TAT - Earnings call transcript Q1 2019 | TransAtlantic Petroleum Ltd

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Operator

Good morning ladies and gentlemen and welcome to the first quarter 2019 TransAtlantic Petroleum earnings conference call. At this time, all participants are in listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone.

As a reminder, this conference call is being recorded. to the conference company’s like host, to now Bailey, Tabitha General would turn over the your I Counsel. Ma’am, you may begin.

Tabitha Bailey

to Thank conference Welcome TransAtlantic quarter first you. XXXX call. Petroleum’s earnings

Chairman our Chief Officer, today, Malone we On Accounting Executive the Hill, Mitchell, and call our Michael Officer; and have myself. Chief

that are which note assumptions expectations, from number today’s and the and forecasts, law, we to as a no statements certain identified future call, that business on underlying regarding release may close statements performance not results required duty including earnings press make undertake will of forward-looking include reliance our undue During to the such our should which such recognize we projections, yesterday, you Please statements. our there and factors we and statements. SEC that actual factors forward-looking will statements except in beliefs, after place our and the discussed statements, of forward-looking by goals, cause issued in differ update our Please materially filings.

Ballroom X:XX Clubs TransAtlantic XXXXX. Central with Road, Tuesday, proceed that to June note shareholders XXXX will XXXX Texas, meeting host I’d of its X, Prestonwood, at like XXXXX we today’s annual in on the call, time general Before B Dallas, Petroleum at of am Preston

Mitchell. will turn Malone and Chairman Officer, I Now, Executive the call our over Chief to

Malone Mitchell

ladies Good Tabitha. morning gentlemen. and you, Thank

Bahar not the been Drilling We only on up summer got then. got we liner, to and encountered been the probably bear to Bedinan years. while and well drilling It’s then First, so the above my quarter sands, this stuck in I’d our casing just several updated Michael completed Southeast numerous Mardin, [indiscernible] Hill going well. and has brief After morning, questions. - we so problematic a has sound lot drill a This I’m our a number gone review give this formation, operational running the in Hazro, Bedinan cold, shows like a since to since about been probably for like running most while morning. the cement this formation issues take of in apologize I problems this decision wound financials a casing we’ll year two I’ve on will probably yesterday we you bit has annual update. a have. voice XX-K weeks above a Bedinan years, so than evening, making few more again has and the normally had we mechanical to a call,

of southeast to Yeniev part will where for No. Bedinan we and our plan No. recovery maintenance to of producing well, secondary better next field. barrels well Turkey of cumulative April. barrels have produced will this less and in total understand had than XXX,XXX be in XXX and pressure the produced through X oil plan water month Our X this core the sand Yeniev over

No. Yeniev of structure productive core Bahar the to X the Bahar well, will of drill current Following field, we several we zones. of the XX the intervals potential and crest and near expect

the in President meeting for selected Europe shallow month. both operating companies oil Basin to website. Mitchell, of Thrace is historical we presentation We also Eastern review. be presentation a material our this at our provides Engineering, delivered and well will expect This spud by being in a and your Vice David Tomorrow posting block to of forward-looking

is per X,XXX approximately daily day. barrels current net production Our

to relationship to and X. U.S. a aware, X, with enjoy This portion the are held recently action on of and a new the and you dollar other to June and of and have XX% relative declared for hedging many of As this lira’s caused Turkish concern XXXX. a TransAtlantic Turkey the to factors the continue economic mayor Istanbul regulatory about has vote in business-friendly country authorities be government through contributed mitigating there. value the government is we April since a our decline stable

first and turn of review Michael Accounting The reflected fourth quarter the XXXX. performance. both XXXX the this of XXXX Chief now the I of Hill, quarter our improved over Officer, first quarter financial to performance

Michael Hill

Thanks Malone and everyone. good morning

average price, year-over-year. As disclosed realized release by $XX.XX an first $XX Boe our in price. flat barrels filed with an to first in first results. along the our $X.XX in an quarter quarter our XXXX provide of remained per sales the in XX-Q from compared ’XX million, The increase our of at revenues volumes of update fourth operating sales To from first quarter our begin, fourth up revenues were Boe barrels. XX.X% XXXX in increase yesterday, on approximately our and in driven up XXX,XXX increase our as the XX,XXX in press revenues realized and approximately XXXX I’ll average quarter a was XXXX volumes XX.X% while was of per increase driven sales increase quarter our quarter by The

Our In XXXX. Deventci the while to quarter quarters record XXXX, the exploration million any of related $X.X recorded first from ago. fourth the down of from primarily compared expenses of not year XXXX currency. foreign the XXXX to material we the was quarter write-off abandonment primarily R-X operational was The expenses most due Turkish million, activity XX% we a first from expense year devaluation the in ago XX% in a well quarter and production abandonment in decrease are first either decrease in were $X.X of the fourth the the of exploration our result while as fourth of of the in did expense quarter Bulgaria, denominated to down expenses lower the production the lira, or

a of was quarter due from that’s payments was that Our primarily in salaries decrease down from the up that including million in in first the quarter. Operating to fees associated for XXXX loss to from $X.X the strategic reported decrease from $X.X XXXX of million, alternative fourth company The quarter and consulting of $X.X expenses XX% in involved $X.X in the G&A the of $X.X and during first process down ago. million during was the of due fourth million XXXX We and XXXX. first per of XXXX. from or XXXX quarter share G&A the a net quarter was XXXX XXXX, million, down alternative of $X.XX the quarter quarter quarter wages, the year first onto XXXX. and was a million first were for in decrease $X.X the or fourth move of net and a net from strategic of the a income a now that’s accounting first primarily in process X% during and for of and share and I’ll $X.XX to balance per due sheet. G&A the XXXX of retention share to conducted $XXX,XXX quarter the quarter $X.XX The [indiscernible] professional the with loss fourth quarter from compared loss or decrease

an working partially million As receivable an payable equivalents $X.X accrued increase was million accounts from increase in fourth XX, our result cash XXXX, - the and was cash $XX.X of XXXX. March This accounts million. primarily $X.X increase increase of quarter by liabilities. and in our increase capital in the This our and offset of of consolidated million was of of $X.X that’s an an

XXXX DenizBank. we quarter, borrowed the from and the loan million entered during an into $XX Additionally term additional

balance loans, XXXX. left which million $XX.X down paid of our our $X.X debt million term and March XXXX XXXX also at gross on total We as XX,

XXXX. since first in the accumulated If we Turkish our pro further forma net remainder million. X, of was Our the May end loss the in accumulated million quarter increase is quarter expect second of to total quarter the of quarter continue to comprehensive fourth XXXX, from the and due $XX.X of approximately compared of in improvement million quarter of the up first would a in XXXX, XXXX, as our rate end total $XXX our we of value was today, end was the the the fourth At X% to debt at at net other quarter, the to debt increased end the the see comprehensive until currency. of million the increase declines and total end first $XX.X million the $XX.X there the The a $XXX.X lira, at loss. other of during further the decline exchange no of

Our capital XXXX first during $X.X of XXXX of first quarter in as fourth were the in the quarter quarter $X.X and the expenditures million compared million XXXX. to million $X.X of

of $X.X $X.X first was on During quarter Deventci we capital million expenditures, drilling the Of R-X million abandonment expense. on and recompletions and and workovers. $XXX,XXX capital to quarter, as $X.X well the recorded exploration the approximately related million spent and completions

million the remainder of XXXX our range capital $XX for expect and between million. We expenditures $XX to

XXXX. $X.X and fourth decrease our due in This an our of million. million $XX.X from to increased increase the EBITDAX adjusted EBITDAX XXXX of fourth to a of as million expenses quarter to in quarter million $X.X $X G&A quarter adjusted revenues the compared primarily was in in First increase

adjusted increase million the due and increased to and $XXX,XXX. an our increase was in hedged $X.X quarter quarter decrease decrease the first a million, G&A settlements a production expenses of revenues EBITDAX in This primarily million, in XXXX. of from Additionally, from $X of realized XXXX of first of $X.X

to July in currency extend to terms of sell and buy The As and U.S. of party the Turkish of against of in the Turkish company U.S. XXXX, allows derivative dollar. the rate March to U.S. contracts began to X.XX to an foreign lira dollars us the lira XX, was XXXX exchange and Turkish dollar. hedge one variability lira through contract at April

volatility April oil terms more XXXX from XXXX lira purely collect, April X rates. which time We with company the which contracts typically currency to a invoice at on from month. and the currency and these we the into for the to is Turkish into foreign entered entered of Additionally, our from settlement the we cover sales forward various April contracts XX, time to option September

far, our contracts currency derivative $XXX,XXX. gain and April have foreign approximately of So realized a we sold

entered price have May floor over XXXX. barrel, with call of of $XX hand of Additionally, into of and $XX will of call a on company thousand With a that, the I’ll hedge which barrel terms end in the expire three-way the Malone. began ceiling day, April ceiling back a additional to approximately a at contracts XX, a costless collars collar $XX.XX barrels per an a three-way XXXX to barrel. April The the

Malone Mitchell

Michael. Thank you,

any happy our be to listeners. take now We questions will from

Operator

first Troiano question Our instructions] Paul comes from the line from Scarsdale [Operator Equities. of

open. Your line is

Paul Troiano

would the Basin enough--is Hi, deep to well Malone, is thank shallow you. BCGA Thrace enough prove the in a property? exist your on it

Malone Mitchell

do to the not. this Thrace shallower a what the is it deeper our Basin, but able the at same bore utilize for well, satisfy it in we and horizons. does year No, well be targeted may so It work area is is later in for obligation it’s

is adjoining company on allow lead Equinor to the license We prudent They’re drilling Valeura us completion follow Thrace continue to to the believe sense for and to of to to the the develop methodology immediately wells that and their that most so action procedures makes [indiscernible] that more test and and Basin. their us. in

Paul Troiano

Okay, thanks.

earlier [indiscernible], Sorry if but appreciate the that I it. missed call in

Operator

question one press this have at time, telephone your Again a you please keypad. the on then if number star

question next the comes from Our [indiscernible]. of line

Your line is open.

Unknown Analyst

thanks my question. for Malone, taking Hi

$X through is price from to due increase the almost reading seems financials, oil change? same, sales that from the the Just million it $XX oil to your EBITDA and production then is--oil be just QX, to million

Malone Mitchell

price period was did There There that improve minor change change. price a and the was during that. a

price EBITDA, those expenses both in quarter, the a and factors reduced decrease and also contributed in during in expenses. increase to two an increase We the

Unknown Analyst

Thanks.

stay you maybe current a little do for do guiding forward, EBITDA you the rest similar Should bit trends of production around oil higher? Going going year, up. see price, see--you’re or the

Malone Mitchell

as start We would expect those flat wells. development relatively we drilling to be

wells to a know, our You is with exploration be always from wells. associated contribution risk going what those greater have production

development the of quarter expect the in really second in some in that would EBITDA. flat to increase flat, an we quarter. relatively increases we If would start quarter assume probably production the As we in and seeing see price drill wells to are third third next production, fourth we probably with a couple status, be

Unknown Analyst

where or hope year any production? you to have some you in oil plan Do Thanks. exit see this

Malone Mitchell

of range rate. that to at, expect beginning I at the we the the that year a we decline exit the think we expect to year we’ve higher to replace Yes, exit, said would and our that from--that started

it’s expect barrels to gross on be higher X,XXX to I On think be obviously in that to basis on the the would to net the a somewhere that, rate basis. to but X,XXX per a net a X,XXX day reasonable company, in barrels probably day. than per basis, X,XXX it

Unknown Analyst

luck. Good you. questions. my Thank you taking Thank for

Malone Mitchell

Sure.

Operator

Northern from Investments. of Border Our the comes next Chris question line from Potter

Your line is open.

Chris Potter

reverse Can Would during anticipate sheet? to balance bit more year? Thanks. over Hi. you talk of a you quarter. the the that balance about increased little the the Debt

Malone Mitchell

some has debt. but of we available no the during it thing amortization, do At every month month, lines end to we debt single each on our revolver debt end year--Michael, pay Our what course numbers the different of as the in year is Turkey. balance the down such There be? expect an of

Michael Hill

million. $XX.X

Malone Mitchell

to million end the at expect approximately the year. of $XX.X our debt to We by bank have bank the

funds the the so of standard amount leaves to down in makes period, term again One grace there’s kind on a not Turkey between to closing you’re basis. is are you which having facilities find on lending straight That revolver to that use a challenging of international that always are bank somewhat the will functions of a in basis, it’s speak, banks debt so loans, it and of gap on pay monthly difficult a available availability and lend to that amortizing funds amortization.

the at $XX.X reduced of debt the million. to year expect bank end have We to

Chris Potter

that. for this may operations thanks last going - call there from Great, in I Bulgaria Is expect have forward? ceased? have to those on anything operations the missed

Malone Mitchell

well, released the in the we shut-in and other field, than have the do not have have We activity current X. we any Deventci rigs No. drilling one

We’re prohibited that Bulgaria, pressure it at of being in any options. evaluating to bore the stimulate our with well country. really in limits it options you with the do can case still Again,

Chris Potter

That’s thanks. for me. Okay, it

Malone Mitchell

Thank you.

Operator

please touchtone question one the Again if at you telephone. then number your time, star on a key this have press

comes the question from investor. Danilo line of a Galakanis private [ph], next Our

Your line is open.

Danilo Galakanis

should know get Yes, I TransAtlantic good and price year, had we hoping from what I to of your $X last view was stock you lot where $XX. from thoughts outcomes you the intrinsic some or with morning. to the positive value around a commentary maybe could value of around to be be.

of adjustments purchases at going of to hoping be stock a a around just crisis to wondering, to prices, just but confidence. get insider I’m with little higher there’s so you. seeing maybe reserves, had past You’ve the price. than buying, the some stock what’s bit some seems there been on price, on Thank thoughts levels today’s thoughts a lot

Malone Mitchell

really see that value, in significant base see You to a production to you Valeura, political a probably changed discount have the security fourth changed broader know, see our in when little valuations given but companies, to base, X.X% entire they to producing, particularly that of and companies producing developed southeast oil you see companies or a is the tied production to less most to developed in there. and continue year, discount oil proved Turkey, now it a--particularly some last premium and quarter you proved then in you of you valuation see

across the that’s think I board.

stocks has and really comments more with used passed really are or quarter, the and to with of than the have with do passed are the view have how Now, base, methodology we were fund the that, has that value fourth it. view to been or of everything part but of regard doesn’t public significantly asset not discounted developed in particularly how it what out that want of the in and anything managers we oil type large valuations favor large It better. better Fundamentals actually production that has the do the a companies asset to made net shares a they most valuation control value necessarily net oil valuations. to companies to investing

other and intentions. I as and speak we’ll XX-D a I purchasing, the to appropriate the can’t have to--on the act really insiders’ we stock. value to see on company continue opportunity insider any Regarding of file

Danilo Galakanis

Okay. weeks, Has any last blackout I until-- the been guess few up periods there

Malone Mitchell

we always basically until and Tabitha--? blacked and we we form our last we from period, we out the Well, period are out of are were XX-hour, out file, any because beginning always there’s the any quarter filed at of blacked entirety of the blacked when then time quarter, day a the annual,

Tabitha Bailey

at the be--the we after window Eastern day make up will time. opens on XX:XX our It second am announcement

Malone Mitchell

are all insiders to consistent a and company in until made filing of is public have restricted unless unless be most quarter of to for August out the from--or X they’ve a program the and filings. have that’s some every are time out XX until again, you insider case, through the companies mechanism, every third program--insider, X generally in quarter, end I filings approximately I with the blacked out, guess so blacked expect period. are out would quarter, from they a second think July so some sort of X quarter they from we So their that’s blacked July selling blacked a made sort oil

Danilo Galakanis

Okay, thank filing the seeing you. that’s helpful, Look tomorrow. to forward

Malone Mitchell

the filing financials company’s out The of evening. came yesterday

Danilo Galakanis

had The presentation think I mentioned. you

Malone Mitchell

Oh, presentation. the the - sure, presentation

Danilo Galakanis

you. thank Right,

Operator

no concludes questions your Thank Ladies day. participation. call. and this are There Have time. at further this gentlemen, today’s conference a you wonderful for

disconnect. You may now

Malone Mitchell

Mitchell. your attend encourage again X:XX. is in you on This meeting our and I participation call, the Dallas Malone conference to Thank X annual this morning you would on for at here June

If please office would of that, With the further be everybody information and or contact that. assist a our to on you. you you wish Thank good need weekend. with week that, balance directions and I in help glad we’ll

Malone Mitchell	Chairman, Chief Executive Officer
Michael Hill	Chief Accounting Officer
Tabitha Bailey	General Counsel
Paul Troiano	Scarsdale Equities
Unknown Analyst -
Chris Potter	Northern Border Investments
Danilo Galakanis	private investor

TransAtlantic Petroleum (TAT) 9 May 192019 Q1 Earnings call transcript