Mr. Wil Saqueton reports
TRANSATLANTIC PETROLEUM LTD. ANNOUNCES FIRST QUARTER 2013 FINANCIAL RESULTS, PROVIDES AN OPERATIONS UPDATE AND SCHEDULES CONFERENCE CALL AND ANNUAL MEETING
TransAtlantic Petroleum Ltd. has released financial results for the quarter ended March 31, 2013, provided an operations update, and scheduled an investor conference call and annual meeting.
Highlights:
- Net income from continuing operations for the first quarter of 2013 was $3.0-million.
- Adjusted earnings before interest, taxes, depreciation and amortization from continuing operations for the first quarter of 2013 totalled $19.5-million (adjusted EBITDA is a non-generally accepted accounting principles financial measure that is defined and reconciled to net income).
- The company acquired bolt-on properties in the Molla area of southeastern Turkey: a 100-per-cent working interest and operatorship of more than 150,000 acres.
- It had encouraging horizontal well results in the Mardin formation of southeastern Turkey.
- The company expects to spud a first horizontal well in the Kesan formation of northwestern Turkey in the summer of 2013.
FINANCIAL RESULTS
For the three months ended
March 31, March 31, Dec. 31,
2013 2012 2012
Net sales
Oil (Mbbl) 239 224 263
Natural gas (MMcf) 801 1,367 862
Total net sales (Mboe) 373 452 407
Total net sales (boe/day) 4,144 4,967 4,424
Realized commodity pricing
Oil ($/bbl unhedged) $103.00 $108.14 $99.96
Oil ($/bbl hedged) $97.76 $101.56 $97.19
Natural gas ($/Mcf unhedged) $10.12 $7.64 $9.87
Natural gas ($/Mcf hedged) $10.12 $7.64 $9.87
Total revenues were $35.5-million for the three months ended March 31, 2013, as compared with $37.5-million for the same period in 2012 and $38.0-million for the three months ended Dec. 31, 2012. Net income from continuing operations for the three months ended March 31, 2013, was $3.0-million, or one cent per share (basic and diluted), as compared with a net loss of $1.5-million, or nil per share (basic and diluted), for the three months ended March 31, 2012, and a net loss of $13.9-million, or four cents per share (basic and diluted), for the three months ended Dec. 31, 2012. Net income for the first quarter of 2013 included $500,000 of unrealized mark-to-market derivative gains and $500,000 of foreign exchange losses.
Adjusted earnings before interest, taxes, depreciation and amortization from continuing operations for the three months ended March 31, 2013, were $19.5-million, as compared with $22.2-million for the three months ended March 31, 2012, and $22.4-million for the quarter ended Dec. 31, 2012.
Operational update
TransAtlantic's seven-day average net production rate as of May 12, 2013, was approximately 4,087 barrels of oil equivalent per day, including 2,630 barrels of oil per day and 8.8 million cubic feet of natural gas per day.
Recent acquisition in southeastern Turkey: Molla-Arpatepe area
In May, 2013, the company acquired three adjacent blocks that encompass more than 150,000 acres in southeastern Turkey. The leases are located between the Goksu, Arpatepe and Bati Raman fields, and 80 per cent of the acreage is within proven hydrocarbon systems. In addition to the potential for horizontal drilling, several existing wells may be enhanced by stimulation and completion technologies. TransAtlantic expects to spud its first horizontal well on the licences by the end of 2013.
Southeastern Turkey: Molla-Arpatepe area
TransAtlantic recently completed the Goksu-4H, the second horizontal well drilled on its Mardin program, in southeastern Turkey. Sales from the Goksu-4H commenced on April 26, 2013, at 314 bbl of oil per day and averaged 263 bbl of oil per day over the first seven days of production. The Goksu-4H was drilled and completed for approximately $2.5-million, an improvement of approximately $1.0-million from the first well in the horizontal Mardin program, the Goksu-3H. The Goksu-3H has produced more than 60,000 gross bbl of oil to date and continues to produce at a rate of approximately 150 bbl of oil per day.
The company recently reached target depth on its third Mardin horizontal well, the Oba-1H, at a vertical depth of approximately 6,300 feet and a total measured depth of 9,650 feet. Testing is likely to occur in June, 2013. TransAtlantic expects to continue its Mardin horizontal well program.
In TransAtlantic's horizontal Bedinan-Dadas program, the Bahar-2H horizontal well has resumed drilling and is expected to reach target depth in June, 2013. The company expects to perform a multistage hydraulic fracture stimulation on the horizontal section of the Bedinan formation.
TransAtlantic has commenced an approximately 800-square-kilometre 3-D seismic program over its Molla, West Molla and northwest Arpatepe licences, which it expects to complete by the end of 2013.
Southeastern Turkey: Selmo area
TransAtlantic plans to resume drilling in the Selmo area with an initial horizontal well, the Selmo-13H, which it expects to spud in June, 2013. The company expects to drill four additional horizontal wells in the area in 2013.
Southeastern Turkey: Gaziantep area
TransAtlantic recently completed a multistage acid stimulation on the Alibey-1H well and expects it to commence production in the summer of 2013.
Northwestern Turkey: Thrace basin
The company completed the Yildirum-1, its first commercial discovery in the Temrez licence (100-per-cent working interest), in mid-April, 2013. The well had initial production of more than one million cubic feet per day following a one-stage hydraulic fracture stimulation. It is currently undergoing reservoir limits testing. TransAtlantic plans to drill at least one appraisal well in 2013 and subsequently construct a pipeline to the area. The Yildirum-1 will be produced by compressed natural gas until the pipeline is completed.
The company's multistage hydraulic fracturing program in Thrace basin is continuing with many recent successes, including the Baglik-1 well, which had initial production of three million cubic feet per day.
Based on recent positive results, TransAtlantic anticipates spudding its first horizontal well in the Thrace basin in the summer of 2013. The DTD-19HK will undergo a multistage hydraulic fracture stimulation of a lateral wellbore in the Kesan formation.
Bulgaria
TransAtlantic expects to continue drilling the Deventci-R2 well by the fall of 2013, depending upon rig availability.
Outlook
The company expects net oil and natural gas sales during the three months ending June 30, 2013, to average approximately 4,000 boe per day, with crude oil comprising approximately 60 per cent of daily volumes.
Conference call
The company has scheduled a conference call for May 24, 2013, at 7:30 a.m. Central Time (8:30 a.m. Eastern Time) to discuss first quarter 2013 financial results and provide an operations update.
Investors who would like to participate in the conference call should dial 877-878-2762 or 678-809-1005 approximately 10 minutes prior to the scheduled start time and ask for the TransAtlantic conference call. The conference ID is 73945988. A replay will be available through June 7, 2013, and may be accessed by dialling 855-859-2056 or 404-537-3406. The conference ID is 73945988.
An enhanced webcast of the conference call and replay will be available through the company's website. To access the live webcast and replay, click on investors, select events and presentations, and click on listen to webcast under the event listing. The webcast requires Microsoft Windows Media Player or RealOne Player.
Annual meeting
The company has scheduled its annual meeting of shareholders for June 24, 2013, at 10 a.m. Central Time. The annual meeting will be held at TransAtlantic's U.S. headquarters, which is located at 16803 Dallas Parkway, Addison, Tex., 75001.
For more information, please see the company's proxy statement, which is available on the company's website or at U.S. Securities and Exchange Commission's website.
NYSE MKT deficiency letter
As expected, on May 17, 2013, the company received a deficiency letter from NYSE MKT LLC indicating that the exchange has determined that the company is not in compliance with sections 134 and 1101 of the exchange's company guide due to the company's failure to file its quarterly report timely on Form 10-Q for the three months ended March 31, 2013, with the Securities and Exchange Commission. In addition, the exchange asserted that the company's failure to file its quarterly report timely on Form 10-Q is a material violation of its listing agreement with the exchange.
Pursuant to the exchange's rules, the company has until May 31, 2013, to submit a plan advising the exchange of actions it has taken, or will take, that would bring the company back into compliance with sections 134 and 1101 of the company guide by no later than Aug. 15, 2013. In the event that the company is unable to file its quarterly report on Form 10-Q on or before May 31, 2013, the company expects to submit a plan to the exchange by that date advising the exchange of actions it has taken, or will take, that would bring the company back into compliance with the company guide by no later than Aug. 15, 2013. The exchange will evaluate the plan and determine whether the company has made a reasonable demonstration in the plan of an ability to regain compliance with the applicable continued listing standards by Aug. 15, 2013, in which case the plan will be accepted and the company will have until Aug. 15, 2013, to regain compliance with the continued listing standards.
The company filed its quarterly report on Form 10-Q for the three months ended March 31, 2013, on May 23, 2013.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. dollars, except per-share amounts)
For the three months ended March 31,
2013 2012
Revenues
Oil and natural gas sales $32,725 $34,667
Sales of purchased natural gas 2,274 1,662
Other 513 1,177
Total revenues 35,512 37,506
Costs and expenses
Production 5,527 3,635
Exploration, abandonment and impairment 3,864 2,796
Cost of purchased natural gas 2,180 1,736
Seismic and other exploration 243 663
General and administrative 7,523 9,277
Depreciation, depletion and amortization 8,976 9,169
Accretion of asset retirement obligations 129 251
Total costs and expenses 28,442 27,527
Operating income 7,070 9,979
Other income (expense)
Interest and other expense (890) (3,259)
Interest and other income 375 134
(Loss) on commodity derivative contracts (776) (12,435)
Foreign exchange (loss) gain (487) 4,272
Total other expense (1,778) (11,288)
Income (loss) from continuing operations before income taxes 5,292 (1,309)
Current income tax expense (1,339) (2,020)
Deferred income tax (expense) benefit (921) 1,859
Net income (loss) from continuing operations 3,032 (1,470)
Net (loss) from discontinued operations, net of taxes (93) (2,157)
Net income (loss) $2,939 ($3,627)
Foreign currency translation adjustment (2,836) 13,363
comprehensive income $103 $9,736
Basic and diluted net income (loss) per common share
From continuing operations 0.01 0.00
From discontinued operations 0.00 (0.01)
We seek Safe Harbor.
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