TransAtlantic Petroleum Ltd. has entered into a non-binding letter of intent to sell its oilfield services business, which is substantially comprised of its wholly owned subsidiaries Viking International Limited and Viking Geophysical Services, Ltd., to a consortium consisting of Dalea Partners, LP and funds advised by Abraaj Investment Management Limited for an aggregate purchase price of $164 million, subject to adjustment in certain limited circumstances. Consideration for the sale would consist of $152.5 million in cash and an $11.5 million interest-bearing promissory note from Dalea. The promissory note would be payable five years from the date of issuance or earlier upon the occurrence of certain specified events.

The Company expects to use the net proceeds from the sale to pay down outstanding indebtedness under its senior secured credit agreement with Standard Bank Plc and BNP Paribas (Suisse) SA, its short-term credit agreement with Dalea and a promissory note from Viking International to Viking Drilling, LLC, an affiliate of Dalea. As of January 31, 2012, TransAtlantic and its subsidiaries had outstanding borrowings of approximately $78 million, $73 million and $2.5 million under the senior secured credit agreement, the Dalea credit agreement and the Viking International note, respectively.

Wil F. Saqueton, TransAtlantic's Chief Financial Officer stated, "The divestiture of the Viking entities immediately strengthens TransAtlantic's balance sheet, leaving us essentially debt free with a simplified administration and accounting process. TransAtlantic should now be able to focus on its core business of developing its exploration and production opportunities and grow at a more rapid pace."

Tags: TransAtlantic Petroleum Corp.