The three production licenses, Izvoru, Vanatori and Marsa, are all located in the Moesian Platform within 100 kilometers west of Bucharest. All three fields were discovered by the former national oil company and were prematurely abandoned. Each license covers approximately 1,200 acres, is for a term of up to 30-years so long as production is established in the initial 3-years. TransAtlantic owns 100% working interest in each of the licenses subject to a royalty ranging from 3.5% to 13.5% based on the level of field production. The corporate tax rate in Romania is 16%. All of the licenses are close to existing infrastructure. Oil produced from the licenses will be sold at world market prices; gas is currently priced at $5.50 per mcf.
The licenses were awarded based on committed work programs. In anticipation of final approval of the licenses, the Company shot a 3D seismic survey over the Izvoru license and 2D surveys over the Vanatori and Marsa licenses in late 2006. The Company is in the process of completing its engineering reservoir study on the Izvoru license, which incorporates the results of the 3D survey. The Company plans to re-establish production at the Izvoru field in early 2008.
The Izvoru field produced 1.4 million barrels of oil (177,000 tons) from 26 wells according to government records. Discovered in 1968, this field produced from a Sarmatian (Tertiary age) limestone reservoir at a depth of approximately 4,000 feet. In addition, one of four wells which penetrated a deeper Albian (Cretaceous age) carbonate reservoir tested oil; this formation is productive in nearby fields. Based on third party engineering studies, the combined Sarmatian and Albian formations contained original resources in place of approximately 22 million barrels of oil (2.8 million tons). Completion difficulties and water production resulted in limited flow rates and recoveries leading to field abandonment in 1998.
The other two fields, Vanatori and Marsa, were both discovered in the 1970's and both produced oil or gas. Five wells were drilled in the Vanatori Field; two of which produced a total of 1.3 Bcf of gas over 6 years from the Sarmatian formation at depths of approximately 5,600 feet. There is also deeper Cretaceous potential at Vanatori. In the Marsa Field, five wells were drilled of which three were productive. Between 1974 and 1983, these wells produced a cumulative 0.3 Bcf of gas from the Meotian (Tertiary age) reservoir at a depth of approximately 2,100 feet.
TransAtlantic is engaged in the exploration, development and production of crude oil and natural gas and has interests in the U.S., Morocco, Turkey, Romania and the U.K. North Sea.
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