| Acres | |||
|---|---|---|---|
| Asset | Interest | Gross | Net |
| Sud Craiova Block EIII-7 | 50% | 1,441,887 | 720,944 |
| Izvoru | 100% | 1,301 | 1,301 |
| Vanatori & Marsa | 100% | 1,165 | 1,165 |
| TOTAL | 1,444,353 | 723,410 | |
| Commercial Terms | |||
| Licensing Regime | |||
Sud Craiova Block EIII-7
Interest: 50% TransAtlantic
Acres: 1,441,887 / 720,944
In September 2008, TransAtlantic reached agreement to farm-in to Sud Craiova Block E III-7, onshore western Romania. The agreement is subject to completion of formal documentation and approval by the Romanian National Agency for Mineral Resources.
In exchange for a 50% working interest, TransAtlantic will drill three exploration wells on the Sud Craiova license, each to a depth of approximately 3,280 feet. At casing point in each well, TransAtlantic's partner and the Company will each elect whether to proceed to completion and will each bear their proportionate share of completion and infrastructure costs.
Opportunity
- Prospect contains numerous prospective areas
- Initial drilling program of 3 wells will target Tertiary-age shallow gas prospects with AVO attribute support
- 2009 seismic acquisition targeted a producing trend that extends from Bulgaria
Izvoru
Location: Moesian Platform
Interest: 100%
Acres: 1,301 / 1,301
Opportunity
- Discovered in 1968 by Petrom, Izvoru produced 1.4m barrels of oil from a Sarmatian reservoir. Additionally, a deeper Albian carbonate tested oil. This formation is productive in nearby fields.
- Based on third party engineering studies, the combined Sarmatian and Albian formations contained original resources in place of approximately 22 million barrels of oil.
- Completion difficulties and water production resulted in limited flow rates and recoveries leading to pre-mature field abandonment in 1998.
Vanatori & Marsa
Interest: 100%
Acres: 1,165
Opportunity
- Both Fields discovered in the 1970s
- Each produced oil or gas but were prematurely abandoned by the state oil company
- Deeper cretaceous potential at Vanatori
- 2D seismic shot over both fields
For the most recent information regarding TransAtlantic's activities in Romania, please download the Company's investor presentation.
Commercial Terms
Romania's fiscal regime is comprised of royalties, excise tax and income tax. Two forms of royalty are payable:
(1) A percentage of the value of gross production on a field basis, such percentage being fixed on a sliding scale depending on production levels. The production royalty rate varies between 3.5% to 13.5% for crude oil and between 3% to 13% for natural gas production
(2) A fixed percentage of the gross income obtained from the transportation and transit of petroleum through the national pipeline system and from petroleum operations carried out through oil terminals belonging to the state. The royalty rate is currently fixed at 5%
The license holder pays corporate income tax, but enjoys a one-year income tax holiday from the first day of production. Corporate income tax is assessed at a rate of 16%. All costs incurred in connection with exploration, development and production operations are deductible for corporate income tax purposes. Excise duty is payable on crude oil and natural gas at the rate of 4 euros per ton of crude oil and 7.4 euros per 1,000 cubic meters of natural gas. Excise tax is not payable on crude oil or natural gas delivered as royalty to the government, or on quantities directly exported. Resident companies which remit dividends outside of Romania are subject to a dividend withholding tax at between 10-15% dependent upon the proportion of the capital owned by the recipient. No customs duty is payable on the export of petroleum nor is customs duty payable on the import of material necessary for the conduct of petroleum operations. There is also a 19% value added tax. Oil is priced at market while gas is tied to a bundle pricing based in part on the import price and in part on the domestic price.
Licensing Regime
The Ministry of Industry and Resources has responsibility for petroleum policy and strategy. The National Agency for Mineral Resources ("NAMR") was set up in 1993 to administer and regulate petroleum operations. When licenses are made available, NAMR publishes a list of available blocks for concession in the Official Gazette. Foreign and Romanian companies must register their interest by a specified date and must submit applications by an application deadline. Applicants are required to prove their financial capacity, technical expertise, and other stipulated requirements. The licensing rounds are competitive and the winning bid is based on a scoring system.
NAMR negotiates the terms of agreements granting the licenses with the winning licensee and the license agreement is then submitted to the Government for its approval. The date of Government approval is the effective date of the license. Blocks which fail to attract a prescribed level of bids are re-offered in a subsequent licensing round. NAMR may issue a prospecting permit or a petroleum concession. A prospecting permit is for the conduct of geological mapping, magnetometry, gravimetry, seismology, geochemistry, remote sensing, and drilling of wildcat wells in order to determine the general geological conditions favoring petroleum accumulations. A petroleum concession provides exclusive rights to conduct petroleum exploration and production under a petroleum agreement.