TransAtlantic announced its financial results for the three months ended March 31, 2010. The Company's financial results are prepared in accordance with U.S. GAAP, and the reporting currency is U.S. dollars.
Selected Financial Highlights
Revenues for the three months ended March 31, 2010 increased to $12.4 million from $1.4 million for the three months ended March 31, 2009. The increase was the result of the acquisition of Incremental Petroleum Limited ("Incremental") in March 2009, as most of the Company's revenue in the first quarter of 2010 was derived from the sale of crude oil from Selmo oil field in Turkey. The Company produced 146,237 net barrels of crude oil in the first quarter 2010 at an average rate of 1,625 net barrels per day.
Turkey Operations Update
Selmo Oil Field
Selmo production has averaged 1,900 barrels of oil per day ("bopd") in May and the Company is currently drilling its eighth in-fill well (S-69). "Production growth in the field should pick back up once Rig I-16 returns to Selmo after drilling the Bakuk-101 well, which is being drilled close to the Syrian border," said Malone Mitchell, the Company's Chairman.
On the Arpatepe license, where the Company holds a 50% interest, the Company acidized the Arpatepe-1 well in early March 2010 to clean up perforations and eliminate damage incurred during the original completion of the Bedinan sandstone. The well is currently flowing approximately 350 bopd. The Arpatepe-2 well has been re-completed and will be placed on production in the next few days at an expected rate of approximately 100 bopd. The Arpatepe-3 well is being completed and is expected to be placed on production at commercial rates. To the west of the Arpatepe field, the Company is currently drilling the Aktepe-1. "We are pleased with our drilling rates on the Aktepe well. We expect to drill the well in about 45 days," Mr. Mitchell said. Under an agreement with its partner, the Company will drill a total of three wells, with the Aktepe being the first, and the Company's partner will drill three wells, the first of which should spud later in May.
On License 4174, the Company deepened the Gosku-1 well to core the Dadas shale and tested the Bedinan sandstone. The Company is currently completing that well. The Company also holds an interest in the Pinarbarsi-1 well that is currently being drilled to the east of the Arpatepe field in the Paleozoic Trend.
The Company began selling gas from its Edirne license, where is holds a 55% interest, in early April. Production from the eight producing wells averaged about 9.7 million cubic feet per day for the first month of production. The Company is engaged in a drilling campaign on the Edirne license and is currently drilling Somurcali-1. "The economics from the wells at Edirne are very good, given the shallow depth of the wells and the high gas prices," Mr. Mitchell observed.
In addition to the activity at Selmo, the Thrace Basin, and in the Paleozoic Trend, the Company also plans a number of exploratory wells on other licenses. The Company is currently drilling the Bakuk-101 well on a license along the Syrian border. The Company will also participate for a 50% interest in an exploration well in South Central Turkey, which is expected to spud in late May or early June. In the late second quarter, the Company also plans to spud a well on License 4175 in southeast Turkey to test a large structure, which is anticipated to contain both Cretaceous and Paleozoic-aged formations.
Morocco Operations Update
The Company is drilling the BTK-1 exploratory well on the Tselfat permit (oil trend). "The BTK-1 is our first prospect targeting an undrilled reservoir generated by our 3D seismic covering the oil trend. We will also spud the GUW-1, our second 3D defined prospect later this month," said Gary Mize, the Company's Chief Operating Officer. The Company plans to drill additional exploratory wells at Asilah, Ouezzane-Tissa, and Guercif later this year.
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