TransAtlantic Petroleum Corp. has completed restructuring of the agreements that will govern future operations on its 215,000-acre Oil Mining Lease 109, offshore Nigeria. The concession has been split into two operational areas: a 15,000 acre area surrounding the existing producing Ejulebe Field and an area covering the balance of the block of 200,000 acres (the "Joint Exploration and Development Area"). In the 15,000-acre area, the Company's interest is permanently fixed at 60% working interest (no reversion at payout). The Company will fund 100% of future development on the 15,000-acre area but will recover its capital and pre-production operating expenses prior to any sharing of "profits" from crude sales. An AVO analysis of the 3D seismic covering the 15,000-acre area is currently underway. In the Joint Exploration and Development Area, the Company retains a 30% working interest and will pay its 30% share of future exploration and development costs. The Company and Atlas Petroleum, its Nigerian partner and operator of OML 109, plan to expedite exploration and development of the Joint Exploration and Development Area through farmouts or other participation by outside investors. In addition, various operational disputes with Atlas have been resolved, the arbitration proceeding is being dismissed and Atlas will complete repayment of its outstanding loan amount by the end of September 2002.
Restructuring the OML 109 agreements provides the Company with commercial certainty to facilitate future exploration and development. These arrangements affect only future operation and will not, in any way, affect ongoing production from the Ejulebe field. Current production of about 7,000 BOPD from the Ejulebe field has now started to decline. The Company continues to evaluate whether additional infill drilling in the Ejulebe field would yield economic results. The Company anticipates that net cash flow from the Ejulebe field will continue through the end of this year and into the first quarter of 2003.
With over $8 million in working capital at the end of the second quarter, the Company is actively evaluating oil and gas opportunities both in Nigeria and in the USA.