) (10,471)
Interest and other income  1,019 466 1,501 938
(Loss) gain on commodity derivative contracts  (7,146) 6,460 (5,277) (2,697)
Foreign exchange (loss) gain  (133) (9,129) 3,066 (9,206)
Total other expense  (7,346) (5,517) (7,073) (21,436)
Income (loss) from continuing operations before income taxes  2,181 (4,584) 14,111 (16,690)
Current income tax (expense) benefit  (1,440) 970 (3,882) (2,692)
Deferred income tax (expense) benefit  (272) (1,190) (2,660) 773
Net income (loss) from continuing operations.  469 (4,804) 7,569 (18,609)
Net income (loss) from discontinued operations.  122 (428) (4,540) (28,897)
 Gain on disposal of discontinued operations  6,437 -- 33,651 --
 Income tax provision  (34) (1,180) (8,207) (1,698)
Net income (loss) from discontinued operations 6,525 (1,608) 20,904 (30,595)
Net income (loss)  $6,994  $ (6,412) $28,473  $ (49,204)
Other comprehensive income (loss)  3,146 (38,271) 17,650 (48,673)
Comprehensive income (loss)  $10,140  $ (44,683) $46,123  $ (97,877)
Basic and diluted net income (loss) per common share:        
From continuing operations  $0.00  $ (0.01) $0.02  $ (0.05)
From discontinued operations $0.02 $0.00 $0.06  $ (0.09)
Basic weighted average number of shares outstanding 367,960 365,472 366,981 352,682
Diluted weighted average number of shares outstanding 370,020 365,472 368,869 352,682
 
TransAtlantic Petroleum Ltd.
Summary Consolidated Statements of Cash Flows
(unaudited)
 For the Nine Months Ended
U.S. dollars in thousandsSeptember 30, 2012September 30, 2011
     
Net cash provided by operating activities from continuing operations  $50,655 $32,691
Net cash used in investing activities from continuing operations  (41,460) (52,718)
Net cash provided (used in) by financing activities from continuing operations  (125,719) 18,607
Net cash provided by (used in) discontinued operations  126,963 (9,363)
Effect of exchange rate changes on cash and cash equivalents  614 (1,761)
Net increase (decrease) in cash and cash equivalents  $11,053  $ (12,544)
 
TransAtlantic Petroleum Ltd.
Summary Consolidated Balance Sheets
 As of
U.S. dollars in thousandsSeptember 30, 2012December 31, 2011
  (unaudited)  
ASSETS    
Current assets:    
Cash and cash equivalents  $26,169 $15,116
Accounts receivable  56,114 46,328
Prepaid and other current assets  6,689 8,338
Deferred income taxes  2,364 2,124
Assets held for sale  1,547 128,117
Total current assets  92,883 200,023
Property and equipment, net  260,476 235,429
Other  23,646 13,187
Total assets  $377,005 $448,639
     
LIABILITIES & SHAREHOLDERS' EQUITY    
Current liabilities:    
 Accounts payable  35,316 26,178
 Short term debt  -- 80,732
 Accrued liabilities and other  38,816 27,023
 Derivative liabilities  4,315 3,716
 Liabilities held for sale  9,472 26,813
Total current liabilities  87,919 164,462
Total liabilities  156,600 277,366
Total shareholders' equity  220,405 171,273
Total liabilities and shareholders' equity  $377,005 $448,639
 
Reconciliation of Net Income to Adjusted EBITDAX
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
U.S. dollars in thousands 2012201120122011
         
Net income (loss) from continuing operations  $469  $ (4,804) $7,569  $ (18,609)
Adjustments:        
Interest and other, net  67 2,848 4,862 9,533
Income tax benefit  1,712 220 6,542 1,919
Exploration, abandonment, and impairment  2,104 3,944 11,783 15,787
Seismic and other exploration  1,746 2,698 1,900 5,675
Foreign exchange loss (gain)  133 9,129 (3,066) 9,206
Share-based compensation  403 389 1,506 1,346
Derivative loss (gain)  7,146 (6,460) 5,277 2,697
Accretion of asset retirement obligation  164 341 579 893
Depreciation, depletion, and amortization  8,147 11,368 26,698 22,613
Revaluation of contingent consideration  -- -- -- 1,250
Bulgaria license penalty  -- -- 2,000 --
Inventory book to physical adjustment  -- -- 1,223 --
Net other items  842 -- 1,426 --
Adjusted EBITDAX from continuing operations  $22,933 $19,673 $68,299 $52,310
         

Adjusted EBITDAX is a non-GAAP financial measure that represents earnings from continuing operations before income taxes, interest, depreciation, depletion, amortization, impairment, abandonment, and exploration expenses, unrealized derivative losses and non-cash share-based compensation expense.

The Company believes Adjusted EBITDAX assists management and investors in comparing the Company's performance and ability to fund capital expenditures and working capital requirements on a consistent basis without regard to depreciation, depletion and amortization, impairment of natural gas and oil properties and exploration expenses, which can vary significantly from period to period. In addition, management uses Adjusted EBITDAX as a financial measure to evaluate the Company's operating performance. Adjusted EBITDAX is also widely used by investors and rating agencies. 

Adjusted EBITDAX is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income, income from operations, or cash flow provided by operating activities prepared in accordance with GAAP. Information regarding income taxes, interest, depreciation, depletion, amortization, impairment, abandonment, and exploration expense is unavailable on a forward-looking basis. Net income, income from operations, or cash flow provided by operating activities may vary materially from Adjusted EBITDAX. Investors should carefully consider the specific items included in the computation of Adjusted EBITDAX. The Company has disclosed Adjusted EBITDAX to permit a comparative analysis of its operating performance and debt servicing ability relative to other companies.

About TransAtlantic

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.

The TransAtlantic Petroleum Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=12745

(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 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

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