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 $29.9 million in the fourth quarter of 2014
First Quarter 2015 Results
| For the Three Months Ended | ||||
| March 31, 2015 | December 31, 2014 | March 31, 2014 | ||
| Net Sales: | ||||
| Oil (MBbls) | 429 | 420 | 260 | |
| Natural gas (MMCF) | 733 | 775 | 934 | |
| Total net sales (MBOE) | 551 | 549 | 416 | |
| Average net sales (BOEPD) | 6,122 | 5,969 | 4,622 | |
| Realized Commodity Prices: | ||||
| Oil ($/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.
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TransAtlantic Petroleum Ltd. Consolidated Statements of Comprehensive Income (Loss) |
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| For the Three Months Ended | ||||||
| Mar. 31, 2015 | Dec. 31, 2014 | Mar. 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. | ||||||
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TransAtlantic Petroleum Ltd. Summary Consolidated Statements of Cash Flows |
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| For the Three Months Ended March 31, | ||
| U.S. Dollars in thousands | 2015 | 2014 |
| 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 |
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TransAtlantic Petroleum Ltd. Summary Consolidated Balance Sheets |
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| As of | ||
| U.S. Dollars in thousands | March 31, 2015 | December 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 thousands | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 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.