| Acres | |||
|---|---|---|---|
| Asset | Interest | Gross | Net |
| Selmo oil field | 100% | 11,108 | 11,108 |
| Thrace gas field | 55% | 119,125 | 65,519 |
| 3118 / Arpatepe | 50% | 95,991 | 47,996 |
| Southeast Basin (excludes Selmo oil field & 3118 / Arpatepe) | 86% | 1,327,151 | 1,143,746 |
| Salt Basin | 50% | 870,005 | 435,004 |
| Apricot Basin | 99% | 857,041 | 844,740 |
| Thrace Basin (excludes Thrace gas field) | 60% | 212,385 | 127,431 |
| TOTAL | 3,492,806 | 2,675,544 | |
| Commercial Terms | |||
| Licensing Regime | |||
Selmo oil field
Interest: 100%
Basin: Southeast
Acres: 11,108 (reservoir is 8,886 acres)
Selmo is located in southeastern Turkey and north of the prolific Zagros fold belt, which encompasses the oil fields of Iran and Iraq. Selmo is the second largest oil field in Turkey (by cumulative production) and is estimated to have approximately 600 million barrels ("mmbls") of oil in place. API of 34 degrees.
Selmo was discovered by Mobil in 1964 and began producing in the same year. Mobil operated the field until 1992 when the field was sold to Petrom, the Romanian state oil company. Petrom operated the field for five years before selling it to Valentia Exploration in 2001, which subsequently sold the field to Incremental Petroleum in 2005.
When TransAtlantic closed the acquisition of Incremental Petroleum in March 2009, 47 wells had been drilled in the Selmo production license, 23 of which were still producing with an average recovery per well of 1.7 mmbls.
The well spacing at Selmo is quite large with 1 well per 188 acres. This well spacing offers significant opportunities for sidetracks and infill drilling.
The Company has a very active drilling program for Selmo over the next 2.5 years. For the most recent information regarding Selmo oil field, please download TransAtlantic's investor presentation. For photos of Selmo oil field, please visit the gallery.
Thrace gas field
Interest: 55%
Basin: Thrace
Acres: 119,125 / 65,519
The Tertiary Thrace Basin is located in the European part of Turkey, to the west of Istanbul and the Sea of Marmara. The Thrace Basin is the largest and thickest Tertiary sedimentary in onshore Turkey and is the country's most productive onshore gas province.
The Thrace gas field will be TransAtlantic's second producing asset. Turkey's relatively high gas prices, established infrastructure, good quality reservoirs, and low cost drilling generate excellent economics for Thrace's shallow plays. The Company has an excellent in-country technical team and local knowledge. Thrace is proceeding to commercialization and is anticipated to be online in Q1:10.
Three wells were drilled by the JV in 2006 by former owner Incremental Petroleum, Otto Energy, and Petraco, of which two were gas discoveries. 3D seismic was acquired over the central part of the license in mid 2007, which identified potential gas bearing structures. Post 3D, five more exploration wells were drilled and all were successful.
The Company has a very active drilling program for Thrace over the next 2.5 years. For the most recent information regarding Thrace gas field, please download TransAtlantic's investor presentation. For photos of Thrace gas field, please visit the gallery.
3118
Interest: 50%
Basin: Southeast
Acres: 95,991 / 47,996
In July 2009, TransAtlantic acquired Energy Operations Turkey, LLC ("EOT") for total consideration of $7.75 million. EOT's assets include a 50% interest in License 3118, where in 2008 EOT participated in two oil discoveries, interests in ten other exploration licenses, inventory and seismic data. The acquisition provides TransAtlantic with the opportunity to expand its operations, achieve scale, and extend its vertical integration strategy in southeastern Turkey.
License 3118 is located near the city of Diyarbakir in southeastern Turkey. In April and September 2008, EOT participated in the drilling of the Arpatepe-1 and Arpatepe-2 wells, which represent Turkey's first and second economic discoveries of crude oil from deeper, Paleozoic sandstone formations. The wells, which flowed naturally and were not stimulated, had initial production rates of 440 and 190 gross barrels per day from limited perforations.
3118 represents an opportunity to establish an additional leg of production to complement the Company's production in the Selmo oil field and the Thrace Basin gas field. For the most recent information regarding 3118, please download TransAtlantic's investor presentation.
Commercial Terms
Royalties are 12.5% and corporate income tax is 20%. Licenses have a four-year term. If a well has not been drilled by the end of the third year, a bond of $50,000 must be posted to extend the license. If the Company drills in the fourth year, the bond is returned. If not, the bond is forfeited. License awards are based upon a committed work program that may involve some or all of geological and geophysical work, seismic reprocessing and interpretation, and contingent shooting of seismic and drilling.
Licensing Regime
The licensing process in Turkey for oil & gas concessions occurs in three stages: permit, license, and lease. Under a permit, the Government grants the non-exclusive right to conduct geological investigation over an area. The size and term of the permit are subject to discretion of the General Directorate of Petroleum Affairs ("GDPA"), the regulator of oil & gas activities under the Ministry of Energy and Natural Resources.
A license grants exclusive rights for petroleum exploration. A license has a term of four years and requires drilling activities in the third year. This obligation may be deferred into a future year by posting a cash bond. After the initial four years, the license may be extended for up to two, two-year extensions. No single company may own more than eight licenses within a district. Rentals are due annually based on hectares under license.
Upon a discovery on a license, the license holder applies to convert the productive area to a lease, not to exceed 25,000 hectares. Under both a license and a lease, the lessee may produce oil & gas. The term of a lease is for 20 years. Annual rentals are due based on hectares under lease.
TransAtlantic holds only one lease for Selmo oil field and the rest of TransAtlantic's acreage in Turkey is held under licenses.