TransAtlantic looks to restructure or repay loan, convertible notes

By Caroline Salls

Pittsburgh, March 30 – TransAtlantic Petroleum Ltd. is focused on several near-term business strategies in light of unfavorable market conditions and the company’s limited access to capital, including restructuring or repaying its senior credit facility and convertible notes, according to a news release.

The company said it is also focusing on curing, waiving or extending a deadline to repay a borrowing base deficiency, the sale of assets to raise cash, a significantly reduced development plan focused on maintaining its acreage position by drilling obligation wells and performing low-cost, high-return well optimizations and continued measures to reduce operating costs and general and administrative expenses.

In connection with restructuring its debt obligations and enhancing liquidity, TransAtlantic said it has engaged Seaport Global to provide assistance with strategic advice and assistance with potential transactions.

As a result of a significant decline in Brent crude oil prices during 2015, the company said the borrowing base under its senior credit facility from BNP Paribas (Suisse) SA and the International Finance Corp. was decreased to $16.6 million effective Dec. 30, resulting in a $15.5 million borrowing base deficiency.

On Dec. 30, the lenders granted the company a waiver of defaults under the senior credit facility, which was conditioned on no borrowing base deficiency existing as of March 31. As of Wednesday, the company said the borrowing base deficiency was $14.2 million.

According to the release, TransAtlantic has negotiated a preliminary waiver of the existing defaults under the senior credit facility and an extension of the borrowing base deficiency repayment obligation until at least Sept. 30.

The preliminary waiver and extension is subject to the approval of the lenders’ respective credit committees, which will be sought in early April.

Because it is currently in default under the credit facility and will be unable to repay the borrowing base deficiency by March 31, the company said the lenders could accelerate the credit facility, and that could result in a cross-default on the outstanding convertible notes.

TransAtlantic had $7.48 million in cash and cash equivalents as of Dec. 31, as well as $299.45 million in assets and $240.53 million of total debt.

The oil and gas company is based in Dallas. TransAtlantic holds interests in Turkey, Albania and Bulgaria.

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