TransAtlantic Petroleum Management Discusses Q4 2012 Results - Operating Results Call Transcript
March 19, 2013 1:30 PM ET
TransAtlantic Petroleum (TAT)
Q4 2012 Operating Results Call
March 19, 2013 10:00 am ET
N. Malone Mitchell - Chairman and Chief Executive Officer
Wil F. Saqueton - Chief Financial Officer, Principal Accounting Officer and Vice President
Ian Delahunty - President
Neal Dingmann - SunTrust Robinson Humphrey, Inc., Research Division
Good day, ladies and gentlemen, and thank you for standing by. Welcome to the TransAtlantic Petroleum Ltd. Fourth Quarter 2012 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like hand the conference over to our host for today, Mr. Malone Mitchell, Chairman and CEO. Sir, please go ahead.
N. Malone Mitchell
Good morning, ladies and gentlemen. This is Malone Mitchell. I apologize. I am at the Customs at the airport. [indiscernible] I'll try to speak loudly.
As you know, last Wednesday, we released some data in an expectation of filing our 10-K yesterday. Last Friday morning, we learned that it would not be possible. We got the word and counsel did not feel that an announcement could be accurately crafted if they did not come along after our meetings with our auditors on Friday, so that they could release it on Monday.
Now along with the normal topic of current period audit issues, which require prior [ph] income adjustment, we knew that our deferred tax liability needed approval that the methodology of estimating our RSU forfeitures, which we have had used its 10% of the total issued RSUs, there's an error. For just a little over 600,000, right about 500,000 units in the prior periods, but believed that this would fall below the materiality threshold.
We're also still tying it by our prior year property accounts toward to the satisfaction of ourselves and KPMG Dallas. We've all [indiscernible] the same firm [indiscernible] then they succeeded KPMG [indiscernible] that we have some further required proofs on our property [indiscernible]. Unfortunately by Thursday night late and Friday morning, we found that [indiscernible] from 2009 and 2010 have not been properly depleted. Our current accounting rules require [indiscernible] on prior audited property standards that we simply [indiscernible] this is a noncash entry involve some [indiscernible] in 2010. We believe the total [indiscernible] adjusted is likely to be in the $3 [ph] million to $4 million range in noncash entry. This calculation will require [indiscernible] RSU that I mentioned prior period adjustment that we made in our third quarter 10-Q. It will require a review of our 10-K [ph] that KPMG calibrated, which was not previously involved in our 2012 audited 10-K, making filing them in time impossible. In the final calculation, the auditor determines how long this takes to correct. In our current accounting [indiscernible] is complete, but they do a very good job of completing the monthly management accounting, the statutory local accounting and prior period [indiscernible] marking from 2012 with in [indiscernible] 2012 filing. But we have been -- we have been [indiscernible] because we have been delayed on our filings.
For our accounting team, the cycle of starting to work in the current filing has always been impossible because all resources were required to [indiscernible] past issues in the past year. But this is how we're going to break this cycle. With 10-K recalculations continuing through the full second quarter of this year, we are hiring an outside research firm to do the prior period work and provide additional resources. The current accounting team will move to the first quarter of 2013 accounting and filing, so that we can file that timely. We should have done this much sooner. And frankly, 2009 and 2010 were [indiscernible], the lack of systems from that time period in the team did not really get either appropriate and accurate [indiscernible] current accounting team.
Now Wil Saqueton, our CFO, will discuss the limited financial data related to prior period adjustments. Wil?
Wil F. Saqueton
Thanks, Malone. Until we file the 10-K, we can only provide limited financial information. We expect the fourth quarter net loss from continuing operations to be between $20 million to $25 million. The fourth quarter included exploration, abandonment and impairment charges of approximately $24 million, largely driven by dry holes on several high risk exploration wells, including Konak-1 and Durakoy-1, as well as impairment of value on several of our unproved property licenses. We expect fourth quarter adjusted EBITDAX from continuing operations to be between $22 million to $24 million. As of December 31, 2012, our cash balance was $14.8 million. Our long-term debt remained flat at $32.8 million. We continue to have no short-term debt, and our availability on our credit facility stood at $26.9 million. I'll turn the call back over to you, Malone.
N. Malone Mitchell
Thank you, Wil. there is some confusion [indiscernible] numbers. We [indiscernible] in July in Dallas with an independent . [indiscernible] for filings. If [indiscernible] , continuing work in the [indiscernible], and we are still confident in probable [indiscernible] for the Tekirdag in the structure. And we continue to a later cutoff date with same results net to our ranges, which is 30% [ph] . To adjust to lower level of results within approximately 11.1 [ph] Bcf or 2 million barrels, an additional probable 19.7 Bcf or 2.2 million barrels in additional possible reserves. Although we released potential reserves, we [indiscernible] reserve estimates for either . It has not been our practice to publish this publicly. Now our have nearly finished the additions and the changes in the technical management, which I believe and we believe is necessary to complete the frac programs we began this year. I feel good about these changes. I feel good about . Ian Delahunty, our President, will now give update.[ph]
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