- TransAtlantic currently expects production during 2013, excluding any impact from exploration drilling, to total 1.8 million to 2.1 million barrels of oil equivalent ("boe") or an average production rate of between 5,000 and 5,700 boe per day.
- As a result of advanced modeling based on reinterpreted 3D seismic and well control, the Company believes that horizontal drilling can be of large benefit to Selmo's development.
- During 2013 TransAtlantic plans to drill 17 wells in the Tekirdag Field area development program (41.5% working interest), eight wells testing the Hayrabolu structure area, and 11 wells in other licenses.
TransAtlantic Petroleum Ltd. (TSX:TNP) (NYSE-AMEX:TAT) announces the Company's 2013 capital budget and production guidance, as approved by its Board of Directors, provides an operations update, and announces enhancements to the Company's organizational structure.
2013 Capital Expenditure Budget
TransAtlantic's Board of Directors has approved a capital expenditure budget for the twelve months ending December 31, 2013 of $131 million net to the Company. The budgeted spending includes $101 million of drilling and completion expense, $19 million of seismic and $11 million of infrastructure and other.
| Activity || Budgeted CapEx |
| Drilling and Completion || $101 million |
| Seismic || $19 million |
| Infrastructure & Other || $11 million |
| Total || $131 million |
Approximately 32% of the Company's spending is expected to be directed to the Thrace Basin, 40% toward activity on the Molla licenses, 19% at Selmo field, and 9% on exploration and other drilling.
| Region/License || Budgeted CapEx |
| Molla || $52 million |
| Selmo || $25 million |
| Thrace Basin || $42 million |
| Exploration & Other || $12 million |
| Total || $131 million |
Actual expenditures are likely to deviate from this initial plan according to drilling results, commodity prices, cash flow and capital availability (including the consummation of one or more joint ventures). The Company expects cash flow, available credit, and cash on hand will be sufficient to fund this spending program. TransAtlantic continues to work on forming a joint venture on several of the Company's licenses. The successful consummation of a joint venture may also provide cash for planned activities and necessitate increased drilling activity.
2013 Production Guidance
TransAtlantic currently expects production during 2013, excluding any impact from exploration drilling, to total 1.8 million to 2.1 million barrels of oil equivalent ("boe") or an average production rate of between 5,000 and 5,700 boe per day. Crude oil is expected to account for approximately 60% of production volumes.
Regional CapEx Detail and Operations Update
Production from the Goksu-3H has continued at an encouraging rate, averaging 425 bbls of oil per day over its first 30 days of production, 412 bbls of oil per day over its first 60 days of production, and 477 bbls of oil per day over a recent seven day period. To further evaluate the play concept, during 2013 TransAtlantic plans to target the Mardin formation with six horizontal and one vertical wells in the Molla licenses (100% working interest).
The Company is pleased to announce that TransAtlantic's first Bedinan test in the Molla licenses, the Bahar-1 exploration well, was successfully fracture stimulated on December 2, 2012. Sales volumes from the Bahar-1 started at a daily rate of 576 bbls of oil on December 5, 2012 and averaged 375 bbls of oil per day over the subsequent 20 days. In addition to the Bedinan oil flow test, the Hazro formation in Bahar-1 is also being tested. The Hazro exhibited oil and gas shows on the mud logs while drilling which was then corroborated by open hole log analysis and early test results are indicating productivity of approximately 150 bbls of oil per day. After the Hazro test, the Company will determine the appropriate production configuration to resume sales from the well.
In light of the Bahar-1 results, the Company plans to drill three wells targeting the Dadas shale and/or Bedinan sandstone during 2013. TransAtlantic has recently spud the Bahar-2 exploration well, which will be drilled as a horizontal well in the Bedinan sandstone and is expected to be completed with a multi-stage frac.
TransAtlantic has allocated $15 million for seismic activities and infrastructure in the Molla area in order to appraise both the Mardin and Bedinan discoveries.
As a result of advanced modeling based on reinterpreted 3D seismic and well control, the Company believes that horizontal drilling can be of large benefit to Selmo's development. TransAtlantic's budget therefore includes plans to drill five horizontal and one deep vertical test wells in Selmo field during 2013. The Company also expects to fracture stimulate seven existing Selmo wells during the year.
During 2013 TransAtlantic plans to drill 17 wells in the Tekirdag Field area development program (41.5% working interest), eight wells testing the Hayrabolu structure area, and 11 wells in other licenses. Additionally, TransAtlantic has allocated $4 million for seismic activities and infrastructure.
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