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8-K - FORM 8-K - TRANSATLANTIC PETROLEUM LTD. | d242627d8k.htm |
Thrace
Basin September 2011
Exhibit 99.1 |
Forward Looking
Statements Outlooks, projections, estimates, targets, and business plans in
this presentation or any related subsequent discussions are forward-looking
statements. Actual future results, including TransAtlantic Petroleum Ltd.s own
production growth and mix; financial results; the amount and mix of capital
expenditures; resource additions and recoveries; finding and development costs; project and drilling plans, timing, costs, and capacities;
revenue enhancements and cost efficiencies; industry margins; margin enhancements and
integration benefits; and the impact of technology could differ materially due to a
number of factors. These include changes in long-term oil or gas prices or other market conditions affecting the oil,
gas,
and
petrochemical
industries;
reservoir
performance;
timely
completion
of
development
projects;
war
and
other
political
or
security
disturbances; changes in law or government regulation; the outcome of commercial negotiations;
the actions of competitors; unexpected technological developments; the occurrence and
duration of economic recessions; unforeseen technical difficulties; and other factors discussed
here and under the heading Risk Factors" in our Annual Report on Form 10-K
for the year ended December 31, 2010 and our Quarterly Report on
Form
10-Q
for
the
quarter
ended
June
30,
2011
available
at
our
website
at
www.transatlanticpetroleum.com
and
www.sec.gov.
See
also
TransAtlantics 2010 audited financial statements and the accompanying management
discussion and analysis. Forward-looking statements are based on managements
knowledge and reasonable expectations on the date hereof, and we assume no duty to update these statements as of
any future date.
The information set forth in this presentation does not constitute an offer, solicitation or
recommendation to sell or an offer to buy any securities of the Company. The
information published herein is provided for informational purposes only. The Company
makes no representation that the information and opinions expressed herein are
accurate, complete or current. The information contained herein is current as of the
date hereof, but may become outdated or subsequently may change. Nothing contained
herein constitutes financial, legal, tax, or other advice. The SEC has generally
permitted oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has
demonstrated by actual production or conclusive formation tests to be economically and legally
producible under existing economic and operating
conditions.
We
may
use
the
terms
estimated
ultimate
recovery,
EUR,
probable,
possible,
and
non-proven
reserves,
prospective resources
or upside
or other descriptions of volumes of resources or reserves potentially recoverable through
additional drilling or recovery techniques that the SECs guidelines may prohibit
us from including in filings with the SEC. These estimates are by their nature more
speculative than estimates of proved reserves and accordingly are subject to substantially
greater risk of being actually realized by the Company. There is no certainty that any
portion of estimated prospective resources will be discovered. If discovered, there is no certainty that it will be
commercially viable to produce any portion of the estimated prospective resources
BOE is derived by converting natural gas to oil in the ratio of six thousand cubic feet (Mcf)
of natural gas to one barrel (bbl) of oil. Boe may be
misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 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. 2
|
Company
Overview TransAtlantic Petroleum Ltd. is an international energy company engaged in the
acquisition, development, exploration, and production of crude oil and natural gas in
Turkey, Bulgaria and Romania. 3
NYSE-AMEX:
Toronto:
TAT
TNP
Share Price
(1)
:
$0.80
Market Cap
(1)
:
$292.3 million
Enterprise Value
(1)
:
$427.4 million
Proved Reserves
(2)
:
17.2 MMboe
SEC PV10
(3)
:
$536.3 million
(1)
Priced as of market close on 10/7/2011
(2)
Pro-forma YTD acquisitions and divestitures. Reflects DeGoyler and MacNaughton
(D&M) reserve report, effective 12/31/2010 based on $79.00/barrel and $7.77/Mcf and
Pro Forma for TBNG Acquisition assuming 6/1/11 D&M reserve report based on $92.00/barrel
and $7.64/Mcf for gas. BOE conversions are calculated by the Company. (3)
Please see slide 19 for a reconciliation of our PV10 to our standardized measure.
Executive Management
Chairman & CEO:
N. Malone Mitchell, 3rd
President, COO:
Gary T. Mize
VP, CFO:
Wil F. Saqueton
Executive VP:
Scott Larsen
Investment Highlights
Experienced Management:
Track record of success.
In country experience.
Reinvigorated strategy, asset
rationalization underway.
Differentiated Portfolio:
Base production from conventional
assets with developmental upside.
Eastern Europe/Middle East provides
exposure to established hydrocarbon
trend in underexploited areas with
attractive fiscal terms and commodity
prices (Oil-Brent, Gas-Gazprom).
Optionality of multiple shale targets
if/when the code gets cracked.
Substantial Upside:
Large unevaluated acreage position.
Stacked pays -
Shallow conventional
plays with deeper unconventional
potential.
Several discoveries awaiting appraisal. |
Areas of
Operation 4
Turkey
Selmo:
2
nd
largest
oil
field
in
Turkey
(cum
prod.)
Largest producing asset.
Directional pad drilling.
Thrace Basin:
Multi-pay natural gas opportunities.
Conventional and unconventional targets.
Molla:
Recent discovery in Mardin formation
(estimated 2,500 acre structure).
Shale oil and natural gas potential.
Arpatepe:
Recent 3D delineates established oil play.
Exploration program underway.
Other:
Frontier basins offer under-explored, high
potential, oil and gas opportunities.
Proximal to prolific Iraqi and Syrian giants.
Romania
Sud Craiova:
50/50 joint venture with Sterling
Resources.
Prospective for Silurian shale (natural gas).
Also holds Jurassic oil potential.
Seeking additional joint venture partner(s)
to bear the cost of deep shale test.
Bulgaria
Koynare (Deventci):
Conventional natural gas discovery.
Appraisal well by early 2012.
Additional conventional and
unconventional prospects.
Etropole Shale:
Early-stage resource evaluation.
Partners bearing exploration risk.
Test well spud 9/27/2011. |
Reserve
Profile
(1)
Asset Characteristics
5
Natural
Gas
25%
Oil
75%
Undeveloped
48%
Developed
52%
2Q11 Production Profile
Growth
Profile
(1)
Oil
60%
Natural
Gas
40%
Selmo
57%
Thrace
33%
Other
10%
(1)
Pro-forma YTD acquisitions and divestitures. Reflects DeGoyler and MacNaughton
(D&M) reserve report, effective 12/31/2010 based on $79.00/barrel and $7.77/Mcf and
Pro Forma for TBNG Acquisition assuming 6/1/11 D&M reserve report based on $92.00/barrel
and $7.64/Mcf for gas. BOE conversions are calculated by the Company. |
Recent
Developments Announced Intent to Sell Drilling Services Business
Retained PPHB to act as financial advisor in connection with the
sale, transfer, or other disposition of Viking International
and Viking Geophysical.
If consummated, proceeds allow for debt reduction and growth capital.
Dalea credit agreement maturity extended to March 31, 2012.
Molla -
New Field Discovery in Mardin Group
Discovery well (Gosku-1) had an IP rate of 340 bbl/d.
Estimated 2,500 acre structure, delineation underway.
TAT holds 100% working interest.
Several additional structures nearby.
Bulgarian Farm-out Agreement
LNG Energy, Ltd. (TSX Venture: LNG) will initially fund up to US$7.5 million to immediately
drill, core and test an approximately 10,500 foot (3,200 meter) exploration well on the
A-Lovech exploration license targeting the Etropole shale formation. Well was spud
9/27/2011.
If successful, and we are subsequently awarded a production concession, LNG will fund up to an
additional US$12.5 million, of which US$7.5 million is expected to be used to drill a
second well or for other exploration activities on the Etropole
Concession.
TransAtlantic retains 160,000 acre northern section (Koynare Area) that contains a
conventional gas discovery in the Jurassic-aged Orzirovo formation and is also
prospective for the Etropole. 6 |
Turkey:
Overview 7
Thrace Basin
Key Fields/Basins:
TBNG, Habiller, Alpullu, Temrez, Adatepe,
Edirne, Gorceler, Pelit
Proved Reserves:
23.7 Bcf (~2 Bcf deep formations)
(1)
2Q11 Production:
9.0 MMcf/d (inc. 23 days of TBNG)
Thrace Basin
Southeast
Central
Southeast
Key Fields/Basins:
Selmo, Molla, Arpatepe, Bakuk
Proved Reserves:
13.2 MMboe
(1)
2Q11 Production:
2.4 Mboe/d
Central
Key Fields/Basins:
Tuz Golu, Sivas, Gurun, Adana
Proved Reserves:
0.0 MMboe
2Q11 Production:
0.0 Mboe/d
Turkeys Energy Profile
2010 Population:
75,705,147
2010 GDP:
$735.3 billion
2009 Oil Consumption:
703.2 Mbbls/d
2009 Oil Production:
53.0 Mbbls/d
2009 Nat Gas Consumption:
3,391 MMcf/d
2009 Nat Gas Production:
68 MMcf/d
Source: The World Bank & Energy Information Administration (EIA)
(1)
Pro-forma YTD acquisitions and aforementioned D&M reserve reports. BOE
conversions are calculated by the Company. |
Turkey:
Southeast 8
Selmo
100% working interest.
2
nd
largest oil field in Turkey
(cumulative production).
Largest producing asset (2.3 Mbbl/d).
4Q11 frac program planned
Molla
100% working interest.
Recent discovery in Mardin group
(estimated 2,500 acre structure).
Planning appraisal work
Shale oil potential.
Arpatepe
50% working interest.
Appraisal and exploration program
underway driven by 3D seismic.
Bakuk
50% working interest.
Gas discovery -
excellent well.
Limited market access until 2H12.
Additional large target. |
Turkey: Southeast
Selmo
9
Selmo Overview
100% working interest.
Discovered by Mobil in 1964 and located near the prolific
Zagros fold belt, which encompasses the oil fields of Iran
and Iraq.
Second largest oil field in Turkey by cumulative
production (85.4 million barrels). Oil is 34°
API.
41 producing wells, 39 PUD locations, 8 probable
locations
(1)
.
Frac program to begin during 4Q11.
(1)
As defined in aforementioned D&M reserve reports. |
Turkey:
Southeast Arpatepe
10
Arpatepe Overview
License area covers 95,869 acres.
50% working interest.
The Arpatepe-1 and Arpatepe-2 wells represent Turkeys
first and second economic discoveries of crude oil from
deeper, onshore Paleozoic sandstone formations.
3 producing wells.
Arpatepe-4 completing after encountering the target
Bedinan sands formation.
Arpatepe-6 drilling.
4 additional PUD locations, 4 probable locations. |
Turkey:
Southeast Molla Discovery (Goksu)
11
Molla Overview
License areas covers 52,100 acres.
100% working interest.
Northwestern offset to Arpatepe license and lies just
south of a 12+ MMbbl field (Kastel).
Seismic identified 2,500 acre structure
Discovery well (Goksu-1) produced 340 bbl/d with a 20%
water cut on restricted choke after a light acid skin
stimulation.
Appraisal well planned for 4Q11. |
Turkey: Thrace
Basin 12
TBNG
Alpullu
Temrez
Edirne
Adatepe, Pelit, Gocerler
TBNG
Pilot frac program on shallow natural
gas wells underway.
Recompletion program has added 8
MMcf/d to-date.
Alpullu / Temrez
Seismic interpretation underway, 60
prospects identified; 10-60 Bcfe
targets
(1)
.
Recently spud Pancarkoy prospect (60
Bcf prospective resources)
(1)
.
Adatepe/Gocerler
Acquiring and interpreting seismic.
Recompletion and in-fill drilling at
Gocerler to commence in 1Q12.
Indentified 25 Bcf
(1)
of shallow
prospects on 4288.
Edirne
July 2011 approval of wholesale
natural gas license.
Seeking partner to drill deeper S.
Habbilar prospect (License 4037).
(1) Internal prospective resource estimate prepared 6/30/11 |
Turkey: Thrace
Basin Pancarkoy Underway
13
Pancarkoy-1ST
Spud 10/1/2011.
Re-entry well to frac potentially gas bearing Mezardere sands
at 2,300-2,850 meters.
60 Bcf gross unrisked best estimate prospective resources.
(1)
(1) Internal prospective resource estimate prepared 6/30/11
|
Turkey:
Central 14
Overview
Frontier basins offer under-explored,
high potential, oil and gas
opportunities.
Proximal to prolific Iraqi and Syrian
fields and infrastructure.
Seeking exploration partners.
Sivas
100% working interest.
~1.6 million acres
Relatively unexplored tertiary basin
with working petroleum systems.
Tuz
Golu
/
Tuz
Gulu
South
100% working interest.
~1.2 million acres
Relatively unexplored tertiary basin
with active hydrocarbon generation.
Other
Multiple petroleum systems.
Identified shallow amplitude play in
untested Miocene sands
Biogenic gas and deeper Miocene
carbonate potential. |
Bulgaria
15
Overview
The A-Lovech exploration license covers approximately
565,000 acres (2,288 square kilometers) in NW Bulgaria.
All acreage is prospective for the Etropole shale formation.
Proximal to existing natural gas infrastructure.
Attractive terms: 2.5%-30% royalty and 10% corporate tax.
LNG Energy Agreement
LNG Energy , Ltd. (TSX Venture: LNG) to fund initial CapEx to
earn 50% interest in up to 405,000 acre future concession.
LNG will fund up to US$7.5MM to immediately drill, core
and test a ~10,500 foot (3,200 meter) exploration well
targeting the Etropole shale formation. Spud 9/27/2011.
Upon award of a production concession, LNG will fund up to
an additional US$12.5MM, of which US$7.5MM is to be
used to drill a second well or for other exploration activities.
Koynare (Deventci)
160,000 acres (648 square kilometers)
Conventional gas discovery in the Jurassic-aged Orzirovo.
Deventci R-1, is currently producing ~250 Mcf/d on a limited
test basis. Waiting on award of production license (EIA
underway). Deventci-R2 to spud in November 2011.
Seeking a development partner.
Bulgarias Energy Profile
2010 Population:
7,561,910
2010 GDP:
$47.7 billion
2009 Oil Consumption:
110.0 Mbbls/d
2009 Oil Production:
2.9 Mbbls/d
2009 Nat Gas Consumption:
258 MMcf/d
2009 Nat Gas Production:
0 MMcf/d
Source: The World Bank & Energy Information Administration (EIA)
|
Bulgaria
Etropole
16
Peshtene R-11
On 9/27/2011 we spud a planned ~10,500 foot (3,200 meter)
exploration well to core and test the Etropole shale.
Shale produced shows when drilling to deeper targets.
Rock properties similar to prolific US shale plays, with more
favorable terms (royalty and taxes) and commodity pricing.
Etropole position is estimated to hold gross unrisked best
estimate prospective resources of 11 Tcfe
(1)
.
(1) Internal estimate prepared as of November 2010 -
represents potentially recoverable
hydrocarbons from undiscovered accumulation(s) which are subject
to both risk of
discovery and development. |
Romania
17
Overview
50% interest in 1,000,000 acres (400,000 with
unconventional potential)
Sterling Resources-operated joint venture. Seeking
additional joint venture partner(s).
Prospective for Silurian shale (natural gas). Also holds
Jurassic oil potential.
Awarded license for Phase 2 Exploration Period.
Well anticipated in 2012.
Remaining commitment of 200 km 2D seismic.
Chevron has recently acquired exploration licenses
straddling the eastern Bulgarian/Romanian border.
Romanias Energy Profile
2010 Population:
21,449,980
2010 GDP:
$161.6 billion
2009 Oil Consumption:
208.0 Mbbls/d
2009 Oil Production:
112.4 Mbbls/d
2009 Nat Gas Consumption:
1,247 MMcf/d
2009 Nat Gas Production:
1,052 MMcf/d
Source: The World Bank & Energy Information Administration (EIA)
|
Viking
International & Viking Geophysical 18
Overview
Viking International and Viking Geophysical, TransAtlantics wholly
owned subsidiaries, collectively are a fully integrated service company
committed to providing services to the oil and gas industry with
the
goal of exceeding the exploration needs of operators. Viking currently
operates within the regions of Turkey, Bulgaria, and Northern Iraq.
Services include seismic, drilling, wireline, well servicing, and well
fracing.
11 drilling rigs and 5 workover and completion rigs in Turkey. In
addition, we managed three drilling rigs for others pursuant to
management services agreements.
We own one drilling rig in Morocco.
TransAtlantics Board of Directors has formed a special committee
and retained Parks Paton Hoepfl & Brown to sell the companys
oilfield services business. We intend to complete the marketing of the
drilling services business by early December 2011 and consummate
the sale during the first quarter of 2012. |
Financials:
Market Valuation Disconnect 19
US$ millions
$ / share
SEC PV10
(1)
$536.3
$1.47
Less: 2Q11 Net Debt
-135.0
-0.37
Adjusted Proved Value:
$401.3
$1.10
Shares selling meaningfully less than proved valuation alone.
Further overlooking meaningful oilfield services business value and upside from exploration.
Underappreciated Assets
Oilfield Services:
11 drilling rigs.
5 workover and completion rigs.
Seismic equipment and crews.
Exploration Portfolio:
Large unevaluated acreage position.
Several discoveries awaiting appraisal.
Stacked pays.
(1)
Reflects DeGoyler and MacNaughton (D&M) reserve report, effective 12/31/2010
based on $79.00/barrel and $7.77/Mcf. The PV-10 value of the estimated future net
revenue are not intended to represent the current market value of the estimated oil and
natural gas reserves we own. Management believes that the presentation of PV-10,
while not a financial measure in accordance with U.S. GAAP, provides useful information to investors because it is
widely used by professional analysts and sophisticated investors
in evaluating oil and natural gas companies. Because many factors that are unique to each
individual company impact the amount of future income taxes estimated to be
paid, the use of a pre-tax measure is valuable when comparing companies based on
reserves. PV-10 is not a measure of financial or operating performance under U.S.
GAAP. PV-10 should not be considered as an alternative to the standardized measure
as defined under U.S. GAAP. The following table provides a reconciliation of our PV10 to
our standardized measure:
US $ thousands
Total PV 10
$536,282
Future income taxes
(143,000)
Discount of future income taxes at 10% per annum
45,085
Standardized measure
$438,367 |
2Q11 Financial
& Operating Results 20
Three Months
Six Months
Q2
Q2
30-Jun
30-Jun
(in millions, except per share)
2011
2010
2011
2010
Revenues (millions)
$35.51
$18.60
$67.71
$31.00
Production & LOE Expense
$4.16
$4.70
$8.26
8.89
Exploration Expense
11.13
8.12
24.91
15.51
Revaluation of contingent consideration
1.25
-
1.25
-
General & Administrative Expense
10.25
6.77
20.50
12.55
Depletion, Depreciation & Amortization
13.14
4.30
21.64
7.34
Total Cost & Expense
$39.92
$23.90
$76.56
$44.28
Net Operating Loss
$4.41
$5.29
$8.85
$13.29
Net loss from continuing operations
$8.95
$4.61
$27.30
$13.49
Net loss from continuing operations per share
$0.03
$0.02
$0.08
$0.04
EBITDAX (non-GAAP) Gain*
$14.53
$5.76
$27.87
$6.01
EBITDAX (non-GAAP) per diluted share Gain*
$0.04
$0.02
$0.08
$0.02
*From continuing operations, including TBNG |
Unit LOE
Waterfall Pro Forma
21 |
EBITDAX
Reconciliation 22
(in millions)
Q2-11
Q2-10
Q1-11
Net Loss from continuing operations
($8,948)
($4,609)
($18,356)
Add back:
Income tax
$1,127
$1,475
$531
Interest expense
3,695
654
3,776
Interest and other income
(200)
(126)
(196)
Share-based compensation / rsu & options
400
331
557
Exploration, abandonment and impairment
4,463
4,149
7,232
Seismic and other exploration expense
939
2,273
1,489
Gain/loss on commodity derivative contracts
(154)
(3,034)
9,311
Foreign Currency
75
348
485
Depreciation, depletion and accretion
13,135
4,302
8,505
EBITDAX For the Period Ended
$14,532
$5,763
$13,334
This presentation references estimated EBITDAX, which is a non-GAAP financial measure that
represents earnings from continuing operations before income taxes, interest,
depreciation, depletion, amortization, impairment, abandonment and exploration expense.
The
Company
believes
EBITDAX
assists
management
and
investors
in
comparing
the
Companys
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 EBITDAX as a financial measure to evaluate the
Companys operating performance. EBITDAX is also widely used by investors and
rating agencies. 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 EBITDAX.
Investors should carefully consider the specific items included in the computation of
EBITDAX. The Company has disclosed EBITDAX to permit a comparative analysis of its operating performance and debt servicing ability
relative to other companies. |
Investor Contact
Information Chad W. Potter, CFA
VP
Finance / Investor Relations
(214) 265-4746
chad.potter@tapcor.com
Wil F. Saqueton
VP
Chief Financial Officer
(214) 265-4743
wil.saqueton@tapcor.com
TransAtlantic Petroleum, Ltd.
16803 Dallas Parkway
P.O. Box 246
Addison, TX 75001-0246
23 |