The three new licenses have four-year terms and cover a total of 334,618 acres. The Company will be the operator and 100% working interest owner of the licenses. Upon a commercial discovery, each exploration license would be converted to a 20-year production lease, which bears a 12.5% royalty; the corporate tax rate in Turkey is 20%.
The three contiguous licenses are located in southeastern Turkey close to the Iranian and Iraqi borders. The Company's focus in these licenses is on Mesozoic and deeper formations buried under folded Tertiary cover in the Zagros Thrust Belt. This area in southeastern Turkey holds significant resource potential. This play is similar to those found in the major Iraqi Zagros fields, such as the recently discovered Taq Taq field located 80 miles directly south of the licenses.
The license awards are based upon the Company's commitment to an initial work program of detailed fieldwork which will total approximately $360,000 on all three blocks over the next three years. At that point, the Company will decide whether to shoot seismic or drill a well.
TransAtlantic is engaged in the exploration, development and production of crude oil and natural gas in Morocco, Turkey, the U.K. North Sea, Romania and the U.S.
This news release contains statements concerning drilling plans, plans to acquire seismic data, estimates of the costs to complete fieldwork and estimates of when such plans will be executed, as well as other expectations, plans, goals, objectives, assumptions, information or statements 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, oil and gas prices remaining relatively consistent with their current prices, access to the fields, availability of drilling rigs and other equipment, obtaining drilling success consistent with expectations, regulatory approvals being obtained and estimated timelines being met and the actual costs being consistent with estimated costs.
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 the political stability of Turkey, reliance on Turkey's current hydrocarbon and tax laws and regulations, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geological data, competition, reduced availability of drilling and other well services, volatility of oil and gas prices, fluctuations in currency and interest rates, TransAtlantic's ability to access external sources of debt and equity capital, imprecision in estimating the timing and costs of drilling and development, TransAtlantic's ability to secure adequate product transportation, changes in environmental and other regulations or the interpretation of such regulations, the ability to obtain necessary regulatory approvals, weather and general economic and business conditions.
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