10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-34574

TRANSATLANTIC PETROLEUM LTD.

(Exact name of registrant as specified in its charter)

Bermuda	None
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
16803 Dallas Parkway, Suite 200 Addison, Texas	75001
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (214) 220-4323

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Ticker Symbol	Name of each exchange on which registered
Common shares, par value $0.10	TAT	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant is required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒

As of November 8, 2019, the registrant had 57,708,698 common shares outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2019 (Unaudited) and December 31, 2018	4
Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2019 and 2018	5
Unaudited Consolidated Statement of Equity for the Three and Nine Months Ended September 30, 2019 and 2018	6
Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	30
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3. Defaults Upon Senior Securities	32
Item 4. Mine Safety Disclosures	32
Item 5. Other Information	32
Item 6. Exhibits	33

2

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of applicable U.S. and Canadian securities legislation. Additionally, forward-looking statements may be made orally or in press releases, conferences, reports, on our website or otherwise, in the future, by us or on our behalf. Such statements are generally identifiable by the terminology used such as “plans,” “expects,” “estimates,” “budgets,” “intends,” “anticipates,” “believes,” “projects,” “indicates,” “targets,” “objective,” “could,” “should,” “may,” or other similar words.

By their very nature, forward-looking statements require us to make assumptions that may not materialize or that may not be accurate. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements, including the factors discussed under Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018. Such factors include, but are not limited to, the following: our ability to access sufficient capital to fund our operations; fluctuations in and volatility of the market prices for oil and natural gas products; the ability to produce and transport oil and natural gas; the results of exploration and development drilling and related activities; global economic conditions, particularly in the countries in which we carry on business, especially economic slowdowns; actions by governmental authorities including increases in taxes, legislative and regulatory initiatives related to fracture stimulation activities, changes in environmental and other regulations, and renegotiations of contracts; political uncertainty, including sanctions, armed conflicts, and actions by insurgent groups; the negotiation and closing of material contracts or sale of assets; future capital requirements and the availability of financing; risks associated with drilling, operating and decommissioning wells; actions of third-party co-owners of interests in properties in which we also own an interest; and the other factors discussed in other documents that we file with or furnish to the U.S. Securities and Exchange Commission (the “SEC”) and Canadian securities regulatory authorities. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are interdependent upon other factors and our course of action would depend upon our assessment of the future, considering all information then available. In that regard, any statements as to: future oil or natural gas production levels; capital expenditures; asset sales; the allocation of capital expenditures to exploration and development activities; sources of funding for our capital expenditure programs or operations; drilling of new wells; demand for oil and natural gas products; expenditures and allowances relating to environmental matters; dates by which certain areas will be developed or will come on-stream; expected finding and development costs; future production rates; ultimate recoverability of reserves, including the ability to convert probable and possible reserves to proved reserves; dates by which transactions are expected to close; future cash flows, uses of cash flows, collectability of receivables and availability of trade credit; expected operating costs; changes in any of the foregoing; and other statements using forward-looking terminology are forward-looking statements, and there can be no assurance that the expectations conveyed by such forward-looking statements will, in fact, be realized.

Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on information available to us on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity, achievements or financial condition.

Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above, as well as others not now anticipated. The foregoing statements are not exclusive and further information concerning us, including factors that potentially could materially affect our financial results, may emerge from time to time. We do not intend to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements, except as required by law.

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TRANSATLANTIC PETROLEUM LTD.

Consolidated Balance Sheets

(in thousands of U.S. Dollars, except share data)

	September 30, 2019			December 31, 2018
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	14,452		$	9,892
Accounts receivable, net
Oil and natural gas sales		12,032			12,912
Joint interest and other		1,567			982
Related party		853			878
Prepaid and other current assets		12,331			8,696
Derivative asset		384			–
Note receivable - related party		–			5,828
Inventory		4,804			5,167
Total current assets		46,423			44,355
Property and equipment:
Oil and natural gas properties (successful efforts method)
Proved		170,237			163,006
Unproved		14,911			15,695
Equipment and other property		13,091			14,408
		198,239			193,109
Less accumulated depreciation, depletion and amortization		(108,646	)		(105,850	)
Property and equipment, net		89,593			87,259
Other long-term assets:
Other assets		3,107			986
Note receivable - related party		4,150			–
Total other assets		7,257			986
Total assets	$	143,273		$	132,600
LIABILITIES, SERIES A PREFERRED SHARES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,067		$	3,896
Accounts payable - related party		3,552			2,922
Accrued liabilities		13,956			13,073
Derivative liability		414			–
Loans payable		18,912			22,000
Total current liabilities		42,901			41,891
Long-term liabilities:
Asset retirement obligations		4,836			4,667
Accrued liabilities		9,994			7,259
Deferred income taxes		22,720			20,314
Loans payable		7,143			–
Total long-term liabilities		44,693			32,240
Total liabilities		87,594			74,131
Commitments and contingencies
Series A preferred shares, $0.01 par value, 426,000 shares authorized; 426,000 shares issued and outstanding with a liquidation preference of $50 per share as of September 30, 2019 and December 31, 2018		21,300			21,300
Series A preferred shares-related party, $0.01 par value, 495,000 shares authorized; 495,000 shares issued and outstanding with a liquidation preference of $50 per share as of September 30, 2019 and December 31, 2018		24,750			24,750
Shareholders' equity:
Common shares, $0.10 par value, 200,000,000 shares authorized; 57,708,698 shares and 52,413,588 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		5,771			5,241
Treasury stock		(970	)		(970	)
Additional paid-in-capital		580,843			577,488
Accumulated other comprehensive loss		(145,855	)		(142,021	)
Accumulated deficit		(430,160	)		(427,319	)
Total shareholders' equity		9,629			12,419
Total liabilities, Series A preferred shares and shareholders' equity	$	143,273		$	132,600

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

TRANSATLANTIC PETROLEUM LTD.

Consolidated Statements of Operations and Comprehensive (Loss) Income

(Unaudited)

(U.S. Dollars and shares in thousands, except per share amounts)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Revenues:
Oil and natural gas sales	$	14,543		$	20,098		$	50,537		$	54,859
Other		110			42			372			405
Total revenues		14,653			20,140			50,909			55,264
Costs and expenses:
Production		3,162			2,307			8,376			7,980
Transportation and processing		1,262			1,054			3,802			3,385
Exploration, abandonment and impairment		488			162			6,267			393
Seismic and other exploration		48			122			233			340
General and administrative		2,503			2,539			8,247			9,662
Depreciation, depletion and amortization		3,021			2,938			10,179			10,673
Accretion of asset retirement obligations		56			35			157			124
Total costs and expenses		10,540			9,157			37,261			32,557
Operating income		4,113			10,983			13,648			22,707
Other income (expense):
Interest and other expense		(2,780	)		(2,776	)		(8,011	)		(7,649	)
Interest and other income		381			211			776			842
Gain (loss) on derivative contracts		403			(1,290	)		(30	)		(5,156	)
Foreign exchange loss		(797	)		(2,991	)		(2,185	)		(6,987	)
Total other expense		(2,793	)		(6,846	)		(9,450	)		(18,950	)
Income from operations before income taxes		1,320			4,137			4,198			3,757
Income tax expense		(250	)		(5,857	)		(7,039	)		(8,258	)
Net income (loss)		1,070			(1,720	)		(2,841	)		(4,501	)
Other comprehensive income (loss):
Foreign currency translation adjustment		808			(11,765	)		(3,834	)		(23,217	)
Comprehensive income (loss)	$	1,878		$	(13,485	)	$	(6,675	)	$	(27,718	)
Net income (loss) per common share
Basic net income (loss) per common share	$	0.02		$	(0.03	)	$	(0.05	)	$	(0.09	)
Weighted average common shares outstanding		57,680			50,597			54,249			50,465
Diluted net income (loss) per common share	$	0.02		$	(0.03	)	$	(0.05	)	$	(0.09	)
Weighted average common and common equivalent shares outstanding		57,680			50,597			54,249			50,465

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

TRANSATLANTIC PETROLEUM LTD.

Consolidated Statement of Equity for the Three and Nine Months Ended September 30, 2019 and 2018

(Unaudited)

(U.S. Dollars and shares in thousands)

																Accumulated
													Additional			Other						Total
	Common		Treasury					Common		Treasury			Paid-in			Comprehensive			Accumulated			Shareholders'
Three months ended September 30, 2019	Shares		Shares		Warrants			Shares		Stock			Capital			Loss			Deficit			Equity
Balance at June 30, 2019		52,723		333		-		$	5,273	$	(970	)	$	577,538		$	(146,663	)	$	(431,230	)	$	3,948
Issuance of common shares		4,986							498					3,186									3,684
Issuance of restricted stock units		-		-		-			-		-			-			-			-			-
Share-based compensation		-		-		-			-		-			119			-			-			119
Tax effect of restricted stock		-		-		-			-		-			-			-			-			-
Foreign currency translation adjustment		-		-		-			-		-			-			808			-			808
Net income		-		-		-			-		-			-			-			1,070			1,070
Balance at September 30, 2019		57,709		333		-		$	5,771	$	(970	)	$	580,843		$	(145,855	)	$	(430,160	)	$	9,629
Nine months ended September 30, 2019
Balance at December 31, 2018		52,413		333		-		$	5,241	$	(970	)	$	577,488		$	(142,021	)	$	(427,319	)	$	12,419
Issuance of common shares		4,986							498					3,186									3,684
Issuance of restricted stock units		310		-		-			32		-			(32	)		-			-			-
Share-based compensation		-		-		-			-		-			298			-			-			298
Tax effect of restricted stock		-		-		-			-		-			(97	)		-			-			(97	)
Foreign currency translation adjustment		-		-		-			-		-						(3,834	)		-			(3,834	)
Net loss		-		-		-			-		-			-			-			(2,841	)		(2,841	)
Balance at September 30, 2019		57,709		333		-		$	5,771	$	(970	)	$	580,843		$	(145,855	)	$	(430,160	)	$	9,629
Three months ended September 30, 2018
Balance at June 30, 2018		50,591		333		-		$	5,059	$	(970	)	$	575,591		$	(136,218	)	$	(424,884	)	$	18,578
Issuance of restricted stock units		14		-		-			1		-			(1	)		-			-			-
Share-based compensation		-		-		-			-		-			122			-			-			122
Tax effect of restricted stock		-		-		-			-		-			-			-			-			-
Foreign currency translation adjustment		-		-		-			-		-			-			(11,765	)		-			(11,765	)
Net loss		-		-		-			-		-			-			-			(1,720	)		(1,720	)
Balance at September 30, 2018		50,605		333		-		$	5,060	$	(970	)	$	575,712		$	(147,983	)	$	(426,604	)	$	5,215
Nine Months Ended September 30, 2018
Balance at December 31, 2017		50,319		333		700		$	5,032	$	(970	)	$	575,411		$	(124,766	)	$	(422,103	)	$	32,604
Expiration of warrants		-		-		(700	)		-		-			-			-			-			-
Issuance of restricted stock units		286		-		-			28		-			(28	)		-			-			-
Share-based compensation		-		-		-			-		-			340			-			-			340
Tax effect of restricted stock		-		-		-			-		-			(11	)		-			-			(11	)
Foreign currency translation adjustment		-		-		-			-		-			-			(23,217	)		-			(23,217	)
Net loss		-		-		-			-		-			-			-			(4,501	)		(4,501	)
Balance at September 30, 2018		50,605		333		-		$	5,060	$	(970	)	$	575,712		$	(147,983	)	$	(426,604	)	$	5,215

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

TRANSATLANTIC PETROLEUM LTD.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands of U.S. Dollars)

	For the Nine Months Ended
	September 30,
	2019			2018
Operating activities:
Net loss	$	(2,841	)	$	(4,501	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation		298			340
Foreign currency loss		1,776			20,748
Interest on Series A Preferred Shares paid in common shares		3,684			–
Loss on derivative contracts		30			5,156
Cash settlement on derivative contracts		–			(3,710	)
Amortization on loan financing costs		31			31
Deferred income tax expense		4,396			5,577
Exploration, abandonment and impairment		6,267			393
Depreciation, depletion and amortization		10,179			10,673
Accretion of asset retirement obligations		157			124
Changes in operating assets and liabilities:
Accounts receivable		172			(14,920	)
Prepaid expenses and other assets		(6,567	)		(6,831	)
Accounts payable and accrued liabilities		8,122			12,136
Net cash provided by operating activities		25,704			25,216
Investing activities:
Additions to oil and natural gas properties		(24,847	)		(17,708	)
Additions to equipment and other properties		(341	)		(3,254	)
Net cash used in investing activities		(25,188	)		(20,962	)
Financing activities:
Tax withholding on restricted share units		(97	)		(15	)
Note receivable - related party		1,000			–
Loan proceeds		20,605			10,000
Loan repayment		(16,550	)		(12,425	)
Net cash provided by (used in) financing activities		4,958			(2,440	)
Effect of exchange rate on cash flows, cash equivalents, and restricted cash		(914	)		(8,535	)
Net increase (decrease) in cash, cash equivalents and restricted cash		4,560			(6,721	)
Cash, cash equivalents and restricted cash, beginning of period (1)		10,032			20,432
Cash, cash equivalents and restricted cash, end of period (2)	$	14,592		$	13,711
Supplemental disclosures:
Cash paid for interest	$	3,387		$	7,333
Cash paid for taxes	$	2,988		$	2,847

(1) The beginning of period balance at December 31, 2018 includes cash and cash equivalents of $9.9 million and restricted cash of $0.1 million in other assets.  The beginning of period balance at December 31, 2017 includes cash and cash equivalents of $18.9 million and restricted cash of $1.5 million in other assets

(2) The end of period balance at September 30, 2019 includes cash and cash equivalents of $14.5 million and restricted cash of $0.1 million in other assets. The end of period balance at September 30, 2018 includes cash and cash equivalents of $13.6 million and restricted cash of $0.1 million in other assets.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

Transatlantic Petroleum Ltd.

Notes to Consolidated Financial Statements

(Unaudited)

1. General

Nature of operations

TransAtlantic Petroleum Ltd. (together with its subsidiaries, “we,” “us,” “our,” the “Company,” or “TransAtlantic”) is an international oil and natural gas company engaged in acquisition, exploration, development, and production. We have focused our operations in countries that have established, yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure, and provide favorable commodity pricing, royalty rates, and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey and Bulgaria. As of November 8, 2019, approximately 46% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

We are a holding company with two operating segments – Turkey and Bulgaria. Our assets consist of our ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

Basis of presentation

Our consolidated financial statements are expressed in U.S. Dollars (“USD”) and have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All amounts in the notes to the consolidated financial statements are in USD unless otherwise indicated. The unaudited consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews estimates, including those related to fair value measurements associated with acquisitions and financial derivatives, the recoverability and impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2018.

2. Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for leases. The most significant changes include the clarification of the definition of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. Expenses are recognized in the consolidated statement of income in a manner similar to current accounting guidance. Lessor accounting under the new standard is substantially unchanged. The new standard became effective for us beginning with the first quarter of 2019. We adopted the accounting standard using a prospective transition approach, which applied the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We also made an accounting policy election to keep leases with an initial term of twelve months or less off of the consolidated balance sheet. On January 1, 2019, we recognized $2.7 million of additional right-of-use assets and liabilities on our consolidated balance sheets.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently assessing the potential impact of ASU 2016-13 on our consolidated financial statements and results of operations.  

8

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification (“ASC”) Topic 815. The new standard provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and for interim periods therein. The Company adopted this standard effective January1, 2019.The adoption of this update had no impact our consolidated financial statements and results of operations.    

In June 2018, the FASB issued ASU 2018-07, Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting.  This update applied the existing employee guidance to nonemployee share-based transactions, with the exception of specific guidance related to the attribution of compensation cost. This update is effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted this standard effective January 1, 2019. The adoption of this update had no impact on our consolidated financial statements and results of operations.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. This update clarifies that receivables arising from operating leases are not in scope of this topic, but rather Topic 842, Leases. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe the adoption of this standard will have an impact on its consolidated financial statements.

We have reviewed other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position and cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on current or future earnings or operations.

3. Series A Preferred Shares

As of September 30, 2019 and 2018, we had 921,000 outstanding shares of our 12.0% Series A Convertible Redeemable Preferred Shares (“Series A Preferred Shares”). The Series A Preferred Shares contain a substantive conversion option, are mandatorily redeemable, and convert into a fixed number of common shares. As a result, under U.S. GAAP, we have classified the Series A Preferred Shares within mezzanine equity in our consolidated balance sheets. As of September 30, 2019, there were $21.3 million of Series A Preferred Shares and $24.8 million of Series A Preferred Shares – related party outstanding (See Note 13. “Related party transactions”).

Pursuant to the Certificate of Designations for the Series A Preferred Shares (the “Certificate of Designations”), each Series A Preferred Share may be converted at any time, at the option of the holder, into 45.754 common shares (which is equal to an initial conversion price of approximately $1.0928 per common share and is subject to customary adjustments for stock splits, stock dividends, recapitalizations, or other fundamental changes).

If not converted sooner, on November 4, 2024, we are required to redeem the outstanding Series A Preferred Shares in cash at a price per share equal to the liquidation preference plus accrued and unpaid dividends. At any time on or after November 4, 2020, we may redeem all or a portion of the Series A Preferred Shares at the redemption prices listed below (expressed as a percentage of the liquidation preference amount per share) plus accrued and unpaid dividends to the date of redemption, if the closing sale price of the common shares equals or exceeds 150% of the conversion price then in effect for at least 10 trading days (whether or not consecutive) in a period of 20 consecutive trading days, including the last trading day of such 20 trading day period, ending on, and including, the trading day immediately preceding the business day on which we issue a notice of optional redemption. The redemption prices for the 12-month period starting on the dates below are:

Period Commencing	Redemption Price
November 4, 2020	105.000%
November 4, 2021	103.000%
November 4, 2022	101.000%
November 4, 2023 and thereafter	100.000%

Additionally, upon the occurrence of a change of control, we are required to offer to redeem the Series A Preferred Shares within 120 days after the first date on which such change of control occurred, for cash at a redemption price equal to the liquidation preference per share, plus any accrued and unpaid dividends.

Dividends on the Series A Preferred Shares are payable quarterly at our election in cash, common shares, or a combination of cash and common shares at an annual dividend rate of 12.0% of the liquidation preference if paid all in cash or 16.0% of the liquidation preference if paid in common shares. If paid partially in cash and partially in common shares, the dividend rate on the cash portion is

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12.0%, and the dividend rate on the common share portion is 16.0%. Dividends are payable quarterly on March 31, June 30, September 30, and December 31 of each year. The holders of the Series A Preferred Shares also are entitled to participate pro-rata in any dividends paid on the common shares on an as-converted-to-common shares basis.For the three and ninemonths endedSeptember 30, 2019, we accrued $1.8million and $5.1 million, respectively,in dividends on the Series A Preferred Shares, which is recorded in our consolidated statements of operations and comprehensive (loss) income under the caption“Interest and other expense”.Such amounts were paid in cash and in common shares. On July 2, 2019, we issued an aggregate of 2,321,568 common shares to holders of the Series A Preferred Shares as payment of the June 30, 2019 quarterly dividend on the Series A Preferred Shares, and on September 30, 2019, we issued an aggregate of 2,664,164 common shares to holders of the Series A Preferred Shares as payment of the September 30, 2019 quarterly dividend on the Series A Preferred Shares.    

Except as required by Bermuda law, the holders of Series A Preferred Shares have no voting rights, except that for so long as at least 400,000 Series A Preferred Shares are outstanding, the holders of the Series A Preferred Shares voting as a separate class have the right to elect two directors to our Board of Directors. For so long as between 80,000 and 399,999 Series A Preferred Shares are outstanding, the holders of the Series A Preferred Shares voting as a separate class have the right to elect one director to our Board of Directors. Upon less than 80,000 Series A Preferred Shares remaining outstanding, any directors elected by the holders of Series A Preferred Shares shall immediately resign from our Board of Directors.

The Certificate of Designation also provides that without the approval of the holders of a majority of the outstanding Series A Preferred Shares, we will not issue indebtedness for money borrowed or other securities which are senior to the Series A Preferred Shares in excess of the greater of (i) $100 million or (ii) 35% of our PV-10 of proved reserves as disclosed in our most recent independent reserve report filed or furnished by us on EDGAR.

4. Property and equipment

Oil and natural gas properties

The following table sets forth the capitalized costs under the successful efforts method for our oil and natural gas properties as of:

	September 30, 2019			December 31, 2018
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	169,758		$	162,494
Bulgaria		479			512
Total oil and natural gas properties, proved		170,237			163,006
Oil and natural gas properties, unproved:
Turkey		14,911			14,965
Bulgaria		–			730
Total oil and natural gas properties, unproved		14,911			15,695
Gross oil and natural gas properties		185,148			178,701
Accumulated depletion		(103,235	)		(100,582	)
Net oil and natural gas properties	$	81,913		$	78,119

At September 30, 2019 there were no amounts excluded from the depletion calculation for proved development wells currently in progress and for costs associated with fields currently not in production.  At December 31, 2018, we excluded $0.5 million, from the depletion calculation for proved development wells currently in progress and for costs associated with fields currently not in production.

At September 30, 2019, the capitalized costs of our oil and natural gas properties, net of accumulated depletion, included $5.5 million relating to acquisition costs of proved properties, which are being depleted by the unit-of-production method using total proved reserves, and $63.8 million relating to well costs and additional development costs, which are being depleted by the unit-of-production method using proved developed reserves.

At December 31, 2018, the capitalized costs of our oil and natural gas properties included $6.5 million relating to acquisition costs of proved properties, which are being amortized by the unit-of-production method using total proved reserves, and $53.4 million relating to well costs and additional development costs, which are being amortized by the unit-of-production method using proved developed reserves.

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Impairments of proved properties and impairment of exploratory well costs

Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate the carrying value of such properties may not be recoverable. We primarily use Level 3 inputs to determine fair value, including but not limited to, estimates of proved reserves, future commodity prices, the timing and amount of future production and capital expenditures and discount rates commensurate with the risk reflective of the lives remaining for the respective oil and natural gas properties.

During the three months ended September 30, 2019 and 2018, we recorded $0.5 million of exploratory dry-hole costs and $0.2 million of impairment of proved properties and exploratory well costs, respectively, which are primarily measured using Level 3 inputs.

During the nine months ended September 30, 2019 and 2018, we recorded $6.3 million of exploratory dry-hole costs and $0.4 million of impairment of proved properties and exploratory well costs, respectively, which are primarily measured using Level 3 inputs.

Capitalized cost greater than one year

As of September 30, 2019, and December 31, 2018 there were no exploratory well costs greater than one year.

Equipment and other property

The historical cost of equipment and other property, presented on a gross basis with accumulated depreciation, is summarized as follows:

	September 30, 2019			December 31, 2018
	(in thousands)
Other equipment	$	1,176		$	1,240
Land		139			149
Inventory		5,858			6,791
Gas gathering system and facilities		181			194
Vehicles		316			336
Leasehold improvements, office equipment and software		5,421			5,698
Gross equipment and other property		13,091			14,408
Accumulated depreciation		(5,411	)		(5,268	)
Net equipment and other property	$	7,680		$	9,140

At September 30, 2019, and December 31, 2018, in addition to the above, we have classified $4.8 million and $5.2 million, respectively, of inventory as a current asset, which represents our expected inventory consumption during the next twelve months. We classify our remaining materials and supply inventory as a long-term asset because such materials will ultimately be classified as a long-term asset when the material is used in the drilling of a well.

At September 30, 2019 and December 31, 2018, we excluded $11.7 million and $12.0 million of inventory, respectively, from depreciation as the inventory had not been placed into service.

5. Asset retirement obligations

The following table summarizes the changes in our asset retirement obligations (“ARO”) for the nine months ended September 30, 2019 and for the year ended December 31, 2018:

	September 30, 2019			December 31, 2018
	(in thousands)
Asset retirement obligations at beginning of period	$	4,667		$	4,727
Foreign exchange change effect		(320	)		(1,270	)
Additions		332			1,036
Accretion expense		157			174
Asset retirement obligations at end of period	$	4,836		$	4,667

Our ARO is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging costs, remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs.

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6. Derivative instruments

We use derivative instruments to manage certain risks related to commodity prices and foreign currency exchange rates. The use of derivative instruments for risk management is covered by operating policies and is closely monitored by our senior management. We do not hold any derivatives for speculative purposes and do not use derivatives with leveraged or complex features. We have not designated the derivative contracts as hedges for accounting purposes, and accordingly, we record the derivative contracts at fair value and recognize changes in fair value in earnings as they occur.

Commodity price derivatives

To the extent that a legal right of offset exists, we net the value of our derivative contracts with the same counterparty in our consolidated balance sheets. All of our oil derivative contracts are settled based upon Brent crude oil pricing.  We recognize gains and losses related to these contracts on a fair value basis in our consolidated statements of operations and comprehensive (loss) income under the caption “Gain (loss) on derivative contracts.” Settlements of derivative contracts are included in operating activities on our consolidated statements of cash flows under the caption “Cash settlement on derivative contracts.”

At September 30, 2019, we had outstanding derivative contracts with respect to our future crude oil production as set forth in the table below:

Fair Value of Commodity Derivative Instruments as of September 30, 2019
				Weighted		Weighted
				Average		Average
		Quantity		Minimum		Maximum Price		Additional Call		Estimated Fair
Type	Period	(Bbl/day)		Price (per Bbl)		(per Bbl)		Ceiling		Value of Asset
										(in thousands)
Three-way collar	October 1, 2019 - April 30, 2020		1,000	$	55.00	$	72.90	$	80.00	$	384
Total estimated fair value of asset										$	384

As of December 31, 2018, we had no outstanding derivative contracts with respect to our future crude oil production.

Foreign currency derivatives

To the extent that a legal right of offset exists, we net the value of our derivative contracts with the same counterparty in our consolidated balance sheets. All of our foreign exchange derivative contracts are settled based upon the contract rate. We recognize gains and losses related to these contracts on a fair value basis in our consolidated statements of operations and comprehensive (loss) income under the caption “Gain (loss) on derivative contracts.” Settlements of derivative contracts are included in operating activities on our consolidated statements of cash flows under the caption “Cash settlement on derivative contracts.”

At September 30, 2019, we had outstanding foreign exchange derivative contracts as set forth in the table below:

Fair Value of Foreign Exchange Derivative Instruments as of September 30, 2019

Buy

Sell

Estimated Fair

Type

Buy/Sell

Rate

Settlement Date

Buy Currency

Currency Amount

Sell Currency

Currency Amount

Value of Asset (Liability)

(in thousands)

FXOPT

Buy

6.090

10/28/19

USD

1,400,000

TRY

8,526,000

(414

)

Total estimated fair value of liability

$

(414

)

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During the three months ended September 30, 2019 and 2018, we recorded a net gain on derivative contracts of $0.4 million and a net loss of $1.3 million, respectively.  During the nine months ended September 30, 2019 and 2018, we recorded a net loss on derivative contracts of $0.03 million and $5.2 million, respectively.

Balance sheet presentation

The following table summarizes both: (i) the gross fair value of our derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in our consolidated balance sheets at September 30, 2019, and (ii) the net recorded fair value as reflected on our consolidated balance sheet at September 30, 2019.

		As of September 30, 2019
					Gross
					Amount		Net Amount of
		Gross			Offset in the		Assets (Liabilities)
		Amount of			Consolidated		Presented in the
	Location on Consolidated	Recognized			Balance		Consolidated
Type of Derivative Contract	Balance Sheets	Assets (Liabilities)			Sheets		Balance Sheets
		(in thousands)
Foreign exchange	Current liabilities	$	(414	)	$	-	$	(414	)
Commodity - crude oil	Current assets	$	384		$	-	$	384

As of December 31, 2018, we had no outstanding derivative contracts with respect to foreign exchange.

7. Loans payable

As of the dates indicated, our third-party debt consisted of the following:

	September 30,		December 31,
	2019		2018
Fixed and Floating Rate Loans	(in thousands)
Term Loans (1)	$	25,450	$	22,000
Unsecured line of credit		605		-
Less: current portion		18,912		22,000
Long-term portion	$	7,143	$	–

_________________________________________________________

(1) Includes the 2019 Term Loan, the 2018 Term Loan, and the 2017 Term Loan (each as defined below and collectively, “Term Loans”).

On August 23, 2016, the Turkish branch of TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”) entered into a Credit Agreement (the “Credit Agreement”) with DenizBank, A.S. (“DenizBank”). The Credit Agreement is a master agreement pursuant to which DenizBank may make loans to TEMI from time to time pursuant to additional loan agreements.

2016 Term Loan

On August 31, 2016, DenizBank entered into a $30.0 million term loan (the “2016 Term Loan”) with TEMI under the Credit Agreement. In addition, we and DenizBank entered into additional agreements with respect to up to $20.0 million of non-cash facilities, including guarantee letters and treasury instruments for future hedging transactions.

The 2016 Term Loan bore interest at a fixed rate of 5.25% (plus 0.2625% for Banking and Insurance Transactions Tax per the Turkish government) per annum and was payable in six monthly installments of $1.25 million each through February 2017 and thereafter in twelve monthly installments of $1.88 million each through February 2018. On April 27, 2017, TEMI and DenizBank approved a revised amortization schedule for the 2016 Term Loan. Pursuant to the revised amortization schedule, the maturity date of the 2016 Term Loan was extended from February 2018 to June 2018, and the monthly principal payments were reduced from $1.88 million to $1.38 million. The other terms of the 2016 Term Loan remained unchanged. Amounts repaid under the 2016 Term Loan could not be re-borrowed and early repayments under the 2016 Term Loan were subject to early repayment fees.

The 2016 Term Loan was guaranteed by DMLP, Ltd. (“DMLP”), TransAtlantic Turkey, Ltd. (“TransAtlantic Turkey”), Talon Exploration, Ltd. (“Talon Exploration”), and TransAtlantic Worldwide, Ltd. (“TransAtlantic Worldwide”).

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The 2016 Term Loan contained standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters.In addition, the 2016 Term Loan prohibited Amity Oil International Pty Ltd (“Amity”) and Petrogas Petrol Gaz ve Petrokimya Urunleri Insaat Sanayi ve Ticaret A.S. (“Petrogas”) from incurring additional debt.An event of default under the 2016 Term Loan included, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2016 Term Loan was secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim ve Ticaret A.S. (“Gundem Yatirim”), and (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Selami Erdem Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2016 Term Loan. Gundem Yatirim is beneficially owned by Mr. Mitchell, his adult children, and Mr. Uras. Mr. Mitchell is our chief executive officer and chairman of our board of directors. Mr. Uras is our executive vice president, Turkey.

On June 28, 2018, we repaid the 2016 Term Loan in full in accordance with its terms.

2017 Term Loan

On November 17, 2017, DenizBank entered into a $20.4 million term loan (the “2017 Term Loan”) with TEMI under the Credit Agreement.

The 2017 Term Loan bears interest at a fixed rate of 6.0% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2017 Term Loan had a grace period which bore no interest or payments due until July 2018. Thereafter, the 2017 Term Loan is payable in one monthly installment of $1.38 million, nine monthly installments of $1.2 million each through April 2019 and thereafter in eight monthly installments of $1.0 million each through December 2019, with the exception of one monthly installment of $1.2 million occurring in October 2019. The 2017 Term Loan matures in December 2019. Amounts repaid under the 2017 Term Loan may not be re-borrowed, and early repayments under the 2017 Term Loan are subject to early repayment fees. The 2017 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.  

The 2017 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2017 Term Loan prohibits Amity and Petrogas from incurring additional debt. An event of default under the 2017 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2017 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2017 Term Loan.

At September 30, 2019, we had $3.2 million outstanding under the 2017 Term Loan and no availability, and we were in compliance with the covenants in the 2017 Term Loan.

2018 Term Loan

On May 28, 2018, DenizBank entered into a $10.0 million term loan (the “2018 Term Loan”) with TEMI under the Credit Agreement.

The 2018 Term Loan bears interest at a fixed rate of 7.25% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2018 Term Loan had a grace period through July 2018 during which no payments were due. Thereafter, accrued interest on the 2018 Term Loan is payable monthly and the principal on the 2018 Term Loan is payable in five monthly installments of $0.2 million each through December 2018, four monthly installments of $0.5 million each through April 2019, four monthly installments of $1.0 million each through August 2019, and four monthly installments of $0.75 million each through December 2019. The 2018 Term Loan matures in December 2019. Amounts repaid under the 2018 Term Loan may not be reborrowed, and early repayments under the 2018 Term Loan are subject to early repayment fees. The 2018 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2018 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or

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transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2018 Term Loan prohibits Amity, Talon Exploration, DMLP, and TransAtlantic Turkey from incurring additional debt. An event of default under the 2018 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2018 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2018 Term Loan.

At September 30, 2019, we had $2.3 million outstanding under the 2018 Term Loan and no availability, and we were in compliance with the covenants in the 2018 Term Loan.

2019 Term Loan

On February 22, 2019, DenizBank entered into a $20.0 million term loan (the “2019 Term Loan”) with TEMI under the Credit Agreement.

The 2019 Term Loan bears interest at a fixed rate of 7.5% (plus 0.375% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2019 Term Loan has a grace period through December 2019 during which no payments are due. Thereafter, accrued interest on the 2019 Term Loan is payable monthly, and the principal on the 2019 Term Loan is payable in 14 monthly installments of $1.4 million each. The 2019 Term Loan matures in February 2021. Amounts repaid under the 2019 Term Loan may not be reborrowed, and early repayments under the 2019 Term Loan are subject to early repayment fees. The 2019 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2019 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2019 Term Loan prohibits Amity, Talon Exploration, DMLP, and TransAtlantic Turkey from incurring additional debt. An event of default under the 2019 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2019 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2019 Term Loan.

At September 30, 2019, we had $20.0 million outstanding under the 2019 Term Loan and no availability, and we were in compliance with the covenants in the 2019 Term Loan.

Unsecured lines of credit

Our wholly-owned subsidiaries operating in Turkey are party to unsecured, non-interest bearing lines of credit with a Turkish bank. At September 30, 2019, we had $0.6 million outstanding borrowings under these lines of credit.

8. Leases

Operating leases

We lease office space in Dallas, Texas, Bulgaria, and Turkey.  We also lease apartments, vehicles, and operations yards in Turkey.    The terms of our lease agreements generally range from one to five years, and some contain options to renew or cancel. We determine if an arrangement meets the definition of a lease at inception, at which time we also perform an analysis to determine whether the lease qualifies as an operating or financing lease. We currently do not have any financing leases.

Operating leases are included in prepaid and other current assets and other assets and accrued liabilities (current and long-term) on our consolidated balance sheet.  Lease expense for our operating leases is recognized in our consolidated statements of operations and comprehensive (loss) income under the caption “General and administrative”.  Lease expense for our operating leases for our

15

operations yards in Turkey is recognized in our consolidated statements of operations and comprehensive (loss) income under the caption “Production”.

Lease right-of-use assets and lease liabilities are measured using the present value of future minimum lease payments over the lease term at commencement date. The right-of-use asset also includes any lease payments made on or before the commencement date of the lease, less any lease incentives received. As the rate implicit in the lease is not readily determinable in our leases, we use our incremental borrowing rates based on the information available at the lease commencement date in determining the present value of lease payments.

For leases with an initial non-cancelable lease term of less than one year and no option to purchase, we have elected not to recognize the lease on our consolidated balance sheets and instead recognize lease payments on a straight-line basis over the lease term.

Operating lease costs were comprised of the following:

	September 30, 2019
	(in thousands)
Operations yards	$	439
Office rent		176
Vehicles		103
Other		62
Total lease costs	$	780

Future non-cancelable minimum lease payments under our operating lease commitments as of September 30, 2019 were as follows for each of the next five years and thereafter:

	September 30, 2019
	(in thousands)
Remainder of 2019	$	276
2020		731
2021		658
2022		648
2023		327
2024		-
Thereafter		-
Total	$	2,640
Less: Imputed interest		348
Present value of lease liabilities	$	2,292

As of September 30, 2019, the weighted average remaining lease term in years is 3.8 years and the weighted average discount rate used was 7.6%.  

Future non-cancelable minimum lease payments under our operating lease commitments as of December 31, 2018 were as follows for each of the next five years and thereafter:

	December 31, 2018
	(in thousands)
2019	$	963
2020		710
2021		636
2022		626
2023		316
Thereafter		-
Total	$	3,251

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9. Contingencies relating to production leases and exploration permits

Selmo

We are involved in litigation with persons who claim ownership of a portion of the surface at the Selmo oil field in Turkey. These cases are being vigorously defended by TEMI and Turkish governmental authorities. We do not have enough information to estimate the potential additional operating costs we would incur in the event the purported surface owners’ claims are ultimately successful. Any adjustment arising out of the claims will be recorded when it becomes probable and measurable.

Bulgaria

During 2012, we were notified that the Bulgarian government may seek to recover approximately $2.0 million in contractual obligations under our Aglen exploration permit work program. Due to the Bulgarian government’s January 2012 ban on fracture stimulation and related activities, a force majeure event under the terms of the exploration permit was recognized by the Bulgarian government. Although we invoked force majeure, we recorded $2.0 million in general and administrative expense relating to our Aglen exploration permit during 2012 for this contractual obligation.

In October 2015, the Bulgarian Minister of Energy filed a suit in the Sofia City Court against Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”), claiming $200,000 in liquidated damages for Direct Bulgaria’s alleged failure to fulfill its obligations under the Aglen exploration permit work program. In May 2018, the Sofia City Court concluded that Direct Bulgaria did not fail to fulfill its obligations under the Aglen exploration permit work program as Direct Bulgaria received a force majeure event recognition as a result of a fracture stimulation ban in 2012, imposed by the Bulgarian Parliament, which force majeure event had not been terminated before the expiry of Direct Bulgaria’s obligations under the Aglen exploration permit work program. Additionally, the Sofia City Court concluded that, even if Direct Bulgaria had failed to fulfill its obligations under the Aglen exploration permit work program, the Bulgarian Minister of Energy failed to file suit within the three-year limitation period. Therefore, the Sofia City Court dismissed all claims of the Bulgarian Minister of Energy and ordered the Bulgarian Minister of Energy to pay Direct Bulgaria’s attorney’s fees and legal costs for court experts. In June 2018, the Bulgarian Minister of Energy filed an appeal in the Sofia Court of Appeal. In November 2018, the Sofia Court of Appeal concluded that the judgement of the Sofia City Court was correct and, therefore, dismissed the Bulgarian Minister of Energy’s appeal. In January 2019, the Bulgarian Minister of Energy filed an appeal in the Supreme Court of Cassation. We continue to vigorously defend against this claim.

As a result of the judgement of the Sofia Court of Appeal, we are currently evaluating an adjustment to our contingencies relating to production leases and exploration permits.

10. Shareholders’ equity

Restricted stock units

We recorded share-based compensation expense of $0.1 million for awards of restricted stock units (“RSUs”) for each of the three months ended September 30, 2019 and 2018.  We recorded share-based compensation expense of $0.3 million for awards of RSUs for each of the nine months ended September 30, 2019 and 2018.  

As of September 30, 2019, we had approximately $0.6 million of unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.4 years.

Earnings per share

We account for earnings per share in accordance with ASC Subtopic 260-10, Earnings Per Share (“ASC 260-10”). ASC 260-10 requires companies to present two calculations of earnings per share: basic and diluted. Basic earnings per common share for the three and nine months ended September 30, 2019 and 2018 equals net loss divided by the weighted average shares outstanding during the periods. Weighted average shares outstanding are equal to the weighted average of all shares outstanding for the period, excluding unvested RSUs. Diluted earnings per common share for the three and nine months ended September 30, 2019 and 2018 are computed in the same manner as basic earnings per common share after assuming the issuance of common shares for all potentially dilutive common share equivalents, which includes RSUs and preferred shares, whether exercisable or not. For the three and nine months ended September 30, 2019, there were no dilutive securities included in the calculation of diluted earnings per share.

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The following table presents the basic and diluted earnings per common share computations:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands, except per share amounts)	2019		2018			2019			2018
Net income (loss)	$	1,070	$	(1,720	)	$	(2,841	)	$	(4,501	)
Basic net income (loss) earnings per common share:
Shares:
Weighted average common shares outstanding		57,680		50,597			54,249			50,465
Basic net income (loss) per common share:	$	0.02	$	(0.03	)	$	(0.05	)	$	(0.09	)
Diluted net income (loss) per common share:
Shares:
Weighted average common shares outstanding		57,680		50,597			54,249			50,465
Diluted net income (loss) per common share:	$	0.02	$	(0.03	)	$	(0.05	)	$	(0.09	)

11. Segment information

In accordance with ASC 280, Segment Reporting (“ASC 280”), we have two reportable geographic segments: Turkey and Bulgaria. Summarized financial information from operations concerning our geographic segments is shown in the following table:

	Corporate			Turkey		Bulgaria			Total
	(in thousands)
For the three months ended September 30, 2019
Total revenues	$	-		$	14,653	$	-		$	14,653
(Loss) income from operations before income taxes		(3,984	)		5,932		(628	)		1,320
Capital expenditures	$	-		$	9,696	$	487		$	10,183
For the three months ended September 30, 2018
Total revenues	$	-		$	20,140	$	-		$	20,140
(Loss) income from operations before income taxes		(2,995	)		7,184		(52	)		4,137
Capital expenditures	$	-		$	6,087	$	-		$	6,087
For the nine months ended September 30, 2019
Total revenues	$	-		$	50,909	$	-		$	50,909
(Loss) income from operations before income taxes		(9,524	)		20,304		(6,582	)		4,198
Capital expenditures	$	-		$	20,424	$	5,537		$	25,961
For the nine months ended September 30, 2018
Total revenues	$	-		$	55,264	$	-		$	55,264
(Loss) income from operations before income taxes		(11,230	)		15,160		(173	)		3,757
Capital expenditures	$	-		$	17,708	$	-		$	17,708
Segment assets
September 30, 2019	$	8,842		$	133,806	$	625		$	143,273
December 31, 2018	$	8,358		$	122,325	$	1,917		$	132,600

12. Financial instruments

Interest rate risk

We are exposed to interest rate risk as a result of our variable rate short-term cash holdings.

Foreign currency risk

We have underlying foreign currency exchange rate exposure. Our currency exposures primarily relate to transactions denominated in the Bulgarian Lev, the European Union Euro, and the TRY. We are also subject to foreign currency exposures resulting from translating the functional currency of our subsidiary financial statements into the USD reporting currency. At September 30, 2019, we had 38.0 million TRY (approximately $6.7 million) in cash and cash equivalents, which exposes us to exchange rate risk based on fluctuations in the value of the TRY. At September 30, 2019, we were a party to foreign exchange derivative contracts (See Note 6. “Derivative instruments”).

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Commodity price risk

We are exposed to fluctuations in commodity prices for oil and natural gas. Commodity prices are affected by many factors, including, but not limited to, supply and demand.  At September 30, 2019, we were a party to commodity derivative contracts (See Note 6. “Derivative instruments”). At December 31, 2018, we were not party to any commodity derivative contracts.

Concentration of credit risk

The majority of our receivables are within the oil and natural gas industry, primarily from our industry partners and from government agencies. Included in receivables are amounts due from Turkiye Petrolleri Anonim Ortakligi (“TPAO”), the national oil company of Turkey, Zorlu Dogal Gaz Ithalat Ihracat ve Toptan Ticaret A.S. (“Zorlu”), a privately owned natural gas distributor in Turkey, and TUPRAS, which purchase the majority of our oil and natural gas production. The receivables are not collateralized. To date, we have experienced minimal bad debts and have no allowance for doubtful accounts for TUPRAS. The majority of our cash and cash equivalents are held by four financial institutions in the United States and Turkey.

Fair value measurements

Cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and our loans payable were each estimated to have a fair value approximating the carrying amount at September 30, 2019 and December 31, 2018, due to the short maturity of those instruments.

The following table summarizes the valuation of our financial assets and liabilities as of September 30, 2019:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other			Significant
	Liabilities		Observable Inputs			Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	384		$	-		$	384
Liabilities:
Foreign exchange derivative contracts	$	-	$	(414	)	$	-		$	(414	)
Disclosed but not carried at fair value
Liabilities:
2019 Term Loan		-		-			(17,349	)		(17,349	)
2018 Term Loan		-		-			(2,189	)		(2,189	)
2017 Term Loan		-		-			(3,116	)		(3,116	)
Total	$	-	$	-		$	(22,654	)	$	(22,654	)

The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2018:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Disclosed but not carried at fair value
Liabilities:
2018 Term Loan		-		-		(8,192	)		(8,192	)
2017 Term Loan		-		-		(11,938	)		(11,938	)
Total	$	-	$	-	$	(20,130	)	$	(20,130	)

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We remeasure our derivative contracts on a recurring basis, with changes flowing through earnings.At September 30, 2019 and December 31, 2018, the fair values of the2019 Term Loan, the 2018 Term Loan, and the 2017 Term Loanwere estimated using a discounted cash flow analysis based on unobservable Level 3 inputs, including our own credit risk associated with the loans payable.

13. Related party transactions

The following table summarizes related party accounts receivable and accounts payable as of the dates indicated:

	September 30,		December 31,
	2019		2018
	(in thousands)
Related party accounts receivable:
Service Agreement	$	381	$	526
PSI MSA		472	352
Total related party accounts receivable	$	853	$	878
Related party accounts payable:
Service Agreement	$	127	$	372
PSI MSA		3,425		2,439
Other - board of directors fees		-		111
Total related party accounts payable	$	3,552	$	2,922

Services transactions

We are a party to a Service Agreement (as amended, the “Service Agreement”) with Longfellow Energy, LP (“Longfellow”), Viking Drilling, LLC (“Viking Drilling”), Riata Management, LLC (“Riata”), LFN Holdco LLC (“LFN”), Red Rock Minerals, LP (“RRM”), Red Rock Minerals II, LP (“RRM II”), Red Rock Advisors, LLC (“RRA”), Production Solutions International Limited (“PSIL”), and NexLube Operating, LLC (“NexLube”) and their subsidiaries (collectively, the “Riata Entities”), under which we and the Riata Entities agreed to provide technical and administrative services to each other from time to time on an as-needed basis. Under the terms of the Service Agreement, the Riata Entities agree to provide us upon our request certain computer services, payroll and benefits services, insurance administration services, and entertainment services, and we and the Riata Entities agree to provide to each other certain management consulting services, oil and natural gas services, and general accounting services (collectively, the “Services”). Under the terms of the Service Agreement, we pay, or are paid, for the actual cost of the Services rendered plus the actual cost of reasonable expenses on a monthly basis. We or any Riata Entity may terminate the Service Agreement at any time by providing advance notice of termination to the other parties.

As of September 30, 2019, we had $0.4 million of outstanding receivables and $0.1 million of outstanding payables pursuant to the Service Agreement.

On March 3, 2016, Mr. Mitchell closed a transaction whereby he sold his interests in Viking Services B.V. (“Viking Services”), the beneficial owner of Viking International Limited (“Viking International”), Viking Petrol Sahasi Hizmetleri A.S. (“VOS”) and Viking Geophysical Services Ltd. (“Viking Geophysical”), to a third party. As part of the transaction, Mr. Mitchell acquired certain equipment used in the performance of stimulation, wireline, workover, and similar services, which equipment is owned and operated by Production Solutions International Petrol Arama Hizmetleri Anonim Sirketi (“PSI”). PSI is beneficially owned by PSIL, which is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. Consequently, on March 3, 2016, TEMI entered into a master services agreement (the “PSI MSA”) with PSI on substantially similar terms to our then current master services agreements with Viking International, VOS, and Viking Geophysical. Pursuant to the PSI MSA, PSI performs the services on behalf of TEMI and its affiliates. On February 28, 2019, TEMI and PSI entered into an amendment (the “PSI MSA Amendment”) to the PSI MSA, pursuant to which PSI and TEMI agreed to extend the primary term of the PSI MSA to February 26, 2021, with automatic successive renewal terms of one (1) year each, unless terminated by PSI or TEMI by written notice at least sixty (60) days prior to the end of the primary term or any successive renewal term. The master services agreement with each of Viking International, VOS, and Viking Geophysical currently remain in effect.

As of September 30, 2019, we had $0.5 million of outstanding receivables and $3.4 million of outstanding payables pursuant to the PSI MSA.

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Office sublease

On August 7, 2018 and effective as of June 14, 2018, TransAtlantic USA entered into a sublease agreement (the “Sublease”) with Longfellow to lease corporate office space located at 16803 North Dallas Parkway, Addison, Texas. The Sublease was approved by the audit committee of the board of directors.

TransAtlantic USA subleases approximately 10,000 square feet of corporate office space in Addison, Texas. The initial lease term under the Sublease commenced on June 14, 2018 (the “Commencement Date”) and expires on June 30, 2020, unless earlier terminated in accordance with the Sublease. From the Commencement Date until June 30, 2019, TransAtlantic USA was required to pay monthly rent of $18,333.33 to Longfellow, plus utilities, real property taxes, and liability insurance (to the extent that TransAtlantic USA does not obtain its own liability insurance). The monthly rent increased by $416.67 for the period commencing June 30, 2019 and ending June 30, 2021.

Pursuant to the Sublease, effective as of June 14, 2018, TransAtlantic USA and Longfellow agreed to terminate the Amended and Restated Office Lease, dated June 26, 2017, by and between TransAtlantic USA and Longfellow.

Series A Preferred Shares Dividends

During the nine months ended September 30, 2019, we issued an aggregate of 4,985,732 common shares to holders of the Series A Preferred Shares as payment of the June 30, 2019 and September 30, 2019 quarterly dividends on the Series A Preferred Shares. Of the 4,985,732 common shares, 2,224,903 common shares were issued to Dalea Partners, LP (“Dalea”), Longfellow, and the trusts of Mr. Mitchell’s four adult children.

Dalea Note and Pledge Agreement

On June 13, 2012, we closed the sale of our oilfield services business, which was substantially comprised of our wholly owned subsidiaries, Viking International and Viking Geophysical, to a joint venture owned by Dalea and funds advised by Abraaj Investment Management Limited for an aggregate purchase price of $168.5 million, consisting of approximately $157.0 million in cash and a $11.5 million promissory note from Dalea (the “Original Note”). The promissory note bore interest at a rate of 3.0% per annum and was guaranteed by Mr. Mitchell. The promissory note was payable five years from the date of issuance or earlier upon the occurrence of certain specified events.

On April 19, 2016, we entered into a note amendment agreement (the “Note Amendment Agreement”) with Mr. Mitchell and Dalea, pursuant to which Dalea agreed to deliver an amended and restated promissory note (the “Amended Note”) in favor of us, in the principal sum of $8.0 million, which Amended Note would amend and restate that certain Promissory Note, dated June 13, 2012, made by Dalea in favor of us in the principal amount of $11.5 million (the “Original Note”). The Note Amendment Agreement reduced the principal amount of the Original Note to $8.0 million in exchange for the cancellation of an account payable of approximately $3.5 million (the “Account Payable”) owed by TransAtlantic Albania Ltd. (“TransAtlantic Albania”), our former subsidiary, to Viking International.

In the Amended Note, we and Dalea acknowledged that (i) while the sale of Dalea’s interest in Viking Services enabled us to take the position that the Original Note was accelerated in accordance with its terms, the principal purpose of including the acceleration events in the Original Note was to ensure that certain oilfield services provided by Viking Services to us would continue to be available to us, and (ii) such services will now be provided pursuant to the PSI MSA. PSI is beneficially owned by PSIL, which is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. As a result, the Amended Note revised the events triggering acceleration of the repayment of the Original Note to the following: (i) a reduction of ownership by Dalea (and other controlled affiliates of Mr. Mitchell) of equity interest in PSI to less than 50%; (ii) the sale or transfer by Dalea or PSI of all or substantially all of its assets to any person (a “Transferee”) that does not own a controlling interest in Dalea or PSI and is not controlled by Mr. Mitchell (an “Unrelated Person”), or the subsequent transfer by any Transferee that is not an Unrelated Person of all or substantially all of its assets to an Unrelated Person; (iii) the acquisition by an Unrelated Person of more than 50% of the voting interests of Dalea or PSI; (iv) termination of the PSI MSA other than as a result of an uncured default thereunder by TEMI; (v) default by PSI under the PSI MSA, which default is not remedied within a period of 30 days after notice thereof to PSI; and (vi) insolvency or bankruptcy of PSI. The interest rate on the Amended Note remains at 3.0% per annum and continues to be guaranteed by Mr. Mitchell. The Amended Note contains customary events of default. On February 28, 2019, we and Dalea entered into an amendment (the “Note Amendment”) to the Amended Note (as amended by the Note Amendment, the “Note”), pursuant to which we and Dalea agreed to extend the maturity date of the Note to February 26, 2021 (unless otherwise accelerated in accordance with the terms of the Note).

In addition, pursuant to the Note Amendment Agreement, on April 19, 2016, we entered into a pledge agreement (the “Pledge Agreement”) with Dalea, whereby Dalea pledged the $2.0 million principal amount of the Company’s 13.0% Senior Convertible Notes due 2017 (“Convertible Notes”) owned by Dalea (the “Dalea Convertible Notes”), including any future securities for which the Dalea Convertible Notes are converted or exchanged, as security for the performance of Dalea’s obligations under the Amended Note.

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The Pledge Agreement contains customary events of default. On November 4, 2016, Dalea exchanged $2.0 million of Convertible Notes for 40,000 Series A Preferred Shares.

On June 28, 2019, we and Dalea entered into an amendment to the Pledge Agreement, pursuant to which we and Dalea agreed that any interest payable on the Series A Preferred Shares held by Dalea and pledged under the Pledge Agreement (i) if paid in cash, will be credited first against the outstanding principal balance of the Note and, upon full repayment of the outstanding principal balance of the Note, any accrued and unpaid interest on the Note, and (ii) if paid other than in cash, will be paid to Dalea and, within five business days of such payment to Dalea, Dalea will pay $61,500 toward the principal and, upon full repayment of the outstanding principal balance of the Note, any accrued and unpaid interest on the Note.

During the nine months ended September 30, 2019, we reduced the principal amount of the Note by $1.0 million for amounts prepaid by Dalea on February 28, 2019 in conjunction with the Note Amendment and by $0.2 million as a result of dividends paid on the Series A Preferred Shares.

As of September 30, 2019, the amount receivable under the Note was $4.2 million.

Pledge fee agreements

In connection with the pledge of certain Gundem real estate and Muratli real estate to DenizBank as collateral, on August 31, 2016, we entered into a pledge fee agreement (the “Gundem Fee Agreement”) with Gundem Turizm Yatirim ve Isletme A.S., predecessor-in-interest to Gundem Yatirim with respect to the Gundem real estate and Muratli real estate pledged as collateral for the Term Loans (“Gundem”). Pursuant to the Gundem Fee Agreement, we pay Gundem Yatirim a fee equal to 5% per annum of the collateral value of the Gundem real estate and Muratli real estate pledged as collateral for the Term Loans. Pursuant to the Gundem Fee Agreement, the Gundem real estate has a deemed collateral value of $10.0 million and the Muratli real estate has a deemed collateral value of $5.0 million.

In connection with the pledge of the Diyarbakir real estate to DenizBank as collateral, on August 31, 2016, we entered into a pledge fee agreement with Messrs. Mitchell and Uras (the “Diyarbakir Fee Agreement”) pursuant to which we pay Mr. Mitchell and Mr. Uras a fee of 5% per annum of the collateral value of the Diyarbakir real estate. Pursuant to the Diyarbakir Fee Agreement, the Diyarbakir real estate has a deemed collateral value of $5.0 million.

Amounts payable to Mr. Mitchell under the Gundem Fee Agreement and the Diyarbakir Fee Agreement are used to reduce the outstanding principal amount of the Note. During the nine months ended September 30, 2019, we reduced the principal amount of the Note by $0.5 million for amounts paid under the pledge fee agreements.

14. Subsequent Events

On October 17, 2019, we entered into foreign exchange option and forward contracts to hedge against currency fluctuations between the TRY and USD. The forward contract settlement date was October 31, 2019, and we had an unrealized a loss of $0.1 million. The option contract settlement dates are December 3 and December 30, 2019 for $1.0 million at a strike price of 5.935 TRY to $1.00 USD. 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Quarterly Report on Form 10-Q, references to “we,” “our,” “us” or the “Company,” refer to TransAtlantic Petroleum Ltd. and its subsidiaries on a consolidated basis unless the context requires otherwise. Unless stated otherwise, all sums of money stated in this Quarterly Report on Form 10-Q are expressed in USD.

Executive Overview

We are an international oil and natural gas company engaged in acquisition, exploration, development, and production. We have focused our operations in countries that have established, yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure, and provide favorable commodity pricing, royalty rates, and tax rates to exploration and production companies. As of September 30, 2019, we held interests in 373,948 and 162,500 net acres of developed and undeveloped oil and natural gas properties in Turkey and Bulgaria, respectively. As of November 8, 2019, approximately 46% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

We are a holding company with two operating segments – Turkey and Bulgaria. Our assets consist of our ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

Financial and Operational Performance Summary

The following summarizes our financial and operational performance for the third quarter of 2019:

• We reported $1.1 million of net income for the three months ended September 30, 2019.

• We derived 98.3% of our oil and natural gas revenues from the production of oil and 1.7 % from the production of natural gas during the three months ended September 30, 2019.

• Total oil and natural gas sales revenues decreased 27.6 % to $14.5 million for the quarter ended September 30, 2019 from $20.1 million in the same period in 2018. The decrease was the result of a $15.52 decrease in the average price received per barrel of oil equivalent (“Boe”) and a decrease in sales volumes of 23,000 barrels of oil equivalent (“Mboe”).

• For the quarter ended September 30, 2019, we incurred $10.2 million in capital expenditures, including seismic and corporate expenditures, as compared to $6.1 million for the quarter ended September 30, 2018.

• As of September 30, 2019, we had $7.1 million in long-term debt, $18.9 million in short-term debt, and $46.1 million in Series A Preferred Shares as compared to no long-term debt, $22.0 million in short-term debt, and $46.1 million in Series A Preferred Shares as of December 31, 2018.

Third Quarter 2019 Operational Update

During the third quarter of 2019, we spud two wells and continued workover and recompletion production optimizations in southeastern Turkey.

Southeastern Turkey

Molla

Yeniev Field. In the third quarter of 2019,completion operations continued on the Yeniev-4 well, which had been drilled to a total measured depth of 9,520 feet targeting the Bedinan, Hazro, and Mardin formations. We successfully recovered 84 feet of core from the Bedinan sandstone, which is currently undergoing analysis to assist in infill development planning and secondary recovery evaluation. The well was completed naturally in the lower Bedinan sandstone with an unstimulated initial production rate of 167 barrels of oil per day (“Bopd”).

In the third quarter of 2019, we drilled the Yeniev-5 well to a total measured depth of 7,060 feet targeting the Mardin formation. We successfully recovered 159 feet of core from two intervals within the Mardin, both of which showed live streaming oil on the cores. Completion operations are ongoing.

In October 2019, we drilled the Yeniev-6 well to a total measured depth of 9,650 feet, targeting the Mardin and Bedinan formations. Completion operations are ongoing.

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The West Yeniev-1 well underwent production optimization with the installation of artificial lift in the third quarter of 2019.Production increased to 173 Bopd from 104 Bopd when the well was flowing naturally.Further production optimization is planned in the fourth quarter of 2019 with the goal of further increasing production.

Bahar Field. We drilled the Bahar-12 well in the third quarter of 2019, targeting the Bedinan and Hazro formations. A three-stage Bedinan stimulation was executed. The well had an initial production rate of 382 Bopd flowing naturally. We successfully recovered a total of 274 feet of core from intervals within the Bedinan and Hazro formations. We intend to analyze the cores to assist in optimizing reservoir development.

Bati-Yasince Field. In the third quarter of 2019, we reentered the Bati-Yasince-1 well, targeting the Hazro formation. We drilled the well to a total measured depth of 8,628 feet. Completion operations are ongoing.

Arpatepe Field. In the third quarter of 2019, we engaged in technical design and planning of a water-flood of the Arpatepe field. Following completion of the design and planning, we plan to recomplete the Arpatepe-2 well as a water injection well and execute the first phase of the water-flood.

Selmo

During the third quarter of 2019, we continued recompletion, workover, and production optimization operations in the Selmo field.

Northwestern Turkey

Thrace Basin BCGA

We continue to evaluate our prospects in the Thrace Basin’s Basin Center Gas Accumulation (“Thrace Basin BCGA”) in light of the recent exploration activity by Valeura Energy Inc. with its partner Equinor ASA (formerly Statoil ASA) on a license directly adjacent to our 120,000 net acres in the Thrace Basin of which we believe approximately 50,000 net acres (100% working interest, 87.5% net revenue interest) is in the Thrace Basin BCGA.

In the second quarter of 2019, we drilled the Karli-1 well to a total measured depth of 1,289 feet and encountered several shallow gas sand intervals. While the shallow gas horizon proved non-productive, the well is strategically positioned to test our Thrace Basin BCGA acreage.

Bulgaria

We are currently evaluating future activity in Bulgaria.

Planned Operations

We expect our net field capital expenditures for the remainder of 2019 to range between $2.5 million and $5.0 million for drilling and completion expenses.

We expect that cash on hand and cash flow from operations will be sufficient to fund the remainder of our 2019 net field capital expenditures. If not, we will either curtail our discretionary capital expenditures or seek other funding sources. Our projected remaining 2019 capital expenditure budget is subject to change.

Significant Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. Our significant accounting policies are described in Note 3. “Significant accounting policies” to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 and are of particular importance to the portrayal of our financial position and results of operations and require the application of significant judgment by management. These estimates are based on historical experience, information received from third parties, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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Results of Operations—Three Months Ended September30, 2019 Compared to Three Months Ended September 30, 2018

Our results of operations for the three months ended September 30, 2019 and 2018 were as follows:

	Three Months Ended September 30,						Change
	2019			2018			2019-2018
	(in thousands of U.S. Dollars, except per unit amounts and production volumes)
Sales volumes:
Oil (Mbbl)		237			261			(24	)
Natural gas (Mmcf)		47			45			2
Total production (Mboe)		245			268			(23	)
Average daily sales volumes (Boepd)		2,662			2,917			(255	)
Average prices:
Oil (per Bbl)	$	60.12		$	76.32		$	(16.20	)
Natural gas (per Mcf)	$	6.18		$	4.23		$	1.95
Oil equivalent (per Boe)	$	59.37		$	74.89		$	(15.52	)
Revenues:
Oil and natural gas sales	$	14,543		$	20,098		$	(5,555	)
Other		110			42			68
Total revenues		14,653			20,140			(5,487	)
Costs and expenses (income):
Production		3,162			2,307			855
Transportation and processing		1,262			1,054			208
Exploration, abandonment and impairment		488			162			326
Seismic and other geological and geophysical		48			122			(74	)
General and administrative		2,503			2,539			(36	)
Depletion		2,885			2,800			85
Depreciation and amortization		136			138			(2	)
Interest and other expense		2,780			2,776			4
Interest and other income		(381	)		(211	)		(170	)
Foreign exchange loss		797			2,991			(2,194	)
Gain (loss) on derivative contracts:
Cash settlements on derivative contracts		-			(510	)		510
Change in fair value on derivative contracts		403			(780	)		1,183
Total gain (loss) on derivative contracts		403			(1,290	)		1,693
Oil and natural gas costs per Boe:
Production	$	11.30		$	7.52		$	3.78
Depletion	$	10.31		$	9.13		$	1.18

Oil and Natural Gas Sales. Total oil and natural gas sales revenues decreased to $14.5 million for the three months ended September 30, 2019 from $20.1 million for the same period in 2018. The decrease was primarily due to a decrease in the average realized price per Boe and a decrease in the average daily sales volumes. Our average price received decreased $15.52 per Boe to $59.37 per Boe for the three months ended September 30, 2019 from $74.89 per Boe for the same period in 2018. Our average daily sales volumes decreased 255 Boe per day (“Boepd”) for the three months ended September 30, 2019 as compared to the same period in 2018.

Production. Production expenses increased to $3.2 million, or $11.30 per Boe, for the three months ended September 30, 2019 from $2.3 million, or $7.52 per Boe for the same period in 2018. The increase was primarily due to increased costs for electricity, rental equipment, and diesel fuel consumption associated with new wells on production and the devaluation of the TRY as compared to the same period in 2018.

Transportation and Processing. Transportation and processing expense increased to $1.3 million for the three months ended September 30, 2019 from $1.1 million for the same period in 2018. The increase in transportation expenses was primarily due to an increase in the service cost per barrel as compared to the same period in 2018.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment cost increased to $0.5 million for the three months ended September 30, 2019 from $0.2 million for the same period in 2018. The increase was due to the exploratory dry hole write-off of the Deventci R-1 well.

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General and Administrative. General and administrative expensewas flat at $2.5million for each of the three months ended September30, 2019 and 2018.

Depletion. Depletion expense increased to $2.9 million, or $10.31 per Boe, for the three months ended September 30, 2019 from $2.8 million, or $9.13 per Boe, for the same period of 2018. The increase was primarily due to an increase to our proved properties during the three months ended September 30, 2019.

Interest and Other Expense. Interest and other expense was flat at $2.8 million for each of the three months ended September 30, 2019 and 2018.

Foreign Exchange Loss. We recorded a foreign exchange loss $0.8 million for the three months ended September 30, 2019 as compared to $3.0 million for the same period in 2018. Foreign exchange gains and losses are primarily unrealized (non-cash) in nature and result from the re-measuring of specific transactions and monetary accounts in a currency other than the functional currency. For example, a USD transaction which occurs in Turkey is re-measured at the period-end to the TRY amount if it has not been settled previously. Generally, a strengthening of the USD relative to the TRY increases our foreign exchange loss.

Gain (Loss) on Derivative Contracts. We recorded a net gain on derivative contracts of $0.4 million for the three months ended September 30, 2019 as compared to a net loss of $1.3 million for the same period in 2018. During the three months ended September 30, 2019, we recorded a $0.4 million gain to mark our commodity and currency derivative contracts to their fair value. During the same period in 2018, we recorded a $0.8 million loss to mark our commodity derivative contracts to their fair value and a $0.5 million loss on settled contracts.

26

Results of Operations—NineMonths Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

Our results of operations for the nine months ended September 30, 2019 and 2018 were as follows:

	Nine Months Ended September 30,						Change
	2019			2018			2019-2018
	(in thousands of U.S. Dollars, except per unit amounts and production volumes)
Sales volumes:
Oil (Mbbl)		760			750			10
Natural gas (Mmcf)		145			168			(23	)
Total production (Mboe)		784			778			6
Average daily sales volumes (Boepd)		2,871			2,839			32
Average prices:
Oil (per Bbl)	$	65.42		$	72.09		$	(6.67	)
Natural gas (per Mcf)	$	5.84		$	4.74		$	1.10
Oil equivalent (per Boe)	$	64.48		$	70.52		$	(6.04	)
Revenues:
Oil and natural gas sales	$	50,537		$	54,859		$	(4,322	)
Other		372			405			(33	)
Total revenues		50,909			55,264			(4,355	)
Costs and expenses (income):
Production		8,376			7,980			396
Transportation and processing		3,802			3,385			417
Exploration, abandonment and impairment		6,267			393			5,874
Seismic and other geological and geophysical		233			340			(107	)
General and administrative		8,247			9,662			(1,415	)
Depletion		9,779			10,142			(363	)
Depreciation and amortization		400			531			(131	)
Interest and other expense		8,011			7,649			362
Interest and other income		(776	)		(842	)		66
Foreign exchange loss		2,185			6,987			(4,802	)
Loss on derivative contracts:
Cash settlements on derivative contracts		-			(3,710	)		3,710
Change in fair value on derivative contracts		(30	)		(1,446	)		1,416
Total loss on derivative contracts		(30	)		(5,156	)		5,126
Oil and natural gas costs per Boe:
Production	$	9.35		$	8.97		$	0.38
Depletion	$	10.92		$	11.42		$	(0.50	)

Oil and Natural Gas Sales. Total oil and natural gas sales revenues decreased to $50.5 million for the nine months ended September 30, 2019 from $54.9 million for the same period in 2018. The decrease was primarily due to a decrease in the average realized price per Boe. Our average price received decreased $6.04 per Boe to $64.48 per Boe for the nine months ended September 30, 2019 from $70.52 per Boe for the same period in 2018. This was partially offset by an increase in our average daily sales volumes of 32 Boepd for the nine months ended September 30, 2019 as compared to the same period in 2018.

Production. Production expenses increased to $8.4 million, or $9.35 per Boe, for the nine months ended September 30, 2019 from $8.0 million, or $8.97 per Boe, for the same period in 2018. The increase was primarily due to increased costs for electricity, rental equipment and diesel fuel consumption associated with new wells on production.

Transportation and Processing. Transportation and processing expense increased to $3.8 million for the nine months ended September 30, 2019 from $3.4 million for the same period in 2018. The increase in transportation expenses was primarily due to the increase in our average daily sales volumes of 32 Boepd and an increase in the service cost per barrel as compared to the same period in 2018.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment cost increased to $6.3million for the nine months ended September 30, 2019 from $0.4 million for the same period in 2018. The increase was due to the exploratory dry hole write-off of the Deventci R-1 well.

27

General and Administrative. General and administrative expense decreased to $8.2 million for the nine months ended September 30, 2019 from $9.7 million for the same period in 2018. The decrease was primarily due to a decrease in professional and accounting fees associated with the evaluation of strategic alternatives in 2018.

Depletion. Depletion expense decreased to $9.8 million, or $10.92 per Boe, for the nine months ended September 30, 2019 from $10.1 million, or $11.42 per Boe, for the same period of 2018. The decrease was primarily due to the devaluation of the TRY to the USD.

Interest and Other Expense. Interest and other expense increased to $8.0 million for the nine months ended September 30, 2019 from $7.6 million for the same period in 2018. The increase was due to paying our Series A Preferred dividend in common shares and our higher average debt balances outstanding during the nine months ended September 30, 2019 versus the same period in 2018.

Foreign Exchange Loss. We recorded a foreign exchange loss of $1.9 million for the nine months ended September 30, 2019 as compared to $7.0 million for the same period in 2018. Foreign exchange gains and losses are primarily unrealized (non-cash) in nature and result from the re-measuring of specific transactions and monetary accounts in a currency other than the functional currency. For example, a USD transaction which occurs in Turkey is re-measured at the period-end to the TRY amount if it has not been settled previously. Generally, a strengthening of the USD relative to the TRY increases our foreign exchange loss. The foreign exchange loss for the nine months ended September 30, 2019 was due to a decrease in the value of the TRY compared to the USD. From December 31, 2018 to September 30, 2019, the TRY to the USD declined 7.6%. At September 30, 2019, the exchange rate was 5.6591 as compared to 5.2609 at December 31, 2018.

Loss on Derivative Contracts. We recorded a net loss on derivative contracts of $0.03 million for the nine months ended September 30, 2019 as compared to $5.2 million for the same period in 2018. During the nine months ended September 30, 2019, we recorded a $0.03 million loss to mark our commodity and currency derivative contracts to their fair value. During the same period in 2018, we recorded a $1.4 million loss to mark our commodity derivative contracts to their fair value and a $3.7 million loss on settled contracts.

Capital Expenditures

For the three months ended September 30, 2019, we incurred $10.2 million in capital expenditures, including seismic and corporate expenditures, as compared to $6.1 million for the same period in 2018.

We expect our net field capital expenditures for the remainder of 2019 to range between $2.5 million and $5.0 million for drilling and completion expenses. We expect that cash on hand and cash flow from operations will be sufficient to fund the remainder of our 2019 net field capital expenditures. If not, we will either curtail our discretionary capital expenditures or seek other funding sources. Our projected remaining 2019 capital expenditure budget is subject to change.

Cash flows

Net cash provided by operating activities during the nine months ended September 30, 2019 was $25.7 million, an increase from net cash provided by operating activities of $25.2 million for the same period in 2018. The increase was primarily due to an increase in our operating assets and liabilities and a decrease in our net loss.

Net cash used in investing activities during the nine months ended September 30, 2019 was $25.2 million, an increase from net cash used in investing activities of $21.0 million for the same period in 2018. The increase was primarily due to an increase in our capital expenditures as compared to the same period in 2018.

Net cash provided by financing activities during the nine months ended September 30, 2019 was $5.0 million, an increase from net cash used in financing activities of $2.4 million for the same period in 2018. The change was primarily due to an increase in our outstanding loans.

Liquidity and Capital Resources

As of September 30, 2019, we had $26.1 million of indebtedness, not including $9.6 million of trade payables, as further described below. We believe that our cash flow from operations will be sufficient to meet our normal operating requirements and to fund planned capital expenditures during the next 12 months. As of September 30, 2019, we had a working capital surplus of $3.5 million.

28

Outstanding Debt and Series A Preferred Shares

2017 Term Loan.On November 17, 2017, DenizBank entered into the 2017 Term Loan under the Credit Agreement. The 2017 Term Loan bears interest at a fixed rate of 6.0% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2017 Term Loan had a grace period which bore no interest or payments due until July 2018. Thereafter, the 2017 Term Loan is payable in one monthly installment of $1.38 million, nine monthly installments of $1.2 million each through April 2019 and thereafter in eight monthly installments of $1.0 million each through December 2019, with the exception of one monthly installment of $1.2 million occurring in October 2019. The 2017 Term Loan matures in December 2019. Amounts repaid under the 2017 Term Loan may not be re-borrowed, and early repayments under the 2017 Term Loan are subject to early repayment fees. The 2017 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2017 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2017 Term Loan prohibits Amity and Petrogas from incurring additional debt. An event of default under the 2017 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties and obligations, bankruptcy or insolvency and the occurrence of a material adverse effect.

The 2017 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2017 Term Loan.

At September 30, 2019, we had $3.2 million outstanding under the 2017 Term Loan and no availability, and we were in compliance with the covenants in the 2017 Term Loan.

2018 Term Loan. On May 28, 2018, DenizBank entered into the 2018 Term Loan under the Credit Agreement. The 2018 Term Loan bears interest at a fixed rate of 7.25% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2018 Term Loan had a grace period through July 2018 during which no payments were due. Thereafter, accrued interest on the 2018 Term Loan is payable monthly and the principal on the 2018 Term Loan is payable in five monthly installments of $0.2 million each through December 2018, four monthly installments of $0.5 million each through April 2019, four monthly installments of $1.0 million each through August 2019, and four monthly installments of $0.75 million each through December 2019. The 2018 Term Loan matures in December 2019. Amounts repaid under the 2018 Term Loan may not be reborrowed, and early repayments under the 2018 Term Loan are subject to early repayment fees. The 2018 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2018 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2018 Term Loan prohibits Amity, Talon Exploration, DMLP, and Transatlantic Turkey from incurring additional debt. An event of default under the 2018 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2018 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI will assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2018 Term Loan.

At September 30, 2019, we had $2.3 million outstanding under the 2018 Term Loan and no availability, and we were in compliance with the covenants in the 2018 Term Loan.

2019 Term Loan. On February 22, 2019, DenizBank entered into the 2019 Term Loan under the Credit Agreement.

The 2019 Term Loan bears interest at a fixed rate of 7.5% (plus 0.375% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2019 Term Loan had a grace period through December 2019 during which no payments are due. Thereafter, accrued interest on the 2019 Term Loan is payable monthly and the principal on the 2019 Term Loan is payable in 14 monthly installments of $1.4 million each. The 2019 Term Loan matures in February 2021. Amounts repaid under the 2019 Term

29

Loan may not be reborrowed, and early repayments under the 2019 Term Loan are subject to early repayment fees. The 2019 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2019 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2019 Term Loan prohibits Amity, Talon Exploration, DMLP, and Transatlantic Turkey from incurring additional debt. An event of default under the 2019 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2019 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI will assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2019 Term Loan.

At September 30, 2019, we had $20.0 million outstanding under the 2019 Term Loan and no availability, and we were in compliance with the covenants in the 2019 Term Loan.

Unsecured lines of credit. At September 30, 2019, we had $0.6 million outstanding borrowings under these lines of credit.

Series A Preferred Shares.As of September 30, 2019, we had 921,000 Series A Preferred Shares outstanding. The Series A Preferred Shares contain a substantive conversion option, are mandatorily redeemable, and convert into a fixed number of common shares. As a result, under U.S. GAAP, we have classified the Series A Preferred Shares within mezzanine equity in our consolidated balance sheets. As of September 30, 2019, we had $21.3 million of Series A Preferred Shares and $24.8 million of Series A Preferred Shares – related party outstanding (See Note 3. “Series A Preferred Shares”).

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our chief executive officer and principal accounting and financial officer, as appropriate to allow timely decisions regarding required disclosure.

As of September 30, 2019, management carried out an evaluation, under the supervision and with the participation of our chief executive officer and principal accounting and financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon the evaluation, our chief executive officer and principal accounting and financial officer concluded that, as of September 30, 2019, our disclosure controls and procedures were effective at the reasonable assurance level.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurances of achieving their control objectives.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

During the third quarter of 2019, there were no material developments to the Legal Proceedings disclosed in “Part I, Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 1A. Risk Factors

Except as set forth below, during the third quarter of 2019, there were no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018:

Acts of violence, terrorist attacks, or civil unrest in Turkey and nearby countries, or sanctions on Turkey, could adversely affect our business.

During 2019, we derived all of our revenue from our operations in Turkey and substantially all of our oil production was derived from southeastern Turkey. Historically, the southeastern area of Turkey and nearby countries such as Iran, Iraq, and Syria have occasionally experienced political, social, security, and economic problems, terrorist attacks, insurgencies, war, and civil unrest. Since December 2010, political instability has increased in a number of countries in the Middle East and North Africa. As a result of the civil war in Syria, large numbers of Syrian refugees have fled to Turkey. In addition, tensions continue between Turkey and Syria. In October 2019, President Trump announced a decision to withdraw U.S. military forces from certain areas of northeastern Syria, and Turkey announced the establishment of a safe zone along the border with Syria, contiguous to the region where our southeast Turkey licenses are located. Separately, Turkey has experienced occasional terrorist incidents.  In July 2016, there was a failed attempt to overthrow the government of President Recep Tayyip Erdoğan.

On October 14, 2019, U.S. President Trump issued an executive order authorizing certain sanctions against Turkey, including specifically parties specially designated under this order in connection with Turkey’s military actions in Northern Syria. The U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) specifically designated and placed sanctions on two Turkish ministries and three government officials, including the Turkish Ministry of Energy and Natural Resources (“MENR”) and the Turkish Minister of Energy and Natural Resources, and issued a 30-day wind down license for affected operations and businesses. Our licenses in Turkey are issued by the MENR. Subsequently, on October 23, 2019, OFAC lifted these sanctions designations, while leaving the executive order in place. While the executive order does not impose any specific sanctions affecting Turkey at this time, additional sanctions could be imposed by OFAC under the authority established by this order against ministries, entities, or persons in Turkey, including in connection with or unrelated to draft bills that have been proposed in the U.S. House of Representatives and the U.S. Senate that call for a range of potential new sanctions on Turkey, including sanctions against the Turkish energy industry, that could have a materially adverse effect on our business.

The recent conflict with the terrorist group Islamic State in Iraq and Syria (“ISIS”), the tension in and involving the Kurdish regions of northern Iraq and northern Syria, which are contiguous to the region where our southeast Turkey licenses are located, the aftermath of the attempted coup d’etat, and the threat of sanctions on Turkey may have political, social, or security implications in Turkey or otherwise may impact the Turkish economy.

Turkey has also experienced problems with domestic terrorist and ethnic separatist groups. For example, Turkey has been in conflict for many years with the People’s Congress of Kurdistan (formerly known as the PKK), an organization that is listed as a terrorist organization by states and organizations, including Turkey, the European Union, and the United States.

The potential impact on our business from such events, conditions, and conflicts in these countries is uncertain. We may be unable to access the locations where we conduct operations or transport oil to our offtakers in a reliable manner. In those locations where we have employees or operations, we may incur substantial costs to maintain the safety of our personnel and our operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 2, 2019, we issued an aggregate of 2,321,568 common shares to holders of the Series A Preferred Shares as payment of the June 30, 2019 quarterly dividend on the Series A Preferred Shares. Each common share was issued at a value of $0.7934 per common share, which was equal to the 15-day volume weighted average price through the close of trading of the common shares on the NYSE American on June 14, 2019.

On September 30, 2019, we issued an aggregate of 2,664,164 common shares to holders of the Series A Preferred Shares as payment of the September 30, 2019 quarterly dividend on the Series A Preferred Shares. Each common share was issued at a value of

31

$0.6914 per common share, which was equal to the 15-day volume weighted average price through the close of trading of the common shares on the NYSE American on September 13, 2019.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

32

Item 6. Exhibits

3.1	Certificate of Continuance of TransAtlantic Petroleum Ltd., dated October 1, 2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 1, 2009, filed with the SEC on October 7, 2009).
3.2	Altered Memorandum of Continuance of TransAtlantic Petroleum Ltd., dated March 4, 2014 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated March 6, 2014, filed with the SEC on March 6, 2014).
3.3	Amended Bye-Laws of TransAtlantic Petroleum Ltd., dated March 4, 2014 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated March 6, 2014, filed with the SEC on March 6, 2014).
3.4	Certificate of Designations of 12.0% Series A Convertible Redeemable Preferred Shares of TransAtlantic Petroleum Ltd. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 31, 2016, filed with the SEC on November 4, 2016).
3.5	Memorandum of Increase of Share Capital of TransAtlantic Petroleum Ltd., dated July 2017 (incorporated by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2019).
4.1	Amended and Restated Registration Rights Agreement, dated December 30, 2008, by and between TransAtlantic Petroleum Corp. and Riata Management, LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated December 30, 2008, filed with the SEC on January 6, 2009).
4.2	Specimen Common Share certificate (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K dated March 4, 2014, filed with the SEC on March 6, 2014).
31.1*	Certification of the Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Accounting and Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Chief Executive Officer and Principal Accounting and Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

** Furnished herewith.

33

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

By:	/s/ N. MALONE MITCHELL 3rd
	N. Malone Mitchell 3rd Chief Executive Officer
By:	/s/ MICHAEL P. HILL
	Michael P. Hill Chief Accounting Officer
Date: November 12, 2019

34

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, N. Malone Mitchell 3rd, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of TransAtlantic Petroleum Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 12, 2019	/s/ N. Malone Mitchell 3rd
	N. Malone Mitchell 3rd
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Michael P. Hill, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of TransAtlantic Petroleum Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 12, 2019	/s/ Michael P. Hill
	Michael P. Hill
	Chief Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of TransAtlantic Petroleum Ltd. (the “Company”) does hereby certify, to such officer’s knowledge, that:

This Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly represents, in all material respects, the financial condition and results of operation of the Company as of, and for, the periods presented in the Form 10-Q.

Date: November 12, 2019

/s/ N. Malone Mitchell 3rd      

N. Malone Mitchell 3rd

Chief Executive Officer

/s/ Michael P. Hill

Michael P. Hill

Chief Accounting Officer

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of Operating Lease Costs

Operating lease costs were comprised of the following:

	September 30, 2019
	(in thousands)
Operations yards	$	439
Office rent		176
Vehicles		103
Other		62
Total lease costs	$	780

Schedule of Future Non-Cancelable Minimum Lease Payments Under Operating Lease

Future non-cancelable minimum lease payments under our operating lease commitments as of September 30, 2019 were as follows for each of the next five years and thereafter:

	September 30, 2019
	(in thousands)
Remainder of 2019	$	276
2020		731
2021		658
2022		648
2023		327
2024		-
Thereafter		-
Total	$	2,640
Less: Imputed interest		348
Present value of lease liabilities	$	2,292

Schedule of Future Non-Cancelable Minimum Lease Payments Under Operating Lease

Future non-cancelable minimum lease payments under our operating lease commitments as of December 31, 2018 were as follows for each of the next five years and thereafter:

	December 31, 2018
	(in thousands)
2019	$	963
2020		710
2021		636
2022		626
2023		316
Thereafter		-
Total	$	3,251

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Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related party transactions

13. Related party transactions

The following table summarizes related party accounts receivable and accounts payable as of the dates indicated:

	September 30,		December 31,
	2019		2018
	(in thousands)
Related party accounts receivable:
Service Agreement	$	381	$	526
PSI MSA		472	352
Total related party accounts receivable	$	853	$	878
Related party accounts payable:
Service Agreement	$	127	$	372
PSI MSA		3,425		2,439
Other - board of directors fees		-		111
Total related party accounts payable	$	3,552	$	2,922

Services transactions

We are a party to a Service Agreement (as amended, the “Service Agreement”) with Longfellow Energy, LP (“Longfellow”), Viking Drilling, LLC (“Viking Drilling”), Riata Management, LLC (“Riata”), LFN Holdco LLC (“LFN”), Red Rock Minerals, LP (“RRM”), Red Rock Minerals II, LP (“RRM II”), Red Rock Advisors, LLC (“RRA”), Production Solutions International Limited (“PSIL”), and NexLube Operating, LLC (“NexLube”) and their subsidiaries (collectively, the “Riata Entities”), under which we and the Riata Entities agreed to provide technical and administrative services to each other from time to time on an as-needed basis. Under the terms of the Service Agreement, the Riata Entities agree to provide us upon our request certain computer services, payroll and benefits services, insurance administration services, and entertainment services, and we and the Riata Entities agree to provide to each other certain management consulting services, oil and natural gas services, and general accounting services (collectively, the “Services”). Under the terms of the Service Agreement, we pay, or are paid, for the actual cost of the Services rendered plus the actual cost of reasonable expenses on a monthly basis. We or any Riata Entity may terminate the Service Agreement at any time by providing advance notice of termination to the other parties.

As of September 30, 2019, we had $0.4 million of outstanding receivables and $0.1 million of outstanding payables pursuant to the Service Agreement.

On March 3, 2016, Mr. Mitchell closed a transaction whereby he sold his interests in Viking Services B.V. (“Viking Services”), the beneficial owner of Viking International Limited (“Viking International”), Viking Petrol Sahasi Hizmetleri A.S. (“VOS”) and Viking Geophysical Services Ltd. (“Viking Geophysical”), to a third party. As part of the transaction, Mr. Mitchell acquired certain equipment used in the performance of stimulation, wireline, workover, and similar services, which equipment is owned and operated by Production Solutions International Petrol Arama Hizmetleri Anonim Sirketi (“PSI”). PSI is beneficially owned by PSIL, which is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. Consequently, on March 3, 2016, TEMI entered into a master services agreement (the “PSI MSA”) with PSI on substantially similar terms to our then current master services agreements with Viking International, VOS, and Viking Geophysical. Pursuant to the PSI MSA, PSI performs the services on behalf of TEMI and its affiliates. On February 28, 2019, TEMI and PSI entered into an amendment (the “PSI MSA Amendment”) to the PSI MSA, pursuant to which PSI and TEMI agreed to extend the primary term of the PSI MSA to February 26, 2021, with automatic successive renewal terms of one (1) year each, unless terminated by PSI or TEMI by written notice at least sixty (60) days prior to the end of the primary term or any successive renewal term. The master services agreement with each of Viking International, VOS, and Viking Geophysical currently remain in effect.

As of September 30, 2019, we had $0.5 million of outstanding receivables and $3.4 million of outstanding payables pursuant to the PSI MSA.

Office sublease

On August 7, 2018 and effective as of June 14, 2018, TransAtlantic USA entered into a sublease agreement (the “Sublease”) with Longfellow to lease corporate office space located at 16803 North Dallas Parkway, Addison, Texas. The Sublease was approved by the audit committee of the board of directors.

TransAtlantic USA subleases approximately 10,000 square feet of corporate office space in Addison, Texas. The initial lease term under the Sublease commenced on June 14, 2018 (the “Commencement Date”) and expires on June 30, 2020, unless earlier terminated in accordance with the Sublease. From the Commencement Date until June 30, 2019, TransAtlantic USA was required to pay monthly rent of $18,333.33 to Longfellow, plus utilities, real property taxes, and liability insurance (to the extent that TransAtlantic USA does not obtain its own liability insurance). The monthly rent increased by $416.67 for the period commencing June 30, 2019 and ending June 30, 2021.

Pursuant to the Sublease, effective as of June 14, 2018, TransAtlantic USA and Longfellow agreed to terminate the Amended and Restated Office Lease, dated June 26, 2017, by and between TransAtlantic USA and Longfellow.

Series A Preferred Shares Dividends

During the nine months ended September 30, 2019, we issued an aggregate of 4,985,732 common shares to holders of the Series A Preferred Shares as payment of the June 30, 2019 and September 30, 2019 quarterly dividends on the Series A Preferred Shares. Of the 4,985,732 common shares, 2,224,903 common shares were issued to Dalea Partners, LP (“Dalea”), Longfellow, and the trusts of Mr. Mitchell’s four adult children.

Dalea Note and Pledge Agreement

On June 13, 2012, we closed the sale of our oilfield services business, which was substantially comprised of our wholly owned subsidiaries, Viking International and Viking Geophysical, to a joint venture owned by Dalea and funds advised by Abraaj Investment Management Limited for an aggregate purchase price of $168.5 million, consisting of approximately $157.0 million in cash and a $11.5 million promissory note from Dalea (the “Original Note”). The promissory note bore interest at a rate of 3.0% per annum and was guaranteed by Mr. Mitchell. The promissory note was payable five years from the date of issuance or earlier upon the occurrence of certain specified events.

On April 19, 2016, we entered into a note amendment agreement (the “Note Amendment Agreement”) with Mr. Mitchell and Dalea, pursuant to which Dalea agreed to deliver an amended and restated promissory note (the “Amended Note”) in favor of us, in the principal sum of $8.0 million, which Amended Note would amend and restate that certain Promissory Note, dated June 13, 2012, made by Dalea in favor of us in the principal amount of $11.5 million (the “Original Note”). The Note Amendment Agreement reduced the principal amount of the Original Note to $8.0 million in exchange for the cancellation of an account payable of approximately $3.5 million (the “Account Payable”) owed by TransAtlantic Albania Ltd. (“TransAtlantic Albania”), our former subsidiary, to Viking International.

In the Amended Note, we and Dalea acknowledged that (i) while the sale of Dalea’s interest in Viking Services enabled us to take the position that the Original Note was accelerated in accordance with its terms, the principal purpose of including the acceleration events in the Original Note was to ensure that certain oilfield services provided by Viking Services to us would continue to be available to us, and (ii) such services will now be provided pursuant to the PSI MSA. PSI is beneficially owned by PSIL, which is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. As a result, the Amended Note revised the events triggering acceleration of the repayment of the Original Note to the following: (i) a reduction of ownership by Dalea (and other controlled affiliates of Mr. Mitchell) of equity interest in PSI to less than 50%; (ii) the sale or transfer by Dalea or PSI of all or substantially all of its assets to any person (a “Transferee”) that does not own a controlling interest in Dalea or PSI and is not controlled by Mr. Mitchell (an “Unrelated Person”), or the subsequent transfer by any Transferee that is not an Unrelated Person of all or substantially all of its assets to an Unrelated Person; (iii) the acquisition by an Unrelated Person of more than 50% of the voting interests of Dalea or PSI; (iv) termination of the PSI MSA other than as a result of an uncured default thereunder by TEMI; (v) default by PSI under the PSI MSA, which default is not remedied within a period of 30 days after notice thereof to PSI; and (vi) insolvency or bankruptcy of PSI. The interest rate on the Amended Note remains at 3.0% per annum and continues to be guaranteed by Mr. Mitchell. The Amended Note contains customary events of default. On February 28, 2019, we and Dalea entered into an amendment (the “Note Amendment”) to the Amended Note (as amended by the Note Amendment, the “Note”), pursuant to which we and Dalea agreed to extend the maturity date of the Note to February 26, 2021 (unless otherwise accelerated in accordance with the terms of the Note).

In addition, pursuant to the Note Amendment Agreement, on April 19, 2016, we entered into a pledge agreement (the “Pledge Agreement”) with Dalea, whereby Dalea pledged the $2.0 million principal amount of the Company’s 13.0% Senior Convertible Notes due 2017 (“Convertible Notes”) owned by Dalea (the “Dalea Convertible Notes”), including any future securities for which the Dalea Convertible Notes are converted or exchanged, as security for the performance of Dalea’s obligations under the Amended Note. The Pledge Agreement contains customary events of default. On November 4, 2016, Dalea exchanged $2.0 million of Convertible Notes for 40,000 Series A Preferred Shares.

On June 28, 2019, we and Dalea entered into an amendment to the Pledge Agreement, pursuant to which we and Dalea agreed that any interest payable on the Series A Preferred Shares held by Dalea and pledged under the Pledge Agreement (i) if paid in cash, will be credited first against the outstanding principal balance of the Note and, upon full repayment of the outstanding principal balance of the Note, any accrued and unpaid interest on the Note, and (ii) if paid other than in cash, will be paid to Dalea and, within five business days of such payment to Dalea, Dalea will pay $61,500 toward the principal and, upon full repayment of the outstanding principal balance of the Note, any accrued and unpaid interest on the Note.

During the nine months ended September 30, 2019, we reduced the principal amount of the Note by $1.0 million for amounts prepaid by Dalea on February 28, 2019 in conjunction with the Note Amendment and by $0.2 million as a result of dividends paid on the Series A Preferred Shares.

As of September 30, 2019, the amount receivable under the Note was $4.2 million.

Pledge fee agreements

In connection with the pledge of certain Gundem real estate and Muratli real estate to DenizBank as collateral, on August 31, 2016, we entered into a pledge fee agreement (the “Gundem Fee Agreement”) with Gundem Turizm Yatirim ve Isletme A.S., predecessor-in-interest to Gundem Yatirim with respect to the Gundem real estate and Muratli real estate pledged as collateral for the Term Loans (“Gundem”). Pursuant to the Gundem Fee Agreement, we pay Gundem Yatirim a fee equal to 5% per annum of the collateral value of the Gundem real estate and Muratli real estate pledged as collateral for the Term Loans. Pursuant to the Gundem Fee Agreement, the Gundem real estate has a deemed collateral value of $10.0 million and the Muratli real estate has a deemed collateral value of $5.0 million.

In connection with the pledge of the Diyarbakir real estate to DenizBank as collateral, on August 31, 2016, we entered into a pledge fee agreement with Messrs. Mitchell and Uras (the “Diyarbakir Fee Agreement”) pursuant to which we pay Mr. Mitchell and Mr. Uras a fee of 5% per annum of the collateral value of the Diyarbakir real estate. Pursuant to the Diyarbakir Fee Agreement, the Diyarbakir real estate has a deemed collateral value of $5.0 million.

Amounts payable to Mr. Mitchell under the Gundem Fee Agreement and the Diyarbakir Fee Agreement are used to reduce the outstanding principal amount of the Note. During the nine months ended September 30, 2019, we reduced the principal amount of the Note by $0.5 million for amounts paid under the pledge fee agreements.

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Property Plant And Equipment [Abstract]

Capitalized Costs under Successful Efforts Method for Oil and Natural Gas Properties

The following table sets forth the capitalized costs under the successful efforts method for our oil and natural gas properties as of:

	September 30, 2019			December 31, 2018
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	169,758		$	162,494
Bulgaria		479			512
Total oil and natural gas properties, proved		170,237			163,006
Oil and natural gas properties, unproved:
Turkey		14,911			14,965
Bulgaria		–			730
Total oil and natural gas properties, unproved		14,911			15,695
Gross oil and natural gas properties		185,148			178,701
Accumulated depletion		(103,235	)		(100,582	)
Net oil and natural gas properties	$	81,913		$	78,119

Historical Cost of Equipment and Other Property on Gross Basis with Accumulated Depreciation

The historical cost of equipment and other property, presented on a gross basis with accumulated depreciation, is summarized as follows:

	September 30, 2019			December 31, 2018
	(in thousands)
Other equipment	$	1,176		$	1,240
Land		139			149
Inventory		5,858			6,791
Gas gathering system and facilities		181			194
Vehicles		316			336
Leasehold improvements, office equipment and software		5,421			5,698
Gross equipment and other property		13,091			14,408
Accumulated depreciation		(5,411	)		(5,268	)
Net equipment and other property	$	7,680		$	9,140

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 08, 2019
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Trading Symbol	TAT
Entity Registrant Name	TRANSATLANTIC PETROLEUM LTD.
Entity Central Index Key	0001092289
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-34574
Entity Incorporation, State or Country Code	D0
Entity Address, Address Line One	16803 Dallas Parkway
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Addison
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75001
City Area Code	214
Local Phone Number	220-4323
Entity Common Stock, Shares Outstanding		57,708,698
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Common shares, par value $0.10
Security Exchange Name	NYSEAMER
Entity Interactive Data Current	Yes

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Consolidated Statement of Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Shares [Member]	Treasury Stock [Member]	Warrants [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2017	$ 32,604	$ 5,032	$ (970)		$ 575,411	$ (124,766)	$ (422,103)
Beginning balance, shares at Dec. 31, 2017		50,319,000	333,000	700,000
Expiration of warrants				(700,000)
Issuance of restricted stock units		$ 28			(28)
Issuance of restricted stock units, shares		286,000
Share-based compensation	340				340
Tax effect of restricted stock	(11)				(11)
Foreign currency translation adjustment	(23,217)					(23,217)
Net income (loss)	(4,501)						(4,501)
Ending balance at Sep. 30, 2018	5,215	$ 5,060	$ (970)		575,712	(147,983)	(426,604)
Ending balance, shares at Sep. 30, 2018		50,605,000	333,000
Beginning balance at Jun. 30, 2018	18,578	$ 5,059	$ (970)		575,591	(136,218)	(424,884)
Beginning balance, shares at Jun. 30, 2018		50,591,000	333,000
Issuance of restricted stock units		$ 1			(1)
Issuance of restricted stock units, shares		14,000
Share-based compensation	122				122
Foreign currency translation adjustment	(11,765)					(11,765)
Net income (loss)	(1,720)						(1,720)
Ending balance at Sep. 30, 2018	5,215	$ 5,060	$ (970)		575,712	(147,983)	(426,604)
Ending balance, shares at Sep. 30, 2018		50,605,000	333,000
Beginning balance at Dec. 31, 2018	$ 12,419	$ 5,241	$ (970)		577,488	(142,021)	(427,319)
Beginning balance, shares at Dec. 31, 2018	52,413,588	52,413,000	333,000
Issuance of common shares	$ 3,684	$ 498			3,186
Issuance of common shares, (in shares)		4,986,000
Issuance of restricted stock units		$ 32			(32)
Issuance of restricted stock units, shares		310,000
Share-based compensation	298				298
Tax effect of restricted stock	(97)				(97)
Foreign currency translation adjustment	(3,834)					(3,834)
Net income (loss)	(2,841)						(2,841)
Ending balance at Sep. 30, 2019	$ 9,629	$ 5,771	$ (970)		580,843	(145,855)	(430,160)
Ending balance, shares at Sep. 30, 2019	57,708,698	57,709,000	333,000
Beginning balance at Jun. 30, 2019	$ 3,948	$ 5,273	$ (970)		577,538	(146,663)	(431,230)
Beginning balance, shares at Jun. 30, 2019		52,723,000	333,000
Issuance of common shares	3,684	$ 498			3,186
Issuance of common shares, (in shares)		4,986,000
Share-based compensation	119				119
Foreign currency translation adjustment	808					808
Net income (loss)	1,070						1,070
Ending balance at Sep. 30, 2019	$ 9,629	$ 5,771	$ (970)		$ 580,843	$ (145,855)	$ (430,160)
Ending balance, shares at Sep. 30, 2019	57,708,698	57,709,000	333,000

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2019

Accounting Changes And Error Corrections [Abstract]

Recent accounting pronouncements

2. Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for leases. The most significant changes include the clarification of the definition of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. Expenses are recognized in the consolidated statement of income in a manner similar to current accounting guidance. Lessor accounting under the new standard is substantially unchanged. The new standard became effective for us beginning with the first quarter of 2019. We adopted the accounting standard using a prospective transition approach, which applied the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We also made an accounting policy election to keep leases with an initial term of twelve months or less off of the consolidated balance sheet. On January 1, 2019, we recognized $2.7 million of additional right-of-use assets and liabilities on our consolidated balance sheets.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently assessing the potential impact of ASU 2016-13 on our consolidated financial statements and results of operations.  

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification (“ASC”) Topic 815. The new standard provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and for interim periods therein. The Company adopted this standard effective January 1, 2019. The adoption of this update had no impact our consolidated financial statements and results of operations.    

In June 2018, the FASB issued ASU 2018-07, Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting.  This update applied the existing employee guidance to nonemployee share-based transactions, with the exception of specific guidance related to the attribution of compensation cost. This update is effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted this standard effective January 1, 2019. The adoption of this update had no impact on our consolidated financial statements and results of operations.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. This update clarifies that receivables arising from operating leases are not in scope of this topic, but rather Topic 842, Leases. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe the adoption of this standard will have an impact on its consolidated financial statements.

We have reviewed other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position and cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on current or future earnings or operations.

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Loans Payable - Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Term Loans	$ 25,450	$ 22,000
Unsecured line of credit	605
Less: current portion	18,912	$ 22,000
Long-term portion	$ 7,143

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Derivative Instruments - Summary of Fair Value of Commodity Derivative Instruments of Future Crude Oil Production (Detail) - Commodity Price [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) $ / bbl $ / Call bbl
Derivatives Fair Value [Line Items]
Estimated Fair Value of Liability | $	$ 384
Three-way Collar - October 1, 2019 - April 30, 2020 [Member]
Derivatives Fair Value [Line Items]
Quantity (Bbl/day) | bbl	1,000
Collars Weighted Average Minimum Price (per Bbl) | $ / bbl	55.00
Weighted Average Maximum Price (per Bbl) | $ / bbl	72.90
Additional Call Ceiling | $ / Call	80.00
Estimated Fair Value of Liability | $	$ 384

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Leases - Schedule of Future Non-Cancelable Minimum Lease Payments Under Operating Lease (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Leases [Abstract]
Remainder of 2019	$ 276
2020	731
2021	658
2022	648
2023	327
Total	2,640
Less: Imputed interest	348
Operating lease, liability	$ 2,292
2019		$ 963
2020		710
2021		636
2022		626
2023		316
Total		$ 3,251

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Related Party Transactions - Additional Information (Detail)								9 Months Ended
	Sep. 30, 2019 USD ($) shares	Jul. 02, 2019 shares	Jun. 28, 2019 USD ($)	Feb. 28, 2019	Nov. 04, 2016 shares	Apr. 19, 2016 USD ($)	Jun. 13, 2012 USD ($)	Sep. 30, 2019 USD ($) shares	Dec. 31, 2018 USD ($)	Jun. 14, 2018 ft²	Aug. 31, 2016 USD ($)
Related Party Transaction [Line Items]
Related parties outstanding receivables	$ 853,000							$ 853,000	$ 878,000
Related parties outstanding payables	3,552,000							3,552,000	2,922,000
Note receivable - related party	4,150,000						$ 11,500,000	4,150,000
Dalea and Funds [Member] | 2017 Notes [Member]
Related Party Transaction [Line Items]
Repayments of debt								1,000,000
Interest receivable	$ 4,200,000							$ 4,200,000
Series A Preferred Shares [Member]
Related Party Transaction [Line Items]
Aggregate number of common shares issued to preferred share holders as payment of dividend | shares	2,664,164	2,321,568						4,985,732
Series A Preferred Shares [Member] | 13.0% Senior Convertible Notes Due 2017 [Member] | Convertible Debt [Member]
Related Party Transaction [Line Items]
Debt instrument interest rate stated percentage						13.00%
Series A Preferred Stock [Member] | Dalea and Funds [Member] | 2017 Notes [Member]
Related Party Transaction [Line Items]
Repayments of debt								$ 200,000
Riata Management Service Agreement [Member]
Related Party Transaction [Line Items]
Related parties outstanding receivables	$ 381,000							381,000	526,000
Related parties outstanding payables	127,000							127,000	372,000
PSI MSA [Member]
Related Party Transaction [Line Items]
Related parties outstanding receivables	472,000							472,000	352,000
Related parties outstanding payables	3,425,000							$ 3,425,000	$ 2,439,000
Longfellow [Member] | TransAtlantic USA [Member]
Related Party Transaction [Line Items]
Office sub lease space | ft²										10,000
Office sub lease commencement date								Jun. 14, 2018
Office sub Lease Expiration Date								Jun. 30, 2020
Office sub lease monthly rent payable during first twelve months	18,333.33							$ 18,333.33
Increase in office sub lease monthly rent payable from first year	$ 416.67							$ 416.67
Increase in office sub lease monthly rent payable, commencement date								Jun. 30, 2019
Increase in office sub lease monthly rent payable, expiration date								Jun. 30, 2021
Dalea [Member] | Series A Preferred Shares [Member]
Related Party Transaction [Line Items]
Aggregate number of common shares issued to preferred share holders as payment of dividend | shares								2,224,903
Joint Venture [Member] | Dalea and Funds [Member]
Related Party Transaction [Line Items]
Aggregate purchase price							168,500,000
Cash received from sale of business							$ 157,000,000
Promissory notes receivable, interest rate							3.00%
Promissory note receivable term							5 years
Convertible preferred shares issued upon conversion | shares					40,000
Joint Venture [Member] | Promissory Note [Member] | Dalea and Funds [Member]
Related Party Transaction [Line Items]
Note receivable - related party							$ 11,500,000
Note receivable - related party						$ 8,000,000
Cancellation of purchase price in promissory note						$ 3,500,000
Debt instrument interest rate stated percentage						3.00%
Debt Instrument, maturity date				Feb. 26, 2021
Promissory note, collateral amount						$ 2,000,000
Dalea Promissory Note [Member]
Related Party Transaction [Line Items]
Promissory notes default remedy period						30 days
Debt instrument payment terms			(i) if paid in cash, will be credited first against the outstanding principal balance of the Note and, upon full repayment of the outstanding principal balance of the Note, any accrued and unpaid interest on the Note, and (ii) if paid other than in cash, will be paid to Dalea and, within five business days of such payment to Dalea, Dalea will pay $61,500 toward the principal and, upon full repayment of the outstanding principal balance of the Note, any accrued and unpaid interest on the Note.
Debt Instrument, principal payment			$ 61,500
Dalea Promissory Note [Member] | PSIL [Member]
Related Party Transaction [Line Items]
Noncontrolling equity voting interest percentage						50.00%
Gundem Fee Agreement [Member] | Gundem Real Estate [Member]
Related Party Transaction [Line Items]
Debt instrument interest rate stated percentage											5.00%
Promissory note, collateral amount											$ 10,000,000
Gundem Fee Agreement [Member] | Muratli Real Estate [Member]
Related Party Transaction [Line Items]
Debt instrument interest rate stated percentage											5.00%
Promissory note, collateral amount											$ 5,000,000
Diyarbakir Fee Agreement [Member] | Diyarbakir Real Estate [Member]
Related Party Transaction [Line Items]
Debt instrument interest rate stated percentage											5.00%
Promissory note, collateral amount											$ 5,000,000
Gundem Fee Agreement and the Diyarbakir Fee Agreement [Member]
Related Party Transaction [Line Items]
Decrease in principal amount of Amended Note								$ 500,000

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Contingencies Relating to Production Leases and Exploration Permits - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 31, 2015	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2012
Loss Contingencies [Line Items]
General and administrative		$ 2,503,000	$ 2,539,000	$ 8,247,000	$ 9,662,000
Bulgaria [Member]
Loss Contingencies [Line Items]
Recovery of contractual obligations						$ 2,000,000
Liquidated damages, claim amount	$ 200,000
Bulgaria [Member] | Aglen Exploration Permit Work Program [Member]
Loss Contingencies [Line Items]
General and administrative						$ 2,000,000

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Segment Information - Financial Information of Geographic Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total revenues	$ 14,653	$ 20,140	$ 50,909	$ 55,264
(Loss) income from operations before income taxes	1,320	4,137	4,198	3,757
Capital expenditures	10,183	6,087	25,961	17,708
Segment assets	143,273		143,273		$ 132,600
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
(Loss) income from operations before income taxes	(3,984)	(2,995)	(9,524)	(11,230)
Segment assets	8,842		8,842		8,358
Operating Segments [Member] | Turkey [Member]
Segment Reporting Information [Line Items]
Total revenues	14,653	20,140	50,909	55,264
(Loss) income from operations before income taxes	5,932	7,184	20,304	15,160
Capital expenditures	9,696	6,087	20,424	17,708
Segment assets	133,806		133,806		122,325
Operating Segments [Member] | Bulgaria [Member]
Segment Reporting Information [Line Items]
(Loss) income from operations before income taxes	(628)	$ (52)	(6,582)	$ (173)
Capital expenditures	487		5,537
Segment assets	$ 625		$ 625		$ 1,917

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Series A Preferred Shares - Additional Information (Detail) - Series A Preferred Shares [Member]				3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($) shares	Jul. 02, 2019 shares	Nov. 04, 2016 USD ($) Director $ / shares shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2019 USD ($) shares	Dec. 31, 2018 USD ($) shares
Redeemable Noncontrolling Interest [Line Items]
Preferred shares, outstanding	921,000			921,000	921,000	921,000
Preferred shares, value | $	$ 21,300,000			$ 21,300,000	$ 21,300,000	$ 21,300,000
Preferred stock, dividend rate, percentage					12.00%
Convertible preferred stock, terms of conversion					each Series A Preferred Share may be converted at any time, at the option of the holder, into 45.754 common shares (which is equal to an initial conversion price of approximately $1.0928 per common share and is subject to customary adjustments for stock splits, stock dividends, recapitalizations, or other fundamental changes)
Convertible preferred shares issued upon conversion			45.754
Conversion of stock, per share | $ / shares			$ 1.0928
Preferred stock redemption period end date			Nov. 04, 2024
Preferred stock redemption period start date			Nov. 04, 2020
Maximum closing sale price of common shares on conversion price			150.00%
Preferred stock, redemption description					At any time on or after November 4, 2020, we may redeem all or a portion of the Series A Preferred Shares at the redemption prices listed below (expressed as a percentage of the liquidation preference amount per share) plus accrued and unpaid dividends to the date of redemption, if the closing sale price of the common shares equals or exceeds 150% of the conversion price then in effect for at least 10 trading days (whether or not consecutive) in a period of 20 consecutive trading days, including the last trading day of such 20 trading day period, ending on, and including, the trading day immediately preceding the business day on which we issue a notice of optional redemption.
Change in control, offering redemption period			120 days
Preferred stock, dividend payment terms					Dividends on the Series A Preferred Shares are payable quarterly at our election in cash, common shares, or a combination of cash and common shares at an annual dividend rate of 12.0% of the liquidation preference if paid all in cash or 16.0% of the liquidation preference if paid in common shares. If paid partially in cash and partially in common shares, the dividend rate on the cash portion is 12.0%, and the dividend rate on the common share portion is 16.0%.
Dividend payment description					Dividends are payable quarterly on March 31, June 30, September 30, and December 31 of each year.
Preferred stock accrued dividends | $				$ 1,800,000	$ 5,100,000
Aggregate number of common shares issued to preferred share holders as payment of dividend	2,664,164	2,321,568			4,985,732
Preferred stock voting rights			no voting rights		no voting rights
Certificate of designation description					The Certificate of Designation also provides that without the approval of the holders of a majority of the outstanding Series A Preferred Shares, we will not issue indebtedness for money borrowed or other securities which are senior to the Series A Preferred Shares in excess of the greater of (i) $100 million or (ii) 35% of our PV-10 of proved reserves as disclosed in our most recent independent reserve report filed or furnished by us on EDGAR.
Maximum amount of indebtedness for borrowed money allowed under certificate of designation | $			$ 100,000,000
PV10 reserve value percentage			35.00%
Maximum [Member]
Redeemable Noncontrolling Interest [Line Items]
Right to elect number of directors | Director			2
Minimum [Member]
Redeemable Noncontrolling Interest [Line Items]
Right to elect number of directors | Director			1
Two Director [Member]
Redeemable Noncontrolling Interest [Line Items]
Preferred shares, outstanding			400,000
One Director [Member] | Maximum [Member]
Redeemable Noncontrolling Interest [Line Items]
Preferred shares, outstanding			80,000
One Director [Member] | Minimum [Member]
Redeemable Noncontrolling Interest [Line Items]
Preferred shares, outstanding			399,999
Dividend Paid in Cash [Member]
Redeemable Noncontrolling Interest [Line Items]
Preferred stock, dividend rate, percentage			12.00%
Dividend Paid in Common Shares [Member]
Redeemable Noncontrolling Interest [Line Items]
Preferred stock, dividend rate, percentage			16.00%
Related Party [Member]
Redeemable Noncontrolling Interest [Line Items]
Preferred shares, outstanding	495,000			495,000	495,000	495,000
Preferred shares, value | $	$ 24,750,000			$ 24,750,000	$ 24,750,000	$ 24,750,000

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Financial instruments (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Valuation of Financial Assets and Liabilities

The following table summarizes the valuation of our financial assets and liabilities as of September 30, 2019:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other			Significant
	Liabilities		Observable Inputs			Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	384		$	-		$	384
Liabilities:
Foreign exchange derivative contracts	$	-	$	(414	)	$	-		$	(414	)
Disclosed but not carried at fair value
Liabilities:
2019 Term Loan		-		-			(17,349	)		(17,349	)
2018 Term Loan		-		-			(2,189	)		(2,189	)
2017 Term Loan		-		-			(3,116	)		(3,116	)
Total	$	-	$	-		$	(22,654	)	$	(22,654	)

The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2018:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Disclosed but not carried at fair value
Liabilities:
2018 Term Loan		-		-		(8,192	)		(8,192	)
2017 Term Loan		-		-		(11,938	)		(11,938	)
Total	$	-	$	-	$	(20,130	)	$	(20,130	)

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Property and Equipment - Historical Cost of Equipment and Other Property on Gross Basis with Accumulated Depreciation (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Gross equipment and other property	$ 13,091	$ 14,408
Accumulated depreciation	(5,411)	(5,268)
Net equipment and other property	7,680	9,140
Other equipment [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	1,176	1,240
Land [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	139	149
Inventory [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	5,858	6,791
Gas gathering system and facilities [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	181	194
Vehicles [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	316	336
Leasehold improvements, office equipment and software [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	$ 5,421	$ 5,698

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Asset Retirement obligations

9 Months Ended

Sep. 30, 2019

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement obligations

5. Asset retirement obligations

The following table summarizes the changes in our asset retirement obligations (“ARO”) for the nine months ended September 30, 2019 and for the year ended December 31, 2018:

	September 30, 2019			December 31, 2018
	(in thousands)
Asset retirement obligations at beginning of period	$	4,667		$	4,727
Foreign exchange change effect		(320	)		(1,270	)
Additions		332			1,036
Accretion expense		157			174
Asset retirement obligations at end of period	$	4,836		$	4,667

Our ARO is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging costs, remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs.

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Contingencies relating to production leases and exploration permits

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Contingencies relating to production leases and exploration permits

9. Contingencies relating to production leases and exploration permits

Selmo

We are involved in litigation with persons who claim ownership of a portion of the surface at the Selmo oil field in Turkey. These cases are being vigorously defended by TEMI and Turkish governmental authorities. We do not have enough information to estimate the potential additional operating costs we would incur in the event the purported surface owners’ claims are ultimately successful. Any adjustment arising out of the claims will be recorded when it becomes probable and measurable.

Bulgaria

During 2012, we were notified that the Bulgarian government may seek to recover approximately $2.0 million in contractual obligations under our Aglen exploration permit work program. Due to the Bulgarian government’s January 2012 ban on fracture stimulation and related activities, a force majeure event under the terms of the exploration permit was recognized by the Bulgarian government. Although we invoked force majeure, we recorded $2.0 million in general and administrative expense relating to our Aglen exploration permit during 2012 for this contractual obligation.

In October 2015, the Bulgarian Minister of Energy filed a suit in the Sofia City Court against Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”), claiming $200,000 in liquidated damages for Direct Bulgaria’s alleged failure to fulfill its obligations under the Aglen exploration permit work program. In May 2018, the Sofia City Court concluded that Direct Bulgaria did not fail to fulfill its obligations under the Aglen exploration permit work program as Direct Bulgaria received a force majeure event recognition as a result of a fracture stimulation ban in 2012, imposed by the Bulgarian Parliament, which force majeure event had not been terminated before the expiry of Direct Bulgaria’s obligations under the Aglen exploration permit work program. Additionally, the Sofia City Court concluded that, even if Direct Bulgaria had failed to fulfill its obligations under the Aglen exploration permit work program, the Bulgarian Minister of Energy failed to file suit within the three-year limitation period. Therefore, the Sofia City Court dismissed all claims of the Bulgarian Minister of Energy and ordered the Bulgarian Minister of Energy to pay Direct Bulgaria’s attorney’s fees and legal costs for court experts. In June 2018, the Bulgarian Minister of Energy filed an appeal in the Sofia Court of Appeal. In November 2018, the Sofia Court of Appeal concluded that the judgement of the Sofia City Court was correct and, therefore, dismissed the Bulgarian Minister of Energy’s appeal. In January 2019, the Bulgarian Minister of Energy filed an appeal in the Supreme Court of Cassation. We continue to vigorously defend against this claim.

As a result of the judgement of the Sofia Court of Appeal, we are currently evaluating an adjustment to our contingencies relating to production leases and exploration permits.

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Shareholders' Equity - Additional Information (Detail) - Restricted Stock Units [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 0.1	$ 0.1	$ 0.3	$ 0.3
Unrecognized compensation expense	$ 0.6		$ 0.6
Unrecognized compensation expense recognition period			1 year 4 months 24 days
Dilutive securities included in the calculation of diluted earnings per share	0		0

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Financial Instruments - Additional Information (Detail) - 9 months ended Sep. 30, 2019 ₺ in Millions	USD ($) Institution	TRY (₺)
Financial Statement Line Items With Differences In Reported Amount And Reporting Currency Denominated Amounts [Line Items]
Currency risk descriptions	We have underlying foreign currency exchange rate exposure. Our currency exposures primarily relate to transactions denominated in the Bulgarian Lev, the European Union Euro, and the TRY. We are also subject to foreign currency exposures resulting from translating the functional currency of our subsidiary financial statements into the USD reporting currency. At September 30, 2019, we had 38.0 million TRY (approximately $6.7 million) in cash and cash equivalents, which exposes us to exchange rate risk based on fluctuations in the value of the TRY. At September 30, 2019, we were a party to foreign exchange derivative contracts (See Note 6. “Derivative instruments”).
Number of financial institutions | Institution	4
TUPRAS [Member]
Financial Statement Line Items With Differences In Reported Amount And Reporting Currency Denominated Amounts [Line Items]
Allowance for doubtful accounts | $	$ 0
Cash and cash equivalents [Member]
Financial Statement Line Items With Differences In Reported Amount And Reporting Currency Denominated Amounts [Line Items]
Cash and cash equivalents	$ 6,700,000	₺ 38.0

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Subsequent Events - Additional Information (Detail) $ in Millions		9 Months Ended
	Oct. 31, 2019 USD ($)	Sep. 30, 2019	Dec. 30, 2019 USD ($) ₺ / $	Dec. 03, 2019 USD ($) ₺ / $
Foreign Exchange Option Contract [Member]
Subsequent Event [Line Items]
Derivative description of terms		The option contract settlement dates are December 3 and December 30, 2019 for $1.0 million at a strike price of 5.935 TRY to $1.00 USD
Foreign Exchange Option Contract [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Derivative, amount of hedge			$ 1.0	$ 1.0
Derivative option contract, strike price | ₺ / $			5.935	5.935
Foreign Exchange Forward Contracts [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Unrealized gain (loss) on derivatives	$ (0.1)

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Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Proved development wells excluded from depletion	$ 0		$ 0		$ 500
Acquisition costs of proved properties			5,500		6,500
Well costs and additional development costs	63,800		63,800		53,400
Exploratory dry hole costs	500	$ 200	6,300	$ 400
Capitalized exploratory cost greater than one year	0		0		0
Inventory	4,804		4,804		5,167
Inventory [Member]
Property Plant And Equipment [Line Items]
Property plant and equipment excluded from depreciation	$ 11,700		$ 11,700		$ 12,000

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Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating lease, liability	$ 2,292
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating lease, right-of-use asset		$ 2,700
Operating lease, liability		$ 2,700

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Segment information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Financial Information of Geographic Segments

In accordance with ASC 280, Segment Reporting (“ASC 280”), we have two reportable geographic segments: Turkey and Bulgaria. Summarized financial information from operations concerning our geographic segments is shown in the following table:

	Corporate			Turkey		Bulgaria			Total
	(in thousands)
For the three months ended September 30, 2019
Total revenues	$	-		$	14,653	$	-		$	14,653
(Loss) income from operations before income taxes		(3,984	)		5,932		(628	)		1,320
Capital expenditures	$	-		$	9,696	$	487		$	10,183
For the three months ended September 30, 2018
Total revenues	$	-		$	20,140	$	-		$	20,140
(Loss) income from operations before income taxes		(2,995	)		7,184		(52	)		4,137
Capital expenditures	$	-		$	6,087	$	-		$	6,087
For the nine months ended September 30, 2019
Total revenues	$	-		$	50,909	$	-		$	50,909
(Loss) income from operations before income taxes		(9,524	)		20,304		(6,582	)		4,198
Capital expenditures	$	-		$	20,424	$	5,537		$	25,961
For the nine months ended September 30, 2018
Total revenues	$	-		$	55,264	$	-		$	55,264
(Loss) income from operations before income taxes		(11,230	)		15,160		(173	)		3,757
Capital expenditures	$	-		$	17,708	$	-		$	17,708
Segment assets
September 30, 2019	$	8,842		$	133,806	$	625		$	143,273
December 31, 2018	$	8,358		$	122,325	$	1,917		$	132,600

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Derivative instruments

9 Months Ended

Sep. 30, 2019

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative instruments

6. Derivative instruments

We use derivative instruments to manage certain risks related to commodity prices and foreign currency exchange rates. The use of derivative instruments for risk management is covered by operating policies and is closely monitored by our senior management. We do not hold any derivatives for speculative purposes and do not use derivatives with leveraged or complex features. We have not designated the derivative contracts as hedges for accounting purposes, and accordingly, we record the derivative contracts at fair value and recognize changes in fair value in earnings as they occur.

Commodity price derivatives

To the extent that a legal right of offset exists, we net the value of our derivative contracts with the same counterparty in our consolidated balance sheets. All of our oil derivative contracts are settled based upon Brent crude oil pricing.  We recognize gains and losses related to these contracts on a fair value basis in our consolidated statements of operations and comprehensive (loss) income under the caption “Gain (loss) on derivative contracts.” Settlements of derivative contracts are included in operating activities on our consolidated statements of cash flows under the caption “Cash settlement on derivative contracts.”

At September 30, 2019, we had outstanding derivative contracts with respect to our future crude oil production as set forth in the table below:

Fair Value of Commodity Derivative Instruments as of September 30, 2019
				Weighted		Weighted
				Average		Average
		Quantity		Minimum		Maximum Price		Additional Call		Estimated Fair
Type	Period	(Bbl/day)		Price (per Bbl)		(per Bbl)		Ceiling		Value of Asset
										(in thousands)
Three-way collar	October 1, 2019 - April 30, 2020		1,000	$	55.00	$	72.90	$	80.00	$	384
Total estimated fair value of asset										$	384

As of December 31, 2018, we had no outstanding derivative contracts with respect to our future crude oil production.

Foreign currency derivatives

To the extent that a legal right of offset exists, we net the value of our derivative contracts with the same counterparty in our consolidated balance sheets. All of our foreign exchange derivative contracts are settled based upon the contract rate. We recognize gains and losses related to these contracts on a fair value basis in our consolidated statements of operations and comprehensive (loss) income under the caption “Gain (loss) on derivative contracts.” Settlements of derivative contracts are included in operating activities on our consolidated statements of cash flows under the caption “Cash settlement on derivative contracts.”

At September 30, 2019, we had outstanding foreign exchange derivative contracts as set forth in the table below:

Fair Value of Foreign Exchange Derivative Instruments as of September 30, 2019

Buy

Sell

Estimated Fair

Type

Buy/Sell

Rate

Settlement Date

Buy Currency

Currency Amount

Sell Currency

Currency Amount

Value of Asset (Liability)

(in thousands)

FXOPT

Buy

6.090

10/28/19

USD

1,400,000

TRY

8,526,000

(414

)

Total estimated fair value of liability

$

(414

)

During the three months ended September 30, 2019 and 2018, we recorded a net gain on derivative contracts of $0.4 million and a net loss of $1.3 million, respectively.  During the nine months ended September 30, 2019 and 2018, we recorded a net loss on derivative contracts of $0.03 million and $5.2 million, respectively.

Balance sheet presentation

The following table summarizes both: (i) the gross fair value of our derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in our consolidated balance sheets at September 30, 2019, and (ii) the net recorded fair value as reflected on our consolidated balance sheet at September 30, 2019.

		As of September 30, 2019
					Gross
					Amount		Net Amount of
		Gross			Offset in the		Assets (Liabilities)
		Amount of			Consolidated		Presented in the
	Location on Consolidated	Recognized			Balance		Consolidated
Type of Derivative Contract	Balance Sheets	Assets (Liabilities)			Sheets		Balance Sheets
		(in thousands)
Foreign exchange	Current liabilities	$	(414	)	$	-	$	(414	)
Commodity - crude oil	Current assets	$	384		$	-	$	384

As of December 31, 2018, we had no outstanding derivative contracts with respect to foreign exchange.

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Shareholders' equity

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Shareholders' equity

10. Shareholders’ equity

Restricted stock units

We recorded share-based compensation expense of $0.1 million for awards of restricted stock units (“RSUs”) for each of the three months ended September 30, 2019 and 2018.  We recorded share-based compensation expense of $0.3 million for awards of RSUs for each of the nine months ended September 30, 2019 and 2018.  

As of September 30, 2019, we had approximately $0.6 million of unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.4 years.

Earnings per share

We account for earnings per share in accordance with ASC Subtopic 260-10, Earnings Per Share (“ASC 260-10”). ASC 260-10 requires companies to present two calculations of earnings per share: basic and diluted. Basic earnings per common share for the three and nine months ended September 30, 2019 and 2018 equals net loss divided by the weighted average shares outstanding during the periods. Weighted average shares outstanding are equal to the weighted average of all shares outstanding for the period, excluding unvested RSUs. Diluted earnings per common share for the three and nine months ended September 30, 2019 and 2018 are computed in the same manner as basic earnings per common share after assuming the issuance of common shares for all potentially dilutive common share equivalents, which includes RSUs and preferred shares, whether exercisable or not. For the three and nine months ended September 30, 2019, there were no dilutive securities included in the calculation of diluted earnings per share.

The following table presents the basic and diluted earnings per common share computations:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands, except per share amounts)	2019		2018			2019			2018
Net income (loss)	$	1,070	$	(1,720	)	$	(2,841	)	$	(4,501	)
Basic net income (loss) earnings per common share:
Shares:
Weighted average common shares outstanding		57,680		50,597			54,249			50,465
Basic net income (loss) per common share:	$	0.02	$	(0.03	)	$	(0.05	)	$	(0.09	)
Diluted net income (loss) per common share:
Shares:
Weighted average common shares outstanding		57,680		50,597			54,249			50,465
Diluted net income (loss) per common share:	$	0.02	$	(0.03	)	$	(0.05	)	$	(0.09	)

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Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

On October 17, 2019, we entered into foreign exchange option and forward contracts to hedge against currency fluctuations between the TRY and USD. The forward contract settlement date was October 31, 2019, and we had an unrealized a loss of $0.1 million. The option contract settlement dates are December 3 and December 30, 2019 for $1.0 million at a strike price of 5.935 TRY to $1.00 USD. 

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Asset Retirement obligations (Tables)

9 Months Ended

Sep. 30, 2019

Asset Retirement Obligation Disclosure [Abstract]

Changes in Asset Retirement Obligations

The following table summarizes the changes in our asset retirement obligations (“ARO”) for the nine months ended September 30, 2019 and for the year ended December 31, 2018:

	September 30, 2019			December 31, 2018
	(in thousands)
Asset retirement obligations at beginning of period	$	4,667		$	4,727
Foreign exchange change effect		(320	)		(1,270	)
Additions		332			1,036
Accretion expense		157			174
Asset retirement obligations at end of period	$	4,836		$	4,667

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Shareholders' equity (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Basic and Diluted Earnings Per Common Share Computations

The following table presents the basic and diluted earnings per common share computations:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands, except per share amounts)	2019		2018			2019			2018
Net income (loss)	$	1,070	$	(1,720	)	$	(2,841	)	$	(4,501	)
Basic net income (loss) earnings per common share:
Shares:
Weighted average common shares outstanding		57,680		50,597			54,249			50,465
Basic net income (loss) per common share:	$	0.02	$	(0.03	)	$	(0.05	)	$	(0.09	)
Diluted net income (loss) per common share:
Shares:
Weighted average common shares outstanding		57,680		50,597			54,249			50,465
Diluted net income (loss) per common share:	$	0.02	$	(0.03	)	$	(0.05	)	$	(0.09	)

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General

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

General

1. General

Nature of operations

TransAtlantic Petroleum Ltd. (together with its subsidiaries, “we,” “us,” “our,” the “Company,” or “TransAtlantic”) is an international oil and natural gas company engaged in acquisition, exploration, development, and production. We have focused our operations in countries that have established, yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure, and provide favorable commodity pricing, royalty rates, and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey and Bulgaria. As of November 8, 2019, approximately 46% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

We are a holding company with two operating segments – Turkey and Bulgaria. Our assets consist of our ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

Basis of presentation

Our consolidated financial statements are expressed in U.S. Dollars (“USD”) and have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All amounts in the notes to the consolidated financial statements are in USD unless otherwise indicated. The unaudited consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews estimates, including those related to fair value measurements associated with acquisitions and financial derivatives, the recoverability and impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2018.

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Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Total revenues	$ 14,653	$ 20,140	$ 50,909	$ 55,264
Costs and expenses:
Production	3,162	2,307	8,376	7,980
Exploration, abandonment and impairment	488	162	6,267	393
Seismic and other exploration	48	122	233	340
General and administrative	2,503	2,539	8,247	9,662
Depreciation, depletion and amortization	3,021	2,938	10,179	10,673
Accretion of asset retirement obligations	56	35	157	124
Total costs and expenses	10,540	9,157	37,261	32,557
Operating income	4,113	10,983	13,648	22,707
Other income (expense):
Interest and other expense	(2,780)	(2,776)	(8,011)	(7,649)
Interest and other income	381	211	776	842
Gain (loss) on derivative contracts	403	(1,290)	(30)	(5,156)
Foreign exchange loss	(797)	(2,991)	(2,185)	(6,987)
Total other expense	(2,793)	(6,846)	(9,450)	(18,950)
Income from operations before income taxes	1,320	4,137	4,198	3,757
Income tax expense	(250)	(5,857)	(7,039)	(8,258)
Net income (loss)	1,070	(1,720)	(2,841)	(4,501)
Other comprehensive income (loss):
Foreign currency translation adjustment	808	(11,765)	(3,834)	(23,217)
Comprehensive income (loss)	$ 1,878	$ (13,485)	$ (6,675)	$ (27,718)
Net income (loss) per common share
Basic net income (loss) per common share	$ 0.02	$ (0.03)	$ (0.05)	$ (0.09)
Weighted average common shares outstanding	57,680	50,597	54,249	50,465
Diluted net income (loss) per common share	$ 0.02	$ (0.03)	$ (0.05)	$ (0.09)
Weighted average common and common equivalent shares outstanding	57,680	50,597	54,249	50,465
Oil and Natural Gas Sales [Member]
Revenues:
Total revenues	$ 14,543	$ 20,098	$ 50,537	$ 54,859
Other [Member]
Revenues:
Total revenues	110	42	372	405
Transportation and Processing [Member]
Costs and expenses:
Cost of goods and services sold	$ 1,262	$ 1,054	$ 3,802	$ 3,385

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Leases - Schedule of Operating Lease Costs (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Lessee Lease Description [Line Items]
Total lease costs	$ 780
Operations Yards [Member]
Lessee Lease Description [Line Items]
Total lease costs	439
Office Rent [Member]
Lessee Lease Description [Line Items]
Total lease costs	176
Vehicles [Member]
Lessee Lease Description [Line Items]
Total lease costs	103
Other [Member]
Lessee Lease Description [Line Items]
Total lease costs	$ 62

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Derivative Instruments - Summary of Gross Fair Value of Derivative Instruments by Balance Sheet Classification (Detail) $ in Thousands	Sep. 30, 2019 USD ($)
Derivatives Fair Value [Line Items]
Net Amount of Liabilities Presented in the Consolidated Balance Sheets, Current Liabilities	$ 414
Foreign Exchange [Member] | Current Liabilities [Member]
Derivatives Fair Value [Line Items]
Gross Amount of Recognized Liabilities	(414)
Net Amount of Liabilities Presented in the Consolidated Balance Sheets, Current Liabilities	(414)
Commodity Price [Member] | Current Assets | Crude Oil [Member]
Derivatives Fair Value [Line Items]
Gross Amount of Recognized Liabilities	384
Net Amount of Liabilities Presented in the Consolidated Balance Sheet, Long-term Liabilities	$ 384

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Asset Retirement Obligations - Changes in Asset Retirement Obligations (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations at beginning of period			$ 4,667	$ 4,727	$ 4,727
Foreign exchange change effect			(320)		(1,270)
Additions			332		1,036
Accretion expense	$ 56	$ 35	157	$ 124	174
Asset retirement obligations at end of period	$ 4,836		$ 4,836		$ 4,667

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Segment Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2019 Segment
Segment Reporting [Abstract]
Number of reportable geographic segments	2

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Related Party Transactions - Related Party Accounts Receivable and Accounts Payable (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Total related party accounts receivable	$ 853	$ 878
Total related party accounts payable	3,552	2,922
Service Agreement [Member]
Related Party Transaction [Line Items]
Total related party accounts receivable	381	526
Total related party accounts payable	127	372
PSI MSA [Member]
Related Party Transaction [Line Items]
Total related party accounts receivable	472	352
Total related party accounts payable	$ 3,425	2,439
Other - Board of Directors Fees [Member]
Related Party Transaction [Line Items]
Total related party accounts payable		$ 111

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Financial instruments

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Financial instruments

12. Financial instruments

Interest rate risk

We are exposed to interest rate risk as a result of our variable rate short-term cash holdings.

Foreign currency risk

We have underlying foreign currency exchange rate exposure. Our currency exposures primarily relate to transactions denominated in the Bulgarian Lev, the European Union Euro, and the TRY. We are also subject to foreign currency exposures resulting from translating the functional currency of our subsidiary financial statements into the USD reporting currency. At September 30, 2019, we had 38.0 million TRY (approximately $6.7 million) in cash and cash equivalents, which exposes us to exchange rate risk based on fluctuations in the value of the TRY. At September 30, 2019, we were a party to foreign exchange derivative contracts (See Note 6. “Derivative instruments”).

Commodity price risk

We are exposed to fluctuations in commodity prices for oil and natural gas. Commodity prices are affected by many factors, including, but not limited to, supply and demand.  At September 30, 2019, we were a party to commodity derivative contracts (See Note 6. “Derivative instruments”). At December 31, 2018, we were not party to any commodity derivative contracts.

Concentration of credit risk

The majority of our receivables are within the oil and natural gas industry, primarily from our industry partners and from government agencies. Included in receivables are amounts due from Turkiye Petrolleri Anonim Ortakligi (“TPAO”), the national oil company of Turkey, Zorlu Dogal Gaz Ithalat Ihracat ve Toptan Ticaret A.S. (“Zorlu”), a privately owned natural gas distributor in Turkey, and TUPRAS, which purchase the majority of our oil and natural gas production. The receivables are not collateralized. To date, we have experienced minimal bad debts and have no allowance for doubtful accounts for TUPRAS. The majority of our cash and cash equivalents are held by four financial institutions in the United States and Turkey.

Fair value measurements

Cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and our loans payable were each estimated to have a fair value approximating the carrying amount at September 30, 2019 and December 31, 2018, due to the short maturity of those instruments.

The following table summarizes the valuation of our financial assets and liabilities as of September 30, 2019:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other			Significant
	Liabilities		Observable Inputs			Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	384		$	-		$	384
Liabilities:
Foreign exchange derivative contracts	$	-	$	(414	)	$	-		$	(414	)
Disclosed but not carried at fair value
Liabilities:
2019 Term Loan		-		-			(17,349	)		(17,349	)
2018 Term Loan		-		-			(2,189	)		(2,189	)
2017 Term Loan		-		-			(3,116	)		(3,116	)
Total	$	-	$	-		$	(22,654	)	$	(22,654	)

The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2018:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Disclosed but not carried at fair value
Liabilities:
2018 Term Loan		-		-		(8,192	)		(8,192	)
2017 Term Loan		-		-		(11,938	)		(11,938	)
Total	$	-	$	-	$	(20,130	)	$	(20,130	)

We remeasure our derivative contracts on a recurring basis, with changes flowing through earnings. At September 30, 2019 and December 31, 2018, the fair values of the 2019 Term Loan, the 2018 Term Loan, and the 2017 Term Loan were estimated using a discounted cash flow analysis based on unobservable Level 3 inputs, including our own credit risk associated with the loans payable.

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Property and equipment

9 Months Ended

Sep. 30, 2019

Property Plant And Equipment [Abstract]

Property and equipment

4. Property and equipment

Oil and natural gas properties

The following table sets forth the capitalized costs under the successful efforts method for our oil and natural gas properties as of:

	September 30, 2019			December 31, 2018
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	169,758		$	162,494
Bulgaria		479			512
Total oil and natural gas properties, proved		170,237			163,006
Oil and natural gas properties, unproved:
Turkey		14,911			14,965
Bulgaria		–			730
Total oil and natural gas properties, unproved		14,911			15,695
Gross oil and natural gas properties		185,148			178,701
Accumulated depletion		(103,235	)		(100,582	)
Net oil and natural gas properties	$	81,913		$	78,119

At September 30, 2019 there were no amounts excluded from the depletion calculation for proved development wells currently in progress and for costs associated with fields currently not in production.  At December 31, 2018, we excluded $0.5 million, from the depletion calculation for proved development wells currently in progress and for costs associated with fields currently not in production.

At September 30, 2019, the capitalized costs of our oil and natural gas properties, net of accumulated depletion, included $5.5 million relating to acquisition costs of proved properties, which are being depleted by the unit-of-production method using total proved reserves, and $63.8 million relating to well costs and additional development costs, which are being depleted by the unit-of-production method using proved developed reserves.

At December 31, 2018, the capitalized costs of our oil and natural gas properties included $6.5 million relating to acquisition costs of proved properties, which are being amortized by the unit-of-production method using total proved reserves, and $53.4 million relating to well costs and additional development costs, which are being amortized by the unit-of-production method using proved developed reserves.

Impairments of proved properties and impairment of exploratory well costs

Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate the carrying value of such properties may not be recoverable. We primarily use Level 3 inputs to determine fair value, including but not limited to, estimates of proved reserves, future commodity prices, the timing and amount of future production and capital expenditures and discount rates commensurate with the risk reflective of the lives remaining for the respective oil and natural gas properties.

During the three months ended September 30, 2019 and 2018, we recorded $0.5 million of exploratory dry-hole costs and $0.2 million of impairment of proved properties and exploratory well costs, respectively, which are primarily measured using Level 3 inputs.

During the nine months ended September 30, 2019 and 2018, we recorded $6.3 million of exploratory dry-hole costs and $0.4 million of impairment of proved properties and exploratory well costs, respectively, which are primarily measured using Level 3 inputs.

Capitalized cost greater than one year

As of September 30, 2019, and December 31, 2018 there were no exploratory well costs greater than one year.

Equipment and other property

The historical cost of equipment and other property, presented on a gross basis with accumulated depreciation, is summarized as follows:

	September 30, 2019			December 31, 2018
	(in thousands)
Other equipment	$	1,176		$	1,240
Land		139			149
Inventory		5,858			6,791
Gas gathering system and facilities		181			194
Vehicles		316			336
Leasehold improvements, office equipment and software		5,421			5,698
Gross equipment and other property		13,091			14,408
Accumulated depreciation		(5,411	)		(5,268	)
Net equipment and other property	$	7,680		$	9,140

At September 30, 2019, and December 31, 2018, in addition to the above, we have classified $4.8 million and $5.2 million, respectively, of inventory as a current asset, which represents our expected inventory consumption during the next twelve months. We classify our remaining materials and supply inventory as a long-term asset because such materials will ultimately be classified as a long-term asset when the material is used in the drilling of a well.

At September 30, 2019 and December 31, 2018, we excluded $11.7 million and $12.0 million of inventory, respectively, from depreciation as the inventory had not been placed into service.

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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

8. Leases

Operating leases

We lease office space in Dallas, Texas, Bulgaria, and Turkey.  We also lease apartments, vehicles, and operations yards in Turkey.    The terms of our lease agreements generally range from one to five years, and some contain options to renew or cancel. We determine if an arrangement meets the definition of a lease at inception, at which time we also perform an analysis to determine whether the lease qualifies as an operating or financing lease. We currently do not have any financing leases.

Operating leases are included in prepaid and other current assets and other assets and accrued liabilities (current and long-term) on our consolidated balance sheet.  Lease expense for our operating leases is recognized in our consolidated statements of operations and comprehensive (loss) income under the caption “General and administrative”.  Lease expense for our operating leases for our operations yards in Turkey is recognized in our consolidated statements of operations and comprehensive (loss) income under the caption “Production”.

Lease right-of-use assets and lease liabilities are measured using the present value of future minimum lease payments over the lease term at commencement date. The right-of-use asset also includes any lease payments made on or before the commencement date of the lease, less any lease incentives received. As the rate implicit in the lease is not readily determinable in our leases, we use our incremental borrowing rates based on the information available at the lease commencement date in determining the present value of lease payments.

For leases with an initial non-cancelable lease term of less than one year and no option to purchase, we have elected not to recognize the lease on our consolidated balance sheets and instead recognize lease payments on a straight-line basis over the lease term.

Operating lease costs were comprised of the following:

	September 30, 2019
	(in thousands)
Operations yards	$	439
Office rent		176
Vehicles		103
Other		62
Total lease costs	$	780

Future non-cancelable minimum lease payments under our operating lease commitments as of September 30, 2019 were as follows for each of the next five years and thereafter:

	September 30, 2019
	(in thousands)
Remainder of 2019	$	276
2020		731
2021		658
2022		648
2023		327
2024		-
Thereafter		-
Total	$	2,640
Less: Imputed interest		348
Present value of lease liabilities	$	2,292

As of September 30, 2019, the weighted average remaining lease term in years is 3.8 years and the weighted average discount rate used was 7.6%.  

Future non-cancelable minimum lease payments under our operating lease commitments as of December 31, 2018 were as follows for each of the next five years and thereafter:

	December 31, 2018
	(in thousands)
2019	$	963
2020		710
2021		636
2022		626
2023		316
Thereafter		-
Total	$	3,251

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Series A Preferred Shares - Schedule of Redemption Prices (Detail) - Series A Preferred Shares [Member]	Nov. 04, 2016
Redeemable Noncontrolling Interest [Line Items]
November 4, 2020	105.00%
November 4, 2021	103.00%
November 4, 2022	101.00%
November 4, 2023 and thereafter	100.00%

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related Party Accounts Receivable and Accounts Payable

The following table summarizes related party accounts receivable and accounts payable as of the dates indicated:

	September 30,		December 31,
	2019		2018
	(in thousands)
Related party accounts receivable:
Service Agreement	$	381	$	526
PSI MSA		472	352
Total related party accounts receivable	$	853	$	878
Related party accounts payable:
Service Agreement	$	127	$	372
PSI MSA		3,425		2,439
Other - board of directors fees		-		111
Total related party accounts payable	$	3,552	$	2,922

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Series A Preferred Shares (Tables)

9 Months Ended

Sep. 30, 2019

Temporary Equity Disclosure [Abstract]

Schedule of Redemption Prices

The redemption prices for the 12-month period starting on the dates below are:

Period Commencing	Redemption Price
November 4, 2020	105.000%
November 4, 2021	103.000%
November 4, 2022	101.000%
November 4, 2023 and thereafter	100.000%

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Loans payable (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt

As of the dates indicated, our third-party debt consisted of the following:

	September 30,		December 31,
	2019		2018
Fixed and Floating Rate Loans	(in thousands)
Term Loans (1)	$	25,450	$	22,000
Unsecured line of credit		605		-
Less: current portion		18,912		22,000
Long-term portion	$	7,143	$	–

_________________________________________________________

(1) Includes the 2019 Term Loan, the 2018 Term Loan, and the 2017 Term Loan (each as defined below and collectively, “Term Loans”).

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Loans Payable - Additional Information (Detail) - USD ($)		9 Months Ended
	Apr. 27, 2017	Sep. 30, 2019	Feb. 22, 2019	Dec. 31, 2018	May 28, 2018	Nov. 17, 2017	Aug. 31, 2016
Line Of Credit Facility [Line Items]
Loans payable		$ 25,450,000		$ 22,000,000
2016 TEMI Term Loan [Member]
Line Of Credit Facility [Line Items]
Debt instrument interest rate stated percentage		5.25%
Debt instrument interest rate basis for effective rate		The 2016 Term Loan bore interest at a fixed rate of 5.25% (plus 0.2625% for Banking and Insurance Transactions Tax per the Turkish government)
Debt instrument payment terms		Payable in six monthly installments of $1.25 million each through February 2017 and thereafter in twelve monthly installments of $1.88 million each through February 2018.
Amount of each installment payable through February 2017		$ 1,250,000
Amount of each installment payable through February 2018		$ 1,880,000
Line of credit facility, expiration date		Feb. 28, 2018
2016 TEMI Term Loan [Member] | Turkish Banking and Insurance Transactions Tax Rate [Member]
Line Of Credit Facility [Line Items]
Debt instrument basis spread on variable rate		0.2625%
2017 Term Loan [Member]
Line Of Credit Facility [Line Items]
Debt instrument interest rate stated percentage		6.00%
Debt instrument interest rate basis for effective rate		The 2017 Term Loan bears interest at a fixed rate of 6.0% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum.
Debt instrument payment terms		The 2017 Term Loan had a grace period which bore no interest or payments due until July 2018. Thereafter, the 2017 Term Loan is payable in one monthly installment of $1.38 million, nine monthly installments of $1.2 million each through April 2019 and thereafter in eight monthly installments of $1.0 million each through December 2019, with the exception of one monthly installment of $1.2 million occurring in October 2019.
Line of credit facility, expiration date		Dec. 31, 2019
2017 Term Loan [Member] | Due until July 2018 [Member]
Line Of Credit Facility [Line Items]
Debt instrument interest rate stated percentage		0.00%
Debt instrument, principal installments		$ 0
2017 Term Loan [Member] | One Monthly Installment Payable through April 2019 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		1,380,000
2017 Term Loan [Member] | Nine Monthly Installments Payable through April 2019 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		1,200,000
2017 Term Loan [Member] | Eight Monthly Installments Payable through December 2019 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		1,000,000
2017 Term Loan [Member] | One Monthly Installment Occurring in October 2019 [Member]
Line Of Credit Facility [Line Items]
Amount of each installment payable occurring in October 2019		$ 1,200,000
2017 Term Loan [Member] | Turkish Banking and Insurance Transactions Tax Rate [Member]
Line Of Credit Facility [Line Items]
Debt instrument basis spread on variable rate		0.30%
2018 Term Loan [Member]
Line Of Credit Facility [Line Items]
Debt instrument interest rate stated percentage		7.25%
Debt instrument interest rate basis for effective rate		The 2018 Term Loan bears interest at a fixed rate of 7.25% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum.
Debt instrument payment terms		The 2018 Term Loan had a grace period through July 2018 during which no payments were due. Thereafter, accrued interest on the 2018 Term Loan is payable monthly and the principal on the 2018 Term Loan is payable in five monthly installments of $0.2 million each through December 2018, four monthly installments of $0.5 million each through April 2019, four monthly installments of $1.0 million each through August 2019, and four monthly installments of $0.75 million each through December 2019.
Line of credit facility, expiration date		Dec. 31, 2019
2018 Term Loan [Member] | Due through July 2018 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		$ 0
2018 Term Loan [Member] | Five Monthly Installments Payable through December 2018 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		200,000
2018 Term Loan [Member] | Four Monthly Installments Payable through April 2019 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		500,000
2018 Term Loan [Member] | Four Monthly Installments Payable through August 2019 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		1,000,000
2018 Term Loan [Member] | Four Monthly Installments Payable through December 2019 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		$ 750,000
2018 Term Loan [Member] | Turkish Banking and Insurance Transactions Tax Rate [Member]
Line Of Credit Facility [Line Items]
Debt instrument basis spread on variable rate		0.30%
2019 Term Loan [Member]
Line Of Credit Facility [Line Items]
Debt instrument interest rate stated percentage		7.50%
Debt instrument interest rate basis for effective rate		The 2019 Term Loan bears interest at a fixed rate of 7.5% (plus 0.375% for Banking and Insurance Transactions Tax per the Turkish government) per annum.
Debt instrument payment terms		The 2019 Term Loan has a grace period through December 2019 during which no payments are due. Thereafter, accrued interest on the 2019 Term Loan is payable monthly, and the principal on the 2019 Term Loan is payable in 14 monthly installments of $1.4 million each.
Line of credit facility, expiration date		Feb. 28, 2021
2019 Term Loan [Member] | Due through December 2019 [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		$ 0
2019 Term Loan [Member] | Fourteen Monthly Installments [Member]
Line Of Credit Facility [Line Items]
Debt instrument, principal installments		$ 1,400,000
2019 Term Loan [Member] | Turkish Banking and Insurance Transactions Tax Rate [Member]
Line Of Credit Facility [Line Items]
Debt instrument basis spread on variable rate		0.375%
Unsecured lines of credit [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 600,000
Credit Agreement [Member] | DenizBank [Member] | 2016 TEMI Term Loan [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, initiation date		Aug. 31, 2016
Line Of Credit Facility Maximum Borrowing Capacity							$ 30,000,000
Line of credit facility, expiration date	Jun. 30, 2018
Debt instrument, monthly payments	$ 1,380,000
Credit Agreement [Member] | DenizBank [Member] | 2017 Term Loan [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, initiation date		Nov. 17, 2017
Line Of Credit Facility Maximum Borrowing Capacity						$ 20,400,000
Credit Agreement [Member] | DenizBank [Member] | 2018 Term Loan [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, initiation date		May 28, 2018
Line Of Credit Facility Maximum Borrowing Capacity					$ 10,000,000
Credit Agreement [Member] | DenizBank [Member] | 2019 Term Loan [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, initiation date		Feb. 22, 2019
Line Of Credit Facility Maximum Borrowing Capacity			$ 20,000,000
Non-cash Facilities [Member] | DenizBank [Member]
Line Of Credit Facility [Line Items]
Line Of Credit Facility Maximum Borrowing Capacity							$ 20,000,000
Line of Credit [Member] | 2016 TEMI Term Loan [Member] | Mr. Mitchell [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		80.00%
Line of Credit [Member] | 2016 TEMI Term Loan [Member] | Mr. Uras [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		20.00%
Line of Credit [Member] | 2017 Term Loan [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 3,200,000
Line of Credit [Member] | 2017 Term Loan [Member] | Mr. Mitchell [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		80.00%
Line of Credit [Member] | 2017 Term Loan [Member] | Mr. Uras [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		20.00%
Line of Credit [Member] | 2017 Term Loan [Member] | Mr. Uras [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		100.00%
Line of Credit [Member] | 2018 Term Loan [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 2,300,000
Line of Credit [Member] | 2018 Term Loan [Member] | Mr. Mitchell [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		80.00%
Line of Credit [Member] | 2018 Term Loan [Member] | Mr. Uras [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		20.00%
Line of Credit [Member] | 2018 Term Loan [Member] | Mr. Uras [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		100.00%
Line of Credit [Member] | 2019 Term Loan [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 20,000,000
Line of Credit [Member] | 2019 Term Loan [Member] | Mr. Mitchell [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		80.00%
Line of Credit [Member] | 2019 Term Loan [Member] | Mr. Uras [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		20.00%
Line of Credit [Member] | 2019 Term Loan [Member] | Mr. Uras [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage		100.00%
Turkey [Member] | Credit Agreement [Member] | DenizBank [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, initiation date		Aug. 23, 2016

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Derivative Instruments - Summary of Fair Value of Foreign Exchange Derivative Instruments (Detail) - Foreign Exchange [Member] ₺ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 TRY (₺)
Derivatives Fair Value [Line Items]
Estimated Fair Value of Asset (Liability)	$ (414)
Currency Derivative Instruments One [Member]
Derivatives Fair Value [Line Items]
Type	FXOPT	FXOPT
Buy/Sell	Buy	Buy
Rate	6.090
Settlement Date	Oct. 28, 2019	Oct. 28, 2019
Buy Currency	USD	USD
Buy Currency Amount | ₺		₺ 1,400,000
Sell Currency	TRY	TRY
Sell Currency Amount	$ 8,526,000
Estimated Fair Value of Asset (Liability)	$ (414)

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 14,452	$ 9,892
Accounts receivable, net
Oil and natural gas sales	12,032	12,912
Joint interest and other	1,567	982
Related party	853	878
Prepaid and other current assets	12,331	8,696
Derivative asset	384
Note receivable - related party		5,828
Inventory	4,804	5,167
Total current assets	46,423	44,355
Oil and natural gas properties (successful efforts method)
Proved	170,237	163,006
Unproved	14,911	15,695
Equipment and other property	13,091	14,408
Property and equipment, gross	198,239	193,109
Less accumulated depreciation, depletion and amortization	(108,646)	(105,850)
Property and equipment, net	89,593	87,259
Other long-term assets:
Other assets	3,107	986
Note receivable - related party	4,150
Total other assets	7,257	986
Total assets	143,273	132,600
Current liabilities:
Accounts payable	6,067	3,896
Accounts payable - related party	3,552	2,922
Accrued liabilities	13,956	13,073
Derivative liability	414
Loans payable	18,912	22,000
Total current liabilities	42,901	41,891
Long-term liabilities:
Asset retirement obligations	4,836	4,667
Accrued liabilities	9,994	7,259
Deferred income taxes	22,720	20,314
Loans payable	7,143
Total long-term liabilities	44,693	32,240
Total liabilities	87,594	74,131
Commitments and contingencies
Shareholders' equity:
Common shares, $0.10 par value, 200,000,000 shares authorized; 57,708,698 shares and 52,413,588 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	5,771	5,241
Treasury stock	(970)	(970)
Additional paid-in-capital	580,843	577,488
Accumulated other comprehensive loss	(145,855)	(142,021)
Accumulated deficit	(430,160)	(427,319)
Total shareholders' equity	9,629	12,419
Total liabilities, Series A preferred shares and shareholders' equity	143,273	132,600
Series A Preferred Shares [Member]
Long-term liabilities:
Preferred shares, value	21,300	21,300
Related Party [Member] | Series A Preferred Shares [Member]
Long-term liabilities:
Preferred shares, value	$ 24,750	$ 24,750

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		3 Months Ended				9 Months Ended				12 Months Ended
		Sep. 30, 2019		Sep. 30, 2018		Sep. 30, 2019		Sep. 30, 2018		Dec. 31, 2018
Operating activities:
Net income (loss)		$ 1,070		$ (1,720)		$ (2,841)		$ (4,501)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation						298		340
Foreign currency loss						1,776		20,748
Interest on Series A Preferred Shares paid in common shares						3,684
Loss on derivative contracts		(403)		1,290		30		5,156
Cash settlement on derivative contracts								(3,710)
Amortization on loan financing costs						31		31
Deferred income tax expense						4,396		5,577
Exploration, abandonment and impairment		488		162		6,267		393
Depreciation, depletion and amortization		3,021		2,938		10,179		10,673
Accretion of asset retirement obligations		56		35		157		124		$ 174
Changes in operating assets and liabilities:
Accounts receivable						172		(14,920)
Prepaid expenses and other assets						(6,567)		(6,831)
Accounts payable and accrued liabilities						8,122		12,136
Net cash provided by operating activities						25,704		25,216
Investing activities:
Additions to oil and natural gas properties						(24,847)		(17,708)
Additions to equipment and other properties						(341)		(3,254)
Net cash used in investing activities						(25,188)		(20,962)
Financing activities:
Tax withholding on restricted share units						(97)		(15)
Note receivable - related party						1,000
Loan proceeds						20,605		10,000
Loan repayment						(16,550)		(12,425)
Net cash provided by (used in) financing activities						4,958		(2,440)
Effect of exchange rate on cash flows, cash equivalents, and restricted cash						(914)		(8,535)
Net increase (decrease) in cash, cash equivalents and restricted cash						4,560		(6,721)
Cash, cash equivalents and restricted cash, beginning of period	[1]					10,032		20,432		20,432
Cash, cash equivalents and restricted cash, end of period		$ 14,592	[2]	$ 13,711	[2]	14,592	[2]	13,711	[2]	$ 10,032	[1]
Supplemental disclosures:
Cash paid for interest						3,387		7,333
Cash paid for taxes						$ 2,988		$ 2,847

[1] The beginning of period balance at December 31, 2018 includes cash and cash equivalents of $9.9 million and restricted cash of $0.1 million in other assets. The beginning of period balance at December 31, 2017 includes cash and cash equivalents of $18.9 million and restricted cash of $1.5 million in other assets

[2] The end of period balance at September 30, 2019 includes cash and cash equivalents of $14.5 million and restricted cash of $0.1 million in other assets. The end of period balance at September 30, 2018 includes cash and cash equivalents of $13.6 million and restricted cash of $0.1 million in other assets.

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General (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Nature of operations

Nature of operations

TransAtlantic Petroleum Ltd. (together with its subsidiaries, “we,” “us,” “our,” the “Company,” or “TransAtlantic”) is an international oil and natural gas company engaged in acquisition, exploration, development, and production. We have focused our operations in countries that have established, yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure, and provide favorable commodity pricing, royalty rates, and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey and Bulgaria. As of November 8, 2019, approximately 46% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

We are a holding company with two operating segments – Turkey and Bulgaria. Our assets consist of our ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

Basis of presentation

Basis of presentation

Our consolidated financial statements are expressed in U.S. Dollars (“USD”) and have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All amounts in the notes to the consolidated financial statements are in USD unless otherwise indicated. The unaudited consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews estimates, including those related to fair value measurements associated with acquisitions and financial derivatives, the recoverability and impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2018.

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for leases. The most significant changes include the clarification of the definition of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. Expenses are recognized in the consolidated statement of income in a manner similar to current accounting guidance. Lessor accounting under the new standard is substantially unchanged. The new standard became effective for us beginning with the first quarter of 2019. We adopted the accounting standard using a prospective transition approach, which applied the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We also made an accounting policy election to keep leases with an initial term of twelve months or less off of the consolidated balance sheet. On January 1, 2019, we recognized $2.7 million of additional right-of-use assets and liabilities on our consolidated balance sheets.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently assessing the potential impact of ASU 2016-13 on our consolidated financial statements and results of operations.  

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification (“ASC”) Topic 815. The new standard provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and for interim periods therein. The Company adopted this standard effective January 1, 2019. The adoption of this update had no impact our consolidated financial statements and results of operations.    

In June 2018, the FASB issued ASU 2018-07, Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting.  This update applied the existing employee guidance to nonemployee share-based transactions, with the exception of specific guidance related to the attribution of compensation cost. This update is effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted this standard effective January 1, 2019. The adoption of this update had no impact on our consolidated financial statements and results of operations.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. This update clarifies that receivables arising from operating leases are not in scope of this topic, but rather Topic 842, Leases. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe the adoption of this standard will have an impact on its consolidated financial statements.

We have reviewed other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position and cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on current or future earnings or operations.

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Derivative instruments (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Gross Fair Value of Derivative Instruments by Balance Sheet Classification

The following table summarizes both: (i) the gross fair value of our derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in our consolidated balance sheets at September 30, 2019, and (ii) the net recorded fair value as reflected on our consolidated balance sheet at September 30, 2019.

		As of September 30, 2019
					Gross
					Amount		Net Amount of
		Gross			Offset in the		Assets (Liabilities)
		Amount of			Consolidated		Presented in the
	Location on Consolidated	Recognized			Balance		Consolidated
Type of Derivative Contract	Balance Sheets	Assets (Liabilities)			Sheets		Balance Sheets
		(in thousands)
Foreign exchange	Current liabilities	$	(414	)	$	-	$	(414	)
Commodity - crude oil	Current assets	$	384		$	-	$	384

Foreign Exchange [Member]

Summary of Fair Value of Derivative Instruments

At September 30, 2019, we had outstanding foreign exchange derivative contracts as set forth in the table below:

Fair Value of Foreign Exchange Derivative Instruments as of September 30, 2019

Buy

Sell

Estimated Fair

Type

Buy/Sell

Rate

Settlement Date

Buy Currency

Currency Amount

Sell Currency

Currency Amount

Value of Asset (Liability)

(in thousands)

FXOPT

Buy

6.090

10/28/19

USD

1,400,000

TRY

8,526,000

(414

)

Total estimated fair value of liability

$

(414

)

Crude Oil [Member] | Commodity Price [Member]

Summary of Fair Value of Derivative Instruments

At September 30, 2019, we had outstanding derivative contracts with respect to our future crude oil production as set forth in the table below:

Fair Value of Commodity Derivative Instruments as of September 30, 2019
				Weighted		Weighted
				Average		Average
		Quantity		Minimum		Maximum Price		Additional Call		Estimated Fair
Type	Period	(Bbl/day)		Price (per Bbl)		(per Bbl)		Ceiling		Value of Asset
										(in thousands)
Three-way collar	October 1, 2019 - April 30, 2020		1,000	$	55.00	$	72.90	$	80.00	$	384
Total estimated fair value of asset										$	384

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Leases - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2019
Lessee Lease Description [Line Items]
Operating lease options to renew or cancel	some contain options to renew or cancel
Weighted average remaining lease term	3 years 9 months 18 days
Weighted average discount rate	7.60%
Minimum [Member]
Lessee Lease Description [Line Items]
Lease agreements, term	1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Lease agreements, term	5 years

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Derivative Instruments - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Gain (loss) on derivative contracts	$ 403	$ (1,290)	$ (30)	$ (5,156)

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Common shares, par value	$ 0.10	$ 0.10
Common shares, authorized	200,000,000	200,000,000
Common shares, issued	57,708,698	52,413,588
Common shares, outstanding	57,708,698	52,413,588
Series A Preferred Shares [Member]
Preferred shares, outstanding	921,000	921,000
Unrelated Party [Member] | Series A Preferred Shares [Member]
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized	426,000	426,000
Preferred shares, issued	426,000	426,000
Preferred shares, outstanding	426,000	426,000
Preferred shares, liquidation preference per share	$ 50	$ 50
Related Party [Member] | Series A Preferred Shares [Member]
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized	495,000	495,000
Preferred shares, issued	495,000	495,000
Preferred shares, outstanding	495,000	495,000
Preferred shares, liquidation preference per share	$ 50	$ 50

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Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Cash and cash equivalents	$ 14,452	$ 9,892	$ 13,600	$ 18,900
Other Assets [Member]
Restricted cash	$ 100	$ 100	$ 100	$ 1,500

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Shareholders' Equity - Basic and Diluted Earnings Per Common Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Equity [Abstract]
Net income (loss)	$ 1,070	$ (1,720)	$ (2,841)	$ (4,501)
Weighted average common shares outstanding	57,680	50,597	54,249	50,465
Basic net income (loss) per common share	$ 0.02	$ (0.03)	$ (0.05)	$ (0.09)
Weighted average common shares outstanding	57,680	50,597	54,249	50,465
Diluted net income (loss) per common share	$ 0.02	$ (0.03)	$ (0.05)	$ (0.09)

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Financial Instruments - Valuation of Financial Assets and Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (liabilities), fair value	$ (22,654)	$ (20,130)
Disclosed but not carried at fair value [Member] | 2019 Term Loan [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(17,349)
Disclosed but not carried at fair value [Member] | 2018 Term Loan [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(2,189)	(8,192)
Disclosed but not carried at fair value [Member] | 2017 Term Loan [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(3,116)	(11,938)
Measured on a recurring basis [Member] | Derivative Financial Instruments (Commodity) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, fair value	384
Measured on a recurring basis [Member] | Foreign Exchange Derivative Contracts [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(414)
Significant Other Observable Inputs (Level 2) [Member] | Measured on a recurring basis [Member] | Derivative Financial Instruments (Commodity) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, fair value	384
Significant Other Observable Inputs (Level 2) [Member] | Measured on a recurring basis [Member] | Foreign Exchange Derivative Contracts [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(414)
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (liabilities), fair value	(22,654)	(20,130)
Significant Unobservable Inputs (Level 3) [Member] | Disclosed but not carried at fair value [Member] | 2019 Term Loan [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(17,349)
Significant Unobservable Inputs (Level 3) [Member] | Disclosed but not carried at fair value [Member] | 2018 Term Loan [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(2,189)	(8,192)
Significant Unobservable Inputs (Level 3) [Member] | Disclosed but not carried at fair value [Member] | 2017 Term Loan [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	$ (3,116)	$ (11,938)

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Series A Preferred Shares

9 Months Ended

Sep. 30, 2019

Temporary Equity Disclosure [Abstract]

Series A preferred shares

3. Series A Preferred Shares

As of September 30, 2019 and 2018, we had 921,000 outstanding shares of our 12.0% Series A Convertible Redeemable Preferred Shares (“Series A Preferred Shares”). The Series A Preferred Shares contain a substantive conversion option, are mandatorily redeemable, and convert into a fixed number of common shares. As a result, under U.S. GAAP, we have classified the Series A Preferred Shares within mezzanine equity in our consolidated balance sheets. As of September 30, 2019, there were $21.3 million of Series A Preferred Shares and $24.8 million of Series A Preferred Shares – related party outstanding (See Note 13. “Related party transactions”).

Pursuant to the Certificate of Designations for the Series A Preferred Shares (the “Certificate of Designations”), each Series A Preferred Share may be converted at any time, at the option of the holder, into 45.754 common shares (which is equal to an initial conversion price of approximately $1.0928 per common share and is subject to customary adjustments for stock splits, stock dividends, recapitalizations, or other fundamental changes).

If not converted sooner, on November 4, 2024, we are required to redeem the outstanding Series A Preferred Shares in cash at a price per share equal to the liquidation preference plus accrued and unpaid dividends. At any time on or after November 4, 2020, we may redeem all or a portion of the Series A Preferred Shares at the redemption prices listed below (expressed as a percentage of the liquidation preference amount per share) plus accrued and unpaid dividends to the date of redemption, if the closing sale price of the common shares equals or exceeds 150% of the conversion price then in effect for at least 10 trading days (whether or not consecutive) in a period of 20 consecutive trading days, including the last trading day of such 20 trading day period, ending on, and including, the trading day immediately preceding the business day on which we issue a notice of optional redemption. The redemption prices for the 12-month period starting on the dates below are:

Period Commencing	Redemption Price
November 4, 2020	105.000%
November 4, 2021	103.000%
November 4, 2022	101.000%
November 4, 2023 and thereafter	100.000%

Additionally, upon the occurrence of a change of control, we are required to offer to redeem the Series A Preferred Shares within 120 days after the first date on which such change of control occurred, for cash at a redemption price equal to the liquidation preference per share, plus any accrued and unpaid dividends.

Dividends on the Series A Preferred Shares are payable quarterly at our election in cash, common shares, or a combination of cash and common shares at an annual dividend rate of 12.0% of the liquidation preference if paid all in cash or 16.0% of the liquidation preference if paid in common shares. If paid partially in cash and partially in common shares, the dividend rate on the cash portion is 12.0%, and the dividend rate on the common share portion is 16.0%. Dividends are payable quarterly on March 31, June 30, September 30, and December 31 of each year. The holders of the Series A Preferred Shares also are entitled to participate pro-rata in any dividends paid on the common shares on an as-converted-to-common shares basis. For the three and nine months ended September 30, 2019, we accrued $1.8 million and $5.1 million, respectively, in dividends on the Series A Preferred Shares, which is recorded in our consolidated statements of operations and comprehensive (loss) income under the caption “Interest and other expense”. Such amounts were paid in cash and in common shares. On July 2, 2019, we issued an aggregate of 2,321,568 common shares to holders of the Series A Preferred Shares as payment of the June 30, 2019 quarterly dividend on the Series A Preferred Shares, and on September 30, 2019, we issued an aggregate of 2,664,164 common shares to holders of the Series A Preferred Shares as payment of the September 30, 2019 quarterly dividend on the Series A Preferred Shares.    

Except as required by Bermuda law, the holders of Series A Preferred Shares have no voting rights, except that for so long as at least 400,000 Series A Preferred Shares are outstanding, the holders of the Series A Preferred Shares voting as a separate class have the right to elect two directors to our Board of Directors. For so long as between 80,000 and 399,999 Series A Preferred Shares are outstanding, the holders of the Series A Preferred Shares voting as a separate class have the right to elect one director to our Board of Directors. Upon less than 80,000 Series A Preferred Shares remaining outstanding, any directors elected by the holders of Series A Preferred Shares shall immediately resign from our Board of Directors.

The Certificate of Designation also provides that without the approval of the holders of a majority of the outstanding Series A Preferred Shares, we will not issue indebtedness for money borrowed or other securities which are senior to the Series A Preferred Shares in excess of the greater of (i) $100 million or (ii) 35% of our PV-10 of proved reserves as disclosed in our most recent independent reserve report filed or furnished by us on EDGAR.

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Loans payable

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Loans payable

7. Loans payable

As of the dates indicated, our third-party debt consisted of the following:

	September 30,		December 31,
	2019		2018
Fixed and Floating Rate Loans	(in thousands)
Term Loans (1)	$	25,450	$	22,000
Unsecured line of credit		605		-
Less: current portion		18,912		22,000
Long-term portion	$	7,143	$	–

_________________________________________________________

(1) Includes the 2019 Term Loan, the 2018 Term Loan, and the 2017 Term Loan (each as defined below and collectively, “Term Loans”).

On August 23, 2016, the Turkish branch of TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”) entered into a Credit Agreement (the “Credit Agreement”) with DenizBank, A.S. (“DenizBank”). The Credit Agreement is a master agreement pursuant to which DenizBank may make loans to TEMI from time to time pursuant to additional loan agreements.

2016 Term Loan

On August 31, 2016, DenizBank entered into a $30.0 million term loan (the “2016 Term Loan”) with TEMI under the Credit Agreement. In addition, we and DenizBank entered into additional agreements with respect to up to $20.0 million of non-cash facilities, including guarantee letters and treasury instruments for future hedging transactions.

The 2016 Term Loan bore interest at a fixed rate of 5.25% (plus 0.2625% for Banking and Insurance Transactions Tax per the Turkish government) per annum and was payable in six monthly installments of $1.25 million each through February 2017 and thereafter in twelve monthly installments of $1.88 million each through February 2018. On April 27, 2017, TEMI and DenizBank approved a revised amortization schedule for the 2016 Term Loan. Pursuant to the revised amortization schedule, the maturity date of the 2016 Term Loan was extended from February 2018 to June 2018, and the monthly principal payments were reduced from $1.88 million to $1.38 million. The other terms of the 2016 Term Loan remained unchanged. Amounts repaid under the 2016 Term Loan could not be re-borrowed and early repayments under the 2016 Term Loan were subject to early repayment fees.

The 2016 Term Loan was guaranteed by DMLP, Ltd. (“DMLP”), TransAtlantic Turkey, Ltd. (“TransAtlantic Turkey”), Talon Exploration, Ltd. (“Talon Exploration”), and TransAtlantic Worldwide, Ltd. (“TransAtlantic Worldwide”).

The 2016 Term Loan contained standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2016 Term Loan prohibited Amity Oil International Pty Ltd (“Amity”) and Petrogas Petrol Gaz ve Petrokimya Urunleri Insaat Sanayi ve Ticaret A.S. (“Petrogas”) from incurring additional debt. An event of default under the 2016 Term Loan included, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2016 Term Loan was secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim ve Ticaret A.S. (“Gundem Yatirim”), and (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Selami Erdem Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2016 Term Loan. Gundem Yatirim is beneficially owned by Mr. Mitchell, his adult children, and Mr. Uras. Mr. Mitchell is our chief executive officer and chairman of our board of directors. Mr. Uras is our executive vice president, Turkey.

On June 28, 2018, we repaid the 2016 Term Loan in full in accordance with its terms.

2017 Term Loan

On November 17, 2017, DenizBank entered into a $20.4 million term loan (the “2017 Term Loan”) with TEMI under the Credit Agreement.

The 2017 Term Loan bears interest at a fixed rate of 6.0% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2017 Term Loan had a grace period which bore no interest or payments due until July 2018. Thereafter, the 2017 Term Loan is payable in one monthly installment of $1.38 million, nine monthly installments of $1.2 million each through April 2019 and thereafter in eight monthly installments of $1.0 million each through December 2019, with the exception of one monthly installment of $1.2 million occurring in October 2019. The 2017 Term Loan matures in December 2019. Amounts repaid under the 2017 Term Loan may not be re-borrowed, and early repayments under the 2017 Term Loan are subject to early repayment fees. The 2017 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.  

The 2017 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2017 Term Loan prohibits Amity and Petrogas from incurring additional debt. An event of default under the 2017 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2017 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2017 Term Loan.

At September 30, 2019, we had $3.2 million outstanding under the 2017 Term Loan and no availability, and we were in compliance with the covenants in the 2017 Term Loan.

2018 Term Loan

On May 28, 2018, DenizBank entered into a $10.0 million term loan (the “2018 Term Loan”) with TEMI under the Credit Agreement.

The 2018 Term Loan bears interest at a fixed rate of 7.25% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2018 Term Loan had a grace period through July 2018 during which no payments were due. Thereafter, accrued interest on the 2018 Term Loan is payable monthly and the principal on the 2018 Term Loan is payable in five monthly installments of $0.2 million each through December 2018, four monthly installments of $0.5 million each through April 2019, four monthly installments of $1.0 million each through August 2019, and four monthly installments of $0.75 million each through December 2019. The 2018 Term Loan matures in December 2019. Amounts repaid under the 2018 Term Loan may not be reborrowed, and early repayments under the 2018 Term Loan are subject to early repayment fees. The 2018 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2018 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2018 Term Loan prohibits Amity, Talon Exploration, DMLP, and TransAtlantic Turkey from incurring additional debt. An event of default under the 2018 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2018 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2018 Term Loan.

At September 30, 2019, we had $2.3 million outstanding under the 2018 Term Loan and no availability, and we were in compliance with the covenants in the 2018 Term Loan.

2019 Term Loan

On February 22, 2019, DenizBank entered into a $20.0 million term loan (the “2019 Term Loan”) with TEMI under the Credit Agreement.

The 2019 Term Loan bears interest at a fixed rate of 7.5% (plus 0.375% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2019 Term Loan has a grace period through December 2019 during which no payments are due. Thereafter, accrued interest on the 2019 Term Loan is payable monthly, and the principal on the 2019 Term Loan is payable in 14 monthly installments of $1.4 million each. The 2019 Term Loan matures in February 2021. Amounts repaid under the 2019 Term Loan may not be reborrowed, and early repayments under the 2019 Term Loan are subject to early repayment fees. The 2019 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2019 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2019 Term Loan prohibits Amity, Talon Exploration, DMLP, and TransAtlantic Turkey from incurring additional debt. An event of default under the 2019 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2019 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2019 Term Loan.

At September 30, 2019, we had $20.0 million outstanding under the 2019 Term Loan and no availability, and we were in compliance with the covenants in the 2019 Term Loan.

Unsecured lines of credit

Our wholly-owned subsidiaries operating in Turkey are party to unsecured, non-interest bearing lines of credit with a Turkish bank. At September 30, 2019, we had $0.6 million outstanding borrowings under these lines of credit.

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Segment information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment information

11. Segment information

In accordance with ASC 280, Segment Reporting (“ASC 280”), we have two reportable geographic segments: Turkey and Bulgaria. Summarized financial information from operations concerning our geographic segments is shown in the following table:

	Corporate			Turkey		Bulgaria			Total
	(in thousands)
For the three months ended September 30, 2019
Total revenues	$	-		$	14,653	$	-		$	14,653
(Loss) income from operations before income taxes		(3,984	)		5,932		(628	)		1,320
Capital expenditures	$	-		$	9,696	$	487		$	10,183
For the three months ended September 30, 2018
Total revenues	$	-		$	20,140	$	-		$	20,140
(Loss) income from operations before income taxes		(2,995	)		7,184		(52	)		4,137
Capital expenditures	$	-		$	6,087	$	-		$	6,087
For the nine months ended September 30, 2019
Total revenues	$	-		$	50,909	$	-		$	50,909
(Loss) income from operations before income taxes		(9,524	)		20,304		(6,582	)		4,198
Capital expenditures	$	-		$	20,424	$	5,537		$	25,961
For the nine months ended September 30, 2018
Total revenues	$	-		$	55,264	$	-		$	55,264
(Loss) income from operations before income taxes		(11,230	)		15,160		(173	)		3,757
Capital expenditures	$	-		$	17,708	$	-		$	17,708
Segment assets
September 30, 2019	$	8,842		$	133,806	$	625		$	143,273
December 31, 2018	$	8,358		$	122,325	$	1,917		$	132,600

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Property and Equipment - Capitalized Costs under Successful Efforts Method for Oil and Natural Gas Properties (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Oil and natural gas properties, proved	$ 170,237	$ 163,006
Oil and natural gas properties, unproved	14,911	15,695
Gross oil and natural gas properties	185,148	178,701
Accumulated depletion	(103,235)	(100,582)
Net oil and natural gas properties	81,913	78,119
Turkey [Member]
Property Plant And Equipment [Line Items]
Oil and natural gas properties, proved	169,758	162,494
Oil and natural gas properties, unproved	14,911	14,965
Bulgaria [Member]
Property Plant And Equipment [Line Items]
Oil and natural gas properties, proved	$ 479	512
Oil and natural gas properties, unproved		$ 730

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General - Additional Information (Detail) - Segment	9 Months Ended
	Sep. 30, 2019	Nov. 08, 2019
Nature Of Business [Line Items]
Number of operating segments	2
Subsequent Event [Member]
Nature Of Business [Line Items]
Percentage of common shares owned		46.00%