TransAtlantic Petroleum (TAT)

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TransAtlantic Petro (TAT) - $2.95. Company quick look.

Nutshell: Small cap E&P focused on Turkey, Morocco, and Romania. Management founded Riata which IPO'd as SD, sold out of majority there, and while the team has more lawyers and less G&G types on it than I generally like to see, the staff has a good amount of experience in their target countries. The objective is fairly straight forward: apply new technology and capital to under explored and exploited areas in good oil and gas finding territory with favorable financial terms (more favorable than in the U.S. at least).  Selling into the captive gas market of Turkey is also bonus (see below). Management holds a majority stake and other saavy types like Boone Pickens hold sizable positions as well. I took a "get to know you" sized position on Friday in advance of earnings on February 22nd. I'm likely to go ahead and work up a cash flow model in the wake of their conference call.


  • Reserves: $74/ BOE on proved of 11.7 mm barrels of oil equivalent; a fairly meaningless level at this point as they're just getting started.  TAT puts the 3P reserves at 22 mm boe.
  • CFPS:
    • 2009: -$0.02
    • 2010: $0.23; 13x

Property Overview:

Turkey:  Turkey is the company's primary focus providing a majority of current production and expected production growth. A little bit about Turkey is in order since it's not my normal stomping ground. The local energy market is captive to outside pricing as the country has very little domestic production relative to their consumption.  Natural gas prices are essentially set by contracts with the Russians (in the Fall these were north of $8) and in these situations the local governments are likely to encourage domestic production growth with the help of outside interests (as such, royalty terms and tax rates are friendly).

TAT's interests in Turkey consist of the Selmo oil field (infill development drilling is underway as are efforts to increase recovery), the Thrace Basin (Edirne gas field) which just came on line in December from existing formations but which has deeper gas potential, as well as some interesting exploration prospects (one of which should be a 2Q10 spud on a fold belt which is prolific in neighboring Iraq). From Turkey alone, the company is on the way to a quick ramp in production throughout 2010.


  • 2.5 mm net acres.
  • Plan to employ new 3D shot in 2008; first 3D originated test should spud soon.


  • Not a big focus, as results have been mixed.
  • With shallow gas exploration success they plan to shoot 3D.

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