TransAtlantic Petroleum Ltd Turkey Exploration Portfolio Turkey August 2011

TransAtlantic Petroleum Ltd has built up one of the largest acreage positions in Turkey with exploration, development and production assets in both established

Turkey

hydrocarbon areas and high impact frontier basins. TransAtlantic is offering a material position across its extensive exploration portfolio to joint venture partners who share TransAtlantic’s long term commitment to pursue E&P activities in Turkey and unlock its significant potential.

TRANSATLANTIC Petroleum Ltd.

TRANSATLANTIC Petroleum Ltd.

TransAtlantic Petroleum Ltd Turkish Portfolio TransAtlantic Petroleum Ltd (“TransAtlantic” or “the Company”), is a TSX and NYSE Amex listed, vertically integrated, international energy company engaged in the acquisition, exploration, development and production of crude oil and natural gas, with upstream assets in Turkey, Bulgaria, Romania and Morocco.

Turkish Licences Included in Farm-Out Process

In Turkey, the company has built up a prominent position across the highly prospective hydrocarbon basins with a total acreage position of ca 6.4 million acres, (ca. 25,900 km2). In addition to holding an extensive exploration portfolio, the company currently produces ca. 38 MMscf/d (gross) of gas from the Thrace Basin and has gross oil production ca. of 2,900 bopd from its fields in Anatolia. In order to de-risk the various identified plays and prove up the significant prospective hydrocarbon potential of its large exploration portfolio, the Company is offering joint venture opportunities across a variety plays to undertake evaluation, seismic acquisition and drilling activities. TransAtlantic Worldwide Ltd, a wholly-owned subsidiary of the Company, has engaged FirstEnergy Capital LLP (“FirstEnergy”) as its exclusive financial advisor for this farm-out process.

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TRANSATLANTIC Petroleum Ltd.

Offered Package The offered package comprises an extensive portfolio (ca. 4 million acres, 16,200 km2) of conventional oil- and gas-prone exploration acreage as well as unconventional shale oil and tight gas potential. The package includes; • High impact gas-prone acreage in Thrace (Temrez and Habiller licences), close to existing infrastructure and gas markets • Large acreage position in under-explored frontier basins in Tuz Golu, Sivas and Gurun in Central Turkey • Oil-prone exploration potential in the established hydrocarbon provinces near the Zagros Foldbelt (Idil, Midyat and Germav licences) in southern and southeastern Anatolia with acreage on trend with nearby Syrian and Iraqi fields • Emerging petroleum province in Eastern Mediterranean (Adana licences) • Acreage ideally positioned to allow testing and unlocking of significant unconventional potential: shale oil in SE Turkey (Molla) and tight gas in Thrace (Temrez) TransAtlantic’s preference is to attract a strategic partner, or a consortium of partners, across the whole or majority of the offered package. The envisaged deal structure would require the interested party or parties to cover specified past and future work program costs (seismic and/or drilling) attributable to each individual licence to earn a working interest of up to 60% across the offered portfolio. TransAtlantic will also consider compelling alternative proposals for individual assets.

Licence

Interest (%)

Operator

Habiller

4037

100%

Petrogas

Temrez

4861

100%

Amity Oil

Adana

4842

100%

Amity Oil

Yuksekkoy

4350

100%

TransAtlantic Turkey Limited

Comment

Thrace

Adana

Tuz Golu North

4314-4317

100%

TEMI

South

4717-4722

100%

TransAtlantic Turkey Limited

Assignment of 50% from Innex - Pending

4729-4741

100%

TransAtlantic Turkey Limited

4325

90%

TransAtlantic Turkey Limited

10 % Selsinsan

Old Molla

4174

100%

TransAtlantic Turkey Limited

25% held by Talon

New Molla

4845

100%

TransAtlantic Turkey Limited

3970-3972

100%

TransAtlantic Turkey Limited

Germav

4175

100%

TransAtlantic Turkey Limited

Idil

4642

100%*

Transatlantic Turkey Limited

Sivas Basin Sivas Gurun Gurun Molla

Midyat Midyat

25 % held by DMLP

Others

*50% held by Selsinsan as TransAtlantic nominee

Note: Petrogas, DMLP, Amity Oil, Talon Exploration, TEMI and TransAtlantic Turkey Ltd. are wholly-owned subsidiaries of TransAtlantic Petroleum Ltd.

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TRANSATLANTIC Petroleum Ltd.

Key Opportunity Highlights Strategic Opportunity • Second largest onshore portfolio of exploration, appraisal and production acreage in Turkey, all with high working interests • Unique opportunity to acquire a portfolio-wide interest and take an “early mover” position in a region which is receiving increasing industry interest • Includes both oil and gas-prone conventional exploration and unconventional shale oil and tight gas potential • Ideally suited to single strategic partner or small consortium of partners who share TransAtlantic’s long term commitment to pursue E&P activities in Turkey • Aggressive work programme in place to de-risk exploration plays and test the hydrocarbon potential in under-explored and high potential basins

Diverse Portfolio • The offered portfolio provides access to a diverse package of high impact exploration opportunities: •

Thrace acreage located in area of existing gas production and infrastructure

•

Frontier Basins offer exciting under-explored acreage across several large Tertiary basins conducive to risk



reduction using AVO seismic technology •

SE Turkey region adjacent to significant proven hydrocarbon provinces (e.g. Syria, northern Iraq)

•

Unconventional shale oil potential in the Molla area and unconventional tight gas potential in Thrace

Partnership Opportunity • TransAtlantic has



•

a strong management team with considerable in-country experience and expertise

•

established strong relationships with authorities at local and governmental levels

•

seismic and drilling services that can be provided by TransAtlantic through its subsidiaries: Viking International (in-country drillings rigs, test and fraccing units, etc.) and Viking Geophysical Services (seismic)

Attractive Fiscal and Operating Environment • Licences are governed by attractive fiscal terms • Very strong local demand for both oil and gas in local markets • Acreage close to existing infrastructure, population centres and markets • Local conditions are ideal for safe and efficient upstream operations • World market oil and gas prices

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TRANSATLANTIC Petroleum Ltd.

Asset Overview Thrace Basin - Habiller & Temrez Licences • The Thrace Basin area, located in the European part of Turkey, provides the majority of Turkish domestic gas production • TransAtlantic has built up a considerable portfolio of production, development and exploration assets in this area • Although

TransAtlantic

is

currently

focussing

on

conventional gas exploitation, increasing emphasis is given to unlocking the significant identified unconventional gas potential that exists in deeper tight sands

• TransAtlantic’s current gross production from the Thrace Basin is ca. 38 MMscf/d • Conventional gas production is mainly from the Oligocene/Miocene sandstones of the Osmancık and Danişmen Formations. Unconventional resources, where fraccing is key to unlocking the potential, is associated with tight sands of the stratigraphically deeper Eocene/Oligocene Hamitabat, Ceylan and Mezardere formations • TransAtlantic is currently seeking a joint venture partner for its Habillar and Temrez blocks where considerable potential has been identified

Temrez (4861) • Block located in the central part of the Thrace Basin • The producing Alpullu Field (100% TransAtlantic) is located immediately north of the Block (and is excluded from this offering) • Block fully covered by 3D seismic (SW part currently being processed) • Main plays include: •

Fluvio-deltaic channel sands in the Osmancık



/ Danişmen / Upper Mezardere formations,



characterised by high amplitudes on seismic •



Tight, gas-prone sands of the Mezardere/ Ceylan/Hamitabat formations

• Several large anticlinal structures in the central, southwestern and eastern part of the Block • Pipeline is already constructed to transport gas to market Page 5

TRANSATLANTIC Petroleum Ltd.

Recent Drilling • Taş-1 well recently drilled to test a seismic anomaly in the upper part of the Mezardere Sandstone. The well demonstrated the presence of a gas bearing sand sequence with average porosities of 12%. The well is currently being fracced • Numerous analogous high amplitude events are present in the acreage

Seismic Section Through Taş-1 Well Location

Deep Well Concept to Test Mezardere / Hamitabat

• A number of locations have been identified to drill a deep well to test the reservoir and gas potential in the lower Mezardere/Ceylan and deeper Hamitabat formations, e.g. on the Temrez structure and on the large Avluobasi structure which straddles the boundary with the adjacent TPAO block to the east of the Temrez block • The current work programme envisages the drilling of three wells to test the unconventional play in the Mezardere/Hamitabat section • TransAtlantic will consider farming out selected areas on the licence Page 6

TRANSATLANTIC Petroleum Ltd.

Habiller (4037) •

Block located in the eastern part of the Thrace Basin,



adjacent to the Greek and Bulgarian border

•

Producing Edirne fields immediately to the north-west



of the Habillar block

•

Two modern 3D seismic surveys available, together with



older vintage 2D seismic data

•

In the north-eastern part of the licence prospects drilled



on seismic amplitude anomalies at Osmancık level



proved gas bearing and four wells were brought into



production end of July 2011, producing at initial rate of

4 mmscf/d • Cukur-1 prospect provides analogous potential in the Osmanick Fm • For the remainder and larger part of the block the main play comprises gas-prone sandstones of the Hamitabat Formation in large, faulted anticlinal structures • Two wells were drilled on a large 4-way dip closure, close to east-west trending running fault (Habiller-1 and -2 in 1962 and 1985, resp.), encountering shows and demonstrating the presence of hydrocarbons in the Hamitabat Formation • TransAtlantic has recently re-entered and fracced the Upper Hamitabat in Habiller-2; despite poor hole conditions established flow on test of ca 120 bfpd of which 10% was condensate • Considerable upside exists to test •

the northern part of the structure away from the major fault

•

the southern and structurally higher



part of the anticline which could potentially be



tested by a side-track from Habiller-2

• Additional potential exists in the Middle and Lower Hamitabat which have not been tested by Habiller-2 • Work programme includes the drilling of at least one exploration well to fully test the Hamitabat section (3,000m) • TransAtlantic is prepared to discuss the inclusion of some of the production from the north-western part of the block in the context of a robust work programme to test and unlock the Hamitabat potential

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TRANSATLANTIC Petroleum Ltd.

Interior Tertiary Basins Tuz Golu, Sivas and Gurun The Interior Tertiary basins in Central Turkey comprise under-explored, sedimentary

deep

basins

that

share characteristics with the productive Thrace Basin. • TransAtlantic

licences

cover large parts of the Toz Golu North and South basins and practically the entire Sivas Basin. In addition TransAtlantic holds acreage in Gurun, to the south of Sivas • Basin formation during the late Cretaceous was followed by deposition of thick sedimentary sequences with proven source rocks, reservoirs and seals. These combine to form working petroleum systems in each of the basins, as evidenced by subsurface tests, shows and surface seeps • The accumulation of thick sedimentary sequences (Tuz Golu > 10 km and Sivas > 10 km) compares favourably with Thrace > 9 km and relatively high recent heat flow (> 25C/km) means that the basins are actively generating hydrocarbons • Exploration within the TransAtlantic licences is at an early stage with limited seismic or well data available. However, gravity and magnetic data, surface geology and regional well data indicate the possibility of significant resources being present. Published proven resource estimates for discoveries immediately adjacent to TransAtlantic’s acreage are in the range of 70-160 Bcf • TransAtlantic has put in place an extensive work programme to high grade the licences area, delineate prospects and confirm the hydrocarbon potential by drilling a number of exploration wells

Key SR – Source Rocks

RES - Reservoir

SL – Seal Rocks

TR – Trap Formation

GEN- HC Generation Page 8

Oil or Gas Show

TRANSATLANTIC Petroleum Ltd.

Tuz Golu Basin

• Under-explored Tuz Golu Basin contains a thick sequence of Upper Cretacous to Neogene sediments • Gravity and magnetic data indicate presence of sedimentary basins up to 10 km deep • Proven and active petroleum systems demonstrated by 22 regional wells with oil and/or gas shows at various stratigraphic levels • TransAtlantic licences cover a substantial portion of the basin and are situated in favourable locations relative to the main petroleum kitchen areas • Area covered by network of gas pipelines and infrastructure permitting early exploitation of new discoveries • Nearby local markets with strong demand for oil and gas (North Tuz Golu licences only 60 km south of Ankara)

Proven and Active Petroleum Systems • Reservoir potential mainly provided by sandstones of Upper

Cretaceous to Pliocene age with additional reservoir potential



provided by carbonates of Late Cretaceous to Eocene age

• Excellent Mio-Pliocene source rocks with TOC up to 20% • Deeper Cretaceous to Paleocene source rocks with TOC 6-12% • Oil and gas seeps and oil staining documented from several

localities in north-western half of the basin

• Gas flared from historic discoveries (1978-1980) in Karapinar area Page 9

TRANSATLANTIC Petroleum Ltd.

North Tuz Golu (4314-4317)

• Four blocks, totalling 1,977 km2 (ca. 0.49 million acres) • Existing 2D seismic, including several 2010 test lines • Large untested roll-over structure identified on seismic • Oil and gas-cut mud recovered from DST in nearby offset well at base Upper Paleocene, down-dip from main roll-over structure • Potential for additional carbonate build-up targets

• Work programme includes: • •

Acquisition of additional 400 km of 2D seismic Drill one exploration well to at least 3,700 m

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TRANSATLANTIC Petroleum Ltd.

South Tuz Golu (4717-4722)

Oil Show at MTA Well 2007

Gulhanim-2 Well Test Source: Niche Group - Presentation July 2011

• Six blocks, totalling 2,967 km2 (ca. 0.73 million acres) • Limited existing 2D seismic data available • Significant gas shows/discovery in nearby Karapinar wells immediately north of the South Tuz Golu licences • Oil shows in Bor Area (MTA, 2007) • Recent drilling by ARAR Resources / Niche Group (Gulhanim-2) encountered three separate hydrocarbon-bearing zones with estimated resources of up to 330Bcf – CNG plant currently under construction at location • Several potential drilling locations identified • Work programme includes •

Re-processing of all existing seismic data

•

Acquisition of additional seismic to delineate prospects and leads

•

Drilling of two exploration wells to at least 3,500 m Page 11

TRANSATLANTIC Petroleum Ltd.

Sivas Basin Sivas (4729-4741) •

Large area covering 6,449 km2 (ca. 1.6 million acres) over 13

blocks •

Gravity and magnetic data show presence of a thick low



density sedimentary sequence

•

Basin fully covered by TransAtlantic Blocks

•

Thick ( > 8 km) sequence of Neogene sediments penetrated



by a single stratigraphic well which did not reach the main



reservoir and source rock

Regional Stratigraphy - Sivas Basin

• Studies of surface outcrops indicate the presence of working petroleum systems • It is expected that the basin will yield trap sizes in excess of 100 Bcfe analogous to those found in similar transpressional basins • Close to dense population centres and network of gas pipelines and infrastructure exists in the area which would permit early exploitation of any discovery

After: Liner etal 2002

Gravity Map - Sivas

• Work program includes two wells to a depth of 3,500 m and a minimum 1,000 km of 2D seismic

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TRANSATLANTIC Petroleum Ltd.

Gurun (4325)

• Located ca. 100 km south of the Sivas licences in Central Turkey • Main play comprises thick, permeable and fractured carbonates of Jurassic (Liassic) age, sealed by overlying Jurassic / Tertiary shales, in large anticlinal structures

Gurun Topography • Historic wells (Hacillar, drilled by MTA in 1960’s) encountered oil shows in Jurassic age carbonates, demonstrating presence of active petroleum system • Potential Cretaceous – Paleozoic source rocks identified by Mobil • Large untested surface anticlines have been identified • 2D Seismic acquisition of 113 km completed and processing ongoing • Work programme includes: •

Spud one exploration well to a depth of at least 1800 m by February 2012

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TRANSATLANTIC Petroleum Ltd.

Adana Licences Adana (4842) & Yuksekkoy (4350) •

Two under-explored blocks with recently



acquired 2D seismic coverage (236.5 km



acquired in 2011)

•

Main play comprises thick, untested Pliocene



clastic sequence, with sandstone reservoirs



and intra-formational shales within listric fault

system •

Significant potential identified in numerous,



stacked Pliocene targets supported



by strong amplitude anomalies on recent



(2011) 2D seismic

• Average drilling depth is ca. 1,800 m for Pliocene targets • Likely hydrocarbon type is biogenic gas which can be produced without need for any significant processing or treatment • Local demand for gas exists in the area of the city of Adana

Stacked, High Amplitude Pliocene Sands

•

Deeper oil play identified with Miocene



carbonates analogous to those currently



producing 36o API oil in the nearby Bulgurdag



field (cumulative production > 3 MM bbl)

•

Work programme includes •



seismic over both blocks •



Page 14

Acquisition of additional 250 km of 2D One exploration well to test the Pliocene potential

TRANSATLANTIC Petroleum Ltd.

Molla (new) (4845) and Molla (old) (4174) • Located ca. 25 km east of Diyarbakir in SE Turkey • Main target for this area is shale oil potential of the Silurian Dadaş Formation • Marine Dadas shales are the source rock for many nearby fields in the Foothills Belt, e.g. TransAtlantic’s Selmo and Perenco’s Barbes Deep, Katin and Kastel fields and the Molla discovery • Molla (new) block ideally located to test and exploit the Dadaş shale oil potential as modelling suggest that the shales within the block are of sufficient thickness (>100M) and are mature for oil • Goksu-1R well, drilled by TransAtlantic in 2010 on the southern part of the block, re-entered and deepend previous well drilled by Shell in 1992, encountered excellent quality Kerogen Type II source rock in the Dadaş Formation with average TOCs of ca. 8%, S2 of 45 mg HC/g and HI value of ca 570 mg HC/g TOC • Work programme includes testing of the Hazro Formation in Goksu-1R and one well to test the Dadaş shale (ca. 2,500 m) in

Germav (4175)

Molla (new) by March 2012

• Located close to the Syrian border in SE Turkey • Main target is the Paleozoic Bedinan Formation • Kaletepe-1 2010 well did not reach anticipated reservoir due to repeated imbricates • Sparse grid of 2D seismic available

• Bedinan Formation, in large anticline with surface expression, remains untested • Work programme includes one exploration well to test the Bedinan Formation (at ca. 4,000 m) • In addition, Mardin carbonates remains untested (no returns during drilling of Kaletepe-1 over this interval); shows in Kerburan-1, off structure Page 15

TRANSATLANTIC Petroleum Ltd.

Midyat (3970-3972) • Under explored blocks located close to the Syrian border • Located on a regional gravity / basement high: Mardin/Midyat High • Five 2D seismic lines (140 km) acquired in 2010 over eastern blocks • Main play comprises Cretaceous Mardin Fm and underlying Triassic Cudi Group and Paleozoic in a series of imbricate structures

• Midyat-101, drilled off structure in Block 3971, encountered oil shows in Mardin, leaving considerable updip potential • Bakuk-1R, which tested a gravity high/surface anticline to the south, encountered gas in Germav sandstones and Sinan Fm dolomite and tested gas at commercial rates • Several structures delineated from residual gravity maps on the northern side of the Mardin/Midyat High remain untested particularly to the north of Midyat-101 • Long distance migration from kitchen areas to the north and south (northern Syria) is likely to source the Mardin/Midyat High • 2D Seismic acquired over 3971 and 3972 in 2010; gravity data available over all three blocks • Work programme includes one well (depth ca. 3,000 m) on Block 3971 to test the Mardin

Residual Gravity

Page 16

TRANSATLANTIC Petroleum Ltd.

Idil (4642) • Block located on the Syrian border in SE Turkey and sharing similar geology and productive reservoirs with Syrian fields • Proven hydrocarbon system with multiple reservoirs • Production from Mardin and Cudi in nearby fields (e.g Yolacan and Dincer fields immediately south of the block and numerous fields across the border in Syria and northern Iraq) • Ebyat-1 (1959), which targeted a large anticlinal structure, encountered oil shows in the Mardin, was drilled significantly off-structure; deeper Cudi and Paleozoic potential also remain untested

• Acquisition of six 2D lines in 2011 covering the Ebyat structure (processing being finalised) and reprocessing of existing 2D will improve structural control over the Ebyat anticline and support selection of well location to test Ebyat in a crestal position. • Additional prospectivity may be present in the southern and western part of the block • Work progamme includes one exploration well to test the Mardin/Cudi and Paleozoic in the Ebyat structure

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TRANSATLANTIC Petroleum Ltd.

World Class Conditions in Turkey for Exploitation of Oil and Natural Gas Excellent Fiscal Terms: •

12.5% Royalty

•

20% Corporate Income Tax

•

No VAT imposed on oil and gas activities on exploration licences. No custom duties on oil and gas related

•

imports 15% dividend tax on repatriated profits

World Class Oil and Natural Gas Prices •

All crude oil produced in Turkey is sold to the State company (TUPRAS/TPAO) at world market prices. TransAtlantic realised $107 /bbl in June 2011

•

Attractive natural gas pricing; TransAtlantic realised prices between $7-8 / Mscf over past 6 months

•

No requirement to sell gas to State, with no shortage of offtake candidates

Existing Infrastructure and Strong Domestic Demand

• Wide network of oil and gas pipeline, and refineries • Strong demand for oil and natural gas in Turkey with local markets around major cities and populated areas will allow rapid monetization of any discoveries made

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TRANSATLANTIC Petroleum Ltd.

Offering Opportunity to participate in the exploration of a significant and high impact exploration portfolio in Turkey1. It is TransAtlantic’s preference to attract a financially and technically robust partner, or consortium of partners, across the majority of the offered portfolio. However, proposals for part of the offered portfolio will also be considered. TransAtlantic envisages entering into one or more transactions, in which the incoming party •

earns between 45% and 60% working interest

•

pays over and above the working interest level share of the seismic, drilling and testing costs as per planned



work programme •

pays a negotiated share of the past cost

TransAtlantic is also prepared to enter into discussions concerning a broader collaboration across TransAtlantic’s international portfolio , including Bulgaria and Romania.

Transaction Process Interested parties who have signed a Confidentiality Agreement will be offered a detailed management presentation on each area by TransAtlantic, as well as access to an Online Data Room. Seismic data can be reviewed in the physical data room located in FirstEnergy’s London / Calgary offices.

Timetable Management Presentations and access to the data rooms are available late August. Given the various licence obligation deadlines in the near term and TransAtlantic’s desire to pursue its exploration work programme, no formal bid date will be set and TransAtlantic will consider proposals submitted at any time. In any event, TransAtlantic envisages entering into a binding agreement with interested parties in a timely fashion.

1) TransAtlantic reserves the right to change the composition of the offered package as currently described herein.

Page 19

For more information please contact: Mark Llamas Managing Director Acquisitions & Divestitures +44 (0) 20 7448 0224 [email protected]

Rolf Bakker Director & UK Co-Head Acquisitions & Divestitures +44 (0) 20 7448 0225 [email protected]

Paul Bannister Associate Acquisitions & Divestitures +44 (0) 20 7448 0241 [email protected]

Romain Bohbote Associate Acquisitions & Divestitures +44 (0) 20 7448 0223 [email protected]

UNDER NO CIRCUMSTANCES SHOULD TRANSATLANTIC PERSONNEL BE CONTACTED DIRECTLY WITHOUT THE PRIOR KNOWLEDGE AND APPROVAL OF FIRSTENERGY All images contained in this document are sourced from the Operator unless stated otherwise Cautionary Statement The information in this marketing document, which does not purport to be comprehensive, has been provided to FirstEnergy by TransAtlantic and/or has otherwise been obtained from publicly available or named sources. No representation or warranty, express or implied as to the accuracy of the information in this document is or will be given by TransAtlantic, FirstEnergy or their respective directors, officers, employees or advisers or any other person and, so far as permitted by law, no responsibility or liability is accepted for the accuracy or sufficiency thereof, or for any errors, omissions or miss-statements, negligent or otherwise, relating thereto. Interested parties should conduct and rely solely on, their own independent evaluation and analysis of the proposed transaction prior to submitting an offer. In furnishing this marketing document, neither TransAtlantic nor FirstEnergy undertake any obligation to provide any additional information or to update this marketing document or to correct any inaccuracies that may become apparent. TransAtlantic and FirstEnergy reserve the right, without advance notice, to change any and all dates or procedures respecting the matters described herein, or to terminate negotiations at any time prior to the entry into of any binding contract. TransAtlantic and FirstEnergy reserve the right to negotiate with one or more prospective purchasers at any time and to enter into an agreement for with respect to the offered farm-out without prior notice to other prospective buyers and without liability to any prospective buyers. FirstEnergy Capital LLP is a limited liability partnership registered in England and Wales. Registration number: OC346410 Registered Office: 85 London Wall, London EC2M 7AD, United Kingdom Authorised and regulated by the Financial Services Authority