TransAtlantic (TAT) reported mixed Q215 results on 7 August, which reflected the decline in oil prices. With no wells completed in Q2, production started to slide from its Q1 peak and fell 4% q-o-q to 5.9mboe/d. Cost reductions were slightly below our expectations and operating cash flow of $8.0m was below capex of $10.2m, leaving TAT to draw from its cash pile to cover debt repayments. The dip in oil prices back to $50/bbl Brent may lead TAT to conserve cash and further trim capex until the next uptick. As announced in June, it is still looking for JV partners in Turkey and Albania to help fund drilling expenses; however, it is finding it more difficult to attract interest in the current environment. Notwithstanding the tough macro, its asset base in Turkey and Albania remains attractive with significant growth potential.
