May 11, 2015

TransAtlantic Petroleum Announces First Quarter 2015 Financial Results and Provides Operational Update

HAMILTON, Bermuda, May 11, 2015 (GLOBE NEWSWIRE) -- TransAtlantic Petroleum Ltd. (NYSE-MKT:TAT) (TSX:TNP) (the "Company" or "TransAtlantic") today announced financial results for the quarter ended March 31, 2015 and provided an update on its operations.

First Quarter 2015 Highlights

  • Adjusted EBITDAX from continuing operations of $17.6 million, a 9% increase from the fourth quarter of 2014 (Adjusted EBITDAX is a non-GAAP financial measure that is defined and reconciled to net income at the end of this press release)
  • Average sales production of 6,122 BOEPD (comprised of 4,767 BOPD and 8.1 MMCFPD of natural gas), a 3% increase from the fourth quarter of 2014 and a 32% increase over the first quarter of 2014
  • Net loss from continuing operations of $5.5 million, or $0.13 per share (basic and diluted) which includes $5.1 million of foreign exchange loss
  • Revenue of $27.0 million, a 10% decrease from $29.9 million in the fourth quarter of 2014

First Quarter 2015 Results

 For the Three Months Ended 
 March 31, 2015December 31, 2014March 31, 2014  
Net Sales:        
Oil (MBbls) 429 420 260  
Natural gas (MMCF) 733 775 934  
Total net sales (MBOE) 551 549 416  
Average net sales (BOEPD) 6,122 5,969 4,622  
Realized Commodity Prices:        
Oil ($/Bbl unhedged) $ 47.97 $ 53.19 $ 97.05  
Oil ($/Bbl hedged) $ 58.19 $ 56.66 $ 94.16  
Natural gas ($/MCF unhedged) $ 8.30 $ 9.16 $ 8.30  
Natural gas ($/MCF hedged) $ 8.30 $ 9.16 $ 8.30 

Total revenues were $27.0 million for the three months ended March 31, 2015, compared to $29.9 million for the three months ended December 31, 2014 and $33.6 million for the three months ended March 31, 2014. For the three months ended March 31, 2015, TransAtlantic had net loss from continuing operations of $5.5 million, or $0.13 per share (basic and diluted), compared to net income from continuing operations of $15.4 million, or $0.39 per share (basic and diluted), for the three months ended December 31, 2014, and net income from continuing operations of $4.0 million, or $0.11 per share (basic and diluted), for the three months ended March, 31, 2014.

Net income for the first quarter of 2015 included $5.1 million of foreign exchange losses (an immaterial amount of which were cash losses) and a $3.8 million gain on commodity derivative contracts. Capital expenditures, including seismic and corporate expenditures, totaled $7.8 million for the three months ended March 31, 2015, compared to $29.5 million for the three months ended December 31, 2014 and $26.1 million for the three months ended March 31, 2014.

Adjusted EBITDAX from continuing operations for the three months ended March 31, 2015 was $17.6 million, compared to $16.2 million for the three months ended December 31, 2014 and $21.9 million for the three months ended March 31, 2014.

Operational Update

TransAtlantic's current 14-day average net production is approximately 6,074 BOEPD, and is comprised of 4,605 BOPD and 8.7 MMCFPD. The Company is presently operating one drilling rig in Albania and expects to add one rig in the Molla Area in the next ten days. In addition, TransAtlantic expects to begin a workover program in Albania targeting existing wells to improve artificial lift and increase production.

Southeastern Turkey - Şelmo Field Redevelopment

The Company continues to see positive response from its secondary recovery program in the Selmo field and expects to convert several additional wells to injection as part of its waterflood operations in 2015. Current waterflood response is approximately 100 BOPD. TransAtlantic is in the process of expanding the waterflood infrastructure to the western part of the field. The Company's daily production in the Selmo field declined 1% in the first quarter of 2015 from the fourth quarter of 2014.

Southeastern Turkey - Molla Drilling

TransAtlantic expects to complete the Pinar-1 (100% working interest), an 11,700-foot vertical well that will test a structure west of the Bahar field. The Bahar-6 continues to produce at a rate of approximately 500 BOPD and has produced over 100 MBbls since completion. The company expects to resume drilling in the Bahar field in the second quarter of 2015.

Northwestern Turkey - Thrace Basin Development

TransAtlantic is currently finalizing technical plans and tendering on the company's 2015 Thrace drilling campaign.

Albania

TransAtlantic resumed drilling on the Delvina-34H1 (100% working interest), a Cretaceous, deviated well with proposed target depth of approximately 13,000 feet. Intermediate casing was set at 4,153 feet and the Company is currently drilling the section of hole to the top of the reservoir.

First Quarter 2015 Earnings Conference Call

The Company has scheduled a conference call for Tuesday, May 12, 2015 at 7:30 a.m. Central (8:30 a.m. Eastern) to discuss first quarter 2015 financial results.

Investors who would like to participate in the conference call should dial (877) 878-2762 or (678) 809-1005 approximately 10 minutes prior to the scheduled start time and ask for the TransAtlantic conference call. The conference ID is 39431360. A replay will be available through May 13, 2015 and may be accessed by dialing (855) 859-2056 or (404) 537-3406. The conference ID is 39431360.

An enhanced webcast of the conference call and replay will be available through the Company's website at www.transatlanticpetroleum.com. To access the live webcast and replay, click on "Investors," select "Events & Presentations," and click on "Listen to webcast" under the event listing. The webcast requires iOS, Microsoft Windows Media Player or RealOne Player.

Quarterly Report on Form 10-Q

On May 11, 2015, TransAtlantic filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.

Second Quarter 2015 Operations Update

TransAtlantic expects to issue a quarterly operations update for the Second Quarter of 2015 during the week of July 6, 2015. 

 
TransAtlantic Petroleum Ltd.

Consolidated Statements of Comprehensive Income (Loss)
       
 For the Three Months Ended
 Mar. 31, 2015Dec. 31, 2014Mar. 31, 2014
Revenues:      
Total revenues $ 26,996 $ 29,944 $ 33,646
Costs and expenses:      
Production 5,946 6,681 4,131
Transportation costs 67 284 -
Exploration, abandonment and impairment 330 11,366 4,141
Cost of purchased natural gas 266 788 485
Seismic and other exploration 58 70 3,294
Revaluation of contingent consideration -- -- (2,500)
General and administrative 8,619 10,965 6,552
Depreciation, depletion and amortization 11,578 12,223 10,090
Accretion of asset retirement obligations 111 106 98
Total costs and expenses 26,975 42,483 26,291
Operating income 21 (12,539) 7,355
Other income (expense):      
Interest and other expense (3,310) (1,801) (1,203)
Interest and other income 653 272 273
Gain on commodity derivative contracts 3,812 35,021 962
Foreign exchange (loss) gain (5,148) (606) (1,344)
Total other (expense) income (3,993) 32,886 (1,312)
(Loss) income from continuing operations before income taxes (3,972) 20,347 6,043
Current income tax expense (1,521) (586) (69)
Deferred income tax expense (1) (4,408) (1,981)
Net (loss) income from continuing operations (5,494) 15,353 3,993
Loss from discontinued operations before income taxes -- -- (20)
Net (loss) income (5,494) 15,353 3,973
Other comprehensive loss:      
Foreign currency translation adjustment (23,619) (3,466) (3,295)
Comprehensive (loss) income $ (29,113) $ 11,887 $ 678
       
Net (loss) income per common share      
Basic net (loss) income per common share      
Continuing operations $ (0.13) $ 0.39 $ 0.11
Discontinued operations $ - $ - $ (0.00)
Weighted average common shares outstanding 40,767 39,024 37,392
Diluted net (loss) income per common share      
Continuing operations $ (0.13) $ 0.39 $ 0.11
Discontinued operations $ - $ - $ (0.00)
Weighted average common and common equivalent shares outstanding 40,767 39,223 37,392
       
Note: On March 4, 2014, the Company's shareholders approved a 1-for-10 reverse stock split, which became effective March 6, 2014. As a result, all common share amounts and transactions described herein have been adjusted to reflect the 1-for-10 reverse stock split.      

 

TransAtlantic Petroleum Ltd.

Summary Consolidated Statements of Cash Flows
     
 For the Three Months Ended March 31,
U.S. Dollars in thousands20152014
Net cash provided by operating activities from continuing operations $ 13,792 $ 28,151
Net cash used in investing activities from continuing operations (10,230) (31,192)
Net cash (used in) provided by financing activities from continuing operations (9,205) 6,640
Net cash provided by discontinued operations -- 480
Effect of exchange rate changes on cash (1,338) (252)
Net (decrease) increase in cash and cash equivalents $ (6,981) $ 3,827
 
 
TransAtlantic Petroleum Ltd.

Summary Consolidated Balance Sheets
     
 As of
U.S. Dollars in thousandsMarch 31, 2015December 31, 2014
ASSETS    
Current assets:    
Cash and cash equivalents $ 28,151 $ 35,132
Accounts receivable 33,782 50,193
Prepaid and other current assets 21,251 23,365
Deferred income taxes 854 329
Assets held for sale 26 28
Total current assets 84,064 109,047
Property and equipment, gross 495,379 531,812
Less accumulated depreciation, depletion and amortization (137,458) (141,977)
Property and equipment, net 357,921 389,835
Total other assets 45,945 47,521
Total assets $ 487,930 $ 546,403
LIABILITIES & SHAREHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $ 40,317 $ 57,895
Accrued liabilities and other 34,441 31,561
Deferred income taxes 2,005 2,138
Loans payable 32,887 52,606
Liabilities held for sale 6,348 6,928
Total current liabilities 115,998 151,128
Total liabilities 305,390 334,939
Total shareholders' equity 182,540 211,464
Total liabilities and shareholders' equity $ 487,930 $ 546,403

 

Reconciliation of Net Income to Adjusted EBITDAX (Unaudited)
       
 For the Three Months Ended
U.S. Dollars in thousandsMar. 31, 2015Dec. 31, 2014Mar. 31, 2014
Net (loss) income from continuing operations $ (5,494) $ 15,353 $ 3,993
Adjustments:      
Interest and other, net 2,657 1,529 930
Current and deferred income tax (benefit) expense 1,522 4,994 2,050
Exploration, abandonment, and impairment 330 11,366 4,141
Seismic expense 58 96 3,037
Foreign exchange loss 5,148 606 1,344
Share-based compensation 267 477 396
Gain on commodity derivative contracts (3,812) (35,021) (962)
Cash settlements on commodity derivative contracts 4,384 1,459 (752)
Accretion of asset retirement obligation 111 106 98
Depreciation, depletion, and amortization 11,578 12,223 10,090
Revaluation of contingent consideration -- -- (2,500)
Bad debt expense -- 1,487 --
Net other items 832 1,500 --
Adjusted EBITDAX from continuing operations $ 17,581 $ 16,175 $ 21,865

Adjusted EBITDAX is a non-GAAP financial measure that represents earnings from continuing operations before income taxes, interest, depreciation, depletion, amortization, impairment, abandonment, and exploration expenses, unrealized derivative gains and losses, foreign exchange gains and losses, non-cash share-based compensation expense and significant non-recurring expenses.

The Company believes Adjusted EBITDAX assists management and investors in comparing the Company's performance and ability to fund capital expenditures and working capital requirements on a consistent basis without regard to depreciation, depletion and amortization and impairment of oil and natural gas properties and exploration expenses, 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 also widely used by investors and rating agencies. 

Adjusted EBITDAX is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income, income from operations, or cash flow provided by operating activities prepared in accordance with GAAP. Net income, income from operations, or cash flow provided by operating activities may vary materially from Adjusted EBITDAX. Investors should carefully consider the specific items included in the computation of Adjusted EBITDAX. The Company has disclosed Adjusted EBITDAX to permit a comparative analysis of its operating performance and debt servicing ability relative to other companies.

About TransAtlantic

TransAtlantic Petroleum Ltd. 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, Albania and Bulgaria.

(NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.)

Forward-Looking Statements

This news release contains statements concerning the drilling, completion and cost of wells, the production and sale of oil and natural gas, the acquisition and processing of seismic data, secondary recovery operations, the holding of an earnings conference call, the issuance of an operational update, the holding of an annual meeting of shareholders, as well as other expectations, plans, goals, objectives, assumptions or information 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, the ability of the Company to continue to develop and exploit attractive foreign initiatives.

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, market prices for natural gas, natural gas liquids and oil products; estimates of reserves and economic assumptions; the ability to produce and transport natural gas, natural gas liquids and oil; the results of exploration and development drilling and related activities; economic conditions in the countries and provinces in which the Company carries on business, especially economic slowdowns; actions by governmental authorities, receipt of required approvals, increases in taxes, legislative and regulatory initiatives relating to fracture stimulation activities, changes in environmental and other regulations, and renegotiations of contracts; political uncertainty, including actions by insurgent groups or other conflict; outcomes of litigation; the negotiation and closing of material contracts; shortages of drilling rigs, equipment or oilfield services.

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.

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 ("MCF") of natural gas to one barrel of oil. A BOE conversion ratio of six MCF to one barrel 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.

CONTACT: Lizzy Chesnut

         Investor Relations

         (214) 265-4716

         

         Wil Saqueton

         Vice President and Chief Financial Officer

         (214) 220-4323

         

         TransAtlantic Petroleum Ltd.

         16803 Dallas Parkway

         Addison, Texas 75001

         http://www.transatlanticpetroleum.com


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