In connection with the March 2009 acquisition of Incremental Petroleum, TransAtlantic received the following assets located in California, USA.
History
In mid 2006, Incremental Petroleum introduced a project generation strategy to expand the Company's asset portfolio and diversify operations. Over the subsequent two years, Incremental reviewed more than fifty potential projects. After undertaking a study of the entire significant hydrocarbon bearing basins across North America, Incremental identified the San Joaquin Valley in central California as a region where low risk, onshore drilling with new technologies could prove to add significant value.
In May 2008, Incremental acquired interests in five projects, totaling more than 19,000 acres, in the hydrocarbon region of the San Joaquin Basin, California. Those 5 projects are listed below:
McFlurrey Gas Project
McFlurrey is located in the Sunflower Valley (a.k.a. McLure Valley), a sub-basin of the San Joaquin Basin of Central California.
From the late 1920s through the early 1980s, gas was previously discovered in the vicinity. The wells tested substantial gas columns at high rates, but were plugged and abandoned as the operators' focus was on finding oil. The wells that tested gas are located within one-half mile of an existing gas pipeline and strong regional market. TransAtlantic has drilled two wells in the McFlurrey project to earn a 50% working interest (37.5% revenue interest). The Company must also complete a pipeline and establish initial gas sales.
Kettleman Middle Dome ("KMD")
TransAtlantic has a 10% interest in KMD. KMD includes five producing wells, representing an ongoing development of a large anticline with multiple producing horizons. Previous development was hindered by long term disputes with previous owners.
KMD is on trend eight kilometers to the south of the Kettleman North Dome Field ("KND"). KND has produced approximately 3 TCF of gas and 460 mmbbls of oil. KMD's historical production originates from three main zones: Upper Temblor Sands (7,000-7,500 feet), Kreyenhagen Formation (10,500-12,000 feet), and the McAdams Sands (12,000-12,500 feet). In addition, the field has seven productive formations between 1,800-13,000 feet, with each formation having produced hydrocarbons at commercial rates.
Egypt Exploitation
TransAtlantic may earn a 50% working interest (37.5% revenue interest) by drilling one well to 6,000 feet. The target area is the regional Temblor reservoir that contains an anticline feature. The project was initially drilled in the 1950s, however the oil identified was not considered economically recoverable.
Pharaoh Exploration
Following completion of 3D seismic, TransAtlantic can earn a 50% working interest by drilling a well to 12,500 feet. TransAtlantic's interest is tied to resources discovered below 6,000 feet.
Southeast Kettleman North Dome ("SEKND")
TransAtlantic may agree to drill a 12,500 foot well within 18 months in return for 50% working interest. SEKND is an oil producing anticline, approximately 30km in length. The area is separated by a possible wretch zone. To the south is Kettleman Middle Dome, also a meaningful oil field.
Commercial Terms
The U.S. petroleum tax is based on a royalty-tax system. The fiscal terms include:
History
In mid 2006, Incremental Petroleum introduced a project generation strategy to expand the Company's asset portfolio and diversify operations. Over the subsequent two years, Incremental reviewed more than fifty potential projects. After undertaking a study of the entire significant hydrocarbon bearing basins across North America, Incremental identified the San Joaquin Valley in central California as a region where low risk, onshore drilling with new technologies could prove to add significant value.
In May 2008, Incremental acquired interests in five projects, totaling more than 19,000 acres, in the hydrocarbon region of the San Joaquin Basin, California. Those 5 projects are listed below:
McFlurrey Gas Project
McFlurrey is located in the Sunflower Valley (a.k.a. McLure Valley), a sub-basin of the San Joaquin Basin of Central California.
From the late 1920s through the early 1980s, gas was previously discovered in the vicinity. The wells tested substantial gas columns at high rates, but were plugged and abandoned as the operators' focus was on finding oil. The wells that tested gas are located within one-half mile of an existing gas pipeline and strong regional market. TransAtlantic has drilled two wells in the McFlurrey project to earn a 50% working interest (37.5% revenue interest). The Company must also complete a pipeline and establish initial gas sales.
Kettleman Middle Dome ("KMD")
TransAtlantic has a 10% interest in KMD. KMD includes five producing wells, representing an ongoing development of a large anticline with multiple producing horizons. Previous development was hindered by long term disputes with previous owners.
KMD is on trend eight kilometers to the south of the Kettleman North Dome Field ("KND"). KND has produced approximately 3 TCF of gas and 460 mmbbls of oil. KMD's historical production originates from three main zones: Upper Temblor Sands (7,000-7,500 feet), Kreyenhagen Formation (10,500-12,000 feet), and the McAdams Sands (12,000-12,500 feet). In addition, the field has seven productive formations between 1,800-13,000 feet, with each formation having produced hydrocarbons at commercial rates.
Egypt Exploitation
TransAtlantic may earn a 50% working interest (37.5% revenue interest) by drilling one well to 6,000 feet. The target area is the regional Temblor reservoir that contains an anticline feature. The project was initially drilled in the 1950s, however the oil identified was not considered economically recoverable.
Pharaoh Exploration
Following completion of 3D seismic, TransAtlantic can earn a 50% working interest by drilling a well to 12,500 feet. TransAtlantic's interest is tied to resources discovered below 6,000 feet.
Southeast Kettleman North Dome ("SEKND")
TransAtlantic may agree to drill a 12,500 foot well within 18 months in return for 50% working interest. SEKND is an oil producing anticline, approximately 30km in length. The area is separated by a possible wretch zone. To the south is Kettleman Middle Dome, also a meaningful oil field.
Commercial Terms
The U.S. petroleum tax is based on a royalty-tax system. The fiscal terms include:
- 25% royalty rate
- 8.84% California state tax
- Base federal income tax and marginal federal tax as per the following table: