TransAtlantic Petroleum Corp. provides a reserves and operations update and growth outlook.
In connection with the completion of the Company's acquisition of Incremental Petroleum Limited ("Incremental") in April 2009, RPS Energy Pty Ltd ("RPS") completed independent reserves evaluations of the Company's Selmo oil field and Edirne gas field in Turkey with an effective date of December 31, 2008, in reports compliant with National Instrument 51-101 ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH") titled "Selmo Oil Field Reserves Evaluation May 2009" and "Edirne Field Reserves Evaluation May 2009" (the "RPS Selmo Report" and the "RPS Thrace Report" respectively). RPS did not evaluate the balance of the Company's 6 million net acres in Turkey, Morocco, and Romania. The reports also did not evaluate the value of the Company's drilling rigs and service equipment.
TransAtlantic is currently producing approximately 1,600 barrels of oil per day ("BOPD") from the Selmo oil field ("Selmo") in southeast Turkey. The Company has been evaluating development plans in Selmo since the acquisition of Incremental. Situated on the northern edge of the prolific Zagros fold belt of Iran and Iraq in southeast Turkey, Selmo has produced approximately 83 million barrels of oil to date from a total of 47 wells, 23 of which are still active. The Company plans to commence an active drilling program in Selmo later this month, with expectations to drill 5, 18, and 18 infill wells for the remainder of 2009, 2010, and 2011, respectively. The Company will use its own rigs to drill the wells in Selmo and expects its drilling and completion costs to be less than 50% of the previous operator's estimates. "We expect to bring down the cost of drilling wells by using our own rigs, buying in bulk, and vertically integrating wherever possible," Malone Mitchell, the Company's Chairman, said.
Over time, the Company could drill up to an additional 174 infill wells if the Company is successful in down-spacing the field to 40-acre spacing. "With low recovery factors relative to the original oil in place, and the low density of wells in the field, we see the opportunity to meaningfully increase production and the ultimate recoverable oil by drilling additional wells," Matt McCann, the Company's CEO, concluded.