Jet-Setter Stock: TransAtlantic Petroleum Ltd. (NYSE: TAT)

TransAtlantic Petroleum Ltd. (NYSE: TAT) spotted trading -69.15% off 52-week high price. On the other end, the stock has been noted 139.00% away from the low price over the last 52-weeks. The stock changed 5.09% to recent value of $0.29. The stock transacted 555636 shares during most recent day however it has an average volume of 1044.27K shares.

TransAtlantic Petroleum Ltd. (TNP.TO) (TAT) recently reported the financial results for the quarter ended March 31, 2020 and provided an operations update.

Total revenues were $8.4M for the three months ended March 31, 2020, as contrast to $16.5M for the three months ended December 31, 2019 and $19.0M for the three months ended March 31, 2019. The Company had a net loss of $24.0M, or $0.38 per share (basic and diluted), for the three months ended March 31, 2020, as contrast to a net loss of $.5M, or $0.04 per share (basic and diluted), for the three months ended December 31, 2019, and a net loss of $3.9M, or $0.07 per share (basic and diluted), for the three months ended March 31, 2019. Capital expenditures and seismic and corporate expenditures totaled $2.9M for the three months ended March 31, 2020, as contrast to $4.7M for the three months ended December 31, 2019 and $9.9M for the three months ended March 31, 2019.

Adjusted EBITDAX for the three months ended March 31, 2020 was $8.0M, as contrast to $8.5M for the three months ended December 31, 2019 and $12.3M for the three months ended March 31, 2019.

Liquidity and Capital Resources

The Company’s primary sources of liquidity for the first quarter of 2020 were its cash and cash equivalents, cash flow from operations, and the sale of assets. At March 31, 2020, the Company had cash and cash equivalents of $12.8M, $10.6M in short-term debt, and a working capital surplus of $5.9M, contrast to cash and cash equivalents of $9.7M, $2.9M in long-term debt, $17.1M in short-term debt, and a working capital surplus of $2.0M at December 31, 2019.

In March 2020, crude oil prices declined to about $25 per barrel for Brent crude as a result of market concerns about the economic impact from the coronavirus as well as the ability of OPEC and Russia to agree on a perceived need to implement further production cuts in response to weaker worldwide demand.  Since then, Brent crude prices have rebounded to about $39.00 per barrel as of June 12, 2020 and remain volatile and unpredictable. The current futures forward curve for Brent crude indicates that prices may continue at or near current prices for an extended time.

Türkiye Petrol Rafinerileri A.Ş. (“TUPRAS”), a privately-owned oil refinery in Turkey, purchases substantially all of the Company’s crude oil production. The price of substantially all of the oil delivered pursuant to the purchase and sale contract with TUPRAS is tied to Arab Medium oil prices adjusted upward based on an API adjustment, Suez Canal tariff costs, and freight charges. Recently, there has been a important widening of the differential between the ICE Brent Index price and the Company’s realized oil prices. In 2018 and 2019, the average monthly differential between the ICE Brent Index Price and the Company’s realized oil prices was $2.44 and $0.17 per barrel, respectively. In April and May 2020, the average monthly differential between the ICE Brent Index Price and the Company’s realized oil prices was $6.90 and $8.34 per barrel, respectively. The widening of the differential between ICE Brent Index Price and the Company’s realized oil prices has rendered the Company’s hedges less effective, resulting in importantly lowered revenues. This differential may expand or contract in the future.

The price of the oil delivered pursuant to the purchase and sale contract with TUPRAS is determined under the Petroleum Market Law No. 5015 under the laws of the Republic of Turkey. In November 2019, TUPRAS filed a lawsuit seeking restitution from us for alleged overpayments resulting from a February 2019 amendment to the Turkish domestic crude oil pricing formula under Petroleum Market Law No. 5015 (the “Pricing Amendment”). TUPRAS also claimed that the Pricing Amendment violates the Constitution of the Republic of Turkey and seeks to have the Pricing Amendment cancelled. Additionally, in April 2020, TUPRAS notified us that it intends to extend payment terms for oil purchases by 60 days. The outcome of the TUPRAS lawsuit and negotiations regarding the extension of payment terms is uncertain; however, a conclusion of the lawsuit in TUPRAS’s favor or an extension of payment terms would reduce or delay the Company’s cash flow and decrease the Company’s cash balances.

 Its earnings per share (EPS) expected to touch remained 5.80% for this year while earning per share for the next 5-years is expected to reach at # ref. TAT has a gross margin of 82.70% and an operating margin of 27.90% while its profit margin remained -8.00% for the last 12 months.   According to the most recent quarter its current ratio was 1 that represents company’s ability to meet its current financial obligations. The price moved ahead of 11.19% from the mean of 20 days, 20.77% from mean of 50 days SMA and performed -26.56% from mean of 200 days price. Company’s performance for the week was 7.01%, 21.89% for month and YTD performance remained -41.27%.

 

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