TransAtlantic Petroleum Corporation - Morocco

MOROCCO

Tselfat

Through its wholly owned subsidiary, TransAtlantic Maroc Ltd., the Company holds the Tselfat Exploration License. The license covers 225,000 acres (898 sq. km.) and is located in the onshore area of eastern Morocco, about 200 km East of Rabat and about 40 km to the North of Meknes.

Location Map

Prospect Description

The license contains three previously produced but now abandoned oil and gas fields: Haricha, Tselfat and a portion of the Bou Draa Field. None of the fields utilized seismic or modern completion or reservoir techniques. The refinery of Sidi Kacem is located immediately to the south of the block, close to the Bou Draa oil field and an oil pipeline crosses the western part of the block. From a structural viewpoint, the block overlaps from the eastern edge of the Rharb Basin into the foothills of the Rif Cordillera, in an area known as the Rides Prérifaines.

There were 378 boreholes drilled on the block between 1919 and 1981, the majority of which were development wells drilled on the Tselfat, Bou Draa and Haricha fields. Some boreholes were merely re-drills of earlier ones that encountered technical problems. All of the field development was done without the aid of modern logging and stimulation techniques, and at a time when horizontal drilling was not possible. It is anticipated much higher recovery factors could be achieved using modern development techniques for any future discoveries. In addition, significant scope exists for the rehabilitation of the Tselfat, Bou Draa and Haricha fields.

Seismic Line across License

Haricha -- Bour Draa Trend

Tselfat Trend

Haricha Field -- The Haricha Filed was discovered in the early 1950's on a large surface anticline with oil seeps. The field was developed with 30 wells drilled to a depth of less than 2,000 meters (6,500 ft) and produced oil (2.3 million Bbls) and gas (6.4 Bcf) from porous 20-30% Jurassic (Dogger) sandstones. The field is a complex structural trap formed by a thrust fault. The field is believed to be not fully exploited (4 sq. km., 1,000 acres) with potential that is un-developed. Additional deeper sub-thrust potential is also believed to be

Bou Draa Field - The Bou Draa structure is a large surface anticline generated by a regional thrust fault. About 20% of the field is on Tselfat Permit. Discovered in 1934, over 140 shallow wells (less than 1,000 meters) were drilled on the Bou Draa structure area covering about 1,500 acres (6 sq. km.). The field produced about 276,000 Bbls of oil and 3 Bcf of gas. Additional potential exists in the deeper Jurassic age sandstones.

Tselfat Field - The Tselfat field is also a surface anticline with hydrocarbon seeps. It was the first oil field found in Morocco about 1919. Over 90 shallow wells were drilled in the field, many of which produced oil from Jurassic oolitic carbonate reservoirs. The field produced about 160,000 Bbls of oil.

Fiscal Terms and Work Commitment

Morocco operates under a royalty/tax regime with a participation right by ONHYM, the national oil company. The royalty is 10% for oil, 5% for gas. There is a 10-year corporate tax holiday (after which the corporate tax rate is 30%). Oil and gas related activities, equipment and supplies are exempt from VAT and customs duties. The license is subject to a 4% overriding royalty (reduced to 3% for exploitation concessions). Oil is priced at world market price and there is working refinery less than 10 km. from the License. The gas price is deregulated for end-user sales; it is regulated if sold to the Moroccan government for power generation.

The license was awarded to TransAtlantic in May 2006. The license term is divided into three periods: 3 years, 2 years and 3 years. The license holder pays 100% during the exploration phase; once a discovery is made, each field is converted into an exploitation concession with a 20-year term; ONHYM pays heads up for its 25% working interest in each exploitation concession. During the first three year period, TransAtlantic is committed to shooting a 3D seismic survey of at least 50 sq. km. and drilling one exploratory well of at least 2,000 meters to test the subthrust prospect. TransAtlantic has posted a $3 million bank guarantee in support of the first three-year work commitment, a portion of which is released annually as the work is performed.

Guercif/Beni Znassen

In June 2005, the Company was awarded a reconnaissance license covering 3.4 million acres over the Guercif and Beni Znassen areas in northern Morocco. The license provided TransAltantic with the exclusive right over the Guercif and Beni Znassen areas through June 2007. The term of th elicense has expired, but the Company is in ongoing discussions with ONHYM to convert the license into an exploration permit.

The Guercif and Beni Znassen areas offered the opportunity to pursue an extension of an existing producing play into a complex, under-explored basin. There is regional evidence for the presence of Lower Jurassic age source rocks in the Middle Atlas rift basin. In places, these source rocks may not have reached the oil window before Early Tertiary basin inversion and uplift. Subsequent reburial by up to 2,000 meters in the Neogene may re-activate hydrocarbon generation and allow migration into earlier-formed traps. Additional, but currently more speculative, exploration plays may also exist in the area. Detailed geological, geochemical and geophysical work is still required to analyze the changes in basin architecture, depositional patterns, burial history and heat flow arising from basin formation, inversion and re-activation. These changes have governed not only the distribution of reservoir, source and seal lithologies but also the timetable of maturation, expulsion and migration of hydrocarbons.

Work Program

The work program proposed for the area was intended to high grade future exploration opportunities. In the first year, the Company reprocessed existing 2D seismic data over the area (approximately 4,300 line km.) and flew an aeromagnetic/aerogravity survey to help define prospective areas.

Location map

There are four wells previously drilled within the boundaries of the license. We attempted to correlate the existing wells and additional regional wells and perform petrophysical analysis of the data from those wells. We conducted geological field studies to confirm faulting and structures interpreted from seismic data and remote sensing.

Stratic Energy Corporation (TSX Venture: SE) participated with us in the license as a 40% partner. TransAtlantic together with Stratic have posted a bank guarantee in support of the work program. The guarantee is reduced every six months based on work completed.


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