Ms. Tabitha Bailey reports
TRANSATLANTIC PETROLEUM ISSUES RESERVES PRESENTATION AND PROVIDES UPDATES ON HEDGING, CORE ANALYSIS, OPERATIONS, AND 2020 CAPITAL EXPENDITURE PROGRAM
TransAtlantic Petroleum Ltd. has issued a presentation on the company's 2019 reserves, and has provided an update on the company's hedging program, the results of recent core analysis, its recent operations and its 2020 capital expenditure program.
Today, the company unwound its three-way collar contract with DenizBank AS, which hedged approximately 1,000 barrels of oil per day of the company's oil production in Turkey. The three-way collar contract had a Brent floor of $55, a Brent ceiling of $72.90 and a Brent long call of $80, and was in place through April 30, 2020. The company also unwound its swap contract with Denizbank, which hedged approximately 1,000 barrels per day of the company's oil production in Turkey. The swap contract had a Brent strike price of $60.30 and was in place through Dec. 31, 2020. In connection with these transactions, the company will receive approximately $6.5-million. The company intends to use these proceeds to pay down its term loan with Denizbank, which will leave approximately $10.6-million outstanding under the term loan. Following these transactions, the company does not have any commodity derivative contracts that hedge the company's oil price risk.
The company has issued a presentation on the company's 2019 reserves, which can be found on the company's website under the investor relations section. The presentation contains certain non-generally accepted accounting principle financial measures. Please see the reconciliations for such non-GAAP financial measures contained at the end of the presentation.
Results of recent core analysis
The company has received partial results of the core analysis on the Yeniev-4, Yeniev-5 and Bahar-12 wells. Based on these partial results, the oil saturation in the Bedinan formation in the Bahar field warrants several additional wells. Additional zones in the Hazro sands in the Bahar field have comparable oil saturation with the productive Hazro F3 and F4 zones, warranting further testing of such additional zones. Additional lower permeability pay is present in the Bedinan formation in the Yeniev field above the current perforated intervals, which will likely require a fracture stimulation to produce commercially. Additional core processing is continuing, and the results of this additional core processing will be factored into the company's future development decisions.
The company whipstocked the Goksu-4H well in January, 2020. The well was redrilled to a total depth of 5,720 feet. Although the company encountered high permeability in the Mardin formation, tests did not indicate commercial quantities of oil.
Update on 2020 capital expenditure program
The company expects its net field capital expenditures for 2020 to range between $7.5-million and $15-million. The company expects net field capital expenditures during 2020 to include between $1.0-million and $9.0-million in drilling and completion expense for between three and seven planned wells, between $1.0-million and $3.0-million for recompletions, between $1.0-million and $2.0-million implementing a water flood in the Bedinan sandstone in the Arpatepe field, and approximately $1.0-million in facilities upgrades to the company's natural gas power generation infrastructure. The company will continue to monitor oil prices to keep its capital expenditure budget within the capacity of its cash flow, cash balances and debt retirement schedule. The company's projected 2020 capital expenditure budget is subject to change.
About TransAtlantic Petroleum Ltd.
The company 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.
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