TAT - Earnings call transcript Q3 2019 | TransAtlantic Petroleum Ltd

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2019 TransAtlantic Petroleum Ltd. Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advice that today’s conference is recorded. Instructions] [Operator

like Bailey, conference ahead. General now speaker to hand Tabitha today, Counsel. to would over the your I Please go

Tabitha Bailey

to Quarter Third TransAtlantic Conference Welcome Call. XXXX Earnings Petroleum's

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

which underlying forecasts, today's future projections, statements, certain performance call, such our regarding and make will statements During assumptions statements. and belief, we the forward-looking include goals, expectations,

cause to number factors Please yesterday as statements, and to update recognize and which business actual in note undue SEC our may are factors forward-looking you results the after that a differ should including of of our not required that, filings. on identified we our from except law, place such the release, statements. we Please duty any close issued by materially that there reliance discussed earnings forward-looking in statements, no undertake press and

our Mitchell. we'll Chairman Now, over Executive Officer, turn Chief and the call to Malone

Malone Mitchell

you, oil barrel Thank I August. decline about prices a morning recent increased the call At that pleased the addressed quarter's everybody. in of have to last and announce beginning that call, I'm $X to oil and in since price, Tabitha, good

barrel So up and to we're were. were to we from now close about we $X the down a back second the third quarter, to where

So revenue. helpful that's our in very

review continue governments both monitor remain quarter, U.S. in the been legal ordinary sanctions We resulted and decrees from not Syria we have do operations with and in actions will of do in expenses and to have changes the date, actions the U.S. out these the affect between compliant reciprocal expect regulations. to October, and talk and us. speculation early were of in proposed Turkey. in Beginning fourth unaffected the government to we to both media incurred To some

in our wells, conditions sidetrack year-end. re-drill Goksu wellbore well drilling allow we for field planned completed and now an we may the before additional We've had XXXX. If

reported, XX we laboratory recovered in successfully at to our Bahar X in cores We number Yeniev-X originally well. cores previously intended and our Petroleum's these As had Turkish Ankara. wells in process

initial reserves and all us the cores for result the think of these near a our core has of analysis. core to our budget. and results will spacing year-end and well be plan. required completions re-box This completing processing. XX of determine to decision in made XXXX XXXX At to it receiving January, some in our results will pushes the or the before that ship This our would in to I time, slowed and Yeniev-X, Houston cases, After a from work we the about XX delay our later first well this receipt will work budget we publish

on completed Yeniev-X drilled the result Turkish forward or updates some wells was Going Bedinan specific Petroleum's on lightly the predicting with water We flow no analysis has call. completed very as and we of XXX% daily well that core a the barrels last the since by zone would natural from well the water the and basis. XXX oil a of well. just been approximately have perforated production producing with

We this capacity double. stimulate expect approximately and will productive shortly will well

this which other indicates for field, ultimate to Reservoir in reservoir. is recovery total the good connectivity our pressure from wells

than shows Bedinan in well. Our there decision to of Yeniev-X shows drilling rather made encountered stop significant completion two drilling the and intervals attempt the We onto Mardin. these oil the and after this

there. day barrels established zone. oil now in was at a production zone zone completing oil the to XX We're secondary have Baluca a that's established and [ph] primary zone of New approximately Karababa production C the the XX and

on stimulation to and this as we well. and later back this next analysis design yet the have We stimulated our a week week to rock well have do execute not hope early core as

was Our on Yeniev-X our in cased drilled prognosis. geological as zone and encountered expected and and Mardin well the Bedinan shows

it'll of well, just this activities be another on couple We weeks completion comes before beginning are so online. that well

Our intervals in oil flow barrels both natural with and daily. by Bedinan Bahar Pressure test resulting was and of offsetting XXX drilled two production indicate fractured number completed in wells. intervals communication of XX

We results best the in core need the field. spacing to for wells reservoir Bahar in will determine future well this

the the We the Bahar expect zone additional of in Hazro additional reserves and delineate horizons further analysis cores of to field. potentially

formation. it to Lastly reentered and well Bati-Yasince we FX the the deepened we Hazro

Hazro well. So completed. in FX tested the quarter, and non-productive far Karababa C is Beluga Third being the The now have zone

rig availability shortage the has down near ability not of end limited and and and quarter October, on resumed schedule was of the crews that and we our that workovers September a bit result to a mechanical, of had August, that and was conditions. reservoir During so a completions, production

XXXX. said I unit expect than -- higher to continue we XXXX resumed to a As crews and availability on exited production rate full has pulling workover at we exit

Chief now Michael Officer to the our hand will the Accounting call to over Hill, I financials. review

Michael Hill

and Thanks, good Malone, everyone. morning,

operating million the the disclosed release loss for $X.XX third results. of quarter share of and quarter XX-Q for $X.XX $X.X operating of our We of or $X.X for per second We for third million of million second of share $X.X during million of XXXX operating per $X.X income of of quarter our XXXX to the quarter income third our compared XXXX of along and operating reported $XX $X.XX net quarter XXXX XXXX. million loss XXXX. of As net per the $X,XXX with income a XXXX yesterday, update quarter or net provide a during the reported I'll in on third compared share or to an third the press of quarter filed income

in revenues second was as our in The per in second revenues X% $XX.X million, quarter quarter price from down received XX% from a of compared average of XX% volumes. and revenues year-over-year. the the quarter by the third XXXX XXXX down volumes. BOE XXXX a to realized X% our were XX% decrease decrease our per and was Our quarter realized X% price driven decrease decrease third The in XXXX decrease of sales average third in sales decrease BOE quarter driven by received in

Our quarter $X.X million, XXXX tax from of second from a quarter of the quarter ago. was and to XXXX the XXXX. primarily G&A to consultancy in were the third year and second due The from decrease G&A legal accounting, XXXX down X% down decrease compared second quarter of expenses fees, in a X%

of increase to repairs and $X.X in of in to utilities, compared was fuel quarter quarter up quarter expenses the Our XXXX The million, and compared personal from second diesel the XXXX were the maintenance, from third the second a third XX% trucking quarter year quarter second and increase ago. XX% in XXXX. up expenses an consumption primarily due production to

exploration additional $XXX,XXX after the approximately -- previously In quarter of the costs These of announced to for this Deventci the Bulgaria. the XXXX, and related into we second expense incurred abandonment in third are R-X write-off XXXX. recorded in quarter well

I'll balance now sheet. move to over the

During which September the third our quarter, with and on debt left total we XX, XXXX term paid million balance with million down DenizBank, our XXXX. DenizBank gross XXXX loans of as $XX.X $X.X at

$XX.X to $XX.X of million. of end the end of at $XX.X the quarter million end our Our as quarter and third gross at compared XXXX. fourth million total was net the million the the of $XX.X is And quarter approximately today of at the second debt debt

the million, increase an XX, quarter capital was of working from of September $X.X our XXXX, of fourth million As $X.X consolidated XXXX.

expenditures of quarter $XX.X million XXXX, capital third XXXX. third Our second million the were million $X.X of compared XXXX and in quarter quarter $X.X during to the the of in

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

the the it is However Board. subject of change to discretion at

an with update continue adjusted I'll EBITDAX. on

XXXX quarter million decrease second as of in from the of was of in primarily production expenses quarter XXXX. to in The revenues increase compared EBITDAX in a Third adjusted in XXXX million EBITDAX $XXX,XXX. third was quarter $XX.X second decrease $XX.X an and $X.X the million adjusted and of the $X.X million quarter to due the

in hedge of of increase $X.X an a $XXX,XXX, This revenues transportation is our due from is in our The EBITDAX by by increase in expenses quarter settlements offset in million, of our a partially of a expenses offset adjusted third partially decrease decrease in and $XXX,XXX $XXX,XXX. was of expenses realized XXXX to an in the decrease primarily G&A this $XXX,XXX. of production decrease

the I'll back now Malone. call over to hand

Malone Mitchell

now your address to glad We're questions. Michael. Thanks,

Operator

Instructions] Thank you. [Operator

comes from of Paul Our the first line [ph], question Rabinovitch ahead. go private Please investor.

Unidentified Analyst

hopes calls investor for Malone for thank got had position. for years large very hopes. more I taking optimistic. and I was five for very and high an thanks in morning, then past low you you I've been Good being because I've a years. and concerned

few off your years. part get your the stock in So should to the the you reserves the those able you Basin, one, be of when expiring a license which back price goes the help books was on they the Selmo in books some with correct? of Number reserves stock came lost because seems here tank reason to Will questions. the

Malone Mitchell

as Paul was Turkey the And in XX statute years. discovered go by Selmo in for that's -- Mobile. -- XXXXs their production the sets current licenses

a it licenses we So the adequate XX applicable drill as wells June long those. require XX an time and There the requires can end investment of of enough is as all a of in and field make the of many on number XXXX. back investment years in at but are that to an the receive

to statutes possible. There's in country. within where the that's the with not At the this statute point time sits, effort it some change

to point able to might might measure I with success of think percentage of that at be that still or this kind of say a be accuracy of the what when it's that speculative any inactive. reasonable be

and over in it a license -- it's will range we that that likely it's XXXX. But the in think at know. certainly most expire year it's sits maybe I XX-XX before somewhere as would

Unidentified Analyst

ahead. year? Which Go

Malone Mitchell

the by would which us. the the state from producing oil be facilities facilities At time and company required

Unidentified Analyst

Got it.

lot back And to X,XXX probably so are is Now one were X,XXX, the or of you're day, the of get reasons that. in Selmo going barrels or glory X,XXX you one X,XXX doing to it How of back days new production down barrels X,XXX production? you without X,XXX get the from to possible the is why to stock a to low. get a the to production that's

Malone Mitchell

is. it Well

what very our drilling drilling Now upon to in far year. a addition this we off obviously that budget XXXX program what did we is will that's not dependent think be maybe in

work in of initiation and which in in the we've the zone. Yeniev already Arpatepe work Arpatepe and expect We the begun testing Bedinan waterfloods mechanical field, the

is fairly maintenance seeing by the zones production, the candidate of new That's zone in pressure boost in we Bahar fairly in got the near But excellent And end probably think pressure. we'll XXXX. start we for it's significant think Bedinan those; Bedinan reservoir, good don't a recovery. maintain within reservoir qualities to a a within secondary probably Hazro but the

with couple and that that do production. So

years, and things of One addressed the the lot deeper is is we've targeted that been Bedinan, over horizons. this the past in a I has note quarter, of toward the other I the last drilling of done call which one would

we through we As drill that in when complete typically that, out of drill we shallower through the shows but interval. see, oil and deepest we produce horizons

that we see So far some be there's done shallower typically think oils. on development less what we that at than Bedinan additional cost can our

thing barrel And barrel oil I worth the a is would of that, gas than of a say more today. other is

of years, you Natural production to lot If a sold Thrace look Valeura. Basin from gas which of was Gas production back a we number that

of production oil we that we've the production really is off not far the full the historically. higher of have end had very And currently

we oil production XXXX. to historical our production our oil expect probably So in exceed do

Unidentified Analyst

I you to mentioned Valeura. far as next Basin just as they've you the Now, -- sold it And you developed door to as Thrace Valeura. thought goes, were

Malone Mitchell

Well, sold we

Unidentified Analyst

ahead. go Yes,

Malone Mitchell

I'm sorry.

me your it. finish Let address you and question let

Unidentified Analyst

thought I their the stock the all value because were of was, you work -- the one the -- going Well, next do land propositions to Valeura -- of Thrace Valeura develop the Basin. the was right to and the had again, for the to one of that partner

you're get And But would because right is next same door. meanwhile door next the Valeura assumption out your has the being you of tanked you And value have production bad. land. coming stock increased

And basin in do on good. fact still yes. reflection the you have a that being not very is -- So

you Do is, is one there? still the too? basin land have good So

Malone Mitchell

three questions. Well, you've asked

we there. your last questions. three of yes, still the First, have That's land

day. question zones is little there's that, a shallower is first tested the are basin. to The same -- bit being of deeper production. there's It's in nuance out that that exactly When the of there Gas, a of production and as XX Thrace we of field per and million Basin number from recompleted high cubic gross Natural we the wells drilled was as feet gas acquired

And high attributable X:X. X,XXX a in maybe interest that as oil a our barrels close net to to was day of conversion as on of

Valeura's morning. I think, I at release looked this press

cubic million net a of XXX feet them producing over net little day. were a they think I about to gas, X so barrels about

production years. producing And depleted after the so, significantly over that shallow has largely

and part which partner immediately to second of the along the partner Thrace to complete with to have is, they've adjacent be to continue used yes, not Basin. we in their Statoil Now called their acreage in continued your drill drill question or with along the Equinor acreage us

continue the own and of We middle out the that block. to through producing shallow small those system a that are fields runs pipeline fields our that connects of horizons

we there early position that the that we're doing adjacent are have company basically, the not of the activity the time, we've and money. there's yes, XX in the hard taken experimental years historical the significant that -- of to for first spending companies other had of And, the us work country kind probably

of what horizons. understand they out going continue complete the the produce techniques to are multiple So to best and production try to wells

intervals Rocky That sand have trying of and doing -- stringers or drill And produces best all horizontal on of in drilling drilling a Mountains, geology much they're the them. a best well literally those multiple one and well like individual vertical either gas you fracs the whether well stage that zones I completing still economics. a economics to produces is vertical determine the hundreds very think in through and those combining

now where then essentially able observe be come position best what are right we're with practices to we in up at. fortunate to their a and plan around work work our they've And still

would believe say of hold or XXX,XXX XX,XXX to still as they're XXX,XXX close has geological equivalent I to acres properties acres identical We essentially about we working in. those them of adjacent which

Unidentified Analyst

add they stock. reserves price Our to the as production should impact their And the hopefully stock and that correct? of

Malone Mitchell

a level in I've business years You for would their oil matter than seems think same sentiment have I rather don't a properties like seen net It on of kind what know a think been I to companies valuation just the multiple now. is I've no XX so although it in producing exactly quite size ever pure the as flow all a oil reverted -- that the cash that value. and asset methodology

realm time. would that you change to of industry when some its expect point Certainly to the my of probably occur. again out would at But that's valuation entire ability in speculate

Unidentified Analyst

It you're seems trouble like you've because And Turkey. money. maybe I guess had in raising it's

rocking you drilling wells. you Basin, rules had same So, to and therefore you raise But because because have in the and the to money? assets is rolling, by all of Turkey, -- you're borrow in Turkish money the Permian if that kinds could ability be how limiting your

Malone Mitchell

the a Well, that United the reason availability think energy. In certainly exactly Turkey larger imports And have. far of have you're and XX% primary we XX% States we far, right. its I credit would is than

understood production So, most as trading reserves is of necessarily by industry energy Turkish the banks base. import not

the some and larger because other more way focused So, the gas oil don't than banks are the they upon local reserve and would have. of same within really maybe have banks banks the gas other assets reserves oil departments just international

of availability. may in of that did during Now, effort the the of the risk between there's certainly of of that be legal out Turkey making with believe perception. an But view to and assets occurred with the to Turkey risk that Turkish tensions I've and doing change you that assets U.S. always help we're to than credit banks extension profile course, not a speculation with U.S. into of to regard come profile actually business October pointed Turkey. U.S. the and But regard view as or source the continually activities lower

Unidentified Analyst

need need drilling be able all you all you do to the do? to borrow the to So, you'll money

Malone Mitchell

did not say No, that. I

Unidentified Analyst

trouble well the to just have we So, that need money all the that getting drill we Can may we planning? have wells are once? you have I

Malone Mitchell

amortization a we unable with availability. really We of that banking which as to to no couple the essentially Turkish have we since the the in loans credit a program have amortization revolver-based that been is think base been of loan to secure needed the XXXX. such XXXX There is run really really decline constrains structure. has price the that further the the you in appropriate And immediate the thing we've asset drilling since

certain So, no, the to not as been more limiting able But that. been circular able that's from to had a I stuck less capital been orbit to we've achieve phrase that we've velocity secure orbit. stay degree been we're hard escape have able use accessing tend to we And in to the to or where at. we're an we've time a

And I our that think inching we're way. way

on maintenance necessary low. We've But implement couple in I to we of think and But money not that in of still that's a to pressure able on analysis years not year. give in science wells be dollars to that's the spent capital spent. year the the campaign spent coring is for money us think over that's and doing favorable us. two out basically these money the And to relatively costs dollars we'll that's floods money to the yet equation is this million be be -- that the relative able some is spend very and major something to upcoming reserves We dollars that a multiple pressure in initiating years. and or maintenance.

Unidentified Analyst

stock. in a What past you you One, given question. like two-part a -- is fair step-up value you've ridiculous. what thought plate. This I stock is years I'd of the -- the to price see you for Can was to mean the the

value? fair $X.XX a low hurts. is Will what were taking this And do pathetic be you and think you is of it between now advantage and the of price? lot buying stock price You $X. The

Malone Mitchell

purchasing. just occur I'm to that. Two have if comments. on -- for wait filings on they you'll not comment One, going my We to

valuation NAV not company. opine a an was in with I as years The of that valued I on stated second time, a thing in valuation point on NAV think basis. is are associated I At this to able past being companies the clearly

So familiar is reserves to everybody can value, kind things if you net not -- listening. asset is the of that like which which your and of a is compilation acronym

I do have flow. cash been that think on of oil multiple a based companies revalued free

I the multiples trading are conference they to and I the the peer trading and approximately addressed at at valuation as same last that look other as are I other call addressed cannot the for we're at opine So in than as second quarter. companies

Unidentified Analyst

I $X.XX, over the been mean, $X.XX. all it's place the $X.XX, stock

that -- is value. is I fair mean, saying price not it a $X.XX just lot is. But XX% the Turkish the a You're I crisis it was higher. what know whole before

Just to get sense of way any stock? $X place been $X.XX, the properly the all a over pricing because it's is

Malone Mitchell

Yes. make Paul I I don't that. can on think comment a

company whether of to company. As the or historic to I appears though at to period earnings would companies, relative historically cash as I of be and But industry to to through norms. The persist the a it energy that seems multiple multiple what oil that generally not relative cash lowly valued election, flow been assets very it's other it's entire at industry to Whether the for flow I relative entire that look say time, be terms longer at said, hard persists values. when valued -- appears relative to me our of on. energy in stocks other speculate just its its very through a low

Unidentified Analyst

Appreciate it. so Thanks much. it. Got

Malone Mitchell

you. Thank

Operator

you. Thank

the of Investor. Our next question [ph] line Balas James from comes private

Your now open. line is

Unidentified Analyst

question. taking Do field? maintenance And wondering developing out you if of question mean you is seems was there? stepping the Yeniev are idea a you there My or just just how how driver. at for color my kind of locations regarding Thank I are Good some kind one on many like driver location that's field. growth have morning, any It you're Bedinan's you provide could the time? I Malone.

Malone Mitchell

at early has basis stepping locations where standpoint, wells this James, we've Yeniev out typically field imaged thank we we of on it's -- approximately from you two a structure. really a seismic for a your been do yes have the We XD drilling call. the drilled year. more have time. Yeniev our -- We've And that true. on

number Yeniev it four are the with with that a higher indicated Bedinan other was sands. was image sand confirmed the in happy fact really well were that in We and actually communication

is working reservoir single entire the that reservoir. a So

a I premature. little it's think

to to we're One analysis put of pressure to handle done, trying get are, on size them. trying do wells appropriately the better and with how things what of a core do we've done the what and we analysis would exactly what we're the with the develop them to fields we've is many in

period little to there time draining a was we to than were incorrect. us these at good answers a or And have, reservoirs as whether early whether telling a measure a across that of that more, The getting for place seem oil of what core getting calculated. area on that. either is more to bigger be reservoirs is also it originally – in somehow, off really than that we reservoir area question analysis were data to of able had an us we're the we the we the porosity and Bahar electric some porosity we're the Yeniev out quality bit – you is And us logs, because confused calculations we tells go of that's out of of to that's our we because secondary of if oil have for in our were as back been

at started One what sand more productive Yeniev of we is there's field. did, that than we completing we think things the the originally probably first now is when

we've the small wells, early completed. got only of So sand of a portion some

up everything of So went spending that really lot through with for there cores. this a doubled problems. I'll program I during people. reduced We and And And mechanical well. difficulty entire kind say very the that reason cutting opportunity drilling this cores at is and paid-off exactly the money staff drilling we up year turned it in had. terms But we was the and of a that, think on really cost mechanical of had our out beefed modest

give I you much like So to an exact answer. as would

precision the have about to maybe to as in. of time, able wait get until be really some year think we'll speculation. in till I'm answers results still than But And be going end instead part. point give we've I speculation the more yet a our wells in At on how the many time, far that, that of there's drilled that's as we with think some this there already on at in I certainly drilled. call, some to point said I to are Yeniev as

Unidentified Analyst

All right. Thank so much, you Malone.

Malone Mitchell

Thanks.

Operator

you. Thank

Malone Mitchell

less I will maybe it's it's point out maybe apparent. and – less

the I've quarter think probably in the two are aerial ago, we well or than and in potentially Karagoz a believe Bahar are extent Yeniev I do made well and point field. that Southeast the Bahar that structures our than larger that the or

received we of those think top larger. structures maybe wells just the but extent single of very those we have we're in of than in point believe the bottom at reservoir structure. rather They just time, them And have the this So the little. at structures that the

Operator

the this time. turn Instructions] questions Chairman at Thank further Mitchell, have And would you. for and back to I we remarks. now [Operator no you. call CEO closing Thank Malone

Malone Mitchell

you thank I Well, and willing good have And hope you to you, And on we're you address appreciate week. to everyone us then, and TransAtlantic's week continuing quarter visit Again, call. attention this the you time Thank to if talk at or this a them it, would morning encourage with the have office. earnings always questions we third that. for you.

Operator

participating. for gentlemen, concludes call. Thank and Ladies this conference you today's

disconnect. now may You

TransAtlantic Petroleum (TAT) 13 Nov 192019 Q3 Earnings call transcript