TransAtlantic Petroleum Announces Fourth Quarter and Year-End 2019 Financial Results and Provides an Operations Update
- Estimated proved reserves as of
December 31, 2019were 10,670 thousand barrels of oil equivalent (“MBOE”), up 3% from 10,383 MBOE as of December 31, 2018. Estimated proved developed reserves as of December 31, 2019were 6,004 MBOE, up 11% from 5,423 MBOE as of December 31, 2018. Estimated proved undeveloped reserves as of December 31, 2018were 4,666 MBOE, down 6% from 4,960 MBOE as of December 31, 2018.
- Net loss in the fourth quarter of 2019 was
$2.5 million, down 253% from a loss of $0.7 millionin the fourth quarter of 2018 and down 336% from net income of $1.1 millionin the third quarter of 2019. Net loss in 2019 was $5.4 million, down 3% from a loss of $5.2 millionin 2018.
- Adjusted EBITDAX in the fourth quarter of 2019 was
$8.5 million, up 36% from $6.2 millionin the fourth quarter of 2018 and up 8% from $7.8 millionin the third quarter of 2019.¹ Adjusted EBITDAX in 2019 was $39.2 million, up 6% from $37.1 millionin 2018.
- Total debt as of
December 31, 2019was $20.0 million, down 23.4% from $26.1 millionas of September 30, 2019. Net debt as of December 31, 2019was $10.3 million, down 11% from $11.6 millionas of September 30, 2019.²
- Revenues in the fourth quarter of 2019 were
$16.5 million, up 6% from $15.5 millionin the fourth quarter of 2018 and up 12% from $14.7 millionin the third quarter of 2019. Revenues in 2019 were $67.4 million, down 5% from $70.8 millionin 2018.
- Average daily net sales volumes in the fourth quarter of 2019 were 2,763 barrels of oil equivalent per day (“BOEPD”), up 4% from 2,662 BOEPD in the third quarter of 2019 and down 8% from 3,016 BOEPD in the fourth quarter of 2018. Average daily net sales volumes for 2019 were 2,844 BOEPD, down 2% from 2,892 BOEPD in 2018.
- Operating income in the fourth quarter of 2019 was
$5.1 million, up 82% from $2.8 millionin the fourth quarter of 2018 and up 24% from $4.1 millionin the third quarter of 2019. Operating income for 2019 was $18.9 million, down 26% from $25.5 millionin 2018.
¹ Adjusted EBITDAX is a non-GAAP financial measure. See the reconciliation at the end of the press release.
² Net debt is a non-GAAP financial measure consisting of total debt as reflected on the Company’s balance sheet minus cash and cash equivalents as reflected on the Company’s balance sheet. For
Fourth Quarter 2019 Results of Operations
|For the Three Months Ended|
|Natural gas (MMCF)||53||47||44|
|Total net sales (MBOE)||254||245||278|
|Average net sales (BOEPD)||2,763||2,662||3,016|
|Realized Commodity Prices:|
|Oil ($/BBL unhedged)||$||65.10||$||60.12||$||56.04|
|Oil ($/BBL hedged)||$||65.10||$||60.12||$||54.92|
|Natural gas ($/MCF)||$||5.98||$||6.18||$||6.06|
Total revenues were
Adjusted EBITDAX for the three months ended
2019 Annual Results of Operations
Total revenues were
Adjusted EBITDAX for the year ended
Decline in Oil Prices, Effect on Liquidity and Going Concern
During 2019, the Company repaid its
The Company’s primary sources of liquidity for 2019 were its cash and cash equivalents, cash flow from operations, and borrowings under the 2019 Term Loan. At
Notwithstanding these measures, there remain risks and uncertainties regarding the Company’s ability to generate sufficient revenues at current oil prices to pay its debt obligations and accounts payable when due. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.
Reserves Update and Comparison
The following table summarizes net proved, probable, and possible reserves at
|2019 Reserves||2018 Reserves|
Estimates of reserves are inherently imprecise and are continually subject to revision based on production history, results of additional exploration and development, price changes, and other factors. For more information regarding estimates of reserves, please refer to the Company’s Annual Report on Form 10-K for the year ended
During 2020, the Company plans to continue its recompletion, workover, and production optimization plans in its producing fields, including Bahar, Yeniev, Goksu, Pinar, Southeast Bahar, Catak, and Karagoz. Drilling additional wells will be dependent on oil prices.
In the first quarter of 2020, the Company started construction of phase II electrification of the Bahar field to replace diesel generated power with gas generated power, which will be distributed to each well in the field. The phase II electrification is expected to be completed and operational in the second quarter of 2020.
The Company whipstocked the Goksu-4H well in
In the first quarter of 2020, the Company started implementation of a full field waterflood of the Arpatepe field. The Company plans to recomplete four wells in the field as water injection wells and one well as a water source well. Additionally, the Company plans to build a central facility and gathering system to handle increased volumes.
During 2020, the Company plans to continue its recompletion, workover, and production optimization operations in the Selmo field.
The Company is currently evaluating future activity in
Sale of Petrogas
The Company will host a live webcast and conference call on
A live webcast of the conference call and replay will be available through the Company’s website at www.transatlanticpetroleum.com. To access the webcast and replay, click on “Investors,” select “Events and Presentations,” and click on “Listen to webcast” under the event list. The webcast requires IOS, Microsoft Windows Media Player, or RealOne Player.
A telephonic replay of the call will be available through
Consolidated Statements of Comprehensive Income (Loss)
|For the Three Months Ended||For the Twelve Months Ended|
|Oil and natural gas sales||$||16,292||$||15,409||$||66,829||$||70,268|
|Costs and expenses:|
|Exploration, abandonment and impairment||–||8||6,267||401|
|Seismic and other exploration||97||149||330||489|
|General and administrative||3,538||5,057||11,785||14,719|
|Depreciation, depletion and amortization||3,048||3,386||13,227||14,059|
|Accretion of asset retirement obligations||56||50||213||174|
|Total costs and expenses||11,336||12,719||48,597||45,276|
|Other (expense) income:|
|Interest and other expense||(2,656||)||(2,399||)||(10,667||)||(10,048||)|
|Interest and other income||171||240||947||1,082|
|(Loss) gain on commodity derivative contracts||(936||)||3,359||(966||)||(1,797||)|
|Foreign exchange loss||(2,384||)||(3,305||)||(4,569||)||(10,292||)|
|Total other expense||(5,805||)||(2,105||)||(15,255||)||(21,055||)|
|Income (loss) before income taxes||(670||)||701||3,528||4,458|
|Current income tax expense||(476||)||(139||)||(3,119||)||(2,820||)|
|Deferred income tax expense||(1,379||)||(1,277||)||(5,775||)||(6,854||)|
|Other comprehensive income (loss):|
|Foreign currency translation adjustment||(1,492||)||5,962||(5,326||)||(17,255||)|
|Comprehensive (loss) income||$||(4,017||)||$||5,247||$||(10,692||)||$||(22,471||)|
|Net loss per common share:|
|Basic net loss per common share||$||(0.04||)||$||(0.01||)||$||(0.10||)||$||(0.10||)|
|Weighted average common shares outstanding||57,758||50,625||55,134||50,505|
|Diluted net loss per common share||$||(0.04||)||$||(0.01||)||$||(0.10||)||$||(0.10||)|
|Weighted average common and common equivalent shares outstanding||57,758||50,625||55,134||50,505|
Summary of Consolidated Statements of Cash Flows
(in thousands of
|For the Twelve Months Ended
|Net cash provided by operating activities||$||33,203||$||28,695|
|Net cash used in investing activities||(30,830||)||(26,532||)|
|Net cash used in financing activities||(1,092||)||(6,636||)|
|Effect of exchange rate changes on cash||(1,504||)||(5,931||)|
|Net decrease in cash, cash equivalents, and restricted cash||$||(223||)||$||(10,404||)|
Summary Consolidated Balance Sheets
(in thousands of
|Cash and cash equivalents||$||9,664||$||9,892|
|Accounts receivable, net|
|Oil and natural gas sales||13,299||12,912|
|Joint interest and other||1,218||982|
|Prepaid and other current assets||12,375||8,696|
|Note receivable - related party||–||5,828|
|Total current assets||44,208||44,355|
|Property and equipment:|
|Oil and natural gas properties (successful efforts method)|
|Equipment and other property||10,202||14,408|
|Less accumulated depreciation, depletion and amortization||(106,610||)||(105,850||)|
|Property and equipment, net||84,518||87,259|
|Other long-term assets:|
|Note receivable - related party||3,951||–|
|Total other assets||7,778||986|
|LIABILITIES, SERIES A PREFERRED SHARES AND SHAREHOLDERS' EQUITY|
|Accounts payable - related party||4,262||2,922|
|Total current liabilities||42,170||41,891|
|Asset retirement obligations||4,749||4,667|
|Deferred income taxes||22,728||20,314|
|Total long-term liabilities||40,704||32,240|
|Commitments and contingencies|
|Series A preferred shares,
|Series A preferred shares-related party,
|Accumulated other comprehensive loss||(147,347||)||(142,021||)|
|Total shareholders' equity||7,580||12,419|
|Total liabilities, Series A preferred shares and shareholders' equity||$||136,504||$||132,600|
Reconciliation of Net Loss to Adjusted EBITDAX (Unaudited)
(in thousands of
|For the Three Months Ended||For the Twelve Months Ended|
|Net (loss) income||$||(2,525||)||$||1,070||$||(715||)||$||(5,366||)||$||(5,216||)|
|Interest and other income, net||2,485||2,399||2,159||9,720||8,966|
|Income tax expense||1,855||250||1,416||8,894||9,674|
|Exploration, abandonment, and impairment||-||488||8||6,267||401|
|Seismic and other exploration expense||97||48||149||330||489|
|Foreign exchange loss||2,384||797||3,305||4,569||10,292|
|Share-based compensation expense||121||119||115||419||455|
|Loss (gain) on derivative contracts||936||(403||)||(3,359||)||966||1,797|
|Cash settlements on commodity derivative contracts||-||-||(302||)||-||(4,012||)|
|Accretion of asset retirement obligation||56||56||50||213||174|
|Depreciation, depletion, and amortization||3,048||3,021||3,386||13,227||14,059|
Adjusted EBITDAX (“Adjusted EBITDAX”) is a non-GAAP financial measure that represents net (loss) income plus interest and other income, net, income tax expense, exploration, abandonment, and impairment, seismic and other exploration expense, foreign exchange loss, share-based compensation expense, loss (gain) on derivative contracts, cash settlements on commodity derivative contracts, accretion of asset retirement obligation, depreciation, depletion, and amortization, and net other items.
The Company believes Adjusted EBITDAX assists management and investors in comparing the Company’s performance on a consistent basis without regard to depreciation, depletion, and amortization, impairment of oil and natural gas properties, exploration expenses, and foreign exchange gains and losses among other items, which can vary significantly from period to period. In addition, management uses Adjusted EBITDAX as a financial measure to evaluate the Company’s operating performance.
Adjusted EBITDAX is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income or income prepared in accordance with GAAP. Net income or income may vary materially from Adjusted EBITDAX. Investors should carefully consider the specific items included in the computation of Adjusted EBITDAX.
The Company is an international oil and natural gas company engaged in the acquisition, exploration, development, and production of oil and natural gas. The Company holds interests in developed and undeveloped properties in
(NO STOCK EXCHANGE, SECURITIES COMMISSION, OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.)
This news release contains statements concerning the Company’s ability to continue as a going concern, its drilling program, the evaluation of its prospects in
Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates, and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements or information. These risks and uncertainties include, but are not limited to, the Company’s ability to continue as a going concern; well development results; access to sufficient capital; market prices for natural gas, natural gas liquids, and oil products, including price changes resulting from coronavirus fears as well as oil oversupply concerns; estimates of reserves and economic assumptions; the ability to produce and transport natural gas, natural gas liquids, and oil products, including price changes resulting from coronavirus fears as well as oil oversupply concerns; the results of exploration and development drilling and related activities; the effects of the coronavirus on our operations, demand for oil and natural gas as well as governmental actions in response to the coronavirus; economic conditions in the countries and provinces in which the Company carries on business, especially economic slowdowns; actions by governmental authorities; the unwinding of the Company’s hedges against a decline in the price of oil; receipt of required approvals; increases in taxes; legislative and regulatory initiatives relating to fracture stimulation activities; changes in environmental and other regulations; renegotiations of contracts; political uncertainty, including sanctions, armed conflicts, and actions by insurgent groups; outcomes of litigation; the negotiation and closing of material contracts; and other risks described in the Company’s filings with the
The forward-looking statements or information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events, or otherwise, unless so required by applicable securities laws.
Note on BOE
Barrels of oil equivalent, or BOE, are derived by the Company by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas (“MCF”) to one stock tank barrel, or 42 U.S. gallons liquid volume (“BBL”), of oil. A BOE conversion ratio of six MCF to one BBL is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. BOE may be misleading, particularly if used in isolation.
Vice President, General Counsel and Corporate Secretary
Source: TransAtlantic Petroleum Ltd.