| Acres | ||||
|---|---|---|---|---|
| Asset | Location | Interest | Gross | Net |
| Ouezzane-Tissa & Asilah | Rif Belt | 50% | 3,036,068 | 1,518,034 |
| Guercif | Guercif Basin | 80% | 962,000 | 769,600 |
| Tselfat | Rharb Basin | 100% | 222,345 | 222,345 |
| TOTAL | 4,220,413 | 2,509,979 | ||
| Commercial Terms | ||||
| Licensing Regime | ||||
| Acres | ||||
|---|---|---|---|---|
| Asset | Location | Interest | Gross | Net |
| Ouezzane-Tissa & Asilah | Rif Belt | 50% | 3,036,068 | 1,518,034 |
| Guercif | Guercif Basin | 80% | 962,000 | 769,600 |
| Tselfat | Rharb Basin | 100% | 222,345 | 222,345 |
| TOTAL | 4,220,413 | 2,509,979 | ||
| Commercial Terms | ||||
| Licensing Regime | ||||
Ouezzane-Tissa & Asilah (7)
Location: Rif Belt
Interest: 50%
Acres: 3,036,068 / 1,518,034
In July 2008, TransAtlantic agreed to farm-in to the Ouezzane-Tissa and Asilah exploration permits held by Direct Petroleum Morocco and Anschutz Morocco Corporation (collectively, "Direct") in northern Morocco.
Opportunity
- Large, promising under-explored area containing multiple reservoirs and oil seeps
- ADD-HR anomalies indicate hydrocarbon anomaly
- Acquired 200 square kilometers of seismic in 2008
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Guercif
Location: Guercif Basin
Interest: 80%
Acres: 962,000 / 769,600
In June 2005, TransAtlantic was awarded a reconnaissance prospect covering 3.4 million acres in north eastern Morocco. In January 2008, TransAtlantic converted a portion of its reconnaissance prospect into two exploration permits.
Opportunity
- Re-entering Jurassic "missed-pay" prospects with hydrocarbon-bearing intervals that were overlooked at time of original drilling
- Six additional prospects and leads, many with direct seismic hydrocarbon indicators
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Tselfat (Haricha, Tselfat, and Bou Draa Fields)
Location: Rharb Basin
Interest: 100%
Acres: 222,345
In May 2006, TransAtlantic was awarded the Tselfat exploration prospect in northern Morocco, approximately 200km east of Rabat and 40km north of Meknes. From a structural perspective, Tselfat overlaps from the eastern edge of the Rharb Basin into the foothills of the Rif Cordillera, in an area known as the Rides Prérifaines.
In 2008, TransAtlantic shot 175 square kilometers of 3D seismic, which is the first seismic shot over the trend.
For the most recent information regarding TransAtlantic's activities in Morocco please download the Company's investor presentation. For photos of Morocco, please visit the gallery.
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Commercial Terms
For Moroccan exploration acreage, TransAtlantic's interests and the interests of its partners are subject to 25% interest held by the national oil company of Morocco, Office National des Hydrocarbures et des Mines ("ONHYM"). During the exploration phase, TransAtlantic and its partners operate and bear 100% of the costs to earn 75% interest. ONHYM is carried for 25% of the costs during the exploration phase. Once a discovery is made, the area covered by the discovery is converted into an exploitation concession. Under an exploitation concession, TransAtlantic and its partners (75%) and ONHYM (25%) will each pay their share of costs.
Upon conversion to an exploitation concession, a discovery bonus is paid to ONHYM, and when certain sustained daily production levels are reached, one-time production bonuses are paid. At Tselfat at Ouezzane-Tissa and Asilah, the discovery bonus is $500,000 and the production bonus is as follows:
| Barrels/day | Production Bonus |
|---|---|
| 15,000 | $750,000 |
| 25,000 | $1,000,000 |
| 35,000 | $2,000,000 |
| 50,000 | $3,000,000 |
At Guercif, the discovery bonus is $500,000 and the production bonus is as follows:
| Barrels/day | Production Bonus |
|---|---|
| 10,000 | $500,000 |
| 20,000 | $750,000 |
| 30,000 | $1,000,000 |
| 50,000 | $3,000,000 |
There is a ten-year tax holiday in Morocco on revenues from petroleum production commencing in the year in which production begins. After ten years, the corporate tax rate is 30%. Oil & gas exploration activities are exempt from both value added tax and customs duties. The royalty paid to the Moroccan government for onshore production is 10% on oil and 5% on gas. In addition, the first approximately 2.1 million barrels of oil production and the first approximately 11 billion cubic feet of gas production are exempt from royalty. Once an area is converted into an exploitation concession, surface rentals of $2.85 per acre are paid annually.
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Licensing Regime
The licensing process in Morocco for oil & gas concessions occurs in three stages:
1 - Reconnaissance prospect
2 - Exploration permit
3 - Exploitation concession
Under a reconnaissance license, the government grants exploration rights for a one-year term to conduct seismic and other exploratory activities (but not drilling). The reconnaissance license may be extended for up to one additional year. Interests under a reconnaissance license are not transferable. The reconnaissance lLicense commits a company to a work program and requires the company to post a bank guarantee for the estimated program cost. At the end of the reconnaissance license's term, the company must designate one or more areas for conversion to an Exploration Permit or relinquish all rights.
An exploration permit has a term for up to eight years and covers an area not to exceed 2,000 square kilometers. Under an exploration permit, exploration and appraisal studies and operations are undertaken in order to establish the existence of oil & gas in commercially exploitable quantities. This generally entails the drilling of exploration wells to establish the presence of oil and/or gas and such additional appraisal wells to determine: (1) the limits and the productive capacity of a hydrocarbon deposit, (2) to determine whether or not to go forward to develop and produce the prospect. The eight-year term under an exploration permit is divided into three separate time frames of 2-3 years each. At the end of each 2-3 year period, the oil company may relinquish part of the license. A distinct work program is negotiated for each separate term and TransAtlantic posts a bank guarantee for the estimated program cost. The interests under an exploration permit are 75% to TransAtlantic and 25% to ONHYM. Interests under an exploration permit are transferable. However, 100% of the costs of all activities under an exploration permit are borne by the oil company.
An exploitation concession is applied for upon the discovery of a commercially exploitable field. The concession size corresponds to the area of the commercial discovery. The maximum duration of an exploitation concession is 25 years. Once an exploitation concession becomes effective, then the costs incurred for the development of the field are to be funded by the parties in proportion to their respective percentage interests (75% oil company, 25% ONHYM). The oil company serves as operator. The oil company and ONHYM have entered into an association contract (similar to a joint operating agreement) to govern operations on the concession. Interests under an exploitation concession are transferable. All oil production is sold at market prices. Gas production may be regulated, if sold to the Moroccan National Power Company. A bonus (the amount of which is negotiated at the time of negotiation of a petroleum agreement) is paid to the government by the oil company upon conversion to an exploitation concession. Additional production bonuses are also paid when certain production levels from the exploitation concession are achieved. The levels of production and the amount of production bonuses are negotiated as part of a petroleum agreement. The bonuses are deductible for tax purposes.
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