TransAtlantic Petroleum Ltd. (TSX: TNP) (NYSE
American: TAT) (the “Company” or “TransAtlantic”) today announced
its financial results for the quarter ended September 30, 2020 and
provided an operations update. Additional information can be found
on the Company’s website at http://www.transatlanticpetroleum.com.
Pending Merger
As previously disclosed, on August 7, 2020, the
Company entered into an Agreement and Plan of Merger (the “Merger
Agreement”), pursuant to which an affiliate of a group of holders
(the “Preferred Shareholder Group”) representing 100% of the
Company’s outstanding 12.0% Series A Convertible Redeemable
Preferred Shares (“Series A Preferred Shares”) would acquire all of
the outstanding common shares, par value $0.10 per share (“common
shares”) for $0.13 per share in cash (the “Merger”).
The members of the Preferred Shareholder Group
are each member of the Mitchell Group, KMF Investments Partners,
LP, West Investment Holdings, LLC, Randall I. Rochman, and Betsy
Rochman. The members of the Mitchell Group are Longfellow Energy,
LP (“Longfellow”), Dalea Partners, LP (“Dalea”), the Alexandria
Nicole Mitchell Trust 2005, the Elizabeth Lee Mitchell Trust 2005,
the Noah Malone Mitchell Trust 2005, and Stevenson Briggs Mitchell.
Longfellow and Dalea are affiliates of the Chairman of the
Company’s Board of Directors and Chief Executive Officer, N. Malone
Mitchell 3rd.
The Merger is subject to approval by the
Company’s common shareholders of the Merger Agreement, a Bermuda
statutory merger agreement, and the transactions contemplated
thereby at a special meeting (the “Special Meeting”) of our
shareholders that will be held on December 17, 2020 and the
satisfaction of other customary closing conditions.
Summary
-
Average daily net sales volumes were 2,072 barrels of oil
equivalent per day (“BOEPD”) in the third quarter of 2020, as
compared to 2,185 BOEPD in the second quarter of 2020 and 2,662
BOEPD in the third quarter of 2019.
-
Revenues were $8.6 million for the third quarter of 2020, as
compared to $6.5 million for the second quarter of 2020 and $14.7
million for the third quarter of 2019.
-
Operating income was $1.8 million for the third quarter of 2020, as
compared to an operating loss of $1.8 million for the second
quarter of 2020 and operating income of $4.1 million for the third
quarter of 2019.
-
Net loss was $3.0 million for the third quarter of 2020, as
compared to a net loss of $7.7 million for the second quarter of
2020 and net income of $1.1 million for the third quarter of
2019.
-
Adjusted EBITDAX was $2.1 million for the third quarter of 2020, as
compared to $0.8 million for the second quarter of 2020 and $7.8
million for the third quarter of 2019.1
-
Outstanding debt was $9.2 million as of September 30, 2020, as
compared to $11.3 million as of June 30, 2020.
Third Quarter
2020 Results of
Operations
|
For the Three Months Ended |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
Net Sales: |
|
|
|
|
|
|
|
|
Oil (MBBL) |
|
190 |
|
|
199 |
|
|
237 |
Natural gas (MMCF) |
|
1 |
|
|
1 |
|
|
47 |
Total net sales (MBOE) |
|
190 |
|
|
199 |
|
|
245 |
Average net sales (BOEPD) |
|
2,072 |
|
|
2,185 |
|
|
2,662 |
Realized Commodity
Prices: |
|
|
|
|
|
|
|
|
Oil ($/Bbl unhedged) |
$ |
44.40 |
|
$ |
32.60 |
|
$ |
60.12 |
Oil ($/Bbl hedged) |
$ |
37.40 |
|
$ |
31.70 |
|
$ |
60.12 |
Natural gas ($/MCF) |
$ |
4.61 |
|
$ |
5.46 |
|
$ |
6.18 |
Total revenues were $8.6 million for the three
months ended September 30, 2020, as compared to $6.5 million for
the three months ended June 30, 2020 and $14.7 million for the
three months ended September 30, 2019. The Company had a net loss
of $3.0 million, or $0.04 per share (basic and diluted), for the
three months ended September 30, 2020, as compared to $7.7 million,
or $0.12 per share (basic and diluted), for the three months ended
June 30, 2020, and net income of $1.9 million, or $0.02 per share
(basic and diluted), for the three months ended September 30, 2019.
Capital expenditures and seismic and corporate expenditures totaled
$0.3 million for the three months ended September 30, 2020, as
compared to $0.6 million for the three months ended June 30, 2020
and $10.2 million for the three months ended September 30,
2019.
Adjusted EBITDAX was $2.1 million for the three
months ended September 30, 2020, as compared to $0.8 million for
the three months ended June 30, 2020 and $10.9 million for the
three months ended September 30, 2019.
Liquidity and Capital
Resources
The Company’s primary sources of liquidity for
2020 were its cash and cash equivalents, cash flow from operations,
the sale of assets and borrowings under the U.S. Paycheck
Protection Program (“PPP”) loan. At September 30, 2020, the Company
had cash and cash equivalents of $5.9 million, $9.2 million in
short-term debt, and a working capital surplus of $3.3 million,
compared to cash and cash equivalents of $9.7 million, $2.9 million
in long-term debt, $17.1 million in short-term debt and a working
capital surplus of $2.0 million at December 31, 2019.
In March 2020, crude oil prices declined to
approximately $25 per barrel for Brent crude as a result of market
concerns about the economic impact from the COVID-19 as well as the
ability of OPEC and Russia to agree on a perceived need to
implement further production cuts in response to weaker worldwide
demand. Since then, Brent crude prices have rebounded to
approximately $45.00 per barrel as of November 12, 2020 and remain
unpredictable.
As a result of the decline in Brent crude
prices, the current near term price outlook and resulting lower
current and projected cash flows from operations, the Company has
reduced its planned capital expenditures to those necessary for
production lease maintenance and those projecting a return on
invested capital at current realized prices. In order to mitigate
the impact of reduced prices on its 2020 cash flows and liquidity,
the Company implemented cost reduction measures to reduce its
operating costs and general and administrative expenses. In
connection therewith, the Company intends to prioritize funding
operating expenditures over general and administrative
expenditures, whenever possible.
On March 9, 2020, the Company unwound its
commodity derivative contracts with respect to its future crude oil
production. In connection with these transactions, the Company
received $6.5 million of proceeds from the derivative counterparty.
In order to reduce future interest expense, the Company used these
proceeds to pay down the Company’s $20.0 million term loan (the
“2019 Term Loan”) with DenizBank, A.S. (“DenizBank”). On April 3,
2020, the Company entered into a new swap contract with DenizBank,
which hedged approximately 2,000 barrels of oil per day. The swap
contract extends through February 2021, has an ICE Brent Index
strike price of $36.00 per barrel, and is settled monthly.
Therefore, DenizBank is required to make a payment to the Company
if the average monthly ICE Brent Index price is less than $36.00
per barrel, and the Company is required to make a payment to
DenizBank if the average monthly ICE Brent Index price is greater
than $36.00 per barrel.
Türkiye Petrol Rafinerileri A.Ş. (“TUPRAS”), a
privately-owned oil refinery in Turkey, purchases substantially all
of the Company’s crude oil production. The price of substantially
all of the oil delivered pursuant to the purchase and sale
agreement with TUPRAS is tied to Arab Medium oil prices adjusted
upward based on an API adjustment, Suez Canal tariff costs, and
freight charges. Between March 2020 and May 2020, there was a
significant widening of the differential between the average
monthly ICE Brent Index price and the Company’s realized oil
prices. In 2018 and 2019, the average monthly ICE Brent Index Price
exceeded the Company’s realized oil prices by $2.44 and $0.17 per
barrel, respectively. The differential between the average monthly
ICE Brent Index Price and the Company’s realized oil prices widened
from $3.40 per barrel in March 2020 to $8.34 per barrel in May
2020. The widening of the differential between the average monthly
ICE Brent Index Price and the Company’s realized oil prices
rendered the Company’s hedges less effective, resulting in
significantly lowered revenues from March 2020 through May 2020. In
June 2020, the differential between the average monthly ICE Brent
Index Price and the Company’s realized oil prices contracted to
$0.74 per barrel, and, in July 2020, the Company’s realized oil
prices exceeded the average monthly ICE Brent Index Price by $3.71
per barrel. The differential between the average monthly ICE Brent
Index Price and the Company’s realized oil prices remains
unpredictable and may expand or contract in the future.
The price of the oil delivered pursuant to the
purchase and sale agreement with TUPRAS is determined under the
Petroleum Market Law No. 5015 under the laws of the Republic of
Turkey. In November 2019, TUPRAS filed a lawsuit seeking
restitution from the Company for alleged overpayments resulting
from a February 2019 amendment to the Turkish domestic crude oil
pricing formula under Petroleum Market Law No. 5015 (the “Pricing
Amendment”). TUPRAS also claimed that the Pricing Amendment
violates the Constitution of the Republic of Turkey and seeks to
have the Pricing Amendment cancelled. Additionally, in April 2020,
TUPRAS notified the Company that it intends to extend payment terms
for oil purchases by 60 days. The outcome of the TUPRAS lawsuit and
negotiations regarding the extension of payment terms is uncertain;
however, a conclusion of the lawsuit in TUPRAS’s favor or an
extension of payment terms would reduce or delay the Company’s cash
flow and decrease the Company’s cash balances.
In the second quarter of 2020, the Company
borrowed approximately $626,000 pursuant to the PPP to cover
certain payroll, benefit, and rent expenses. The Company has
forecast that amounts borrowed or received pursuant to the PPP will
be forgiven for cash flow purposes. New guidance on the criteria
for forgiveness continues to be released, and the Company currently
expects that it will meet the conditions for forgiveness for a
majority of the loan. Additionally, in the second quarter of 2020,
the Turkish government passed legislation permitting employers to
reduce the working hours of employees, reducing payroll and benefit
expenses, through the end of August 2020. The actual reduction in
payroll and benefit expenses due to this legislation is
approximately $533,000.
As of September 30, 2020, the Company had $8.6
million of outstanding principal under the 2019 Term Loan. The 2019
Term Loan is payable in one monthly installment of $0.1 million,
four monthly installments of $0.5 million and ten monthly
installments of $0.7 million plus accrued interest from October
2020 through the maturity date in December 2021. In addition,
dividends on the Company’s Series A Preferred Shares are payable
quarterly at the Company’s election in cash, common shares, or a
combination of cash and common shares at an annual dividend rate of
12.0% of the liquidation preference if paid in cash or 16.0% of the
liquidation preference if paid in common shares. If paid partially
in cash and partially in common shares, the dividend rate on the
cash portion is 12.0%, and the dividend rate on the common share
portion is 16.0%. In order to conserve cash, the Company elected to
pay the 2020 third quarter dividend in common shares, and, as such,
on September 30, 2020, the Company issued 7,749,267 common shares
to holders of Series A Preferred Shares.
On August 7, 2020, to supplement its liquidity,
the Company entered into an up to $8.0 million loan with an
affiliate of Mr. Mitchell. The loan is due August 7, 2021. Even
with this additional liquidity, as of the date hereof, based on
cash on hand and projected future cash flow from operations, the
Company’s current liquidity position is severely constrained. As a
result, substantial doubt exists regarding the Company’s ability to
continue as a going concern. The Company’s management is actively
pursuing improving the Company’s working capital position in order
to remain a going concern for the foreseeable future.
Operational Update
Southeastern Turkey
Molla
During the remainder of 2020, the Company plans
to continue its recompletion, workover, and production optimization
plans in its producing fields including Bahar, Yeniev, Goksu,
Pinar, Southeast Bahar, Catak, and Karagoz. Drilling additional
wells will be dependent on oil prices.
Yeniev Field
In the third quarter of 2020, the Company
executed a recompletion operation in the Yeniev-6 well to test the
Mardin formation. The well was put on production after acid
stimulation with an initial production rate of 27 Bbl/d.
Selmo
During the remainder of 2020, the Company plans
to continue its recompletion, workover, and production optimization
operations in the Selmo field.
Bulgaria
The Company is currently evaluating future
activity in Bulgaria.
Special
Meeting
The Company currently intends to host a special
meeting of common shareholders on December 17, 2020, at 10:00 a.m.
Central Time at the Company’s offices at 16803 Dallas Parkway,
Addison, Texas 75001. After the meeting, the Company will offer an
audio recording of the special meeting. To listen to the audio
recording, please visit the Company’s website at
www.transatlanticpetroleum.com, click on “Investors,” and select
“Special Meeting.”
Payment of the Upcoming Dividend on
Series A Preferred Shares in Common Shares
The Company has elected to pay the upcoming
quarterly dividends on its Series A Preferred Shares in its common
shares, as permitted by the certificate of designation for the
Series A Preferred Shares. The upcoming quarterly dividends are
payable on December 31, 2020 to holders of record on December 15,
2020. The common shares issued as dividends on the Series A
Preferred Shares will be listed on the NYSE American and the
Toronto Stock Exchange.
TransAtlantic Petroleum
Ltd.Consolidated Statements of Comprehensive
Income (Loss) (Unaudited)(U.S.
Dollars and shares in thousands, except per share
amounts)
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
September 30, 2020 |
|
|
September 30, 2019 |
|
|
September 30, 2020 |
|
|
September 30, 2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
$ |
8,629 |
|
|
$ |
14,653 |
|
|
$ |
23,489 |
|
|
$ |
50,909 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production |
|
2,308 |
|
|
|
3,162 |
|
|
|
8,207 |
|
|
|
8,376 |
|
Transportation and processing |
|
914 |
|
|
|
1,262 |
|
|
|
3,035 |
|
|
|
3,802 |
|
Exploration, abandonment and impairment |
|
69 |
|
|
|
488 |
|
|
|
20,407 |
|
|
|
6,267 |
|
Seismic and other exploration |
|
– |
|
|
|
48 |
|
|
|
45 |
|
|
|
233 |
|
General and administrative |
|
1,965 |
|
|
|
2,503 |
|
|
|
6,711 |
|
|
|
8,247 |
|
Depreciation, depletion and amortization |
|
1,542 |
|
|
|
3,021 |
|
|
|
7,048 |
|
|
|
10,179 |
|
Accretion of asset retirement obligations |
|
44 |
|
|
|
56 |
|
|
|
141 |
|
|
|
157 |
|
Total costs and expenses |
|
6,842 |
|
|
|
10,540 |
|
|
|
45,594 |
|
|
|
37,261 |
|
Operating (loss) income |
|
1,787 |
|
|
|
4,113 |
|
|
|
(22,105 |
) |
|
|
13,648 |
|
Other (expense)
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale |
|
– |
|
|
|
– |
|
|
|
(10,128 |
) |
|
|
– |
|
Interest and other expense |
|
(2,557 |
) |
|
|
(2,780 |
) |
|
|
(7,165 |
) |
|
|
(8,011 |
) |
Interest and other income |
|
230 |
|
|
|
381 |
|
|
|
643 |
|
|
|
776 |
|
Loss on commodity derivative contracts |
|
(359 |
) |
|
|
403 |
|
|
|
3,937 |
|
|
|
(30 |
) |
Foreign exchange loss |
|
(532 |
) |
|
|
(797 |
) |
|
|
(1,016 |
) |
|
|
(2,185 |
) |
Total other expense |
|
(3,218 |
) |
|
|
(2,793 |
) |
|
|
(13,729 |
) |
|
|
(9,450 |
) |
(Loss) income before
income taxes |
|
(1,431 |
) |
|
|
1,320 |
|
|
|
(35,834 |
) |
|
|
4,198 |
|
Income tax (expense) benefit |
|
(1,528 |
) |
|
|
(250 |
) |
|
|
1,176 |
|
|
|
(7,039 |
) |
Net (loss)
income |
|
(2,959 |
) |
|
|
1,070 |
|
|
|
(34,658 |
) |
|
|
(2,841 |
) |
Other comprehensive
(loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
(2,916 |
) |
|
|
808 |
|
|
|
3,760 |
|
|
|
(3,834 |
) |
Comprehensive (loss)
income |
$ |
(5,875 |
) |
|
$ |
1,878 |
|
|
$ |
(30,898 |
) |
|
$ |
(6,675 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share |
$ |
(0.04 |
) |
|
$ |
0.02 |
|
|
$ |
(0.47 |
) |
|
$ |
(0.05 |
) |
Weighted average common shares outstanding |
|
66,183 |
|
|
|
57,680 |
|
|
|
73,738 |
|
|
|
54,249 |
|
Diluted net income (loss) per common share |
$ |
(0.04 |
) |
|
$ |
0.02 |
|
|
$ |
(0.47 |
) |
|
$ |
(0.05 |
) |
Weighted average common and common equivalent shares
outstanding |
|
66,183 |
|
|
|
57,680 |
|
|
|
73,738 |
|
|
|
54,249 |
|
TransAtlantic Petroleum
Ltd.Summary Consolidated Statements of Cash Flows
(Unaudited)(in thousands of U.S.
Dollars)
|
For the Nine Months Ended September 30, |
|
|
2020 |
|
|
2019 |
|
Net cash provided by operating activities |
$ |
10,977 |
|
|
$ |
25,704 |
|
Net cash used in investing
activities |
|
(2,452 |
) |
|
|
(25,188 |
) |
Net cash (used in) provided by
financing activities |
|
(10,849 |
) |
|
|
4,958 |
|
Effect of exchange rate
changes on cash |
|
(1,463 |
) |
|
|
(914 |
) |
Net (decrease) increase in
cash, cash equivalents, and restricted cash |
$ |
(3,787 |
) |
|
$ |
4,560 |
|
TransAtlantic Petroleum
Ltd.Summary Consolidated Balance
Sheets(in thousands of U.S. Dollars, except share
data)
|
September 30, 2020 |
|
|
December 31, 2019 |
|
ASSETS |
(unaudited) |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
5,877 |
|
|
$ |
9,664 |
|
Accounts receivable, net |
|
|
|
|
|
|
|
Oil and natural gas sales |
|
6,192 |
|
|
|
13,299 |
|
Joint interest and other |
|
1,137 |
|
|
|
1,218 |
|
Related party |
|
565 |
|
|
|
561 |
|
Prepaid and other current assets |
|
13,215 |
|
|
|
12,375 |
|
Note receivable - related party |
|
3,416 |
|
|
|
– |
|
Derivative asset |
|
35 |
|
|
|
– |
|
Inventory |
|
2,999 |
|
|
|
7,091 |
|
Total current assets |
|
33,436 |
|
|
|
44,208 |
|
Property and
equipment: |
|
|
|
|
|
|
|
Oil and natural gas properties (successful efforts method) |
|
|
|
|
|
|
|
Proved |
|
106,277 |
|
|
|
167,948 |
|
Unproved |
|
9,979 |
|
|
|
12,978 |
|
Equipment and other property |
|
11,765 |
|
|
|
10,202 |
|
|
|
128,021 |
|
|
|
191,128 |
|
Less accumulated depreciation, depletion and
amortization |
|
(80,144 |
) |
|
|
(106,610 |
) |
Property and equipment, net |
|
47,877 |
|
|
|
84,518 |
|
Other long-term
assets: |
|
|
|
|
|
|
|
Other assets |
|
3,549 |
|
|
|
3,827 |
|
Note receivable - related party |
|
– |
|
|
|
3,951 |
|
Total other assets |
|
3,549 |
|
|
|
7,778 |
|
Total
assets |
$ |
84,862 |
|
|
$ |
136,504 |
|
LIABILITIES, SERIES A
PREFERRED SHARES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
1,971 |
|
|
$ |
4,555 |
|
Accounts payable - related party |
|
2,956 |
|
|
|
4,262 |
|
Accrued liabilities |
|
13,240 |
|
|
|
15,244 |
|
Derivative liability |
|
2,201 |
|
|
|
966 |
|
Loans payable |
|
9,197 |
|
|
|
17,143 |
|
Total current liabilities |
|
29,565 |
|
|
|
42,170 |
|
Long-term
liabilities: |
|
|
|
|
|
|
|
Asset retirement obligations |
|
3,185 |
|
|
|
4,749 |
|
Accrued liabilities |
|
8,761 |
|
|
|
10,370 |
|
Deferred income taxes |
|
16,718 |
|
|
|
22,728 |
|
Loans payable |
|
– |
|
|
|
2,857 |
|
Total long-term liabilities |
|
28,664 |
|
|
|
40,704 |
|
Total
liabilities |
|
58,229 |
|
|
|
82,874 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Series A preferred shares, $0.01 par value, 100,000 shares
authorized; 100,000 shares issued and outstanding with a
liquidation preference of $50 per share as of June 30, 2020 and
December 31, 2019 |
|
5,000 |
|
|
|
5,000 |
|
Series A preferred shares-related party, $0.01 par value, 821,000
shares authorized; 821,000 shares issued and outstanding with a
liquidation preference of $50 per share as of June 30, 2020 and
December 31, 2019 |
|
41,050 |
|
|
|
41,050 |
|
Shareholders'
equity: |
|
|
|
|
|
|
|
Common shares, $0.10 par value, 200,000,000 shares authorized;
76,335,557 shares and 62,230,058 shares issued and outstanding as
of September 30, 2020 and December 31, 2019, respectively |
|
7,634 |
|
|
|
6,223 |
|
Treasury stock |
|
(970 |
) |
|
|
(970 |
) |
Additional paid-in-capital |
|
584,849 |
|
|
|
582,359 |
|
Accumulated other comprehensive loss |
|
(143,587 |
) |
|
|
(147,347 |
) |
Accumulated deficit |
|
(467,343 |
) |
|
|
(432,685 |
) |
Total shareholders' equity (deficit) |
|
(19,417 |
) |
|
|
7,580 |
|
Total liabilities,
Series A preferred shares and shareholders' equity |
$ |
84,862 |
|
|
$ |
136,504 |
|
Reconciliation of Net Loss to Adjusted
EBITDAX (Unaudited)(in thousands of U.S.
Dollars)
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|
September 30, 2019 |
|
|
September 30, 2020 |
|
|
September 30, 2019 |
|
Net loss |
$ |
(2,959 |
) |
|
$ |
(7,734 |
) |
|
$ |
1,070 |
|
|
$ |
(34,658 |
) |
|
$ |
(2,841 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other, net |
|
2,327 |
|
|
|
2,104 |
|
|
|
2,399 |
|
|
|
6,522 |
|
|
|
7,235 |
|
Income tax expense (benefit) |
|
1,528 |
|
|
|
261 |
|
|
|
250 |
|
|
|
(1,176 |
) |
|
|
7,039 |
|
Exploration, abandonment, and impairment |
|
69 |
|
|
|
- |
|
|
|
488 |
|
|
|
20,407 |
|
|
|
6,267 |
|
Seismic and other exploration expense |
|
- |
|
|
|
- |
|
|
|
48 |
|
|
|
45 |
|
|
|
233 |
|
Foreign exchange loss |
|
532 |
|
|
|
356 |
|
|
|
797 |
|
|
|
1,016 |
|
|
|
2,185 |
|
Share-based compensation expense |
|
40 |
|
|
|
114 |
|
|
|
119 |
|
|
|
269 |
|
|
|
298 |
|
Loss (gain) on commodity derivative contracts |
|
359 |
|
|
|
3,217 |
|
|
|
(403 |
) |
|
|
(3,937 |
) |
|
|
30 |
|
Cash settlements on commodity derivative contracts |
|
(1,333 |
) |
|
|
(79 |
) |
|
|
- |
|
|
|
5,135 |
|
|
|
- |
|
Accretion of asset retirement obligation |
|
44 |
|
|
|
44 |
|
|
|
56 |
|
|
|
141 |
|
|
|
157 |
|
Depreciation, depletion, and amortization |
|
1,542 |
|
|
|
2,517 |
|
|
|
3,021 |
|
|
|
7,048 |
|
|
|
10,179 |
|
Loss on sale |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,128 |
|
|
|
- |
|
Adjusted EBITDAX |
$ |
2,149 |
|
|
$ |
800 |
|
|
$ |
7,845 |
|
|
$ |
10,940 |
|
|
$ |
30,782 |
|
Adjusted EBITDAX (“Adjusted EBITDAX”) is a
non-GAAP financial measure that represents net loss plus interest
and other income, net, income tax (benefit) expense, exploration,
abandonment, and impairment, seismic and other exploration expense,
foreign exchange loss, share-based compensation expense, (gain)
loss on commodity derivative contracts, cash settlements on
commodity derivative contracts, accretion of asset retirement
obligation, depreciation, depletion, and amortization and loss on
sale.
The Company believes Adjusted EBITDAX assists
management and investors in comparing the Company’s performance on
a consistent basis without regard to depreciation, depletion, and
amortization, impairment of oil and natural gas properties,
exploration expenses, and foreign exchange gains and losses among
other items, which can vary significantly from period to period. In
addition, management uses Adjusted EBITDAX as a financial measure
to evaluate the Company’s operating performance.
Adjusted EBITDAX is not a measure of financial
performance under GAAP. Accordingly, it should not be considered as
a substitute for net income prepared in accordance with GAAP. Net
income may vary materially from Adjusted EBITDAX. Investors should
carefully consider the specific items included in the computation
of Adjusted EBITDAX.
About TransAtlantic
The Company is an international oil and natural
gas company engaged in the acquisition, exploration, development,
and production of oil and natural gas. The Company holds interests
in developed and undeveloped properties in Turkey and Bulgaria.
(NO STOCK EXCHANGE, SECURITIES
COMMISSION, OR OTHER REGULATORY AUTHORITY HAS APPROVED OR
DISAPPROVED THE INFORMATION CONTAINED HEREIN.)
Note on
BOE
Barrels of oil equivalent, or BOE, are derived
by the Company by converting natural gas to oil in the ratio of six
thousand cubic feet of natural gas (“MCF”) to one stock tank
barrel, or 42 U.S. gallons liquid volume (“BBL”), of oil. A BOE
conversion ratio of six MCF to one 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. BOE
may be misleading, particularly if used in isolation.
Forward-Looking Statements
This news release contains statements concerning
the Company’s ability to continue as a going concern, its drilling
program, the evaluation of its prospects in Turkey and Bulgaria,
the drilling, completion, and cost of wells, the production and
sale of oil and natural gas, and the holding of an earnings
conference call, as well as other expectations, plans, goals,
objectives, assumptions, and information about future events,
conditions, exploration, production, results of operations, and
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.
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 occurrence of
any event, change, or other circumstances that could give rise to
the termination of the Merger Agreement; the inability to obtain
the requisite shareholder approval for the proposed Merger or the
failure to satisfy other conditions to completion of the proposed
Merger; risks that the proposed transaction disrupts current plans
and operations; the ability to recognize the benefits of the
Merger; the amount of the costs, fees, and expenses and charges
related to the Merger; the Company’s ability to continue as a going
concern; well development results; access to sufficient capital;
market prices for natural gas, natural gas liquids, and oil
products, including price changes resulting from coronavirus fears
as well as oil oversupply concerns; estimates of reserves and
economic assumptions; the ability to produce and transport natural
gas, natural gas liquids, and oil products; the results of
exploration and development drilling and related activities; the
effects of the coronavirus on the Company’s operations, demand for
oil and natural gas as well as governmental actions in response to
the coronavirus; economic conditions in the countries and provinces
in which the Company carries on business, especially economic
slowdowns; actions by governmental authorities; the unwinding of
the Company’s hedges against a decline in the price of oil; receipt
of required approvals; increases in taxes; legislative and
regulatory initiatives relating to fracture stimulation activities;
changes in environmental and other regulations; renegotiations of
contracts; political uncertainty, including sanctions, armed
conflicts, and actions by insurgent groups; outcomes of litigation;
the negotiation and closing of material contracts; and other risks
described in the Company’s filings with the Securities and Exchange
Commission (the “SEC”).
The forward-looking statements or information
contained in this news release are made as of the date hereof and
the Company undertakes no obligation to update publicly or revise
any forward-looking statements or information, whether as a result
of new information, future events, or otherwise, unless so required
by applicable securities laws.
Additional Information and Where to Find
It
In connection with the Merger, the Company filed
with the SEC a definitive proxy statement on Schedule 14A on
November 4, 2020. In addition, certain participants in the proposed
transaction have prepared and filed a Schedule 13E-3 transaction
statement that included the definitive proxy statement on Schedule
14A and may file or furnish other documents with the SEC regarding
the proposed transaction. This press release is not a substitute
for the definitive proxy statement, the Schedule 13E-3, or any
other document that the Company may file or furnish with the SEC.
INVESTORS IN, AND SECURITY HOLDERS OF, THE COMPANY ARE URGED TO
READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS (INCLUDING THE SCHEDULE 13E-3) THAT ARE FILED OR
FURNISHED (OR WILL BE FILED OR FURNISHED WITH THE SEC), AS WELL AS
ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the
definitive proxy statement, the Schedule 13E-3 and other documents
filed or furnished with the SEC by the Company through the web site
maintained by the SEC at www.sec.gov or by contacting the
Corporate Secretary at TransAtlantic Petroleum Ltd., c/o
TransAtlantic Petroleum (USA) Corp., 16803 Dallas Parkway, Addison,
TX 75001 or at (214) 220-4323.
Participants in the
Solicitation
The Company and its directors and executive
officers and other members of management and employees may, under
SEC rules, be deemed to be “participants” in the solicitation of
proxies from the Company’s shareholders in connection with the
proposed transaction. Information regarding the persons who may be
considered “participants” in the solicitation of proxies is set
forth in the definitive proxy statement and Schedule 13E-3
transaction statement relating to the Merger filed with the SEC.
Information regarding directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, in the Company is contained in the Company’s definitive
annual meeting proxy statement filed with the SEC on April 20,
2020. You may obtain a free copy of this document as described in
under the heading “Additional Information and Where to Find It”
above. Investors may obtain additional information regarding the
direct and indirect interests of such potential participants in the
proposed transaction by reading the definitive proxy statement,
Schedule 13E-3 transaction statement, and the other relevant
documents filed with the SEC when they become available.
Contacts:
Tabitha T. Bailey Vice President, General
Counsel, and Corporate Secretary(214) 265-4708
TransAtlantic Petroleum Ltd.16803 Dallas
ParkwayAddison, Texas
75001http://www.transatlanticpetroleum.com
1 Adjusted EBITDAX is a non-GAAP financial
measure. See the reconciliation at the end of the press
release.
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