TransAtlantic Petroleum Announces Results of Goksu-3H Horizontal Well and Provides Operational Update
HAMILTON, Bermuda, Oct. 30, 2012 (GLOBE NEWSWIRE) -- TransAtlantic Petroleum Ltd. (TSX:TNP) (NYSE: TAT) (the "Company" or "TransAtlantic") is pleased to provide initial production results of the Goksu-3H, the Company's first horizontal producing well in Turkey, and provide an update of recent operating activity.
The Goksu-3H exploration well (100% working interest) was recently completed as TransAtlantic's first horizontal producing well in Turkey. The Goksu-3H began flowing naturally on October 22, 2012 after approximately 36 hours of jetting. TransAtlantic has flowed the well on chokes ranging from 19/64" to 24/64". The well's flowing tubing pressure has stabilized between 185 and 205 pounds per square inch ("psi") with a stable shut in casing pressure of approximately 500 psi. To date, the well has recovered approximately 3,000 barrels ("bbls") of oil and 10,000 bbls of water (approximately 65% of the drilling fluid lost during drilling operations). Average oil cut has ranged between 20% and 40% with daily production between 350 and 500 bbls of oil. The production rate has been restricted to allow flowing tubing pressure to remain in the 200 psi range, similar to the conditions maintained with the Goksu-2 exploration well that was completed in February 2012.
N. Malone Mitchell, 3rd, TransAtlantic's Chairman and Chief Executive Officer, stated, "As this is a new completion method for the country, and the method utilized on the Goksu-3H may or may not be optimal, water to oil ratios may change, for better or worse, when the volume of drilling fluid lost during drilling is recovered. Long-term decline rates for this completion method and this reservoir are not known at this time. We are certainly pleased with the early production results and will closely monitor the well before projecting the ultimate outcome."
Third Quarter Production and Activity
Oil and natural gas sales during the third quarter of 2012 averaged 4,168 thousand barrels of oil equivalent ("Mboe") per day with crude oil accounting for sixty percent of total volumes. Gas sales during the third quarter of 2012 were impacted by reduced demand during the Ramadan religious holiday in Turkey. During the quarter, TransAtlantic and its subsidiaries spudded nine gross wells, completed 17 gross wells and executed fracs in 10 wellbores. The Company's 7-day average net production rate as of October 21, 2012 was approximately 4,366 net boe per day, including approximately 10.4 million cubic feet ("MMcf") per day of natural gas and approximately 2,628 bbls per day of oil..
Molla Field Area. In addition to the Goksu-3H activity noted above, TransAtlantic also began completion operations on the Bahar-1 exploration well (100% working interest) during the third quarter of 2012. The Bahar-1 is expected to undergo fracture stimulation of the Bedinan formation during the fourth quarter of 2012.
Selmo Field Area. TransAtlantic has stimulated 10 wells in Selmo field since the frac crew arrived on location in mid-September 2012. Early results during flowback are encouraging, with the first seven wells showing an average increase in production of 45 bbls of oil per day. At least four additional wells are expected to be stimulated after the Bahar-1 fracture treatment is completed.
Arpatepe Field Area. In the third quarter of 2012, TransAtlantic began completion activity for the Arpatepe-6 well (50% working interest). The well started producing in mid-October 2012 at an initial gross rate of approximately 200 bbls of oil per day. The Bati Arpatepe-1 well (50% working interest), which was drilled and funded by Aladdin Middle East, Ltd., the operator of the Arpatepe license, did not find commercial quantities of hydrocarbons and has been plugged and abandoned.
Idil Area. TransAtlantic has recently spud the Durakoy-1 exploration well (50% working interest) on the Idil exploration license just north of the Syrian border. The surface location of the larger Ebyat Anticline prospect is located at a higher elevation and is expected to spud during 2013, after winter weather conditions subside.
Gazientep Area. During the third quarter of 2012, TransAtlantic and its partners completed drilling the Alibey-1H, our first horizontal operation in Turkey. Completion techniques for this well are currently being evaluated and are expected to commence during the fourth quarter of 2012.
Northwestern Turkey (Thrace Basin)
Terkirdag Field Area. TransAtlantic and its partners stimulated five wells during the third quarter of 2012, with initial peak production rates that averaged approximately 0.8 MMcf of natural gas per day (41.5% working interest).
Based upon the results gathered during the proof of concept program, TransAtlantic and its partners have designed an initial 88-well development program for the Tekirdag Field Area that will begin during the fourth quarter of 2012 and proceed as a two-rig drilling program into 2015. Gross well costs are expected to range between $2.0 million and $3.0 million, depending upon total depth and completion design. Gross expected ultimate recovery under the program is expected to exceed 70 billion cubic feet ("Bcf") of natural gas.
Gurun Area. TransAtlantic resumed drilling the Konak-1 exploration well during the third quarter. After encountering drilling difficulties, the well was sidetracked. The company has run intermediate casing to approximately 6,700 feet, but may have to suspend operations before reaching total depth in preparation for winter weather conditions.
Sivas Basin. TransAtlantic completed the initial planned acquisition of the Sivas Basin 2D seismic and aeromag data, which Shell Upstream Turkey B.V. co-funded. TransAtlantic has extended the seismic data acquisition program in the Sivas Basin and expect to complete this additional data acquisition in the fourth quarter of 2012.
Natural Gas Pricing
Effective October 1, 2012, Botas Boru Hatlari Ile Petrol Tasima AS ("BOTAŞ"), Turkey's state-owned pipeline company, increased residential and industrial natural gas pricing by approximately 10%. At the current exchange rate of approximately 1.8 Turkish lira per United States dollar, the Company expects to receive approximately $9.50 per thousand cubic feet of natural gas produced.
TransAtlantic Petroleum Ltd. is an international energy company engaged in the acquisition, development, exploration and production of oil and natural gas. The Company holds interests in developed and undeveloped oil and natural gas properties in Turkey, Bulgaria and Romania.
(NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.)
The TransAtlantic Petroleum Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=12745
This news release contains statements regarding expected results from future drilling, completion and fracture stimulation of exploration, appraisal and development wells, expected natural gas pricing, 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; 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, is derived by the Company by converting natural gas to oil in the ratio of six thousand cubic feet ("Mcf") of natural gas to one bbl of oil. A boe conversion ratio of 6 Mcf to 1 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.