Selmo located on the northern edge of the prolific Zagros fold belt of Iran and Iraq in southeast Turkey, Selmo has produced around 83 million barrels of oil to date from a total of 47 wells, 23 of which are still active. TransAtlantic Petroleum plans to begin an active drilling program in Selmo later in May 2009, with expectations to drill 5, 18, and 18 infill wells for the remainder of 2009, 2010, and 2011, respectively. TransAtlantic Petroleum will use its own rigs to drill the wells in Selmo and expects its drilling and completion costs to be less than 50% of the previous operator’s estimates. “We expect to bring down the cost of drilling wells by using our own rigs, buying in bulk, and vertically integrating wherever possible,” Malone Mitchell, TransAtlantic Petroleum’s chairman, said.

Over time, TransAtlantic Petroleum could drill up to an additional 174 infill wells if the company is successful in down-spacing the field to 40-acre spacing. “With low recovery factors relative to the original oil in place, and the low density of wells in the field, we see the opportunity to meaningfully increase production and the ultimate recoverable oil by drilling additional wells,” Matt McCann, the company’s chief executive officer, concluded.

In connection with the conclusion of the company’s acquisition of Incremental Petroleum in April 2009, RPS Energy Pty Ltd (RPS) finished independent reserves evaluations of TransAtlantic Petroleum’s Selmo oil field and Edirne gas field in Turkey with an effective date of December 31, 2008, in reports compliant with National Instrument 51-101 (NI 51-101) and the Canadian Oil and Gas Evaluation Handbook (COGEH) titled Selmo Oil Field Reserves Evaluation May 2009 and Edirne Field Reserves Evaluation May 2009 (the RPS Selmo report and the RPS Thrace report respectively). RPS did not evaluate the balance of the company’s six million net acres in Turkey, Morocco, and Romania. The reports also did not evaluate the value of TransAtlantic Petroleum’s drilling rigs and service equipment.

The RPS Thrace report also quantified the after-tax NPV 10% value of P1, P2 and P3 reserves using forecast prices as $24 million, $35 million and $49 million, respectively. RPS assumed one mcf of BOTAS gas to be priced at $10.60, $13.10, and $15.10 for 2009, 2010, and 2011, respectively. The estimated recoverable reserves include the existing wells and one additional well which starts drilling this week, leaving the company’s planned drilling program largely unevaluated. “Thrace’s gas wells have very quick payouts. It’s rare to find an opportunity like Thrace,” said Mitchell. He continued, “Through our drilling program in Thrace, we expect to grow our gas production to around 14 million cubic feet per day.”

Other Projects

TransAtlantic Petroleum has two drilling rigs in Turkey, with plans to mobilize a third rig to the country in the near term. “We continue to be very excited about the opportunities we see in Turkey, both on our large acreage position and in the country generally. Another rig will help us take advantage of those opportunities,” said Mitchell.

In Morocco and Romania, where TransAtlantic Petroleum has over 3.2 million undeveloped net acres, the company has two drilling rigs and trucking and ancillary equipment. TransAtlantic Petroleum is presently drilling one well in Morocco and anticipates drilling five more wells in Morocco and seven wells in Romania during the remainder of 2009.

Including the drilling programs in Selmo and Thrace, the acquisition of certain equipment, and exploration costs, TransAtlantic Petroleum estimates that capital expenditures will total around $63 million in 2009.