S-1

As filed with the Securities and Exchange Commission on December 23, 2009

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

TRANSATLANTIC PETROLEUM LTD.

(Exact name of registrant as specified in its charter)

Bermuda	1382	None
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

5910 N. Central Expressway, Suite 1755

Dallas, Texas 75206

(214) 220-4323

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Jeffrey S. Mecom

Vice President and Corporate Secretary

5910 N. Central Expressway, Suite 1755

Dallas, Texas 75206

(214) 220-4323

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Garrett A. DeVries

Haynes and Boone, LLP

2323 Victory Avenue, Suite 700

Dallas, Texas 75219

(214) 651-5614

(214) 200-0428 (fax)

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement, as determined by the selling shareholders.

If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.    x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered(1)	Proposed maximum aggregate offering price per share(2)	Proposed maximum aggregate offering price(2)	Amount of registration fee
Common Shares, par value $0.01 each	42,838,451	$3.025	$129,586,314.28	$9,239.50

(1) In accordance with Rule 416, we are also registering an indeterminable number of common shares as may be issued in connection with stock splits, stock dividends or similar transactions.

(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act and based upon the average of the high and low prices on the NYSE Amex on December 16, 2009.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.

The information contained in this prospectus is not complete and may be changed. The selling shareholders named in this prospectus may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

Subject to completion, dated December 23, 2009

Prospectus

42,838,451 shares

TransAtlantic Petroleum Ltd.

Common Shares

The selling shareholders named in this prospectus may use this prospectus to offer and sell from time to time up to 42,838,451 of our common shares. We will not receive any of the proceeds from the sale of our common shares by the selling shareholders. This prospectus does not cover the issuance of any common shares by us to the selling shareholders.

Except for underwriting discounts and selling commissions, which may be paid by the selling shareholders, we have agreed to pay the expenses incurred in connection with the registration of the common shares covered by this prospectus.

The selling shareholders may sell the common shares from time to time at market prices prevailing at the time of sale, prices related to prevailing market prices or privately negotiated prices. The selling shareholders may sell the common shares to or through underwriters, brokers or dealers or directly to purchasers. Underwriters, brokers or dealers may receive discounts, commissions or concessions from the selling shareholders, purchasers in connection with sales of the common shares, or both. Additional information relating to the distribution of the common shares by the selling shareholders can be found in this prospectus under the heading “Plan of Distribution.” If underwriters or dealers are involved in the sale of any securities offered by this prospectus, their names, and any applicable purchase price, fee, commission or discount arrangement between or among them, will be set forth, or will be calculable from the information set forth, in a supplement to this prospectus.

Our common shares are traded on the Toronto Stock Exchange under the symbol “TNP” and are traded on the NYSE Amex under the symbol “TAT”. On December 22, 2009, the closing price of our common shares on the Toronto Stock Exchange was $Cdn 3.45, and the closing price for our common shares on the NYSE Amex was $3.27 per share.

Investing in our common shares involves risks. See “Risk Factors” beginning on page 5.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is [—], 2009.

TABLE OF CONTENTS

SUMMARY	1
RISK FACTORS	5
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS	16
USE OF PROCEEDS	16
MARKET PRICE OF AND DIVIDENDS ON OUR COMMON SHARES AND RELATED SHAREHOLDER MATTERS	17
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
BUSINESS	32
PROPERTIES	41
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	51
DESCRIPTION OF CAPITAL STOCK	56
MANAGEMENT	59
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	61
SELLING SHAREHOLDERS	64
PLAN OF DISTRIBUTION	71
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE	73
WHERE YOU CAN FIND MORE INFORMATION	74
LEGAL MATTERS	74
EXPERTS	75
INDEPENDENT PETROLEUM ENGINEERS	75
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS	F-1

You should rely only on the information contained or incorporated by reference in this prospectus and any applicable prospectus supplement or amendment. We have not, and the selling shareholders have not, authorized any person to provide you with different information. This prospectus is not an offer to sell, nor is it an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this prospectus is complete and accurate as of the date on the front cover, but the information may have changed since that date.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, the selling shareholders referred to in this prospectus may offer and sell from time to time up to 42,838,451 outstanding common shares.

Information about the selling shareholders may change over time. Any changed information given to us by the selling shareholders will be set forth in a prospectus supplement if and when necessary. Further, in some cases, the selling shareholders will also be required to provide a prospectus supplement containing specific information about the terms on which they are offering and selling our common shares. If a prospectus supplement is provided and the description of the offering in the prospectus supplement varies from the information in this prospectus, you should rely on the information in the prospectus supplement.

Unless the context requires otherwise, references in this prospectus to “TransAtlantic,” “we,” “us,” and “our” are to TransAtlantic Petroleum Ltd. and its subsidiaries on a consolidated basis. All references to “$” or “dollars” in this prospectus refer to U.S. dollars, unless otherwise indicated. Canadian dollars is abbreviated Cdn$, and Australian dollars is abbreviated AUD$.

SUMMARY

This summary highlights information about this offering and the information included or incorporated by reference in this prospectus. This summary does not contain all of the information that you should consider before investing in our common shares. You should carefully read the entire prospectus, especially the risks of investing in our common shares discussed under “Risk Factors” in this prospectus, any accompanying prospectus supplement and the documents incorporated herein by reference before making an investment decision.

TransAtlantic Petroleum Ltd.

TransAtlantic Petroleum Ltd. is a vertically integrated, international oil and gas company engaged in the acquisition, development, exploration, and production of crude oil and natural gas. We hold interests in developed and undeveloped oil and gas properties in Turkey, Morocco, Romania, and California. In addition, we provide oilfield services and contract drilling services to third parties in Turkey and plan to provide similar services in Morocco.

We underwent a strategic transformation during 2008 as a result of a series of transactions with N. Malone Mitchell, 3rd, chairman of our board of directors. Mr. Mitchell founded Riata Energy, Inc. in 1985 and built it into one of the largest privately held oil and gas producers in the United States. In 2006, Mr. Mitchell sold his controlling interest in Riata Energy, Inc. (now Sandridge Energy, Inc.) and founded a group of companies that are primarily focused on investing in international energy opportunities.

We were incorporated under the laws of British Columbia, Canada on October 1, 1985 under the name Profco Resources Ltd. and continued to the jurisdiction of Alberta, Canada under the Business Corporations Act (Alberta) on June 10, 1997. Effective December 2, 1998, we changed our name to TransAtlantic Petroleum Corp. Effective October 1, 2009, we continued to the jurisdiction of Bermuda under the Companies Act 1981 of Bermuda from the Province of Alberta and changed our name to TransAtlantic Petroleum Ltd. Our common shares trade on the Toronto Stock Exchange in Canadian dollars under the symbol “TNP” and on the NYSE Amex in U.S. dollars under the symbol “TAT”. Our principal executive office is located at 5910 N. Central Expressway, Suite 1755, Dallas, Texas 75206. Our telephone number is (214) 220-4323. Our website address is www.transatlanticpetroleum.com. Except for any documents that are incorporated by reference into this prospectus that may be accessed from our website, the information available on or through our website is not part of this prospectus.

Recent Developments

Incremental Acquisition. In the first quarter of 2009, we acquired Incremental Petroleum Limited (“Incremental”) through our wholly-owned subsidiary, TransAtlantic Australia Pty. Ltd. (“TransAtlantic Australia”). We announced our intention to make an all cash takeover offer to acquire all of the outstanding shares of Incremental in the fourth quarter of 2008. The offer expired on March 6, 2009 and Incremental delisted from the Australian Stock Exchange on March 26, 2009. At March 31, 2009, we owned approximately 96% of Incremental’s outstanding common shares. We completed the acquisition of the remaining 4% of Incremental’s outstanding common shares through an Australian statutory procedure on April 20, 2009. The acquisition of Incremental expanded our rig fleet and increased our workforce of highly qualified field staff, engineers and geologists in Turkey, one of our target countries. Through the Incremental acquisition, we acquired Turkish properties including the producing Selmo oil field, the Edirne gas field and additional exploration acreage. We also acquired three prospects in California.

Through the Incremental acquisition, we acquired a 100% working interest in a production lease in the Selmo oil field in southeastern Turkey. Situated on the northern edge of the Zagros fold belt of Iran and Iraq in southeast Turkey, Selmo has produced approximately 83 million barrels of oil to date. During the third quarter of 2009, our interest in the Selmo field produced 137,400 barrels of crude oil at an average rate of 1,494 barrels per day.

Through the Incremental acquisition, we acquired a 55% working interest in an exploration license in the Edirne gas field located in the Thrace Basin in northwestern Turkey. We are constructing a gathering system and facilities in the Thrace Basin necessary to begin selling natural gas from our discoveries in the Edirne gas field. On

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December 15, 2009, we entered into a five year gas sales agreement pursuant to which a natural gas distributor in Turkey agreed to purchase all of our gas production from the Edirne field. We will sell the gas at a price equal to a 15% discount to the Industrial Interruptible Tariff benchmark set by BOTAS Petroleum Pipeline Corporation (“BOTAS”), the state-owned crude oil and natural gas pipelines and trading company in Turkey. We expect our initial eight wells in the Edirne field to come online in January 2010 with net production to us exceeding 5.5 million cubic feet of natural gas per day beginning in the first quarter of 2010. Once gas sales commence, we plan to resume drilling in the Thrace Basin, with five wells planned and an additional two wells under consideration. We are presently acquiring an additional 100 square kilometers of 3D seismic on the western portion of the Edirne license using our own seismic equipment.

Through the Incremental acquisition, we acquired a 100% working interest in License 4262, covering 2,805 acres in southeastern Turkey, a 100% working interest in four exploration licenses in Midyat in southeastern Turkey covering approximately 460,400 acres and a 50% working interest in eight exploration licenses in the Tuz Golu basin in central Turkey covering approximately 870,000 acres.

In addition, through the Incremental acquisition, we acquired interests in three projects in the San Joaquin Valley in central California. We own a non-operated working interest in the Kettleman Middle Dome Unit. This unit produces approximately 125 gross barrels of oil per day along with small amounts of associated natural gas. We own a 5% interest in five existing wells on the Kettleman Middle Dome Unit (three are currently producing). On all new projects and well proposals submitted and completed after May 16, 2008, we will own a 10% non-operated working interest. In addition, we drilled two wells under our McFlurrey farm-out in March and April 2009, paying 100% of the cost. We tested the first well and determined it was non-commercial. Based on these results, we did not test the second well. We also own a 50% interest in the South East Kettleman North Dome oil field. We are currently exploring our options to divest the McFlurrey and South East Kettleman North Dome projects.

Sale of Common Shares. On June 22, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 98,377,300 common shares at a price of Cdn$1.65 per common share, raising gross proceeds of approximately $143.1 million. Of the 98,377,300 common shares sold, 41,818,000 common shares were offered and sold by us to Dalea Partners, LP (“Dalea”), an entity owned and controlled by our chairman, N. Malone Mitchell, 3rd. We used $61.8 million of the net proceeds towards paying off a credit agreement with Dalea. The remaining portion of the net proceeds was used to fund our exploration and development activities and for general corporate purposes. In connection with these offerings, we entered into a registration rights agreement providing for the registration of up to 98,377,300 common shares issued in these offerings, of which 55,544,300 shares have been registered for resale under the Securities Act of 1933, as amended (the “Securities Act”).

EOT Acquisition. On July 23, 2009, our wholly-owned subsidiary, TransAtlantic Worldwide Ltd., acquired all of the ownership interests in Energy Operations Turkey, LLC (“EOT”) for total consideration of $7.8 million. EOT’s assets include a 50% interest in License 3118, interests in ten other exploration licenses in southern and southeastern Turkey, inventory and seismic data. License 3118, which covers approximately 96,000 acres (389 square kilometers), is located near the city of Diyarbakir in southeastern Turkey. In April and September 2008, EOT participated in the drilling of the Arpatepe-1 and Arpatepe-2 wells on License 3118, which represent Turkey’s first and second economic discoveries of crude oil from deeper, onshore Paleozoic sandstone formations. The wells, which flowed naturally and were not stimulated, had initial production rates of 440 and 190 gross barrels of oil per day, respectively, from limited perforations. At December 16, 2009, the wells were producing an aggregate of approximately 60 gross barrels of oil per day.

Continuance to Bermuda. Effective October 1, 2009, we continued to the jurisdiction of Bermuda under the Companies Act 1981 of Bermuda from the Province of Alberta and changed our name from TransAtlantic Petroleum Corp. to TransAtlantic Petroleum Ltd. Our shareholders approved the continuance by a special resolution at a special meeting of shareholders held on July 14, 2009. In connection with the continuance, each of our common shares became and remained a common share of TransAtlantic Petroleum Ltd., and we became subject to the laws of Bermuda as if we had originally been incorporated under the Companies Act 1981 of Bermuda. We believe that continuing our company to Bermuda will be beneficial to us and our shareholders because we will receive more favorable tax treatment in Bermuda.

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Offering of Common Shares. On November 24, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 48,298,790 common shares at a price of Cdn$2.35 per common share, raising gross proceeds of approximately Cdn$113.5 million. Of the 48,298,790 common shares sold, we offered and sold 4,255,400 common shares to Dalea. We intend to use approximately Cdn$87.3 million of the net proceeds towards our 2010 capital expenditure program, including approximately Cdn$12.8 million for the acquisition of equipment, approximately Cdn$47.9 million for the drilling of exploration wells in Turkey, Morocco and Romania and approximately Cdn$26.6 million for the drilling of development wells (including well infrastructure) in the Selmo field and the Thrace Basin. The remaining net proceeds from the offerings will be used for general corporate purposes, which may include the acquisition of other equipment which is not currently included in our 2010 capital expenditure program, the expansion of our drilling program in 2010, additional corporate or property acquisitions or the repayment of approximately $6 million in debt relating to the acquisition of a drilling rig in July 2009. In connection with these offerings, we entered into a registration rights agreement providing for the registration of up to 48,298,790 common shares issued in these offerings. Concurrently with the offerings, we completed a Regulation D private placement to two accredited investors in the United States of 750,000 common shares at Cdn$2.35 per common share for gross proceeds to us of approximately Cdn$1.76 million. See “Description of Capital Stock—Registration Rights of Selling Shareholders.” This prospectus does not offer for sale any common shares beneficially owned by Dalea.

Credit Facility. On December 21, 2009, our wholly-owned subsidiaries, DMLP, Ltd., Petroleum Exploration Mediterranean International Pty. Ltd. (“PEMI”), Talon Exploration, Ltd. and TransAtlantic Turkey, Ltd. (collectively, the “Borrowers”) entered into a three year, $250 million senior credit facility with Standard Bank Plc and BNP Paribas (Suisse) SA. The credit facility is guaranteed by us and each of Incremental Petroleum (Selmo) Pty. Ltd., TransAtlantic Petroleum (USA) Corp. and TransAtlantic Worldwide, Ltd. (collectively, the “Guarantors”). The initial borrowing base under the credit facility is $30 million, subject to redetermination from time to time. Loans under the credit facility will accrue interest at a rate of three month LIBOR plus 6.25% per annum. We intend to use the credit facility to finance a portion of the development of our oil and gas properties in Turkey, acquisitions and for general corporate and working capital purposes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Current Activities. Our current activities are focused on integrating the acquisitions of Incremental and EOT and developing our oil and gas properties in Turkey, Morocco, Romania and California. Our success will depend in part on discovering hydrocarbons in commercial quantities and then bringing these discoveries into production. We are currently engaged in the following drilling and exploration activities:

Turkey

• Drilling the S-58 development well on the Selmo oil field

• Sidetracking the S-44 well on the Selmo oil field

• Completing construction of a gas gathering facility to bring Edirne gas field production online

Morocco

• Drilling the OZW-1 exploratory well on the Ouezzane-Tissa permits

• Drilling the HKE-1 exploratory well on the Ouezzane-Tissa permits

Romania

• Testing and completing the re-development wells on the Izvoru, Vanatori and Marsa licenses

• Drilling exploratory wells on the Sud Craiova license

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The Offering

Common shares offered by the selling shareholders	42,838,451 shares
Selling shareholders	All of the common shares are being offered by the selling shareholders named herein. This prospectus does not offer for sale any common shares beneficially owned by Dalea. See “Selling Shareholders” for more information on the selling shareholders.
Use of proceeds	We will not receive any proceeds from the sale of the common shares in this offering.
Plan of distribution	The selling shareholders named in this prospectus, or their pledgees, donees, transferees or other successors-in-interest, may offer or sell the common shares from time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. The selling shareholders may resell the common shares to or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions, or commissions. For additional information on the methods of sale that may be used by the selling shareholders, see “Plan of Distribution.”
Toronto Stock Exchange symbol	TNP
NYSE Amex symbol	TAT

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RISK FACTORS

Investing in our common shares involves risks. You should carefully consider and evaluate all of the information contained in this prospectus and in the documents incorporated herein by reference before you decide to invest in our common shares. Any of the risks and uncertainties set forth therein could materially and adversely affect our business, results of operations and financial condition, which in turn could materially and adversely affect the trading price of our common shares being offered by this prospectus. As a result, you could lose all or part of your investment.

Risks Related to Our Business

We have a history of losses and may never be profitable.

We have incurred substantial losses in prior years. During 2008, our net loss and comprehensive loss was approximately $16.5 million and we used cash of $13.7 million in operating activities. For the three and nine months ended September 30, 2009, our consolidated net loss was approximately $13.1 million and $33.8 million, respectively. We may suffer significant additional losses in the future and may never be profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. We expect to incur losses unless and until such time as one or more of our properties generates sufficient revenue to fund our continuing operations.

The future performance of our business will depend upon our ability to identify, acquire and develop additional oil and gas reserves that are economically recoverable. Success will depend upon the ability to acquire working and revenue interests in properties upon which oil and gas reserves are ultimately discovered in commercial quantities, and the ability to develop prospects that contain additional proven oil and gas reserves to the point of production. Without successful acquisition and exploration activities, we will not be able to develop additional oil and gas reserves or generate additional revenues. There are no assurances that additional oil and gas reserves will be identified or acquired on acceptable terms, or that oil and gas reserves will be discovered in sufficient quantities to enable us to recover our exploration and development costs or sustain our business.

The successful acquisition and development of oil and gas properties requires an assessment of recoverable reserves, future oil and gas prices and operating costs, potential environmental and other liabilities, and other factors. Such assessments are inherently uncertain. In addition, no assurance can be given that our exploration and development activities will result in the discovery of any reserves. Operations may be curtailed, delayed or canceled as a result of lack of adequate capital and other factors, such as lack of availability of rigs and other equipment, title problems, weather, compliance with governmental regulations or price controls, mechanical difficulties, or unusual or unexpected formations, pressures and or work interruptions. In addition, the costs of exploration and development may materially exceed our initial estimates.

We will require significant capital to continue our exploration and development activities beyond December 2010.

We recently expanded our planned 2010 drilling program. We may not have sufficient funds to conduct our exploration and development activities beyond December 2010. If we are unable to finance our planned exploration and development activities on acceptable terms or at all, our operations may be materially and adversely affected.

Future cash flows and the availability of debt or equity financing will be subject to a number of variables, such as:

• the success of our prospects in Romania, Morocco, Turkey and California;

• success in finding and commercially producing reserves; and

• prices of natural gas and oil.

Debt financing could lead to:

• a substantial portion of operating cash flow being dedicated to the payment of principal and interest;

• our company being more vulnerable to competitive pressures and economic downturns; and

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• restrictions on our operations.

We might not be able to obtain necessary financing on acceptable terms, or at all. If sufficient capital resources are not available, we might be forced to curtail developmental and exploratory drilling and other activities or be forced to sell some assets on an untimely or unfavorable basis, which would have a material adverse effect on our business, financial condition and results of operations.

Difficulties in combining the operations of Incremental and EOT with our operations may prevent us from achieving the expected benefits from the acquisitions.

There are significant risks and uncertainties associated with our acquisitions of Incremental and EOT. The acquisitions are expected to provide substantial benefits, including among other things, expanding our rig fleet and increasing our workforce of highly qualified field staff, engineers and geologists in Turkey, one of our target countries. Achieving such expected benefits is subject to a number of uncertainties, including:

• whether the operations of Incremental and EOT are integrated with our company in an efficient and effective manner;

• difficulty transitioning customers and other business relationships to our company;

• problems unifying management of a combined company;

• loss of key employees from our existing or acquired businesses; and

• intensified competition from other companies seeking to expand sales and market share during the integration period.

Failure to achieve these benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy from the development and operation of our existing business that could materially and adversely impact our business, financial condition and operating results.

Our secured credit facility contains various covenants that limit our management’s discretion in the operation of our business and can lead to an event of default that may adversely affect our business, financial condition and results of operations.

The operating and financial restrictions and covenants in our credit facility with Standard Bank, Plc and BNP Paribas (Suisse) SA may adversely affect our ability to finance future operations or capital needs or to engage in other business activities. Our credit facility contains various covenants that restrict our ability to, among other things:

• incur additional debt;

• create liens;

• enter into any hedge agreement for speculative purposes;

• engage in business other than as an oil and gas exploration and production company;

• enter into sale and leaseback transactions; or

• enter into any merger, consolidation or amalgamation.

In addition, the credit facility requires us to maintain specified financial ratios and tests and to enter into a commodity price hedge agreement, as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” Various risks, uncertainties and events beyond our control could affect our ability to comply with the covenants and financial tests and ratios required by the credit facility and could result in a default under the credit facility.

An event of default under the credit facility includes, among other events, breach of certain covenants and obligations, our bankruptcy or insolvency, and failure to meet the required financial tests and ratios. In the event of our bankruptcy or insolvency, all amounts payable under the credit facility become immediately due and payable. In the event of any other

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default under our credit facility, the lenders would be entitled to accelerate the repayment of amounts outstanding. Moreover, in the event of a default we would lose the ability to draw on, and the lenders would have the option to terminate, any obligation to make further extensions of credit under the credit facility. In addition, in the event of a default under the credit facility, which is secured by substantially all of the assets of the Borrowers, the lenders could proceed to foreclose against the assets securing such obligations. In the event of an acceleration of our indebtedness or a foreclosure on all or substantially all of the assets of the Borrowers, our business, financial condition and results of operations may be materially and adversely affected.

Global financial conditions have been subject to increased volatility. This may impact our ability to obtain equity, debt or bank financing in the future and may adversely impact our operations.

Current global financial conditions have been subject to increased volatility and numerous commercial and financial enterprises have either gone into bankruptcy or creditor protection or have had to be rescued by governmental authorities. Access to public financing has been negatively impacted by sub-prime mortgage defaults, the liquidity crisis affecting the asset-backed commercial paper and collateralized debt obligation markets, massive investment losses by banks with resultant recapitalization efforts and deterioration in the global economy. These factors may impact our ability to obtain equity, debt or bank financing on terms commercially reasonable to us, if at all. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. If these increased levels of volatility and market turmoil continue, our operations could be adversely impacted and the trading price of our securities could continue to be adversely affected.

Banks have been adversely affected by the worldwide economic crisis and have severely curtailed existing liquidity lines, increased pricing and introduced new and tighter borrowing restrictions to corporate borrowers, with extremely limited access to new facilities or for new borrowers. These factors could negatively impact our ability to access liquidity needed for our business in the longer term.

We depend on a limited number of key personnel who would be difficult to replace.

We depend on the performance of Mr. Mitchell, Scott C. Larsen, president, and Matthew McCann, chief executive officer. The loss of any of Messrs. Mitchell, Larsen or McCann could negatively impact our ability to execute our strategy. We do not maintain key person life insurance policies on Messrs. Mitchell or McCann.

We may experience difficulty staffing our drilling rigs.

We have a limited number of employees and will need to staff our drilling rigs and add staff to other departments. We may experience difficulty in finding a sufficient number of experienced crews to work on our drilling rigs and experienced staff in other departments to complete the work required.

Our contract drilling operations will depend on the level of activity in the oil and natural gas exploration and production industry.

Our contract drilling operations will depend on the level of activity in oil and natural gas exploration and production in our operating markets. Both short-term and long-term trends in oil and natural gas prices affect the level of that activity. Because oil and natural gas prices are volatile, the level of exploration and production activity can also be volatile. Lower oil and natural gas prices may depress our level of exploration and production activity.

Drilling for and producing natural gas and oil are high-risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations.

Our future success depends on the success of our exploration, development and production activities in each of our prospects. These activities are subject to numerous risks beyond our control, including the risk that we will be unable to economically produce our reserves or be able to find commercially productive natural gas or oil reservoirs. Our decisions to purchase, explore, develop or otherwise exploit prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. The cost of drilling, completing and operating wells is often uncertain before drilling commences. Overruns in budgeted expenditures are common risks that can make a particular project unprofitable. Further, many factors may curtail, delay or prevent drilling operations, including:

• unexpected drilling conditions;

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• pressure or irregularities in geological formations;

• equipment failures or accidents;

• pipeline and processing interruptions or unavailability;

• title problems;

• adverse weather conditions;

• lack of market demand for natural gas and oil;

• delays imposed by, or resulting from, compliance with environmental and other regulatory requirements; and

• declines in natural gas and oil prices.

Our future drilling activities might not be successful, and drilling success rates overall or within a particular area could decline. We could incur losses by drilling unproductive wells. Shut-in wells, curtailed production and other production interruptions may materially adversely affect our business, financial condition and results of operations.

We have limited and concentrated current production.

We have limited current production, and substantially all of our crude oil production is concentrated in the Selmo field in Turkey. A Turkish government-owned oil and gas company purchases all of our crude oil production from the Selmo field. If this company fails to purchase our crude oil production from the Selmo field, our results of operations could be materially and adversely affected.

We could experience labor disputes that could disrupt our business in the future.

As of December 15, 2009, approximately 58 of our employees that are employed by one of our Turkish subsidiaries are represented by a collective bargaining agreement with the Turkish Employers Association of Chemical, Oil and Plastic Industries (KIPLAS) and the Petroleum, Chemical and Rubber Workers Union of Turkey (PETROL-IS). This agreement terminates in January 2010. We intend to begin renegotiating the agreement in early January 2010. There can be no assurance that we will be able to negotiate the terms of any expiring or expired agreement in a manner acceptable to us. Therefore, potential work disruptions from labor disputes may result, which may disrupt our business and adversely affect our financial condition and results of operations.

Our operations are primarily conducted in Morocco, Romania and Turkey and we are subject to political, economic and other risks and uncertainties in these countries.

Due to our international operations, we are subject to the following issues and uncertainties that can affect our operations adversely:

• the risk of expropriation, nationalization, war, revolution, border disputes, renegotiation or modification of existing contracts, and import, export and transportation regulations and tariffs;

• taxation policies, including royalty and tax increases and retroactive tax claims;

• exchange controls, currency fluctuations and other uncertainties arising out of foreign government sovereignty over international operations;

• laws and policies of the United States and of the other countries in which we operate affecting foreign trade, taxation and investment;

• the possibility of being subjected to the exclusive jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the United States; and

• the possibility of restrictions on repatriation of earnings or capital from foreign countries.

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Acts of violence, terrorist attacks or civil unrest in Turkey could adversely affect our business.

We currently derive substantially all of our revenue from the Selmo oil field in southeastern Turkey. In addition, we have plans for substantial exploration activities in Turkey and expect to begin producing gas from the Thrace Basin in northwestern Turkey in January 2010. Recently, areas of Turkey have experienced political, social or economic problems, terrorist attacks, insurgencies or civil unrest. In those locations where we have employees or operations, we may incur substantial costs to maintain the safety of our personnel and our operations. Despite these precautions, the safety of our personnel and operations in these locations may continue to be at risk, and we may in the future suffer the loss of employees and contractors or our operations could be disrupted, any of which could have a material adverse effect on our business and results of operations.

We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have a material adverse effect on the price of our common shares.

Under Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish a report by our management on internal control over financial reporting. Such a report must contain, among other matters, an assessment of the effectiveness of our internal control over financial reporting, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by our management. In addition, beginning with the fiscal year ending December 31, 2009, such report will have to contain a statement that our auditors have issued an attestation report on management’s assessment of such internal control over financial reporting. Due to the limited number of our staff, it is not possible to achieve complete segregation of duties, nor do we currently maintain written policies and procedures at our international offices. Further, we must engage accounting assistance with respect to complex, non-routine accounting issues, Canadian and U.S. generally accepted accounting principles matters, tax compliance, and reporting for our international operations. Our efforts to comply with the requirements of Section 404 may result in increased general and administrative expense and a diversion of management time and attention. As a result, we may not be able to conclude that we have effective internal controls in the future. The integration of Longe Energy Limited (“Longe”), Incremental and EOT into our operations may make it more difficult for us to comply with Section 404. We may not be able to complete our evaluation, testing and required remediation, if any, in a timely fashion. Failure to have effective internal controls could lead to a misstatement of our financial statements. If, as a result of deficiencies in our internal controls, we cannot provide reliable financial statements, our business decision process may be adversely affected, our business and operating results could be harmed, investors could lose confidence in our reported financial information and the price of our common shares could decrease. In addition, failure to maintain effective internal control over financial reporting could result in investigations or sanctions by regulatory authorities.

We could be assessed for Canadian federal tax as a result of our recent continuance under the Companies Act 1981 of Bermuda.

For Canadian tax purposes, we are deemed, immediately before the completion of our continuance under the Companies Act 1981 of Bermuda, to have disposed of each property owned by us for proceeds equal to the fair market value of that property, and will be subject to tax on any resulting net income. In addition, we are required to pay a special “branch tax” equal to 25% of any excess of the fair market value of our property over the “paid-up capital” (as defined in the Income Tax Act (Canada)) of our outstanding common shares and our liabilities. Management, together with its professional advisors, will determine the fair market value of our property and the paid-up capital of our common shares for these purposes. Management does not anticipate that the deemed disposition of our assets at fair market value will result in any material adverse Canadian income tax consequences to us and believes that the paid-up capital of our common shares and our liabilities exceeds the fair market value of our property resulting in no “branch tax” being payable. However, our final determination of the fair market value of our property may be higher than currently anticipated or the Canada Revenue Agency (“CRA”) may not accept our determination of the fair market value of our property. In the event that our final determination or CRA’s determination of fair market value is significantly higher than currently anticipated and such determination is final, we may be subject to material amounts of tax resulting from the deemed disposition.

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We are involved in litigation over the ownership of a portion of the surface rights at the Selmo oil field in Turkey.

Substantially all of our revenue is generated from the sale of oil produced from the Selmo oil field in Turkey. Our subsidiary, Incremental, has been involved in litigation with persons who claim ownership of a portion of the surface rights at Selmo. We and the Turkish government are vigorously defending these cases. Although the litigation does not affect our ownership of the Selmo production license, if this litigation is not resolved in our favor, our operations on the affected portions of the Selmo oil field could be materially disrupted. A material disruption to our operations at Selmo could have a material adverse effect on our business.

Our retained net profits interest on Oil Mining License 109 may not yield any revenue to us.

In June 2005, we sold our interest in Oil Mining License 109, a 215,000 acre concession located offshore Nigeria (“OML 109”), and retained a net profits interest of up to $16 million based on future exploration success. Absent a new discovery on OML 109 by the new owner, the retained net profits interest will not yield any revenue to us. Our consolidated financial statements for the years ended December 31, 2008 and 2007 and for the nine months ended September 30, 2009 and 2008 incorporated by reference into this prospectus do not have any amounts recorded related to this net profits interest.

Risks Related to the Oil and Gas Industry

Reserve estimates depend on many assumptions that may turn out to be inaccurate.

Any material inaccuracies in our reserve estimates or underlying assumptions could materially affect the quantities and present values of our reserves. The process of estimating natural gas and oil reserves is complex. It requires interpretations of available technical data and various assumptions, including assumptions relating to economic factors. Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value of reserves that we may report. In order to prepare these estimates, we must project production rates and timing of development expenditures. We must also analyze available geological, geophysical, production and engineering data, and the extent, quality and reliability of this data can vary. The process also requires economic assumptions relating to matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves most likely will vary from our estimates. Any significant variance could materially affect the estimated quantities and pre-tax net present value of reserves that we may report. In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil and natural gas prices and other factors, many of which are beyond our control.

Investors should not assume that the pre-tax net present value of our proved reserves is the current market value of our estimated oil and natural gas reserves. We base the pre-tax net present value of future net cash flows from our proved reserves on prices and costs on the date of the estimate. Actual future prices, costs, and the volume of produced reserves may differ materially from those used in the pre-tax net present value estimate.

We may not correctly evaluate reserve data or the exploitation potential of properties as we engage in our acquisition, development, and exploitation activities.

Our future success will depend on the success of our acquisition, development, and exploitation activities. Our decisions to purchase, develop or otherwise exploit properties or prospects will depend in part on the evaluation of data obtained from production reports and engineering studies, geophysical and geological analyses and seismic and other information, the results of which are often inconclusive and subject to various interpretations. Our estimates regarding reserves and production resulting from the acquisition of Incremental may prove to be incorrect, which could significantly reduce our income and our ability to generate cash needed to fund our capital program and other working capital requirements in the longer term.

We may be unable to acquire or develop additional reserves, which would reduce our cash flows and income.

In general, production from natural gas and oil properties declines over time as reserves are depleted, with the rate of decline depending on reservoir characteristics. If we are not successful in our exploration and development activities or in acquiring properties containing reserves, our reserves will generally decline as reserves are produced. Our natural gas and oil production is highly dependent upon our ability to economically find, develop or acquire reserves in commercial quantities.

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To the extent cash flow from operations is reduced, either by a decrease in prevailing prices for natural gas and oil or an increase in finding and development costs, and external sources of capital become limited or unavailable, our ability to make the necessary capital investment to maintain or expand our asset base of natural gas and oil reserves would be impaired. Even with sufficient available capital, our future exploration and development activities may not result in additional proved reserves, and we might not be able to drill productive wells at acceptable costs.

A substantial or extended decline in natural gas and oil prices may adversely affect our ability to meet our capital expenditure obligations and financial commitments.

Our revenues, operating results and future rate of growth are substantially dependent upon the prevailing prices of, and demand for, natural gas and oil. Lower natural gas and oil prices may also reduce the amount of natural gas and oil that we can produce economically. Historically, natural gas and oil prices and markets have been volatile, and they are likely to continue to be volatile in the future.

A decrease in natural gas or oil prices will not only reduce revenues and profits, but will also reduce the quantities of reserves that are commercially recoverable and may result in charges to earnings for impairment of the value of these assets. If natural gas or oil prices decline significantly for extended periods of time in the future, we might not be able to generate sufficient cash flow from operations to meet our obligations and make planned capital expenditures. Natural gas and oil prices are subject to wide fluctuations in response to relatively minor changes in the supply of, and demand for, natural gas and oil, market uncertainty and a variety of additional factors that are beyond our control. Among the factors that could cause fluctuations are:

• change in local and global supply and demand for natural gas and oil;

• levels of production and other activities of the Organization of Petroleum Exporting Countries and other natural gas and oil producing nations;

• market expectations about future prices;

• the level of global natural gas and oil exploration, production activity and inventories;

• political conditions, including embargoes, in or affecting other oil producing activity; and

• the price and availability of alternative fuels.

Lower natural gas and oil prices may not only decrease our revenues on a per unit basis, but also may reduce the amount of natural gas and oil that we can produce economically. A substantial or extended decline in oil or natural gas prices may materially adversely affect our business, financial condition and results of operations.

Undeveloped resources are uncertain.

We have undeveloped resources. Undeveloped resources, including undeveloped reserves, by their nature, are significantly less certain than developed resources. The discovery, determination and exploitation of undeveloped resources require significant capital expenditures and successful drilling and exploration programs. We may not be able to raise the additional capital we need to develop these resources. There is no certainty that we will discover additional resources or that resources will be economically viable or technically feasible to produce.

We are subject to operating hazards.

The oil and gas business involves a variety of operating risks, including the risk of fire, explosion, blowout, pipe failure, casing collapse, stuck tools, abnormally pressured formations and environmental hazards such as oil spills, gas leaks, pipeline ruptures and discharges of toxic gases, the occurrence of any of which could result in substantial losses to our company due to injury and loss of life, loss of or damage to well bores and/or drilling or production equipment, costs of overcoming downhole problems, severe damage to and destruction of property, natural resources and equipment, pollution and other environmental damage, clean-up responsibilities, regulatory investigation and penalties and suspension of operations. Gathering systems and processing facilities are subject to many of the same hazards and any significant problems related to those facilities could adversely affect our ability to market our production.

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We are subject to complex laws and regulations, including environmental regulations, which can have a material adverse effect on our cost, manner or feasibility of doing business.

Exploration for and exploitation, production and sale of oil and gas in each country in which we operate is subject to extensive national and local laws and regulations, including complex tax laws and environmental laws and regulations, and requires various permits and approvals from various governmental agencies. If these permits are not issued or unfavorable restrictions or conditions are imposed on our drilling activities, we might not be able to conduct our operations as planned. Alternatively, failure to comply with these laws and regulations, including the requirements of any permits, might result in the suspension or termination of operations and subject us to penalties. Our costs to comply with these numerous laws, regulations and permits are significant. Further, these laws and regulations could change in ways that substantially increase our costs and associated liabilities. Existing laws or regulations, as currently interpreted or reinterpreted in the future, or future laws or regulations may harm our business, results of operations and financial condition.

We do not plan to insure against all potential operating risks. We might incur substantial losses from, and be subject to substantial liability claims for, uninsured or underinsured risks related to our natural gas and oil operations.

We do not intend to insure against all risks. Our natural gas and oil exploration and production activities will be subject to hazards and risks associated with drilling for, producing and transporting natural gas and oil, and any of these risks can cause substantial losses resulting from:

• environmental hazards, such as uncontrollable flows of natural gas, oil, brine, well fluids, toxic gas or other pollution into the environment, including groundwater and shoreline contamination;

• abnormally pressured formations;

• mechanical difficulties, such as stuck oil field drilling and service tools and casing collapse;

• fires and explosions;

• personal injuries and death;

• regulatory investigations and penalties; and

• natural disasters.

We might elect not to obtain insurance if we believe that the cost of available insurance is excessive relative to the risks presented. In addition, pollution and environmental risks generally are not fully insurable. Losses and liabilities arising from uninsured and underinsured events or in amounts in excess of existing insurance coverage could have a material adverse effect on our business, financial condition or results of operations.

We might not be able to identify liabilities associated with properties or obtain protection from sellers against them, which could cause us to incur losses.

Our review and evaluation of prospects and future acquisitions might not necessarily reveal all existing or potential problems. For example, inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, may not be readily identified even when an inspection is undertaken. Even when problems are identified, a seller may be unwilling or unable to provide effective contractual protection against all or part of those problems, and we often assume environmental and other risks and liabilities in connection with acquired properties.

Competition in the oil and gas industry is intense, and many of our competitors have greater financial, technological and other resources than we do, which may adversely affect our ability to compete.

We operate in the highly competitive areas of oil and gas exploration, development, production and acquisition with a substantial number of other companies, including U.S.-based and foreign companies doing business in each of the countries in which we operate. We face intense competition from independent, technology-driven companies as well as from both major and other independent oil and gas companies in each of the following areas:

• seeking oil and gas exploration licenses and production licenses;

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• acquiring desirable producing properties or new leases for future exploration;

• marketing natural gas and oil production;

• integrating new technologies; and

• acquiring the equipment and expertise necessary to develop and operate properties.

Many of our competitors have substantially greater financial, managerial, technological and other resources than we do. These companies are able to pay more for exploratory prospects and productive oil and gas properties than we can. To the extent competitors are able to pay more for properties than we are paying, we will be at a competitive disadvantage. Further, many of our competitors enjoy technological advantages over us and may be able to implement new technologies more rapidly than we can. Our ability to explore for and produce natural gas and oil prospects and to acquire additional properties in the future will depend upon our ability to successfully conduct operations, implement advanced technologies, evaluate and select suitable properties and consummate transactions in this highly competitive environment.

We might not be able to obtain necessary permits, approvals or agreements from one or more government agencies, surface owners, or other third parties, which could hamper our exploration, development or production activities.

There are numerous permits, approvals, and agreements with third parties, which will be necessary in order to enable us to proceed with our development plans and otherwise accomplish our objectives. The government agencies in each country in which we operate have discretion in interpreting various laws, regulations, and policies governing operations under the licenses. Further, we may be required to enter into agreements with private surface owners to obtain access to, and agreements for, the location of surface facilities. In addition, because many of the laws governing oil and gas operations in the international countries in which we operate have been enacted relatively recently, there is only a relatively short history of the government agencies handling and interpreting those laws, including the various regulations and policies relating to those laws. This short history does not provide extensive precedents or the level of certainty that allows us to predict whether such agencies will act favorably toward us. The governments have broad discretion to interpret requirements for the issuance of drilling permits. Our inability to meet any such requirements could have a material adverse effect on our exploration, development or production activities.

We may not be able to complete the exploration, development or production of any, or a significant portion of, the oil and gas interests covered by our leases or licenses before they expire.

Each license or lease under which we operate has a fixed term. We may be unable to complete our exploration, development or production efforts prior to the expiration of licenses or leases. Failure to obtain government approval for a license or lease, an extension of the license or lease, be granted a new exploration license or lease or the failure to obtain a license or lease covering a sufficiently large area would prevent or limit us from continuing to explore, develop or produce a significant portion of the oil and gas interests covered by the license or lease. The determination of the amount of acreage to be covered by the production licenses is in the discretion of the respective governments.

Political and economic instability or fundamental changes in the leadership or in the structure of the governments in the jurisdictions in which we operate could have a material negative impact on our company.

Our foreign property interests and foreign operations may be affected by political and economic risks. These risks include war and civil disturbances, currency restrictions and exchange rate fluctuations, labor problems and high rates of inflation. In addition, local, regional and world events could cause the jurisdictions in which we operate to change the petroleum laws, tax laws, foreign investment laws, or to revise their policies in a manner that renders our current and future projects unprofitable. Further, we are subject to risks in the foreign jurisdictions in which we operate of the nationalization of the oil and gas industry, expropriation of property or other restrictions and penalties on foreign-owned entities, which could render our projects unprofitable or could prevent us from selling our assets or operating our business. The occurrence of any such fundamental change could have a material adverse effect on our business, financial condition and results of operations.

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Risks Related to this Offering

The interests of our controlling shareholder may not coincide with yours and such controlling shareholder may make decisions with which you may disagree.

As of December 16, 2009, N. Malone Mitchell, 3^rd, chairman of our board of directors, beneficially owned approximately 48.8% of our outstanding common shares. As a result, Mr. Mitchell controls substantially all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change in control of our company and make some future transactions more difficult or impossible without the support of Mr. Mitchell. The interests of Mr. Mitchell may not coincide with our interests or the interests of other shareholders.

Offers or availability for sale of a substantial number of common shares by the selling shareholders may cause the market price of our common shares to decline.

We have registered for resale 55,544,300 common shares pursuant to an effective registration statement under the Securities Act. Upon effectiveness of this registration statement, the 42,838,451 shares registered for resale under this prospectus will become freely tradable. The ability of our shareholders to sell substantial amounts of our common shares in the public market, including shares covered by the registration statement of which this prospectus forms a part, or upon the expiration of any statutory holding period under Rule 144, could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common shares could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

The value of our common shares might be affected by matters not related to our own operating performance.

The value of our common shares may be affected by matters that are not related to our operating performance and which are outside of our control. These matters include the following:

• the global economic crisis and general economic conditions in Canada, the United States, Romania, Morocco, Turkey and globally;

• industry conditions, including fluctuations in the price of oil and natural gas;

• governmental regulation of the oil and natural gas industry, including environmental regulation;

• fluctuation in foreign exchange or interest rates;

• liabilities inherent in oil and natural gas operations;

• geological, technical, drilling and processing problems;

• unanticipated operating events which can reduce production or cause production to be shut in or delayed;

• failure to obtain industry partner and other third party consents and approvals, when required;

• stock market volatility and market valuations;

• competition for, among other things, capital, acquisition of reserves, undeveloped land and skilled personnel;

• the need to obtain required approvals from regulatory authorities;

• worldwide supplies and prices of, and demand for, natural gas and oil;

• political conditions and developments in each of the countries in which we operate;

• political conditions in natural gas and oil producing regions;

• revenue and operating results failing to meet expectations in any particular period;

• investor perception of the oil and natural gas industry;

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• limited trading volume of our common shares;

• change in environmental and other governmental regulations;

• announcements relating to our business or the business of our competitors;

• our liquidity; and

• our ability to raise additional funds.

In the past, companies that have experienced volatility in the trading price of their common shares have been the subject of securities class action litigation. We might become involved in securities class action litigation in the future. Such litigation often results in substantial costs and diversion of management’s attention and resources and could have a material adverse effect on our business, financial condition and results of operation.

U.S. shareholders who hold common shares during a period when we are classified as a passive foreign investment company may be subject to certain adverse U.S. federal income tax consequences.

Management believes that we are not currently a passive foreign investment company. However, we may have been a passive foreign investment company during one or more of our prior taxable years and could become a passive foreign investment company in the future. In general, classification of our company as a passive foreign investment company during a period when a U.S. shareholder holds common shares could result in certain adverse U.S. federal income tax consequences to such shareholder.

Certain U.S. shareholders who hold common shares during a period when we are classified as a controlled foreign corporation may be subject to certain adverse U.S. federal income tax rules.

Management believes that we currently are a controlled foreign corporation for U.S. federal income tax purposes and that we will continue to be so treated. Consequently, a U.S. shareholder that owns 10% or more of the total combined voting power of all classes of our stock entitled to vote on the last day of our taxable year may be subject to certain adverse U.S. federal income tax rules with respect to its investment in our company.

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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this prospectus are “forward-looking statements” and are prospective. Forward-looking statements are typically identified by words such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “project,” “estimate,” “continue” or similar words suggesting future outcomes or statements regarding an outlook. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: market prices for natural gas, natural gas liquids and oil products; estimates of reserves and economic assumptions; the ability to produce and transport natural gas, natural gas liquids and oil; the results of exploration and development drilling and related activities; the global economic crisis and economic conditions in the countries and provinces in which we carry on business, especially economic slowdowns; actions by governmental authorities including increases in taxes, changes in environmental and other regulations, and renegotiations of contracts; political uncertainty, including actions by insurgent groups or other conflict; the negotiation and closing of material contracts; and the other factors discussed in other documents that we file with or furnish to the SEC. 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. In that regard, any statements as to future natural gas or oil production levels; capital expenditures; the allocation of capital expenditures to exploration and development activities; sources of funding for our capital program; drilling of new wells; demand for natural gas and oil 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; dates by which transactions are expected to close; cash flows; uses of cash flows; collectibility of receivables; availability of trade credit; expected operating costs; changes in any of the foregoing and other statements using forward-looking terminology are forward-looking statements.

Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other things contemplated by the forward-looking statements will not occur.

Forward-looking statements in this prospectus are based on management’s beliefs and opinions at the time the statements are made. The forward-looking statements contained in this prospectus are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this prospectus are made as of the date of this prospectus and we undertake no obligation to publicly update or revise any forward-looking statements to reflect new information, future events or otherwise, except as required by applicable securities laws.

USE OF PROCEEDS

We will not receive any proceeds from the sale of our common shares by the selling shareholders.

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MARKET PRICE OF AND DIVIDENDS ON OUR COMMON SHARES AND RELATED

SHAREHOLDER MATTERS

Our common shares are traded in Canada on the Toronto Stock Exchange (the “TSX”) under the trading symbol “TNP”. Effective January 2, 2008, our common shares began trading on the TSX in Canadian dollars. Prior to that date, our common shares traded on the TSX in U.S. dollars under the symbol “TNP.U”.

Canada

The table below sets forth the range of quarterly high and low sales prices per share of our common shares in U.S. dollars on the TSX for the periods indicated.

	High		Low
	(US$)		(US$)
2007:
First Quarter	$	0.99	$	0.64
Second Quarter	$	0.92	$	0.35
Third Quarter	$	0.68	$	0.25
Fourth Quarter	$	0.33	$	0.26

The following table sets forth the quarterly high and low sales prices per common share in Canadian dollars on the TSX for the periods indicated.

	High		Low
	(Cdn$)		(Cdn$)
2008:
First Quarter	$	0.37	$	0.26
Second Quarter	$	1.50	$	0.29
Third Quarter	$	1.73	$	1.12
Fourth Quarter	$	1.45	$	0.70
2009:
First Quarter	$	1.49	$	0.68
Second Quarter	$	2.40	$	1.20
Third Quarter	$	3.19	$	1.80
Fourth Quarter (through December 22, 2009)	$	3.65	$	2.37

The closing price of our common shares on the TSX on December 22, 2009 was Cdn$3.45 per share.

United States

On December 8, 2009, our common shares began trading on the NYSE Amex. Prior to December 8, 2009, our common shares traded on the OTC Bulletin Board.

The following table sets forth the high and low bid quotations for our common shares for the periods indicated, as reported by the OTC Bulletin Board. Prior to April 20, 2009, no established trading market for our common shares existed in the United States. The quotations reflect inter-dealer prices, without retail markup, markdowns or commissions and may not represent actual transactions.

	High		Low
	(US$)		(US$)
2009:
Second Quarter (from April 20, 2009)	$	2.15	$	1.09
Third Quarter	$	2.91	$	1.57
Fourth Quarter (through December 7, 2009)	$	3.09	$	2.27

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The following table sets forth the high and low sales price per common share on the NYSE Amex for the periods indicated.

	High		Low
	(US$)		(US$)
2009:
Fourth Quarter (December 8, 2009 through December 22, 2009)	$	3.50	$	2.64

The closing price of our common shares on the NYSE Amex on December 22, 2009 was $3.27 per share.

Common Shares and Dividends

As of December 16, 2009, 303,245,456 common shares were issued and outstanding and held by 371 record holders (including nominee holders such as banks and brokerage firms who hold shares for beneficial owners).

We have not declared any dividends to date on our common shares. We have no present intention of paying any cash dividends on our common shares in the foreseeable future, as we intend to use cash flow to invest in our business.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

We are a vertically integrated, international oil and gas company engaged in the acquisition, development, exploration, and production of crude oil and natural gas. We hold interests in developed and undeveloped oil and gas properties in Turkey, Morocco, Romania, and California. In addition, we provide oilfield services and contract drilling services to third parties in Turkey and plan to provide similar services in Morocco.

Executive Overview and Recent Developments

Strategic Transformation. We underwent a strategic transformation during 2008 as a result of a series of transactions with N. Malone Mitchell, 3rd, chairman of our board of directors. Mr. Mitchell founded Riata Energy, Inc. in 1985 and built it into one of the largest privately held oil and gas producers in the United States. In 2006, Mr. Mitchell sold his controlling interest in Riata Energy, Inc. (now Sandridge Energy, Inc.) and founded a group of companies that are primarily focused on investing in international energy opportunities.

In March 2008, we announced that we had entered into a strategic relationship with Riata Management, LLC (“Riata”), an entity owned by Mr. Mitchell and his wife. Our initial arrangements with Riata included an equity investment into us, the replacement of our farm-in partner in both of our Moroccan properties, the extension of a short term credit facility to us to repay our outstanding short-term debt, and the provision of technical and management expertise to assist us in successfully developing and expanding our international portfolio of projects.

During the second quarter of 2008, we completed a two-stage private placement issuing 35,000,000 common shares to Riata TransAtlantic, LLC (“Riata TransAtlantic”), Dalea and certain friends and family of Mr. Mitchell, for aggregate gross proceeds of Cdn$12 million. Mr. Mitchell is a manager of, and has sole voting and dispositive power over, the common shares held by Riata TransAtlantic, and Mr. Mitchell also owns and controls Dalea. We used the net proceeds to pay off all of our short-term debt, to fund international exploration activities and for general corporate purposes. Longe, an entity that was indirectly owned by Mr. Mitchell, his wife and children, replaced our prior farm-in partner in our Moroccan properties. In addition, Mr. Mitchell and Matthew McCann, general counsel for Riata, were designated by Riata and elected to our board of directors in connection with the private placement. Mr. Mitchell serves as chairman of our board of directors, and Mr. McCann also serves as our chief executive officer.

In the third quarter of 2008, we changed our operating strategy from a prospect generator to a vertically integrated project developer. To execute this new strategy, in December 2008, we acquired 100% of the issued and outstanding shares of Longe from Longfellow Energy, LP (“Longfellow”), an entity indirectly owned by Mr. Mitchell, his wife and children, in consideration for the issuance of 39,583,333 common shares and 10,000,000 common share purchase warrants. Concurrently, we issued 35,416,667 common shares in a private placement with Dalea, Riata TransAtlantic, Mr. McCann and other purchasers that have business or familial relationships with Mr. Mitchell, for gross proceeds of $42.5 million. Longe owns interests in our Moroccan properties and four drilling rigs, as well as associated service equipment, tubulars and supplies. Immediately after the Longe acquisition, we purchased an additional $8.3 million in drilling and service equipment, tubulars and supplies from Viking Drilling, LLC (“Viking”), an entity in which Dalea owns 85%, at Viking’s cost.

We anticipate that ownership of our own drilling rigs and service equipment will enable us to lower drilling and operating costs over the long term and control timing for development of our properties, thereby providing a competitive advantage. In addition, we expect that ownership of the drilling rigs will allow us to achieve operational capabilities in each country in which we operate. Because the availability of drilling rigs and service equipment is limited in Turkey, Morocco and Romania, we also anticipate that ownership of our own drilling rigs and service equipment will create opportunities to increase acreage in each country in which we operate by drilling to earn interests in existing third party licenses. When the rigs and equipment are not operating on our properties, we expect to use them to provide drilling and oilfield services to third parties, creating additional opportunities.

Incremental Acquisition. In the first quarter of 2009, we acquired Incremental through our wholly-owned subsidiary, TransAtlantic Australia. We announced our intention to make an all cash takeover offer to acquire all of the outstanding shares of Incremental in the fourth quarter of 2008. The offer expired on March 6, 2009 and Incremental delisted from the Australian Stock Exchange on March 26, 2009. At March 31, 2009, we owned

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approximately 96% of Incremental’s outstanding common shares. We completed the acquisition of the remaining 4% of Incremental’s outstanding common shares through an Australian statutory procedure on April 20, 2009. The acquisition of Incremental expanded our rig fleet and increased our workforce of highly qualified field staff, engineers and geologists in Turkey, one of our target countries. Through the Incremental acquisition, we acquired Turkish properties including the producing Selmo oil field, the Edirne gas field and additional exploration acreage. We also acquired three prospects in California.

Through the Incremental acquisition, we acquired a 100% working interest in a production lease in the Selmo oil field in southeastern Turkey. Situated on the northern edge of the Zagros fold belt of Iran and Iraq in southeast Turkey, Selmo has produced approximately 83 million barrels of oil to date. During the third quarter of 2009, our interest in the Selmo field produced 137,400 barrels of crude oil at an average rate of 1,494 barrels per day.

Through the Incremental acquisition, we acquired a 55% working interest in an exploration license in the Edirne gas field located in the Thrace Basin in northwestern Turkey. We are constructing a gathering system and facilities in the Thrace Basin necessary to begin selling natural gas from our discoveries in the Edirne gas field. On December 15, 2009, we entered into a five year gas sales agreement pursuant to which a natural gas distributor in Turkey has agreed to purchase all of our gas production from the Edirne field. We will sell the gas at a price equal to a 15% discount to the Industrial Interruptible Tariff benchmark set by BOTAS. We expect our initial eight wells in the Edirne field to come online in January 2010 with net production to us exceeding 5.5 million cubic feet of natural gas per day starting in the first quarter of 2010. Once gas sales commence, we plan to resume drilling in the Thrace Basin, with five wells planned and an additional two wells under consideration. We are presently acquiring an additional 100 square kilometers of 3D seismic on the western portion of the Edirne license using our own seismic equipment.

Through the Incremental acquisition, we acquired a 100% working interest in License 4262, covering 2,805 acres in southeastern Turkey, a 100% working interest in four exploration licenses in Midyat in southeastern Turkey covering approximately 460,400 acres and a 50% working interest in eight exploration licenses in the Tuz Golu basin in central Turkey covering approximately 870,000 acres.

In addition, through the Incremental acquisition, we acquired interests in three projects in the San Joaquin Valley in central California. We own a non-operated working interest in the Kettleman Middle Dome Unit. This unit produces approximately 125 gross barrels of oil per day along with small amounts of associated natural gas. We own a 5% interest in five existing wells on the Kettleman Middle Dome Unit (three are currently producing). On all new projects and well proposals submitted and completed after May 16, 2008, we will own a 10% non-operated working interest. In addition, we drilled two wells under our McFlurrey farm-out in March and April 2009, paying 100% of the cost. We tested the first well and determined it was non-commercial. Based on these results, we did not test the second well. We also own a 50% interest in the South East Kettleman North Dome oil field. We are currently exploring our options to divest the McFlurrey and South East Kettleman North Dome projects.

Sale of Common Shares. On June 22, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 98,377,300 common shares at a price of Cdn$1.65 per common share, raising gross proceeds of approximately $143.1 million. Of the 98,377,300 common shares sold, 41,818,000 common shares were offered and sold by us to Dalea. We used $61.8 million of the net proceeds towards paying off a credit agreement with Dalea. The remaining portion of the net proceeds was used to fund our exploration and development activities and for general corporate purposes. In connection with these offerings, we entered into a registration rights agreement providing for the registration of up to 98,377,300 common shares issued in these offerings, of which 55,544,300 shares have been registered for resale under the Securities Act.

EOT Acquisition. On July 23, 2009, our wholly-owned subsidiary, TransAtlantic Worldwide Ltd., acquired all of the ownership interests in EOT for total consideration of $7.8 million. EOT’s assets include a 50% interest in License 3118, interests in ten other exploration licenses in southern and southeastern Turkey, inventory and seismic data. License 3118, which covers approximately 96,000 acres (389 square kilometers), is located near the city of Diyarbakir in southeastern Turkey. In April and September 2008, EOT participated in the drilling of the Arpatepe-1 and Arpatepe-2 wells on License 3118, which represent Turkey’s first and second economic discoveries of crude oil from deeper, onshore Paleozoic sandstone formations. The wells, which flowed naturally and were not stimulated, had initial production rates of 440 and 190 gross barrels of oil per day, respectively, from limited perforations. At December 16, 2009, the wells were producing an aggregate of approximately 60 gross barrels of oil per day.

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Continuance to Bermuda. Effective October 1, 2009, we continued to the jurisdiction of Bermuda under the Companies Act 1981 of Bermuda from the Province of Alberta and changed our name from TransAtlantic Petroleum Corp. to TransAtlantic Petroleum Ltd. Our shareholders approved the continuance by a special resolution at a special meeting of shareholders held on July 14, 2009. In connection with the continuance, each of our common shares became and remained a common share of TransAtlantic Petroleum Ltd., and we became subject to the laws of Bermuda as if we had originally been incorporated under the Companies Act 1981 of Bermuda. We believe that continuing our company to Bermuda will be beneficial to us and our shareholders because we will receive more favorable tax treatment in Bermuda.

Offering of Common Shares. On November 24, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 48,298,790 common shares at a price of Cdn$2.35 per common share, raising gross proceeds of approximately Cdn$113.5 million. Of the 48,298,790 common shares sold, we offered and sold 4,255,400 common shares to Dalea. We intend to use approximately Cdn$87.3 million of the net proceeds towards our 2010 capital expenditure program, including approximately Cdn$12.8 million for the acquisition of equipment, approximately Cdn$47.9 million for the drilling of exploration wells in Turkey, Morocco and Romania and approximately Cdn$26.6 million for the drilling of development wells (including well infrastructure) in the Selmo field and the Thrace Basin. The remaining net proceeds from the offerings will be used for general corporate purposes, which may include the acquisition of other equipment which is not currently included in our 2010 capital expenditure program, the expansion of our drilling program in 2010, additional corporate or property acquisitions or the repayment of approximately $6 million in debt relating to the acquisition of a drilling rig in July 2009. In connection with these offerings, we entered into a registration rights agreement providing for the registration of up to 48,298,790 common shares issued in these offerings. Concurrently with the offerings, we completed a Regulation D private placement to two accredited investors in the United States of 750,000 common shares at Cdn$2.35 per common share for gross proceeds to us of approximately Cdn$1.76 million. See “Description of Capital Stock—Registration Rights of Selling Shareholders.” This prospectus does not offer for sale any common shares beneficially owned by Dalea.

Credit Facility. On December 21, 2009, the Borrowers entered into a three year, $250 million senior credit facility with Standard Bank Plc and BNP Paribas (Suisse) SA. The credit facility is guaranteed by the Guarantors. The initial borrowing base under the credit facility is $30 million, subject to redetermination from time to time. Loans under the credit facility will accrue interest at a rate of three month LIBOR plus 6.25% per annum. We intend to use the credit facility to finance a portion of the development of our oil and gas properties in Turkey, acquisitions and for general corporate and working capital purposes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Current Activities. Our current activities are focused on integrating the acquisitions of Incremental and EOT and developing our oil and gas properties in Turkey, Morocco, Romania and California. Our success will depend in part on discovering hydrocarbons in commercial quantities and then bringing these discoveries into production. We are currently engaged in the following drilling and exploration activities:

Turkey

• Drilling the S-58 development well on the Selmo oil field

• Sidetracking the S-44 well on the Selmo oil field

• Completing construction of a gas gathering facility to bring Edirne gas field production online

Morocco

• Drilling the OZW-1 exploratory well on the Ouezzane-Tissa permits

• Drilling the HKE-1 exploratory well on the Ouezzane-Tissa permits

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Romania

• Testing and completing the re-development wells on the Izvoru, Vanatori and Marsa licenses

• Drilling exploratory wells on the Sud Craiova license

Planned 2010 Activities. We are in the process of finalizing our capital expenditure budget for 2010. Capital expenditures for 2010 are expected to range between $115 million and $135 million. Our projected 2010 capital budget is subject to change. We currently plan to execute on the following drilling and exploration activities in 2010:

Turkey

• Drill 18 or more development wells on the Selmo oil field, including 1 well to test deeper horizons

• Drill 1 salt water disposal well on the Selmo oil field

• Drill 6 or more appraisal and exploration wells on the Arpatepe oil field

• Drill up to an additional 14 appraisal and exploration wells on the Edirne gas field, upon completion of the first 5 appraisal and exploration wells

• Drill 5 exploration wells on other licenses

Morocco

• Drill the BTK-1 exploratory well on the Tselfat permit

• Drill 1 exploratory well on the Asilah permits

• Drill 2 additional exploratory wells on the Tselfat permit

• Drill 1 exploratory well on the Guercif permits

Romania

• Drill 1 exploratory well on the Izvoru license

• Drill 3 exploratory wells on the Sud Craiova license, contingent on results from prior wells

Change in Method of Accounting for Oil and Gas Exploration and Development Activities

Effective January 1, 2009, we changed our method of accounting for our oil and gas exploration and development activities from the full cost method to the successful efforts method. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections (formerly Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting Changes and Error Corrections”) financial information for prior periods has been revised to reflect retrospective application of the successful efforts method, as prescribed by FASB Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas (formerly SFAS No. 19, “Financial Accounting and Reporting by Oil and Gas Producing Companies”). Although the full cost method of accounting for oil and gas exploration and development activities continues to be an accepted alternative, the successful efforts method of accounting is the preferred method. We believe the successful efforts method provides a more transparent representation of our results of operations and the ability to assess our investments in oil and gas properties for impairment based on their estimated fair values rather than being required to base valuation on prices and costs as of the balance sheet date.

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Critical Accounting Policies

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. generally accepted accounting principles. 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 Notes 2 and 3 to our unaudited consolidated financial statements for the three and nine months ended September 30, 2009 and 2008. We have identified below policies that are of particular importance to the portrayal of our financial position and results of operations and which 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.

We believe the following critical accounting policies affect the significant judgments and estimates used in the preparation of our consolidated financial statements.

Oil and Gas Properties. In accordance with the successful efforts method of accounting for oil and gas properties, costs of productive wells, developmental dry holes and productive leases are capitalized into appropriate groups of properties based on geographical and geological similarities. These capitalized costs are amortized using the unit-of-production method based on estimated proved reserves. Proceeds from sales of properties are credited to property costs, and a gain or loss is recognized when a significant portion of an amortization base is sold or abandoned. Exploration costs, such as exploratory geological and geophysical costs, delay rentals and exploration overhead, are charged to expense as incurred. Exploratory drilling costs, including the cost of stratigraphic test wells, are initially capitalized but charged to exploration expense if and when the well is determined to be nonproductive. The determination of an exploratory well’s ability to produce must be made within one year from the completion of drilling activities. The acquisition costs of unproved acreage are initially capitalized and are carried at cost, net of accumulated impairment provisions, until such leases are transferred to proved properties or charged to exploration expense as impairments of unproved properties.

Valuation of Property and Equipment Other than Oil and Gas Properties. We follow the provisions of FASB Accounting Standards Codification Topic 360, Property, Plant and Equipment (“ASC Topic 360”) (formerly SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets”). ACS Topic 360 requires that our long-lived assets, including drilling service and other equipment, be assessed for potential impairment in their carrying values whenever events or changes in circumstances indicate such impairment may have occurred. Oil and gas properties are evaluated by field for potential impairment. Other properties are evaluated on a specific asset basis or in groups of similar assets as applicable. Impairment is recognized when the estimated undiscounted future net cash flows of the asset are less than its carrying value. If an impairment occurs, the carrying value of the impaired asset is reduced to fair value.

Business Combinations. We follow FASB Accounting Standards Codification Topic 805, Business Combinations (“ASC Topic 805”) (formerly SFAS No. 141R, “Business Combinations”), and FASB Accounting Standards Codification Topic 810-10-65, Consolidation (“ASC Topic 810-10-65”) (formerly SFAS No. 160, “Non-Controlling Interests in Consolidated Financial Statements”). ASC Topic 805 requires most identifiable assets, liabilities, non-controlling interests, and goodwill acquired in a business combination to be recorded at “fair value.” The statement applies to all business combinations, including combinations among mutual entities and combinations by contract alone. Under ASC Topic 805, all business combinations will be accounted for by applying the acquisition method. Accordingly, transactions costs related to acquisitions are to be recorded as a reduction of earnings in the period they are incurred and costs related to issuing debt or equity securities that are related to the transaction will continue to be recognized in accordance with other applicable rules under U.S. generally accepted accounting principles. ASC Topic 805 is effective for periods beginning on or after December 15, 2008 and has been applied to the Incremental and EOT acquisitions. ASC Topic 810-10-65 will require non-controlling interests (previously referred to as minority interests) to be treated as a separate component of equity, not as a liability or other item outside of permanent equity. The statement applies to the accounting for non-controlling interests and transactions with non-controlling interest holders in consolidated financial statements. ASC Topic 810-10-65 is effective for periods beginning on or after December 15, 2008 and has been applied to the non-controlling interests from the Incremental acquisition.

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Per Share Information. Basic per share amounts are calculated using the weighted average common shares outstanding during the period. We use the treasury stock method to determine the dilutive effect of stock options and other dilutive instruments. Under the treasury stock method, only “in the money” dilutive instruments impact the diluted calculations in computing diluted earnings per share. Diluted calculations reflect the weighted average incremental common shares that would be issued upon exercise of dilutive options assuming the proceeds would be used to repurchase shares at average market prices for the period.

Other Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (“SFAS 168”). SFAS 168 replaces SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS 162”), and establishes the FASB Accounting Standards Codification (the “Codification”) as the sole source of authoritative U.S. GAAP recognized by the FASB, excluding SEC guidance, to be applied by nongovernmental entities. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. We have revised our references to pre-Codification GAAP and noted no impact on our financial condition or results of operations.

The FASB issued Accounting Standards Codification Topic 855, Subsequent Events (“ASC Topic 855”) (formerly SFAS 165, “Subsequent Events”), on May 28, 2009. ASC Topic 855 establishes general standards of accounting for, and disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Although there is new terminology, the standard is based on the same principles as those that existed in the auditing standards at the time of adoption. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009.

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.

In December 2008, the SEC adopted release no. 34-59192, “Modernization of Oil and Gas Reporting,” which revised the Regulation S-K and Regulation S-X oil and gas reporting requirements to align them with current industry practices and technological advances. The release revises a number of definitions relating to oil and gas reserves, permits the disclosure in filings with the SEC of probable and possible reserves and permits the use of new technologies to determine proved reserves if those technologies have been demonstrated empirically to lead to reliable conclusions about reserve volumes. In addition, the new disclosure requirements require a company to (i) disclose its internal control over reserves estimation and report the independence and qualification of its reserves preparer or auditor, (ii) file a report of a third party if we represent that the third party prepared reserves estimates or conducted a reserves audit, (iii) report oil and gas reserves using an average price based upon the prior 12-month period rather than period-end prices, and (iv) disclose, in narrative form, the status of proved undeveloped reserves and changes in status of these from period to period. The provisions of this release will become effective for disclosures in our Annual Report on Form 10-K for the year ending December 31, 2009. Management is still evaluating the impact of these changes on our financial statements.

U.S. Operations

In 2007, we decided to exit our U.S. operations and focus on the development of our international properties. As a result of the decision to sell our U.S. operations, we reclassified our U.S. properties as “discontinued operations.” Accordingly, revenues and expenses associated with our U.S. cost center in 2008 and comparative periods were reflected as components of “loss from discontinued operations.” Substantially all of these properties were sold late in 2007 and we recorded a write-down in 2007 of $447,000.

As a result, at December 31, 2008, the net book value of property and equipment in the U.S. was $0. In addition, $14,000 of asset retirement obligations remained at December 31, 2008 relating to property in Oklahoma that was retained. In connection with the acquisition of Incremental, we acquired interests in non-operated properties in California. As a result of acquiring these properties in California, previously reported U.S. discontinued operations are now continuing and the results of operations in 2008 and 2007 previously reported as discontinued have been reclassified to operating revenues, costs and expenses.

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Results of Operations – Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

Revenue. Total crude oil and natural gas sales increased to $17.8 million in the nine months ended September 30, 2009 from $95,000 realized in the first nine months of 2008. The increase is the result of the acquisition of Incremental in the first quarter of 2009, as substantially all of our revenue is derived from the sale of crude oil from the Selmo oil field in Turkey. We recorded $288,000 in oilfield services revenue during the first nine months of 2009. We had no oil field services revenue during the same period in 2008.

Production. We produced 326,000 gross barrels of crude oil from March 5, 2009, the date of our acquisition of Incremental, through September 30, 2009 at an average rate of 1,573 barrels per day. Substantially all of our production is generated from the Selmo oil field in Turkey. We produced a nominal amount of crude oil in the first nine months of 2008.

Production Expenses. Production expenses for the nine months ended September 30, 2009 increased to $6.2 million from $128,000 in the nine months ended September 30, 2008. The increase in production expenses is the result of the acquisition of Incremental and its producing properties in the first quarter of 2009 and the acquisition of EOT and its producing properties in July 2009.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment costs increased to $5.3 million for the nine months ended September 30, 2009. The increase is primarily due to the abandonment of the Atesler-1 well on License 4262 in Turkey. We did not record any exploration, abandonment and impairment expense in the first nine months of 2008.

Seismic and Other Exploration. Seismic and other exploration costs increased to $6.1 million for the nine months ended September 30, 2009. The increase is due primarily to 3D seismic surveys shot over the Asilah licenses in Morocco and License 4175 in Turkey. We did not record any seismic and other exploration expense in the first nine months of 2008.

International Oil and Gas Activities. During the nine months ended September 30, 2009, we continued significant activities in foreign countries to establish our drilling services and exploration and production support functions, including inventory yards, personnel, transportation and fuel, consulting, legal, accounting, travel and other costs. These expenses are necessary to further our identification and development of business opportunities but are not identifiable to specific capital projects. The following table presents exploration expenditures by country:

	For the Nine Months Ended,
(in thousands)	September 30, 2009		September 30, 2008
Morocco	$	1,130	$	(405	)
Romania		392		630
Turkey		6,372		451
Other and unallocated		1,991		331
Total	$	9,885	$	1,007

General and Administrative Expense. General and administrative expense was $8.9 million for the nine months ended September 30, 2009 compared to $2.0 million for the nine months ended September 30, 2008, primarily due to increased corporate staffing and salaries resulting from the acquisitions of Longe and Incremental in the fourth quarter of 2008 and the first quarter of 2009, respectively. We also recorded $779,000 in transaction expenses relating to the Incremental acquisition during the first six months of 2009. In addition, we recorded share-based compensation of $1.2 million during the first nine months of 2009, compared to $490,000 for the first nine months of 2008.

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Depreciation, Depletion and Amortization. Depreciation, depletion and amortization increased to $6.1 million for the nine months ended September 30, 2009. We had no assets subject to depreciation, depletion and amortization in the first nine months of 2008 due to the write-down and sale of substantially all of our U.S. properties during 2007. The increase is due to the acquisition of Incremental in the first quarter of 2009 and drilling services equipment put in service during the first nine months of 2009. We recorded $234,000 of accretion expense in the first nine months of 2009 for asset retirement obligations related to the Incremental acquisition. We did not record any accretion expense in the first nine months of 2008.

Net Loss. The consolidated net loss for the nine months ended September 30, 2009 was $33.8 million, or $0.18 per share (basic and diluted), compared to a consolidated net loss of $3.5 million, or $0.06 per share (basic and diluted), for the nine months ended September 30, 2008. The net loss for the first nine months of 2009 is primarily composed of general and administrative expense of $8.9 million, production expenses of $6.2 million, seismic and other exploration costs of $6.1 million, depreciation, depletion and amortization expenses of $6.1 million, and foreign exchange loss of $4.3 million relating to our financing of the acquisition of Incremental in the first quarter of 2009.

Results of Operations – Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008

Revenue. Total crude oil and natural gas sales increased to $9.1 million in the third quarter of 2009 from $34,000 realized in the third quarter of 2008. The increase is the result of the acquisition of Incremental in the first quarter of 2009. Substantially all of our revenue is derived from the sale of crude oil from the Selmo oil field in Turkey. We sold 120,000 net barrels of crude oil at an average realized price of $75.57 per barrel at the Selmo oil field during the third quarter of 2009. We recorded $204,000 in oilfield services revenue during the third quarter of 2009. We had no oilfield services revenue during the same period in 2008.

Production. We produced 137,400 gross barrels of crude oil during the quarter ended September 30, 2009 at an average rate of 1,494 barrels per day. Substantially all of our production is generated from the Selmo oil field in Turkey. We produced a nominal amount of crude oil in the third quarter of 2008.

Production Expenses. Production expenses in the third quarter of 2009 increased to $3.1 million from $82,000 in the third quarter of 2008. The increase in production expenses is the result of the acquisition of Incremental and its producing properties in the first quarter of 2009.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment expense increased to $4.6 million for the quarter ended September 30, 2009. The increase is primarily due to the abandonment of the Atesler-1 well on License 4262 in Turkey. We did not record any exploration, abandonment and impairment expense in the third quarter of 2008.

Seismic and Other Exploration. Seismic and other exploration costs increased to $2.6 million for the quarter ended September 30, 2009. The increase is primarily due to a 3D seismic survey shot over the Asilah licenses in Morocco and to seismic interpretation costs. We did not record any seismic and other exploration costs in the third quarter of 2008.

International Oil and Gas Activities. During the three months ended September 30, 2009, we continued significant activities in foreign countries to establish our drilling services and exploration and production support functions, including inventory yards, personnel, transportation and fuel, consulting, legal, accounting, travel and other costs. These expenses are necessary to further our identification and development of business opportunities but are not identifiable to specific capital projects. The following table presents exploration expenditures by country:

	For the Three Months Ended,
(in thousands)	September 30, 2009		September 30, 2008
Morocco	$	480	$	306
Romania		180		237
Turkey		3,367		170
Other and unallocated		291		145
Total	$	4,318	$	858

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General and Administrative Expense. General and administrative expense increased to $4.1 million in the third quarter of 2009 compared to $576,000 in the third quarter of 2008, primarily due to increased corporate staffing and salaries resulting from the acquisitions of Longe and Incremental in the fourth quarter of 2008 and the first quarter of 2009, respectively. We also recorded $607,000 in share-based compensation during the third quarter of 2009, compared to $143,000 during the third quarter of 2008.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization increased to $2.4 million in the third quarter of 2009. We had no assets subject to depreciation, depletion and amortization in the third quarter of 2008 due to the write-down and sale of substantially all of our U.S. properties during 2007. The increase is due to the acquisition of Incremental in the first quarter of 2009 and drilling services equipment put in service during the first nine months of 2009. We recorded $122,000 of accretion expense in the third quarter of 2009 for asset retirement obligations related to the Incremental acquisition. We did not record any accretion expense in the third quarter of 2008.

Net Loss. The consolidated net loss for the quarter ended September 30, 2009 was $13.1 million, or $0.05 per share (basic and diluted), compared to a consolidated net loss of $1.5 million, or $0.02 per share (basic and diluted), for the quarter ended September 30, 2008. The third quarter 2009 net loss is primarily composed of international oil and gas activities of $4.3 million, general and administrative expense of $4.1 million, production expenses of $3.1 million, seismic and other exploration costs of $2.6 million, and depreciation, depletion and amortization expense of $2.4 million.

Results of Operations – Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

Revenue. We recognized net crude oil and natural gas sales of $111,000 for the year ended December 31, 2008 from non-operated production in the U.S. This U.S. revenue represented a substantial decrease from sales for the year ended December 31, 2007 of $653,000. The decrease is the result of the sale of our South Gillock and Jarvis Dome properties in the fourth quarter of 2007.

Production Expenses. Lease operating expenses for the year ended December 31, 2008 decreased to $73,000 from $1.2 million as reported for the year ended December 31, 2007. The decrease in lease operating expense is the result of the sale of our South Gillock and Jarvis Dome properties in the fourth quarter of 2007.

Seismic and Other Exploration Costs. Seismic and other exploration costs increased to $7.9 million in 2008 from $0 in 2007 primarily related to two seismic surveys in Morocco and one in Turkey.

General and Administrative Costs. General and administrative costs of $3.0 million in 2008 increased by $890,000 compared to $2.1 million in 2007, primarily because of increased salaries, contract labor, insurance, legal and professional fees.

International Oil and Gas Activities. During the year ended December 31, 2008, we continued exploration activities in foreign countries including salaries, consulting, legal, accounting, travel and other costs necessary to further our identification and development of business opportunities. Expense reimbursements totaling $832,000 from Longe relating to our Moroccan properties are included in international oil and gas activity during the year ended December 31, 2008. The following table presents expenditures by country:

	Year Ended December 31,
(in thousands)	2008		2007
Morocco	$	2,217	$	811
Romania		699		746
Turkey		917		239
Other and unallocated		1,350		516
Total	$	5,183	$	2,312

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Depreciation, Depletion and Amortization. Depreciation, depletion and amortization decreased to $59,000 for 2008 as compared with $152,000 in 2007 due to the sale of substantially all of our U.S. properties during 2007. We recorded an impairment charge of $447,000 in 2007. We recorded depreciation expense of $53,000 in 2008 on drilling equipment and other property following the acquisition of Longe in December 2008.

Interest and Other Income. Interest and other income increased $98,000 to $338,000 in 2008 as compared to $240,000 in 2007, resulting from increased interest income on higher invested cash balances from the private placement in the second quarter of 2008 and from a $56,000 distribution in the third quarter of 2008 for overpayment of expenses from the former contract operator of our Nigerian operations which were sold in 2005.

Net Loss. The consolidated net loss for the year ended December 31, 2008 was $16.5 million or $0.25 per share (basic and diluted), compared to consolidated net loss of $6.3 million or $0.15 per share (basic and diluted) for the year ended December 31, 2007. The 2008 loss is primarily composed of general and administrative expense of $3.0 million, stock-based compensation of $583,000, seismic and other exploration expenses of $7.9 million and $5.2 million relating to international oil and gas activities.

Capital Expenditures

In 2008, we incurred capital expenditures of $9.6 million, including $7.9 million in seismic-related costs which was expensed, $402,000 related to wellsite preparation in Romania, $127,000 for wellsite preparation in Morocco, and $1.2 million in wellsite preparation and drilling in Turkey. We also recorded $202,000 for computer and telecommunication equipment in 2008. For 2007, we recorded capital expenditures of $4.1 million relating to the drilling of a well on our former South Gillock property in Texas.

We recorded capital expenditures of $48.5 million for the third quarter of 2009, compared to $311,000 for capital expenditures in the third quarter of 2008. The increase in capital expenditures is primarily due to drilling activities and the acquisition of equipment.

For the nine months ended September 30, 2009, we have incurred $81.6 million in capital expenditures, excluding the Incremental acquisition, compared to capital expenditures of $576,000 for the nine months ended September 30, 2008. We expect to incur capital expenditures of approximately $24.0 million during the fourth quarter of 2009, of which approximately $22.0 million is planned to be incurred for exploration and production activities and approximately $2.0 million is planned to be incurred for equipment and other capital expenditures.

We are in the process of finalizing our capital expenditure budget for 2010. Capital expenditures for 2010 are expected to range between $115 million and $135 million. The anticipated expenditures are balanced between development of the Company’s Selmo, Thrace Basin, and Arpatepe assets, exploration on potential high impact blocks in Turkey and Morocco, lower risk exploration on the Tselfat permit in Morocco, exploration and seismic acquisition in Turkey and Romania and limited acquisitions of equipment. Our projected 2010 capital budget is subject to change.

Settlement Provision

In conjunction with the sale of our Bahamian subsidiary effective June 20, 2005, we deposited funds into an escrow account to address any liabilities and claims relating to our prior operations in Nigeria. The remaining potential liability to us includes taxes owed for the period January through June 2005, and we expect the remaining escrow amount of $240,000 to be sufficient to cover any potential liabilities.

Liquidity and Capital Resources

Our primary sources of liquidity for 2007 were cash and cash equivalents and sale of assets. Our primary sources of liquidity for 2008 and the first three months of 2009 were our cash and cash equivalents and proceeds from the issuance of our common shares. Since the acquisition of Incremental, our primary sources of liquidity have been cash flow from operations from our acquisition of Incremental, which included a 100% working interest in the producing Selmo oil field among other assets, and proceeds from the sale of our common shares. At September 30, 2009, we had cash and cash equivalents of $28.4 million, $10.1 million in short-term debt, no long-term debt and working capital of $16.9 million compared to cash and cash equivalents of $30.1 million, no debt, and working capital of $28.9 million at December 31, 2008. Cash used in operating activities during the third quarter of 2009 was

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$8.8 million compared to cash used in operating activities of $3.0 million in the third quarter of 2008, primarily as a result of the acquisition of Incremental and Longe. Cash used in operating activities during the first nine months of 2009 was $25.4 million compared to cash used in operating activities of $2.6 million in the first nine months of 2008, primarily as a result of the acquisition of Incremental and Longe. At November 1, 2009, we had cash and cash equivalents of $15.5 million, $9.8 million in short-term debt, no long-term debt and working capital of $9.9 million. During November 2009, we raised gross proceeds of approximately Cdn$115.3 million from the sale of our common shares and, in December 2009, we repaid $1.9 million of debt under a general credit agreement with Turkiye Garanti Bankasi, as described in the next paragraph.

On July 5, 2007, PEMI, a wholly-owned subsidiary of Incremental, entered into a general credit agreement (the “PEMI Credit Agreement”) with Turkiye Garanti Bankasi. PEMI borrowed $5.5 million under the PEMI Credit Agreement in order to fund drilling and development activity in the Selmo oil field. The loan bears interest at a fixed rate of 7.6% per annum, and all outstanding principal and interest under the PEMI Credit Agreement is due August 6, 2010. On December 15, 2009, we repaid the PEMI Credit Agreement in full.

In December 2008, we issued 35,416,667 common shares at a price of $1.20 per share in a private placement with Dalea, Riata TransAtlantic, Mr. McCann, and other purchasers that have business or familial relationships with Mr. Mitchell, that resulted in gross proceeds of $42.5 million. We used substantially all of the net proceeds to purchase additional equipment for our planned drilling and service operations in Turkey, Morocco and Romania, to fund drilling activities in those countries and for general corporate purposes.

On June 22, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 98,377,300 common shares at a price of Cdn$1.65 per common share, raising gross proceeds of approximately $143.1 million. Of the 98,377,300 common shares sold, 41,818,000 common shares were offered and sold by us to Dalea. We used $61.8 million of the net proceeds towards paying off a credit agreement with Dalea. The remaining portion of the net proceeds were used to fund our exploration and development activities and for general corporate purposes.

On July 23, 2009, in connection with our acquisition of EOT, we entered into a promissory note with the sellers in the amount of $1.5 million due July 23, 2010. The note bears interest at a fixed rate of 3% per annum.

On July 27, 2009, in connection with our purchase of a drilling rig from Viking, we entered into a promissory note in the amount of $5.9 million. Dalea owns 85% of Viking. The note is due and payable on August 1, 2010, bears interest at a fixed rate of 10% per annum and is secured by the drilling rig and associated equipment. Interest under the note is payable quarterly on November 1, 2009, February 1, 2010, May 1, 2010 and August 1, 2010.

On November 24, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 48,298,790 common shares at a price of Cdn$2.35 per common share, raising gross proceeds of approximately Cdn$113.5 million. Of the 48,298,790 common shares sold, we offered and sold 4,255,400 common shares to Dalea. We intend to use approximately Cdn$87.3 million of the net proceeds towards our 2010 capital expenditure program, including approximately Cdn$12.8 million for the acquisition of equipment, approximately Cdn$47.9 million for the drilling of exploration wells in Turkey, Morocco and Romania and approximately Cdn$26.6 million for the drilling of development wells (including well infrastructure) in the Selmo field and the Thrace Basin. The remaining net proceeds from the offerings will be used for general corporate purposes, which may include the acquisition of other equipment which is not currently included in our 2010 capital expenditure program, the expansion of our drilling program in 2010, additional corporate or property acquisitions or the repayment of approximately $6 million in debt relating to the acquisition of a drilling rig in July 2009. In connection with these offerings, we entered into a registration rights agreement providing for the registration of up to 48,298,790 common shares issued in these offerings. Concurrently with the offerings, we completed a Regulation D private placement to two accredited investors in the United States of 750,000 common shares at Cdn$2.35 per common share for gross proceeds to us of approximately Cdn$1.76 million. See “Description of Capital Stock—Registration Rights of Selling Shareholders.” This prospectus does not offer for sale any common shares beneficially owned by Dalea.

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On December 21, 2009, the Borrowers entered into a three year, $250 million senior credit facility with Standard Bank Plc and BNP Paribas (Suisse) SA. We intend to use the credit facility to finance a portion of the development of our oil and gas properties in Turkey and for general corporate and working capital purposes.

The credit facility is guaranteed by us and the Guarantors. The initial borrowing base under the credit facility is $30 million, subject to redetermination from time to time. Loans under the credit facility will accrue interest at a rate of three month LIBOR plus 6.25% per annum. In addition, we are required to pay (i) a commitment fee payable quarterly in arrears at a per annum rate equal to 3.125% per annum of the unused and uncancelled portion of each lender’s commitment under the credit facility, (ii) on the date of issuance of any letter of credit, a fronting fee in an amount equal to 0.25% of the original maximum amount available to be drawn under such letter of credit and (iii) a per annum letter of credit fee for each letter of credit issued equal to the face amount of such letter of credit multiplied by (a) 1.0% for any letter of credit that is cash collateralized or backed by a standby letter of credit issued by a financial institution acceptable to Standard Bank Plc or (b) 6.25% for all other letters of credit.

The credit facility is secured by a pledge of (i) receivables payable under each Borrower’s hydrocarbon sales contracts; (ii) the Borrowers’ bank accounts which receive the payments due under Borrowers’ hydrocarbon sales contracts; (iii) the shares of each of DMLP, Ltd., Talon Exploration, Ltd., PEMI and TransAtlantic Turkey, Ltd.; and (iv) substantially all of the present and future assets of the Borrowers.

During a measurement period of the four most recently completed fiscal quarters occurring on or after March 31, 2010, the financial covenants under the credit facility require each of the Borrowers to maintain a:

• ratio of total debt to EBITDAX of greater than 2.50 to 1.00;

• ratio of EBITDAX (less non-discretionary capital expenditures) to interest expense of less than 4.00 to 1.00; and

• ratio of current assets to current liabilities of not less than 1.10 to 1.00.

Pursuant to the terms of the credit facility, until amounts under the credit facility are repaid, each of the Borrowers shall not, and shall cause each of its subsidiaries not to, in each case subject to certain exceptions, incur indebtedness or create any liens, enter into any agreements that prohibit the ability of any Borrower or its subsidiary to create any liens, enter into any merger, consolidation or amalgamation, liquidate or dissolve, dispose of any property or business, make certain payments or any investments, enter into any transactions with an affiliate, enter into a sale and leaseback arrangement, engage in business other than as an oil and gas exploration and production company or outside of Turkey or its jurisdiction of formation, change its organizational documents, fiscal periods or accounting principles, modify certain agreements, enter into any hedge agreement for speculative purposes or open or maintain new deposit, securities or commodity accounts.

An event of default under the credit facility includes, among other events, breach of certain covenants and obligations, cross-default to other indebtedness, bankruptcy or insolvency and the occurrence of a material adverse effect. In addition, the occurrence of a change of control is an event of default. A change of control is defined as the occurrence of any of the following: (i) our failure to own, of record and beneficially, all of the equity of the Borrowers or to exercise, directly or indirectly, day-to-day management and operational control of the Borrowers; (ii) the failure by the Borrowers to own or hold, directly or indirectly, all of the interests granted to Borrowers pursuant to certain hydrocarbon licenses designated in the credit facility agreement; or (iii) (a) Mr. Mitchell ceases for any reason to be the executive chairman of our board of directors at any time, (b) Mr. Mitchell and certain of his affiliates cease to own of record and beneficially at least 35% of our common shares; or (c) any person, group or company, excluding Mr. Mitchell and certain of his affiliates, shall become, or obtain rights to become, the beneficial owner of more than 35% of our outstanding common shares entitled to vote for members of our board of directors on a fully-diluted basis. Provided that, if Mr. Mitchell ceases to be executive chairman of our board of directors by reason of his death or disability, such event shall not constitute a matured event of default unless we have not appointed a successor reasonably acceptable to the lenders within 60 days of the occurrence of such event. If an event of default shall occur and be continuing, all loans under the credit facility will bear an additional interest rate of 2.0% per annum. In the case of an event of default upon bankruptcy or insolvency, all amounts payable under the credit facility become immediately due and payable. In the case of any other event of default, all amounts due under the credit facility may be accelerated by the lenders or the administrative agent. Borrowers have certain rights to cure an event of default arising from a violation of the interest coverage ratio or leverage ratio by obtaining cash equity or loans from us.

Pursuant to the credit facility, PEMI entered into hedge agreements with Standard Bank Plc and BNP Paribas, which provide commodity price support from the closing date until the date of the initial delivery to the technical agent of the independent reserves report in respect to the anticipated production volumes attributable to proved reserves at (i) 800 bbl/day for 2010, (ii) 700 bbl/day for 2011 and (iii) 600 bbl/day for 2012.

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We expect to have sufficient cash, cash equivalents, availability under the credit facility and cash flow from operations to fund our operations for at least the next twelve months. However, we may not have sufficient funds to conduct our planned exploration and development activities beyond December 2010.

Contractual Obligations

There have been no material changes to our contractual obligations at September 30, 2009 compared to contractual obligations at December 31, 2008.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements at December 31, 2008.

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BUSINESS

Development of Our Business

We are a vertically integrated, international oil and gas company engaged in the acquisition, development, exploration, and production of crude oil and natural gas. We hold interests in developed and undeveloped oil and gas properties in Turkey, Morocco, Romania, and California. In addition, we provide oilfield services and contract drilling services to third parties in Turkey and plan to provide similar services in Morocco.

Strategic Transformation. We underwent a strategic transformation during 2008 as a result of a series of transactions with N. Malone Mitchell, 3rd, chairman of our board of directors. Mr. Mitchell founded Riata Energy, Inc. in 1985 and built it into one of the largest privately held oil and gas producers in the United States. In 2006, Mr. Mitchell sold his controlling interest in Riata Energy, Inc. (now Sandridge Energy, Inc.) and founded a group of companies that are primarily focused on investing in international energy opportunities.

In March 2008, we announced that we had entered into a strategic relationship with Riata, an entity owned by Mr. Mitchell and his wife. Our initial arrangements with Riata included an equity investment into us, the replacement of our farm-in partner in both of our Moroccan properties, the extension of a short term credit facility to us to repay our outstanding short-term debt, and the provision of technical and management expertise to assist us in successfully developing and expanding our international portfolio of projects.

During the second quarter of 2008, we completed a two-stage private placement issuing 35,000,000 common shares to Riata TransAtlantic, Dalea and certain friends and family of Mr. Mitchell, for aggregate gross proceeds of Cdn$12 million. Mr. Mitchell is a manager of, and has sole voting and dispositive power over, the common shares held by Riata TransAtlantic, and Mr. Mitchell also owns and controls Dalea. We used the net proceeds to pay off all of our short-term debt, to fund international exploration activities and for general corporate purposes. Longe, an entity that was indirectly owned by Mr. Mitchell, his wife and children, replaced our prior farm-in partner in our Moroccan properties. In addition, Mr. Mitchell and Matthew McCann, general counsel for Riata, were designated by Riata and elected to our board of directors in connection with the private placement. Mr. Mitchell serves as chairman of our board of directors, and Mr. McCann also serves as our chief executive officer.

In the third quarter of 2008, we changed our operating strategy from a prospect generator to a vertically integrated project developer. To execute this new strategy, in December 2008, we acquired 100% of the issued and outstanding shares of Longe from Longfellow, an entity indirectly owned by Mr. Mitchell, his wife and children, in consideration for the issuance of 39,583,333 common shares and 10,000,000 common share purchase warrants. Concurrently, we issued 35,416,667 common shares in a private placement with Dalea, Riata TransAtlantic, Mr. McCann and other purchasers that have business or familial relationships with Mr. Mitchell, for gross proceeds of $42.5 million. Longe owns interests in our Moroccan properties and four drilling rigs, as well as associated service equipment, tubulars and supplies. Immediately after the Longe acquisition, we purchased an additional $8.3 million in drilling and service equipment, tubulars and supplies from Viking, an entity in which Dalea owns 85%, at Viking’s cost.

We anticipate that ownership of our own drilling rigs and service equipment will enable us to lower drilling and operating costs over the long term and control timing for development of our properties, thereby providing a competitive advantage. In addition, we expect that ownership of the drilling rigs will allow us to achieve operational capabilities in each country in which we operate. Because the availability of drilling rigs and service equipment is limited in Turkey, Morocco and Romania, we also anticipate that ownership of our own drilling rigs and service equipment will create opportunities to increase acreage in each country in which we operate by drilling to earn interests in existing third party licenses. When the rigs and equipment are not operating on our properties, we expect to use them to provide drilling and oilfield services to third parties, creating additional opportunities.

Incremental Acquisition. In the first quarter of 2009, we acquired Incremental through our wholly-owned subsidiary, TransAtlantic Australia. We announced our intention to make an all cash takeover offer to acquire all of the outstanding shares of Incremental in the fourth quarter of 2008. The offer expired on March 6, 2009 and Incremental delisted from the Australian Stock Exchange on March 26, 2009. At March 31, 2009, we owned approximately 96% of Incremental’s outstanding common shares. We completed the acquisition of the remaining 4% of Incremental’s outstanding common shares through an Australian statutory procedure on April 20, 2009. The

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acquisition of Incremental expanded our rig fleet and increased our workforce of highly qualified field staff, engineers and geologists in Turkey, one of our target countries. Through the Incremental acquisition, we acquired Turkish properties including the producing Selmo oil field, the Edirne gas field and additional exploration acreage. We also acquired three prospects in California.

Through the Incremental acquisition, we acquired a 100% working interest in a production lease in the Selmo oil field in southeastern Turkey. Situated on the northern edge of the Zagros fold belt of Iran and Iraq in southeast Turkey, Selmo has produced approximately 83 million barrels of oil to date. During the third quarter of 2009, our interest in the Selmo field produced 137,400 barrels of crude oil at an average rate of 1,494 barrels per day.

Through the Incremental acquisition, we acquired a 55% working interest in an exploration license in the Edirne gas field located in the Thrace Basin in northwestern Turkey. We are constructing a gathering system and facilities in the Thrace Basin necessary to begin selling natural gas from our discoveries in the Edirne gas field. On December 15, 2009, we entered into a five year gas sales agreement pursuant to which a natural gas distributor in Turkey has agreed to purchase all of our gas production from the Edirne field. We will sell the gas at a price equal to a 15% discount to the Industrial Interruptible Tariff benchmark set by BOTAS. We expect our initial eight wells in the Edirne field to come online in January 2010 with net production to us exceeding 5.5 million cubic feet of natural gas per day starting in the first quarter of 2010. Once gas sales commence, we plan to resume drilling in the Thrace Basin, with five wells planned and an additional two wells under consideration. We are presently acquiring an additional 100 square kilometers of 3D seismic on the western portion of the Edirne license using our own seismic equipment.

Through the Incremental acquisition, we acquired a 100% working interest in License 4262, covering 2,805 acres in southeastern Turkey, a 100% working interest in four exploration licenses in Midyat in southeastern Turkey covering approximately 460,400 acres and a 50% working interest in eight exploration licenses in the Tuz Golu basin in central Turkey covering approximately 870,000 acres.

In addition, through the Incremental acquisition, we acquired interests in three projects in the San Joaquin Valley in central California. We own a non-operated working interest in the Kettleman Middle Dome Unit. This unit produces approximately 125 gross barrels of oil per day along with small amounts of associated natural gas. We own a 5% interest in five existing wells on the Kettleman Middle Dome Unit (three are currently producing). On all new projects and well proposals submitted and completed after May 16, 2008, we will own a 10% non-operated working interest. In addition, we drilled two wells under our McFlurrey farm-out in March and April 2009, paying 100% of the cost. We tested the first well and determined it was non-commercial. Based on these results, we did not test the second well. We also own a 50% interest in the South East Kettleman North Dome oil field. We are currently exploring our options to divest the McFlurrey and South East Kettleman North Dome projects.

Sale of Common Shares. On June 22, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 98,377,300 common shares at a price of Cdn$1.65 per common share, raising gross proceeds of approximately $143.1 million. Of the 98,377,300 common shares sold, 41,818,000 common shares were offered and sold by us to Dalea. We used $61.8 million of the net proceeds towards paying off a credit agreement with Dalea. The remaining portion of the net proceeds was used to fund our exploration and development activities and for general corporate purposes. In connection with these offerings, we entered into a registration rights agreement providing for the registration of up to 98,377,300 common shares issued in these offerings, of which 55,544,300 shares have been registered for resale under the Securities Act.

EOT Acquisition. On July 23, 2009, our wholly-owned subsidiary, TransAtlantic Worldwide Ltd., acquired all of the ownership interests in EOT for total consideration of $7.8 million. EOT’s assets include a 50% interest in License 3118, interests in ten other exploration licenses in southern and southeastern Turkey, inventory and seismic data. License 3118, which covers approximately 96,000 acres (389 square kilometers), is located near the city of Diyarbakir in southeastern Turkey. In April and September 2008, EOT participated in the drilling of the Arpatepe-1 and Arpatepe-2 wells on License 3118, which represent Turkey’s first and second economic discoveries of crude oil from deeper, onshore Paleozoic sandstone formations. The wells, which flowed naturally and were not stimulated, had initial production rates of 440 and 190 gross barrels of oil per day, respectively, from limited perforations. At December 16, 2009, the wells were producing an aggregate of approximately 60 gross barrels of oil per day.

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Continuance to Bermuda. Effective October 1, 2009, we continued to the jurisdiction of Bermuda under the Companies Act 1981 of Bermuda from the Province of Alberta and changed our name from TransAtlantic Petroleum Corp. to TransAtlantic Petroleum Ltd. Our shareholders approved the continuance by a special resolution at a special meeting of shareholders held on July 14, 2009. In connection with the continuance, each of our common shares became and remained a common share of TransAtlantic Petroleum Ltd., and we became subject to the laws of Bermuda as if we had originally been incorporated under the Companies Act 1981 of Bermuda. We believe that continuing our company to Bermuda will be beneficial to us and our shareholders because we will receive more favorable tax treatment in Bermuda.

Offering of Common Shares. On November 24, 2009, we closed a Regulation S offering of common shares outside the United States and a concurrent Regulation D private placement of common shares inside the United States to accredited investors. In the aggregate, we sold 48,298,790 common shares at a price of Cdn$2.35 per common share, raising gross proceeds of approximately Cdn$113.5 million. Of the 48,298,790 common shares sold, we offered and sold 4,255,400 common shares to Dalea. We intend to use approximately Cdn$87.3 million of the net proceeds towards our 2010 capital expenditure program, including approximately Cdn$12.8 million for the acquisition of equipment, approximately Cdn$47.9 million for the drilling of exploration wells in Turkey, Morocco and Romania and approximately Cdn$26.6 million for the drilling of development wells (including well infrastructure) in the Selmo field and the Thrace Basin. The remaining net proceeds from the offerings will be used for general corporate purposes, which may include the acquisition of other equipment which is not currently included in our 2010 capital expenditure program, the expansion of our drilling program in 2010, additional corporate or property acquisitions or the repayment of approximately $6 million in debt relating to the acquisition of a drilling rig in July 2009. In connection with these offerings, we entered into a registration rights agreement providing for the registration of up to 48,298,790 common shares issued in these offerings. Concurrently with the offerings, we completed a Regulation D private placement to two accredited investors in the United States of 750,000 common shares at Cdn$2.35 per common share for gross proceeds to us of approximately Cdn$1.76 million. See “Description of Capital Stock—Registration Rights of Selling Shareholders.” This prospectus does not offer for sale any common shares beneficially owned by Dalea.

Credit Facility. On December 21, 2009, the Borrowers entered into a three year $250 million senior credit facility with Standard Bank Plc and BNP Paribas (Suisse) SA. The credit facility is guaranteed by us and the Guarantors. The initial borrowing base under the credit facility is $30 million, subject to redetermination from time to time. Loans under the credit facility will accrue interest at a rate of three months LIBOR plus 6.25% per annum. We intend to use the credit facility to finance a portion of the development of our oil and gas properties in Turkey, acquisitions and for general corporate and working capital purposes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Current Activities. Our current activities are focused on integrating the acquisitions of Incremental and EOT and developing our oil and gas properties in Turkey, Morocco, Romania and California. Our success will depend in part on discovering hydrocarbons in commercial quantities and then bringing these discoveries into production. We are currently engaged in the following drilling and exploration activities:

Turkey

• Drilling the S-58 development well on the Selmo oil field

• Sidetracking the S-44 well on the Selmo oil field

• Completing construction of a gas gathering facility to bring Edirne gas field production online

Morocco

• Drilling the OZW-1 exploratory well on the Ouezzane-Tissa permits

• Drilling the HKE-1 exploratory well on the Ouezzane-Tissa permits

Romania

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• Testing and completing the re-development wells on the Izvoru, Vanatori and Marsa licenses

• Drilling exploratory wells on the Sud Craiova license

Planned 2010 Activities. We are in the process of finalizing our capital expenditure budget for 2010. Capital expenditures for 2010 are expected to range between $115 million and $135 million. Our projected 2010 capital budget is subject to change. We currently plan to execute on the following drilling and exploration activities in 2010:

Turkey

• Drill 18 or more development wells on the Selmo oil field, including 1 well to test deeper horizons

• Drill 1 salt water disposal well on the Selmo oil field

• Drill 6 or more appraisal and exploration wells on the Arpatepe oil field

• Drill up to an additional 14 appraisal and exploration wells on the Edirne gas field, upon completion of the first 5 appraisal and exploration wells

• Drill 5 exploration wells on other licenses

Morocco

• Drill the BTK-1 exploratory well on the Tselfat permit

• Drill 1 exploratory well on the Asilah permits

• Drill 2 additional exploratory wells on the Tselfat permit

• Drill 1 exploratory well on the Guercif permits

Romania

• Drill 1 exploratory well on the Izvoru license

• Drill 3 exploratory wells on the Sud Craiova license, contingent on results from prior wells

Turkey. We began 2009 with twelve exploration licenses in Turkey. We currently hold interests in 32 exploration licenses and one production lease covering a total of 3.3 million gross acres (2.4 million net acres) in Turkey.

Through the EOT acquisition, we acquired a 50% interest in License 3118 and interests in ten other exploration licenses in southern and southeastern Turkey. License 3118, which covers approximately 96,000 acres (389 square kilometers), is located near the city of Diyarbakir in southeastern Turkey. In April and September 2008, EOT participated in the drilling of the Arpatepe-1 and Arpatepe-2 wells on License 3118, which represent Turkey’s first and second economic discoveries of crude oil from deeper, onshore Paleozoic sandstone formations. The wells, which flowed naturally and were not stimulated, had initial production rates of 440 and 190 gross barrels per day, respectively, from limited perforations. At December 16, 2009, the wells were producing an aggregate of approximately 60 gross barrels of oil per day.

Through the Incremental acquisition, we acquired a 100% working interest in a production lease in the Selmo oil field in southeastern Turkey. During the third quarter of 2009, our interest in the Selmo field produced 137,400 barrels of crude oil at an average rate of 1,494 barrels per day. We have limited current production, and substantially all of our crude oil production is concentrated in the Selmo field. A Turkish government-owned oil and gas company purchases all of our crude oil production from the Selmo field.

We also acquired a 55% interest in an exploration license in the Edirne gas field in the Thrace Basin on which there have been drilled eight successful shallow gas wells. We drilled the Kirmizihoyuk-1 well and the Kusey Ikihoyuk-1 well on the Edirne license (55% interest) in the Thrace Basin and successfully tested two other wells on the Edirne license. On December 15, 2009, we entered into a five year gas sales agreement pursuant to which a

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natural gas distributor in Turkey has agreed to purchase all of our gas production from the Edirne field. We will sell the gas at a price equal to a 15% discount to the Industrial Interruptible Tariff benchmark set by BOTAS. We expect our initial eight wells in the Edirne field to come online in January 2010 with net production to us exceeding 5.5 million cubic feet of natural gas per day starting in the first quarter of 2010. We have drilled and completed the S-53 well, S-54 well and S-62 well in the Selmo field, and they are now in production. We are currently drilling the S-58 well and plan to spud another well before the end of 2009. In addition, we plan to commence a five-well drilling program on the Edirne license in the Thrace Basin before the end of 2009.

With the acquisition of Incremental, we now own 100% of License 4262, covering 2,805 acres (12 square kilometers) in southeastern Turkey. We drilled the Atesler well on License 4262 to a depth of 10,851 feet. We tested the Atesler well in early August 2009 and determined that the well is non-commercial and would be plugged and abandoned. With the acquisition of Incremental, we also own 100% of four additional exploration licenses covering approximately 460,400 acres (1,863 square kilometers) located in Midyat in southeastern Turkey. Also as part of the Incremental acquisition, we acquired a 100% interest in eight licenses south of the city of Ankara in the Tuz Golu Basin, and have transferred 50% of the interest to another company. These licenses are in a large, relatively unexplored basin.

Separately, we pursued the acquisition of other licenses in southeastern Turkey. In April 2009, we farmed-in to one license for cash consideration and the obligation to carry a 10% interest in the first well drilled to earn 90% interest in License 4325. We also applied to the Turkish General Directorate of Petroleum Affairs (the “GDPA”) and in August 2008 were awarded six licenses in the Malatya area. We paid a party who will be a 10% participant in these licenses cash consideration and agreed that party would back-in after payout for 10% in the first well to be drilled on these licenses.

In July 2007, we were awarded three additional onshore exploration licenses, Blocks 4268, 4269 and 4270, all of which are in southeastern Turkey on the border with Iraq. These licenses will also involve a work program, including technical studies, reprocessing of data and contingent plans for drilling wells. We are the operator and 100% working interest owner of these licenses.

In June 2006, we were awarded three onshore exploration licenses in southeastern Turkey. Two of the licenses, Block 4173 and Block 4174, are located near Bismil on the Tigris River. In March 2008, we farmed-out 75% of our working interest in Blocks 4173 and 4174 to EOT. In exchange for a 75% interest in the exploration licenses, EOT drilled an exploration well at its cost to test the Bedinan Ordivician formation (approximately 3,700 meters) on one of the licenses. The well encountered mechanical difficulties shortly after encountering the target formation and was abandoned. Through the acquisition of EOT in July 2009, we are the operator and 100% working interest owner of Blocks 4173 and 4174. We plan to re-enter a previously drilled well on Block 4174 and deepen it in January 2010.

The third license, Block 4175, is located near Cizre about 60 kilometers from the Iraq border. In the first quarter of 2009, we completed a 105 kilometers 2D seismic shoot over the license. We have conducted an initial work program of detailed fieldwork and geochemical analysis on this license. We plan to drill the initial well on Block 4175 in the first half of 2010. We are the operator and 100% working interest owner of Block 4175.

In December 2008, we leased an equipment yard in Diyarbakir and started shipping tubulars, drilling equipment and supplies into the country in support of our planned drilling activities. With the acquisition of Incremental, we acquired a second yard at Selmo and have since purchased acreage and started an equipment yard on the Edirne license to support drilling activities in the Thrace Basin.

Morocco. We own interests in ten exploration permits in Morocco. We were awarded two Guercif exploration permits effective January 2, 2008. These permits expire in January 2011. Our Tselfat exploration permit was awarded to us in May 2006 and expires in July 2010. We are the operator and 80% working owner of the Guercif permits, and we are the operator and 100% working interest owner in the Tselfat permit. As part of our Guercif work program, we re-entered, logged and tested the MSD-1 well, which we completed in the fourth quarter of 2008. The logs and test failed to establish the presence of hydrocarbons. We are committed to drill another well before the end of 2010 and will carry the 20% owner in the Guercif license in that well. As part of our Tselfat work program, in the second quarter of 2008, we completed a 3D seismic survey over a portion of the Tselfat permit. We drilled the HR-33bis well in the Haricha field on the Tselfat exploration permit to help assess whether there is the opportunity for

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redevelopment of the previously produced but abandoned Haricha field. We tested the two lower zones and are evaluating the results. We plan to complete our evaluation of these zones and test two additional zones in early 2010. We are planning to drill at least two additional shallow exploration wells and one deeper exploration well on the Tselfat permit in 2010.

In July 2008, we agreed to farm-in to five Ouezzane-Tissa and two Asilah exploration permits held by Direct Petroleum Morocco, Inc. and Anschutz Morocco Corporation (collectively, “Direct”) in northern Morocco. The Direct exploration permits cover seven blocks with a combined area of 3,036,068 acres (12,287 square kilometers). Under the farm-in agreement, we will earn a 50% interest in the Ouezzane-Tissa and Asilah exploration permits by carrying Direct for 100% of the costs of drilling three wells on the Ouezzane-Tissa and Asilah permits. If one of the three wells is a commercial success, as defined in the farm-in agreement, then we would carry Direct in the drilling of a fourth well. We became the operator of the Ouezzane-Tissa and Asilah exploration permits after receiving government approval. The Ouezzane-Tissa permits expire in August 2010, and the Asilah permits expire in May 2012. We are currently drilling at our cost both our first well on the Ouezzane-Tissa exploration permit, the OZW-1 well, and our second well, the HKE-1 well. We conducted a 2D seismic survey in late 2008 and acquired 200 kilometers of 2D seismic over the Asilah permits, and in 2009, we acquired an additional approximately 90 kilometers of 2D seismic on the Asilah permits. We are evaluating the data for a planned well on the Asilah permits in 2010.

During 2008, we leased an equipment yard and shipped one drilling rig, tubulars and supplies into the country in support of our planned drilling activities. We shipped a second drilling rig to Morocco in the first quarter of 2009.

Romania. We hold three production licenses in Romania which expire in August 2010. We are the operator and 100% working interest owner in the licenses. In 2009, we drilled the Delta and Beta wells on the Izvoru license and one well on each of the Marsa and Vanatori licenses. We are currently testing the Beta well.

In June 2009, we finalized our previously announced agreement with Sterling Resources Ltd. (“Sterling”) to farm-in to Sterling’s Sud Craiova Block E III-7, covering 1.5 million acres (6,070 square kilometers) in western Romania. In exchange for a 50% working interest, we agreed to drill three exploration wells on the Sud Craiova license, each to a depth of approximately 3,280 feet (1,000 meters). At casing point in each well, we and Sterling will each elect whether to proceed to completion and will each bear our proportionate share of completion and infrastructure costs. Sterling will remain the operator of the Sud Craiova license. We began drilling the first of the three wells at our cost on the Sud Craiova license in November 2009.

During 2008, we leased an equipment yard and shipped tubulars, drilling equipment and supplies into the country in support of our planned drilling activities. We contracted with a third party to drill our initial seven-well program in Romania rather than drilling with our own rig.

United States. With the acquisition of Incremental, we acquired interests in three projects in the San Joaquin Valley in central California: two farm-outs and a small non-operated working interest in a producing field. Incremental acquired these projects in May 2008.

We own a non-operated working interest in the Kettleman Middle Dome Unit operated by Exaro Energy, LLC and located in Kings County California. This unit produces approximately 125 gross barrels of oil per day along with small amounts of associated natural gas. We own a 5% interest in five existing wells on the Kettleman Middle Dome Unit (three are currently producing). On all new projects and well proposals submitted and completed after May 16, 2008, we will own a 10% non-operated working interest. The operator plans to recomplete two of the five wells located in the unit. Plans for further development will be addressed after the results of the two recompletions are evaluated.

Our McFlurrey farm-out covers 9,100 net acres of leasehold in Kings, Fresno and Kerns counties in California. We operate and will earn a 50% interest in exchange for drilling four exploratory wells, building a gas pipeline and acquiring some 3D seismic. We drilled the first two wells in March and April 2009, paying 100% of the cost. We tested the first well and determined it was non-commercial. Based on these results, we did not test the second well.

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We own a 50% interest in the South East Kettleman North Dome oil field. The South East Kettleman North Dome farm-out covers 1,155 net acres of leasehold in Kings County, northeast of the McFlurrey farm-out. The acreage is held by production from the Kettleman Middle Dome which directly offsets the South East Kettleman North Dome to the south. We are currently exploring our options to divest the McFlurrey and South East Kettleman North Dome projects.

Principal Capital Expenditures and Divestitures

The following table sets forth our principal capital expenditures during 2008 and for the nine months ended September 30, 2009 (in thousands of dollars):

Expenditure Type	Fiscal Year Ended December 31, 2008		Nine Months Ended September 30, 2009
Property acquisition	$	1.7	$	33.0
Drilling services and other equipment		40.9		48.6
Subtotal		42.6		81.6
Acquisition of Incremental Petroleum Limited		—		57.7
Total Capital Expenditures and Divestitures	$	42.6	$	139.3

There were no capital divestures during 2008 or for the nine months ended September 30, 2009.

Principal Markets

In accordance with FASB Accounting Standards Codification Topic 280, Segment Reporting (“ASC Topic 280”) (formerly SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information), we have two reportable operating segments, exploration and production of oil and natural gas (“E&P”) and drilling services, within three reportable geographic segments: Romania, Turkey and Morocco. Segment assets, net revenues and net loss in each of our reportable segments are as follows:

	Corporate and Other		Morocco			Romania		Turkey		Total
	(in thousands)
2009
Segment assets as at September 30,	$	22,923	$	61,110		$	12,603	$	144,765	$	241,401
Three months ended September 30,
Total revenues		49		—			—		9,209		9,258
Net loss (profit) attributable to TransAtlantic Petroleum Ltd		4,104		5,085			675		3,279		13,143
Nine months ended September 30,
Total revenues		68		—			—		17,977		18,045
Net loss attributable to TransAtlantic Petroleum Ltd.		12,040		10,495			5,625		5,370		33,530
2008
Segment assets as at December 31,	$	39,480	$	27,591		$	3,953	$	10,230	$	81,254
Three months ended September 30,
Total revenues		34		—			—		—		34
Net loss (profit)		958		288			237		—		1,483
Nine months ended September 30,
Total revenues		95		—			—		—		95
Net loss (profit)		3,267		(419	)		630		—		3,478

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	E&P		Drilling Services		Corporate and Other		Total
	(in thousands)
2009
Segment assets as at September 30,	$	169,145	$	52,588	$	19,668	$	241,401
Three months ended September 30,
Total revenues		9,054		204		—		9,258
Net loss		7,982		2,688		2,473		13,143
Nine months ended September 30,
Total revenues		17,757		288		—		18,045
Net loss		17,028		6,093		10,409		33,530
2008
Segment assets as at December 31,	$	14,334	$	35,749	$	31,171	$	81,254
Three months ended September 30,
Total revenues		34		—		—		34
Net loss		48		—		1,435		1,483
Nine months ended September 30,
Total revenues		95		—		—		95
Net loss		33		—		3,445		3,478

Competition

We operate in the highly competitive areas of oil and gas exploration, development and acquisition with a substantial number of other companies, including U.S.-based and foreign companies doing business in each of the countries in which we operate. We face intense competition from independent, technology-driven companies as well as from both major and other independent oil and gas companies in each of the following areas:

• seeking oil and gas exploration licenses and production licenses and leases;

• acquiring desirable producing properties or new leases for future exploration;

• marketing natural gas and oil production;

• integrating new technologies; and

• acquiring the equipment and expertise necessary to develop and operate properties.

Many of our competitors have substantially greater financial, managerial, technological and other resources than we do. These companies are able to pay more for exploratory prospects and productive oil and gas properties than we can. To the extent competitors are able to pay more for properties than we are paying, we will be at a competitive disadvantage. Further, many of our competitors enjoy technological advantages over us and may be able to implement new technologies more rapidly than we can. Our ability to explore for natural gas and oil prospects and to acquire additional properties in the future will depend upon our ability to successfully conduct operations, implement advanced technologies, evaluate and select suitable properties and consummate transactions in this highly competitive environment.

Governmental Regulations

Government Regulation. Our current or future operations, including exploration and development activities on our properties, require permits from various governmental authorities, and such operations are and will be governed by laws and regulations governing exploration, development, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection and other matters. Compliance with these requirements may prove to be difficult and expensive. Due to our international operations, we are subject to the following issues and uncertainties that can affect our operations adversely:

• the risk of expropriation, nationalization, war, revolution, border disputes, renegotiation or modification of existing contracts, and import, export and transportation regulations and tariffs;

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• taxation policies, including royalty and tax increases and retroactive tax claims;

• exchange controls, currency fluctuations and other uncertainties arising out of foreign government sovereignty over international operations;

• laws and policies of the United States affecting foreign trade, taxation and investment;

• the possibility of being subjected to the exclusive jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the United States; and

• the possibility of restrictions on repatriation of earnings or capital from foreign countries.

Permits and Licenses. In order to carry out exploration and development of oil and gas interests or to place these into commercial production, we may require certain licenses and permits from various governmental authorities. There can be no guarantee that we will be able to obtain all necessary licenses and permits that may be required. In addition, such licenses and permits are subject to change and there can be no assurances that any application to renew any existing licenses or permits will be approved.

Repatriation of Earnings. Currently, there are no restrictions on the repatriation of earnings or capital to foreign entities from Turkey, Morocco or Romania. However, there can be no assurance that any such restrictions on repatriation of earnings or capital from the aforementioned countries or any other country where we may invest will not be imposed in the future. We may be liable for payment of taxes upon repatriation of certain earnings from the aforementioned countries.

Environmental. The oil and natural gas industry is subject to extensive and varying environmental regulations in each of the jurisdictions in which we may operate. Environmental regulations establish standards respecting health, safety and environmental matters and place restrictions and prohibitions on emissions of various substances produced concurrently with oil and natural gas. In most instances, the regulatory requirements relate to the handling and disposal of drilling and production waste products and waste created by water and air pollution control procedures. These regulations can have an impact on the selection of drilling locations and facilities, potentially resulting in increased capital expenditures. In addition, environmental legislation may require those wells and production facilities to be abandoned and sites reclaimed to the satisfaction of local authorities. Such regulation has increased the cost of planning, designing, drilling, operating and in some instances, abandoning wells. We are committed to complying with environmental and operation legislation wherever we operate.

Such laws and regulations not only expose us to liability for our own negligence, but may also expose us to liability for the conduct of others or for our actions that were in compliance with all applicable laws at the time those actions were taken. We may incur significant costs as a result of environmental accidents, such as oil spills, natural gas leaks, ruptures, or discharges of hazardous materials into the environment, including clean-up costs and fines or penalties. Additionally, we may incur significant costs in order to comply with environmental laws and regulations and may be forced to pay fines or penalties if we do not comply.

Employees

As of December 15, 2009, we employed approximately 470 people and, through a service agreement with Longfellow, Viking, Longe, MedOil Supply, LLC and Riata, contracted for the services of approximately 55 additional people. As of December 15, 2009, approximately 58 of our employees that are employed by one of our Turkish subsidiaries are represented by collective bargaining agreements with the Turkish Employers Association of Chemical, Oil and Plastic Industries (KIPLAS) and the Petroleum, Chemical and Rubber Workers Union of Turkey (PETROL-IS). This agreement will terminate in January 2010. We intend to begin renegotiating the agreement in early January 2010. We consider our union and employee relations to be satisfactory.

Formation

We were incorporated under the laws of British Columbia, Canada on October 1, 1985 under the name Profco Resources Ltd. and continued to the jurisdiction of Alberta, Canada under the Business Corporations Act (Alberta) on June 10, 1997. Effective December 2, 1998, we changed our name to TransAtlantic Petroleum Corp. Effective October 1, 2009, we continued to the jurisdiction of Bermuda under the Companies Act 1981 of Bermuda under the name “TransAtlantic Petroleum Ltd.”

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PROPERTIES

Turkey

General. We began 2009 with interests in twelve exploration licenses in Turkey. We currently hold interests in 32 exploration licenses and one production lease covering a total of 3.3 million gross acres (2.4 million net acres) in Turkey.

Blocks 4173, 4174 and 4175. In June 2006, we were awarded three onshore exploration licenses in southeastern Turkey. The three licenses together cover a total of 162,762 acres (660 square kilometers) and expire in June 2010. These licenses were awarded to us based on our commitment to perform certain work programs for each of the respective areas. Additional commitments to shoot seismic or drill wells will be contingent on the results from the initial work programs.

Two of the licenses, Block 4173 and Block 4174, are located near Bismil on the Tigris River. Our primary target is an under explored Palaeozoic play at a depth of approximately 9,800 feet. The work program involves conducting geochemical studies and reprocessing existing 2D seismic data, and based on these results additional 2D seismic may be shot or a well drilled. In March 2008, we farmed-out 75% of our working interest in Blocks 4173 and 4174 to EOT. In exchange for a 75% interest in the exploration licenses, EOT drilled an exploration well at its cost before the end of 2008 to test the Bedinan Ordivician formation (approximately 3,700 meters) on one of the licenses. The well encountered mechanical difficulties shortly after encountering the target formation and was abandoned. Through the acquisition of EOT in July 2009, we are the operator and 100% working interest owner of Blocks 4173 and 4174. We plan to re-enter a previously drilled well on Block 4174 and deepen it in January 2010.

The third license, Block 4175, is located near Cizre about 60 kilometers from the Iraq border. The target is a deep sub-thrust play similar to the major Iraqi and Iranian Zagros fields to the south. In the first quarter of 2009, we completed a 105 kilometers 2D seismic shoot over the license. We have conducted an initial work program of detailed fieldwork and geochemical analysis on this license. We plan to drill the initial well on Block 4175 in the first half of 2010. We are the operator and 100% working interest owner of Block 4175.

Blocks 4268, 4269 and 4270. In July 2007, we were awarded three additional onshore exploration licenses, Blocks 4268, 4269 and 4270, all of which are in southeastern Turkey on the border with Iraq. The three licenses cover a total of 334,600 acres (1,354 square kilometers) and expire in June 2010, but can be extended for an additional year by posting a $50,000 bond. These licenses will also involve a work program, including technical studies, reprocessing of data and contingent plans for drilling wells. We are the operator and 100% working interest owner of these licenses.

Malatya Blocks. In August 2008, we acquired exploration licenses on Blocks 4572, 4573, 4574, 4575, 4576 and 4577 covering 733,901 acres (2,970 square kilometers) in the Malatya area of south-central Turkey. We paid a party who will be a 10% participant in these licenses cash consideration and agreed that party would back-in after payout for 10% in the first well to be drilled on these licenses. We are the operator and 90% working interest owner of these licenses, which expire in August 2012.

Selmo Production Lease. Through the Incremental acquisition, we acquired a production lease in the Selmo oil field on Block 829. The lease covers 8,886 acres (36 square kilometers) in southeastern Turkey. We have drilled the S-53 well, S-54 well and S-62 well in the Selmo field, and they are now in production. We are currently drilling the S-58 well and plan to commence drilling an additional well before the end of 2009. We are the operator and 100% working interest owner in the Selmo production lease. During the third quarter of 2009, our interest in the Selmo field produced 137,400 barrels of crude oil at an average rate of 1,494 barrels per day.

Edirne License. Through the Incremental acquisition, we acquired an interest in an exploration license in the Edirne gas field on Block 3839, covering 119,125 acres (482 square kilometers) in the Thrace Basin of northwestern Turkey, on which there have been drilled eight successful shallow gas wells. We drilled the

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Kirmizihoyuk-1 well and the Kusey Ikihoyuk-1 well on the Edirne license and successfully tested two other wells on the license. On December 15, 2009, we entered into a five year gas sales agreement pursuant to which a natural gas distributor in Turkey has agreed to purchase all of our gas production from the Edirne field. We will sell the gas at a price equal to a 15% discount to the Industrial Interruptible Tariff benchmark set by BOTAS. We expect our initial eight wells in the Edirne field to come online in January 2010 with net production to us exceeding 5.5 million cubic feet of natural gas per day starting the first quarter of 2010. We plan to commence a five-well drilling program on the Edirne license in the Thrace Basin before the end of 2009. We are the operator and 55% working interest owner in the Edirne license.

Block 4262. Through the Incremental acquisition, we acquired an exploration license on Block 4262, covering 2,805 acres (12 square kilometers) in southeastern Turkey. We drilled the Atesler well on Block 4262 to a depth of 10,851 feet. We tested the Atesler well in early August 2009 and determined that the well is non-commercial and would be plugged and abandoned. We are the operator and 100% working interest owner in this license, which expires in March 2011.

Tuz Golu Blocks. Through the Incremental acquisition, we acquired exploration licenses on Blocks 4310, 4311, 4314, 4315, 4316, 4317, 4342 and 4344 covering 870,000 acres (3,521 square kilometers) south of Ankara in central Turkey in the Tuz Golu Basin. These licenses are in a large, relatively unexplored basin and expire in May 2012. We are the operator and 50% working interest owner in these licenses.

Midyat Blocks. Through the Incremental acquisition, we acquired exploration licenses on Blocks 3969, 3970, 3971 and 3972 covering 460,400 acres (1,863 square kilometers) in southeastern Turkey. These licenses expire in November 2010. We are the operator and 100% working interest owner in these licenses.

Block 4325. In April 2009, we farmed-in to an exploration license on Block 4325 for cash consideration and the obligation to carry a 10% interest in the first well drilled to earn 90% interest in the license. Block 4325 covers 122,246 acres (495 square kilometers) in south-central Turkey. We are the operator of the license, which expires in February 2012.

License 3118. Through the EOT acquisition, we acquired a 50% interest in License 3118 and interests in ten other exploration licenses in southern and southeastern Turkey. License 3118, which covers approximately 96,000 acres (389 square kilometers), is located near the city of Diyarbakir in southeastern Turkey. In April and September 2008, EOT participated in the drilling of the Arpatepe-1 and Arpatepe-2 wells on License 3118, which represent Turkey’s first and second economic discoveries of crude oil from deeper, onshore Paleozoic sandstone formations. The wells, which flowed naturally and were not stimulated, had initial production rates of 440 and 190 gross barrels per day, respectively, from limited perforations. At December 16, 2009, the wells were producing an aggregate of approximately 60 gross barrels per day.

Other. In December 2008, we leased an equipment yard in Diyarbakir and started shipping tubulars, drilling equipment and supplies into the country in support of our planned drilling activities. With the acquisition of Incremental, we acquired a second yard at Selmo and have since purchased acreage and started an equipment yard on the Edirne license to support the Thrace Basin drilling activities.

Incremental had total net proved reserves of 9.51 MMboe at Selmo and the Edirne gas field as of December 31, 2008.

Commercial Terms. Turkey’s fiscal regime for oil and gas licenses is presently comprised of royalties and income tax. Royalties are at 12.5% and the corporate income tax rate is 20%. The licenses have a four-year term but after the third year, a payment in the form of a bond must be made to extend the license if no new well has been drilled prior to that date. The GDPA, the agency responsible for the regulation of oil and gas activities under the Ministry of Energy and Natural Resources in Turkey, awards a license after it approves the applicant’s work program, which may include obligations such as geological and geophysical work, seismic reprocessing and interpretation and contingent shooting of seismic and drilling of wells.

Licensing Regime. The licensing process in Turkey for oil and gas concessions occurs in three stages: permit, license and lease. Under a permit, the government grants the non-exclusive right to conduct a geological investigation over an area. The size of the area and the term of the permit are subject to the discretion of the GDPA.

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A license grants exclusive rights over an area for the exploration for petroleum. A license has a term of four years and requires drilling activities by the third year, but this obligation may be deferred into the fourth year by posting a bond. No single company may own more than eight licenses within a district. Rentals are due annually based on the hectares under the license.

Once a discovery is made, the license holder applies to covert the area, not to exceed 25,000 hectares, to a lease. Under a lease, the lessee may produce oil and gas. The term of a lease is for 20 years. Annual rentals are due based on the hectares comprising the lease.

Morocco

General. In June 2005, we were awarded the Guercif—Beni Znassen reconnaissance license covering 3.4 million acres (13,750 square kilometers) in northeastern Morocco. Effective January 2, 2008, we converted a portion of our Guercif—Beni Znassen reconnaissance license into two exploration permits covering a total of 962,000 acres (3,893 square kilometers) in the Guercif area in northeastern Morocco, pursuant to a petroleum agreement with the national oil company of Morocco, Office of National des Hydrocarbures et des Mines (“ONHYM”). The Guercif exploration permits are for an eight-year term divided into three periods, each with a defined work program. Under the initial three-year work program, we have re-entered, logged and tested the MSD-1 well, a well previously drilled in the area, which we completed in the fourth quarter of 2008. The logs and test failed to establish the presence of hydrocarbons. We are committed to drill another well before the end of 2010 and will carry the 20% owner in the Guercif license in that well. In addition, we replaced our obligation to acquire 300 kilometers of 2D seismic with the obligation to drill another well.

Pursuant to a participation agreement between us (30%), Stratic Energy Corporation (“Stratic”) (20%) and Sphere Petroleum QSC (“Sphere”) (50%), Sphere agreed to bear the entire cost of an initial three-year work program to earn its 50% interest in the two Guercif exploration permits. In addition, Sphere posted the required bank guarantee for the initial work program with the Moroccan government and agreed to reimburse us and Stratic for our respective back costs. In April 2008, Sphere assigned all of its interests in the Guercif participation agreement to Longe in exchange for Longe’s assumption of all of Sphere’s obligations under those agreements. We acquired Longe in December 2008. As a result, we are the operator and 80% working interest owner of the Guercif exploration permits.

In May 2006, we were awarded the Tselfat exploration permit pursuant to a petroleum agreement with ONHYM covering 222,345 acres (900 square kilometers) in northern Morocco. Tselfat has three fields, Haricha, Brou Draa and Tselfat, that produced from the early 1920s to 1970s, with limited production continuing into the 1990s. All of the wells are presently abandoned. The Tselfat permit provides several opportunities including redevelopment of the existing fields, extensions of known productive horizons and exploration of higher impact targets at depth. Since the award of the Tselfat exploration permit, we have been collecting, collating, digitizing and reviewing all of the existing well, production, seismic and other data. We have reprocessed some of the 2D seismic that exists over the block. In addition, we shot a 175 square kilometer 3D seismic survey over the Brou Draa and Haricha fields, which was completed in the second quarter of 2008. We drilled the HR-33bis well in the Haricha field on the Tselfat exploration permit to help assess whether there is the opportunity for redevelopment of the previously produced but abandoned Haricha field. We tested the two lower zones and are evaluating the results. We plan to complete our evaluation of these zones and test two additional zones in early 2010. We are planning to drill at least two additional shallow exploration wells and one deeper exploration well on the Tselfat permit in 2010.

In August 2007, we reached an agreement to farm-out 50% of our interest in the Tselfat exploration permit to Sphere. In exchange for an option to acquire 50% of our interest in the Tselfat permit, Sphere agreed to fund the costs to acquire a 3D seismic survey over the Haricha field and northern portion of the Brou Draa field and fund the cost of additional geological studies. Upon the exercise of its option, Sphere agreed to fund the drilling and testing of an exploratory well and replace our bank guarantee deposited with the Moroccan government. In April 2008, Sphere assigned all of its interests in the Tselfat farm-out and option agreement to Longe in exchange for Longe’s assumption of all of Sphere’s obligations under those agreements. We acquired Longe in December 2008. As a result, we have a 100% working interest and operate the Tselfat permit.

In July 2008, we agreed to farm-in to the five Ouezzane-Tissa and two Asilah exploration permits held by Direct in northern Morocco. The Direct exploration permits cover seven blocks with a combined area of 3,036,068

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acres (12,287 square kilometers). Under the farm-in agreement, we will earn a 50% interest in the Ouezzane-Tissa and Asilah exploration permits by carrying Direct for 100% of the costs of drilling three wells on the Ouezzane-Tissa and Asilah permits. If one of the three wells is a commercial success, as defined in the farm-in agreement, then we would carry Direct in the drilling of a fourth well. Longfellow has posted a $25.0 million guaranty of our obligations under the farm-in agreement with Direct. We became the operator of the Ouezzane-Tissa and Asilah exploration permits after receiving government approval. We are currently drilling at our cost both our first well on the Ouezzane-Tissa exploration permit, the OZW-1 well, and our second well, the HKE-1 well. We conducted a 2D seismic survey in late 2008 and recently acquired 200 kilometers of 2D seismic over the Asilah permits, and in 2009, we acquired an additional approximately 90 kilometers of 2D seismic on the Asilah permits. We are evaluating the data for a planned well on the Asilah permits in 2010.

During 2008 we leased an equipment yard and shipped one drilling rig, tubulars and supplies into Morocco in support of our planned drilling activities. We shipped a second drilling rig to Morocco in the first quarter of 2009.

There are no reserves associated with our Moroccan properties as of December 31, 2008.

Commercial Terms. Pursuant to a petroleum agreement (and the companion association contract) dated May 18, 2006 with ONHYM for the Tselfat exploration permit, we committed to a work program during the initial three-year period that involved shooting a 3D seismic survey over an area of at least 50 square kilometers, which we completed in the fourth quarter of 2008. The work program also requires us to drill a well to a depth exceeding 2,000 meters. We posted a $3.0 million bank guarantee in support of the program, of which $2.0 million has been returned to us.

Pursuant to a petroleum agreement (and the companion association contract) dated November 2, 2007 with ONHYM for the Guercif exploration permits, we committed to a work program during the initial three-year period that involved re-entering, logging and testing a well previously drilled in the area, which we have completed. The work program also requires us to acquire 300 kilometers of 2D seismic and reprocess and reinterpret an aerogravity and magnetic survey. We have applied to ONHYM to change the seismic obligation to a drilling obligation. Sphere posted a $2 million bank guarantee in support of the program, which was replaced by Longe in April 2008.

During the exploration phase of each exploration permit, we and our partners will operate and bear 100% of the costs to earn a 75% interest. Our interests are subject to the 25% interest held by ONHYM, which is carried by us and our partners during the exploration phase, all of which is governed by the applicable petroleum agreement. ONHYM pays its share of costs in the development phase. Once a discovery is made, the area covered by the discovery is converted into an exploitation concession, which is governed by the applicable association contract. Under an exploitation concession, we and our partners (75%) and ONHYM (25%) will each pay our respective share of costs. Upon conversion to an exploitation concession, we will pay a discovery bonus to ONHYM, and when certain sustained daily production levels are reached, we will pay one-time production bonuses. At Tselfat, Ouezzane-Tissa and Asilah, the discovery bonus at conversion is $500,000 and the one-time production bonuses are as follows: 15,000 Bbls/day—$750,000; 25,000 Bbls/day—$1 million; 35,000 Bbls/day—$2 million and 50,000 Bbls/day—$3 million. At Guercif, the discovery bonus at conversion is $500,000 and the one-time production bonuses are as follows: 10,000 Bbls/day—$500,000; 20,000 Bbls/day—$750,000; 30,000 Bbls/day—$1 million and 50,000 Bbls/day—$3 million. These production bonuses are deductible and are treated as development costs for Moroccan tax purposes. There is a ten-year tax holiday on revenues from petroleum production commencing in the year in which production begins. After ten years, the corporate tax rate is 30%. Oil and 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 Mmbbl of oil production and the first approximately 11 Bcf of gas production are exempt from royalty. Once an area is converted into an exploitation concession, we are required to pay annual surface rentals of $2.85 per acre.

Licensing Regime. The licensing process in Morocco for oil and gas concessions occurs in three stages: reconnaissance license, exploration permit and then 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 size may be very large and generally is unexplored or under-explored. The reconnaissance license may be extended for up to one additional year. Interests under a

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reconnaissance license are not transferable. The recipient of a reconnaissance license commits to a work program and posts a bank guarantee in the amount of the estimated cost for the program. At the end of the term of the reconnaissance license, the license holder must designate one or more areas for conversion to an exploration permit or relinquish all rights.

An exploration permit, which is codified in a petroleum agreement with ONHYM, is for a term of 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 and 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 as may be necessary to determine the limits and the productive capacity of a hydrocarbon deposit 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 terms, each with a duration of two to three years. A distinct work program is negotiated for each separate term and the oil company then must post a bank guarantee to cover the cost of the work program for that term. The interests under an exploration permit are 75% to the oil company 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, which is 75% to the oil company and 25% to ONHYM. The oil company serves as operator. The oil company and ONHYM enter into an association contract (similar to a joint operating agreement) to govern operations on the concession. Interests under an exploitation concession are transferable. All production is sold at market prices. 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, and 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.

Romania

General. In February 2006, we were awarded three onshore production licenses in Romania. The Izvoru, Vanatori and Marsa licenses cover about 1,200 acres (5 square kilometers), 780 acres (4 square kilometers) and 188 acres (1 square kilometer), respectively. The fields on the licenses were discovered by the former Romanian national oil company and are all located within 100 kilometers of Romania’s capital, Bucharest. The licenses were awarded to us based upon our commitment to perform certain work programs on each of the respective fields, including shooting seismic and drilling or re-entering wells. There is no current production from any of the fields. We are the operator and 100% working interest owner of the fields. We entered into petroleum agreements with the Romanian government covering each license, which were finalized in September 2007 and expire in August 2010.

The initial work program will include the drilling of two new wells in the Izvoru field. We shot a 25 square kilometer 3D seismic survey over the Izvoru Field in late 2006. The seismic results were merged with engineering studies to provide a field development plan. We shot a 2D seismic survey over both Vanatori and Marsa fields in late 2006. The seismic results will be merged with engineering studies to provide a field development plan.

In 2009, we drilled the Delta and Beta wells on the Izvoru license and one well on each of the Marsa and Vanatori licenses. We are currently testing the Beta well.

In June 2009, we finalized our previously announced agreement to farm-in to Sterling’s Sud Craiova Block E III-7, covering 1.5 million acres (6,070 square kilometers) in western Romania. In exchange for a 50% working interest, we agreed to drill three exploration wells on the Sud Craiova license, each to a depth of approximately 3,280 feet (1,000 meters). We began drilling the first of the three wells at our cost on the Sud Craiova license in November 2009.

During 2008, we leased an equipment yard and shipped tubulars and drilling equipment and supplies to our properties in Romania in support of our planned drilling activities. We contracted with a third party to drill our initial seven-well program in Romania rather than drilling with our own rig.

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There are no reserves associated with our Romanian properties as of December 31, 2008.

Commercial Terms. Romania’s current petroleum laws provide a framework for investment and operation that allows foreign investors to retain the proceeds from the sale of petroleum production. The fiscal regime is comprised of royalties, excise tax and income tax. Two forms of royalty are payable as:

• a percentage of the value of gross production on a field basis, such percentage being fixed on a sliding scale depending on production levels. The production royalty rate varies between 3.5% to 13.5% for crude oil and between 3% to 13% for natural gas production; and

• a fixed percentage of the gross income obtained from the transportation and transit of petroleum through the national pipeline system and from petroleum operations carried out through oil terminals belonging to the state. The royalty rate is currently fixed at 5%.

The license holder pays Romanian corporate income tax, but enjoys a one-year income tax holiday from the first day of production. Corporate income tax is assessed at a rate of 16%. All costs incurred in connection with exploration, development and production operations are deductible for corporate income tax purposes. Excise duty is payable on crude oil and natural gas at the rate of 4 Euro per ton of crude oil and 7.4 Euro per 1,000 cubic meters of natural gas. Excise tax is not payable on crude oil or natural gas delivered as royalty to the Romanian government or on quantities directly exported. Resident companies which remit dividends outside of Romania are subject to a dividend withholding tax at between 10% to 15%, depending on the proportion of the capital owned by the recipient. No customs duty is payable on the export of petroleum, nor is customs duty payable on the import of material necessary for the conduct of petroleum operations. There is also a 19% value added tax. Oil is priced at market while gas is tied to a bundle pricing based in part on the import price and in part on the domestic price.

Licensing Regime. The Ministry of Industry and Resources of Romania has responsibility for petroleum policy and strategy. The National Agency for Mineral Resources (“NAMR”) was set up in 1993 to administer and regulate petroleum operations. When licenses are to be made available, NAMR publishes a list of available blocks for concession in the Official Gazette. Foreign and Romanian companies must register their interest by a specified date and must submit applications by an application deadline. Applicants are required to prove their financial capacity, technical expertise and other requirements as required by NAMR. The licensing rounds are competitive and the winning bid is based on a scoring system.

NAMR negotiates the terms of agreements granting the licenses with the winning licensee and the license agreement is then submitted to the Romanian government for its approval. The date of government approval is the effective date of the license. Blocks which fail to attract a prescribed level of bids are re-offered in a subsequent licensing round. NAMR may issue a prospecting permit or a petroleum concession. A prospecting permit is for the conduct of geological mapping, magnetometry, gravimetry, seismology, geochemistry, remote sensing and drilling of wildcat wells in order to determine the general geological conditions favoring petroleum accumulations. A petroleum concession provides exclusive rights to conduct petroleum exploration and production under a petroleum agreement.

United States

With the acquisition of Incremental, we acquired interests in three projects in the San Joaquin Valley in central California: two farm-outs and a small non-operated working interest in a producing field. Incremental acquired these projects in May 2008.

We own a non-operated working interest in the Kettleman Middle Dome Unit operated by Exaro Energy, LLC and located in Kings County California. This unit produces approximately 125 gross barrels of oil per day along with small amounts of associated natural gas. We own a 5% interest in five existing wells on the Kettleman Middle Dome Unit (three are currently producing). On all new projects and well proposals submitted and completed after May 16, 2008, we will own a 10% non-operated working interest. The operator plans to recomplete two of the five wells located in the unit. Plans for further development will be addressed after the results of the two recompletions are evaluated.

Our McFlurrey farm-out covers 9,100 net acres of leasehold in Kings, Fresno and Kerns counties in California. We operate and will earn a 50% interest in exchange for drilling four exploratory wells, building a gas

46

pipeline and acquiring some 3D seismic. We drilled the first two wells in March and April 2009, paying 100% of the cost. We tested the first well and determined it was non-commercial. Based on these results, we did not test the second well.

We own a 50% interest in the South East Kettleman North Dome oil field. The South East Kettleman North Dome farm-out covers 1,155 net acres of leasehold in Kings County northeast of the McFlurrey farm-out. The acreage is held by production from the Kettleman Middle Dome which directly offsets the South East Kettleman North Dome to the south. We are currently exploring our options to divest the McFlurrey and South East Kettleman North Dome projects.

In Oklahoma, we lease two properties, one in Dewey County (128 net acres) and one in McClain County (29 net acres). We participated for a 20% non-operated working interest in a well drilled on the Dewey County property at the end of 2006 that is currently producing a small amount of oil and natural gas. The McClain County property is currently the subject of a declaratory judgment action that we filed to declare that prior leases lapsed due to lack of production. We expect the case to be tried in the first quarter of 2010. The McClain County property and the outcome of the litigation are not material to us. We plan to resolve the title issues prior to developing or selling the McClain County property.

There are no reserves associated with our U.S. properties as of December 31, 2008.

Nigeria

We originally acquired an interest in the OML 109 offshore Nigerian concession in 1992. We drilled both the discovery well and the first appraisal well in the Ejulebe field on OML 109 in 1994 and 1995, respectively. In June 2005, we sold our Bahamian subsidiary which owned the interest in OML 109. As part of the transaction, we received cash payments of $780,000 and will receive deferred payments of up to a maximum of $16 million based on the success of the future exploration and development on the concession. We paid transaction costs of $220,000 (including legal, consulting and other deal-related costs) and, in addition, agreed to pay a bonus to our President for his efforts in completing this transaction equivalent to 3.75% of the deferred payments, if and when received, up to a maximum of $600,000. We do not expect to receive any deferred payments.

In addition, out of the $2.5 million reserved by us as an abandonment fund, $1.8 million was deposited into an escrow fund to address any liabilities and claims relating to our prior operations in Nigeria, and in 2007 approximately $720,000 was returned to us. As of December 31, 2008, the balance of the escrow fund was $240,000. The remaining potential liability to us is for taxes owed for the period January through June 2005, and we expect the remaining escrow amount to be sufficient to cover any potential tax liabilities.

Estimated Reserves of Crude Oil and Natural Gas

As a reporting issuer under Alberta, British Columbia and Ontario securities laws, we are required under Canadian law to comply with National Instrument 51-101 “Standards of Disclosure for Oil and Gas Activities” (“NI 51-101”) implemented by the members of the Canadian Securities Administrators in all of our reserves related disclosures. Under NI 51-101, proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. Reported proved reserves should target, under a specific set of economic conditions, at least a 90% probability that the quantities of oil and natural gas actually recovered will equal or exceed the estimated proved reserves. In the United States, we are required to disclose proved reserves using the standards contained in Rule 4-10(a) of the SEC’s Regulation S-X. We have filed no estimates of total, proved net oil or gas with any other federal authority or agency in the United States. We have filed a business acquisition report with certain Canadian securities regulators pursuant to applicable rules in Canada which contains summaries of certain reserve evaluations completed in connection with our acquisition of Incremental.

The crude oil and natural gas industry commonly applies a conversion factor to production and estimated proved reserve volumes of natural gas in order to determine an “all commodity equivalency” referred to as barrels of oil equivalent (“Boe”). The conversion factor we have applied in this prospectus is 5,800 cubic feet (“Mcf”) of natural gas equals one barrel (“Bbl”) of oil. The Boe conversion ratio we use is based on an energy equivalency conversion method primarily applicable at the burner tip. It may not represent a value equivalency at the wellhead and may be misleading, particularly if used in isolation. At December 31, 2008, prior to our acquisition of Incremental, we had no oil and gas reserves and no related future net revenue. At that time, we had a non-operated 20% working interest in one well on our Dewey County property in Oklahoma, and no reserves are attributed to that property. All of our oil and gas properties are onshore.

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Property and Equipment

Oil and Gas Properties. The following table sets forth the capitalized costs under the successful efforts method for oil and gas properties (in thousands):

	As of September 30, 2009			As of December 31, 2008
Oil and gas properties, proved
U.S.	$	1,814		$	—
Turkey	$	79,012		$	—
	$	80,826		$	—
Accumulated depletion		(3,031	)		—
Net oil and gas properties, proved	$	77,795		$	—
Oil and gas properties, unproved
Morocco	$	7,797		$	103
Romania		5,700			402
Turkey		9,757			1,227
Total oil and gas properties, unproved	$	23,254		$	1,732

We have oil and gas properties in Turkey and the United States that are revenue producing, and therefore $3,031 of depletion has been recorded. Uncertainties affect the recoverability of these costs as the recovery of the costs outlined above are dependent upon us obtaining government approvals, obtaining and maintaining licenses in good standing and achieving commercial production or sale.

Drilling Services and Other Equipment. The historical cost of drilling services and other equipment, presented on a gross basis with accumulated depreciation is summarized as follows (in thousands):

	As of September 30, 2009			As of December 31, 2008
Drilling services and other equipment	$	92,587		$	40,886
Accumulated depreciation		(3,169	)		(53	)
Net drilling services and other equipment	$	89,418		$	40,833

Productive Wells. The following table sets forth the number of productive wells in which we held a working interest as of December 31, 2008:

	Oil		Natural Gas
	Gross(1)	Net(1)	Gross(1)	Net(1)
United States
Producing	0	0	1	0.2
Non-producing	0	0	0	0

(1) “Gross Wells” are the wells in which we hold a working interest (operating or non-operating). “Net Wells” are the Gross Wells multiplied by our working interest percentage (operating or non-operating).

As of December 31, 2008, we held 640 gross developed acres and 128 net developed acres in Dewey County, Oklahoma associated with our only productive well.

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Production. The following table sets forth our net production of oil (in Bbls) and natural gas (in Mcf), after payment of royalties, as of December 31, 2008, 2007 and 2006:

	Net Production
Year	Oil(1)	Natural Gas
2008	863	2,029
2007	6,079	41,409
2006	8,975	129,867

(1) “Oil” volumes include condensate (light oil) and medium crude oil.

Drilling Activity. The following table sets forth the number of wells we drilled for the years ended December 31, 2008, 2007 and 2006:

	Development Wells(1)		Exploratory Wells
United States	Productive	Dry	Productive	Dry
2008	0	0	0	0
2007	0	1	0	0
2006	1	0	0	0

(1) We owned a 100% working interest in each of these wells. As a result, net wells and gross wells are the same.

Undeveloped Acreage. The following table sets forth our undeveloped land position as of December 31, 2008:

	Undeveloped (Acres)
	Gross(1)	Net(2)
Morocco	4,220,413	2,509,979
Romania	2,168	2,168
Turkey	965,753	765,616
Total	5,188,334	3,277,763

(1) “Gross” means the total number of acres in which we have a working interest.

(2) “Net” means the sum of the products obtained by multiplying the number of gross acres by our percentage working interest therein.

Abandonment and Reclamation Costs. We sold our interests in the Jarvis Dome property and South Gillock property (consisting of the South Gillock and State Kohfeldt Units) in Texas in October and November 2007, respectively, and the Bayou Couba property in Louisiana in December 2006. We have no further liability for abandonment or reclamation costs for those properties. We have reserved $14,000 for estimated abandonment and reclamation costs regarding our one producing well in Oklahoma, in which we own a 16% net revenue interest.

Current Activities. Our current activities are focused on integrating the acquisitions of Incremental and EOT and developing our oil and gas properties in Turkey, Morocco, Romania and California. Our success will depend in part on discovering hydrocarbons in commercial quantities and then bringing these discoveries into production. We are currently engaged in the following drilling and exploration activities:

Turkey

• Drilling the S-58 development well on the Selmo oil field

• Sidetracking the S-44 well on the Selmo oil field

• Completing construction of a gas gathering facility to bring Edirne gas field production online

Morocco

• Drilling the OZW-1 exploratory well on the Ouezzane-Tissa permits

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• Drilling the HKE-1 exploratory well on the Ouezzane-Tissa permits

Romania

• Testing and completing the re-development wells on the Izvoru, Vanatori and Marsa licenses

• Drilling exploratory wells on the Sud Craiova license

As of December 16, 2009, we were in the process of drilling 4 gross wells (3 net wells).

Planned 2010 Activities. We are in the process of finalizing our capital expenditure budget for 2010. Capital expenditures for 2010 are expected to range between $115 million and $135 million. Our projected 2010 capital budget is subject to change. We currently plan to execute on the following drilling and exploration activities in 2010:

Turkey

• Drill 18 or more development wells on the Selmo oil field, including 1 well to test deeper horizons

• Drill 1 salt water disposal well on the Selmo oil field

• Drill 6 or more appraisal and exploration wells on the Arpatepe oil field

• Drill up to an additional 14 appraisal and exploration wells on the Edirne gas field, upon completion of the first 5 appraisal and exploration wells

• Drill 5 exploration wells on other licenses

Morocco

• Drill the BTK-1 exploratory well on the Tselfat permit

• Drill 1 exploratory well on the Asilah permits

• Drill 2 additional exploratory wells on the Tselfat permit

• Drill 1 exploratory well on the Guercif permits

Romania

• Drill 1 exploratory well on the Izvoru license

• Drill 3 exploratory wells on the Sud Craiova license, contingent on results from prior wells

Incremental Reserves Report

RPS Energy Pty. Ltd. (“RPS”) completed independent reserves evaluations of our Selmo oil field and Edirne gas field in Turkey with an effective date of December 31, 2008, in a report compliant with Rule 4-10(a) of the SEC’s Regulation S-X titled “Evaluation of the Selmo Oil Field and Edirne Gas Fields”, dated September 17, 2009 (the “RPS Report”). The Edirne gas field is located in the Thrace Basin in northwestern Turkey. RPS did not evaluate the balance of our net acres in Turkey, Morocco, and Romania. The RPS Report also did not evaluate the value of our drilling rigs and service equipment. The following table shows the net proved reserves at the Selmo oil field and the Edirne gas field in Turkey as of December 31, 2008:

		Proved Reserves(1)
	Proved Developed Producing	Proved Developed Non- producing	Proved Undeveloped	Total Proved Reserves
Edirne	0.00	0.00	0.14	0.14
Selmo	4.10	0.00	5.27	9.37
Total	4.10	0.00	5.41	9.51

(1) As of December 31, 2008 in millions of barrels of oil equivalent. RPS applied a Boe conversion ratio of 5,800 cubic feet of natural gas to one barrel of oil.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Service Agreement

Effective May 1, 2008, we entered into a service agreement, as amended (the “Service Agreement”), with Longfellow, Viking, Longe, MedOil Supply, LLC and Riata (collectively, the “Service Entities”), under which we and the Service 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 Service Entities agreed to provide us upon our request certain computer services, payroll and benefits services, insurance administration services and entertainment services, and we and the Service Entities agreed to provide to each other certain management consulting services, oil and 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 the Service Entities may terminate the Service Agreement at any time by providing advance notice of termination to the other party.

As of November 1, 2008, pursuant to the Service Agreement, the salary, bonus and benefits earned by each of our named executive officers are paid by Riata and we reimburse Riata for the actual cost thereof. In 2008, we reimbursed Riata $79,607 for the salary, bonus and benefits provided to the named executive officers. In addition, Barbara Pope, sister-in-law of Mr. Mitchell, and Terry Pope, brother-in-law of Mr. Mitchell, are employees of Riata and provide services to us under the Service Agreement. In 2008, we reimbursed Riata $9,705 and $16,087 for services provided by Ms. Pope and Mr. Pope, respectively, pursuant to the Service Agreement. For the nine months ended September 30, 2009, we reimbursed Riata $93,000 and $91,000 for services provided by Ms. Pope and Mr. Pope, respectively, pursuant to the Service Agreement. During 2008, Mr. McCann was an employee of Riata and provided services to us under the Service Agreement. In 2008, we reimbursed Riata $41,856 for services provided by Mr. McCann pursuant to the Service Agreement. As of January 1, 2009, Mr. McCann became our chief executive officer.

We recorded expenditures for the year ended December 31, 2008 of $4.6 million for goods and Services provided by the Service Entities pursuant to the Service Agreement or other arrangements, including salary, bonus and benefits reimbursements identified in the prior paragraph, of which $1.5 million was included in accounts payable at December 31, 2008 and settled in cash during the first quarter of 2009. There were no amounts due to us from the Service Entities at December 31, 2008.

The following table provides a breakdown of reimbursements of actual costs and expenses made by us to the Service Entities under the Service Agreement:

Service Agreement Category	For the Year Ended December 31, 2008		For the Nine Months Ended September 30, 2009
Salaries and benefits for named executive officers	$	79,607	$	463,140
Salaries and benefits for non-named executive officers		1,571,039		3,542,887
Inventory relating to drilling operations		1,135,642		1,665,819
Prepaid drilling services		605,729		300,388
Travel, hotels and meals, excluding the use of Riata-owned aircraft		343,335		291,705
Computer equipment and software		266,659		182,521
Third party legal and professional fees		170,945		149,951
Equipment relating to drilling operations		143,871		6,170,281
Office expenses and supplies		66,997		183,701
Allocated overhead		26,473		70,957
Geologic and geophysical maps and fees		18,850		—
Leases		—		349,718
Total	$	4,429,147	$	13,371,068

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Aircraft Reimbursements

In addition, we and Riata have an arrangement whereby our executive officers, employees, or consultants, or other persons providing Services to us under the Service Agreement, are permitted to use aircraft owned by Riata for company-related business travel. For the use of this aircraft, we reimburse Riata an amount per passenger equal to the cost of a business class ticket on a commercial airline for comparable travel. Riata bears 100% of the cost of fuel, landing fees and all other expenses incurred in connection with such flights in excess of the amount reimbursed by us. In each case, the actual cost of the flight exceeded the amount of the reimbursement by us. For the nine months ended September 30, 2009, we reimbursed Riata $116,081 for the use of this aircraft. For 2008, we reimbursed Riata $165,654 for the use of this aircraft. Because this reimbursement is only for company-related business travel of persons providing Services to us and is integrally and directly related to the performance of such persons’ duties, our reimbursement is not compensation nor a perquisite to any of our directors or executive officers. In addition, we reimbursed Riata $25,309 for the use of this aircraft by Mr. Mitchell’s wife and son, who accompanied Mr. Mitchell on company-related business travel in 2008.

Sale of Bayou Couba

In December 2006, we sold our 10% working interest in the Bayou Couba property in Louisiana and the debenture we held of American Natural Energy Corporation (“ANEC”) for $2.0 million to an unrelated third party. During 2006, we received net payments (oil and gas sales plus debenture interest less drilling advances and lease operating expenses) of $345,000 from ANEC. As of December 16, 2009, we owned 2,237,136 common shares of ANEC, which shares are carried at no value. One of our directors is also currently a director of ANEC.

Quest Loan

In April 2007, we entered into a $3.0 million short-term standby bridge loan from Quest Capital Corp. (“Quest”). We drew down $3.0 million on the loan in the second quarter of 2007. In August 2007, we increased the loan facility to $4.0 million and drew down the additional $1.0 million. We issued 503,823 common shares to Quest at an aggregate value of approximately $359,000 as we drew on the loan. In November 2007, we paid down $2.0 million in principal on the loan and extended the maturity date on the outstanding principal balance of $2.0 million to March 31, 2008. Quest extended the maturity date to April 30, 2008 to facilitate the closing of the loan with Riata, as described below. We repaid the loan in full on April 8, 2008. The Quest loan incurred interest at a rate of twelve percent (12%) per annum, calculated daily and compounded monthly, and we paid an aggregate of $392,461 in interest and fees on the loan. We currently have one director in common with Quest, Mr. Bayley, who currently serves as Quest’s co-chairman. At the time of the Quest transactions, we had two directors in common with Quest and Mr. Bayley served as Quest’s chief executive officer. Transactions with Quest were conducted on an arm’s length basis. The loans were made by Quest in the ordinary course of business and were made on substantially the same terms, including interest rates, as those prevailing at the time for comparable loans with persons not related to Quest.

Transactions with Messrs. Mitchell and McCann

We have entered into various transactions with our chairman, Mr. Mitchell, and various companies formed and owned or controlled by Mr. Mitchell that are primarily focused on investing in international energy opportunities. In addition, we entered into various transactions with Mr. McCann, our chief executive officer since January 1, 2009 and a member of our board of directors since May 2008.

On April 8, 2008, we entered into a $2.0 million short-term loan at an interest rate of twelve percent (12%) per annum with Riata and used the proceeds to repay the Quest loan in full. We repaid the Riata loan in full on May 30, 2008 and all interest under the Riata loan was waived.

In addition, on April 8, 2008, Dalea purchased 10,000,000 common shares from us at a purchase price of Cdn$0.30 per share pursuant to the first stage of a the private placement announced in March 2008 and, on May 30, 2008, Dalea and Riata TransAtlantic purchased a further 12,630,000 common shares from us at a purchase price of Cdn$0.36 per share pursuant to the second stage of the private placement. Mr. McCann, at that time a member of our board of directors, also participated in the second stage of the private placement, purchasing 1,100,000 common

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shares. However, neither Mr. Mitchell nor Mr. McCann were related parties of us on March 28, 2008, the date that Dalea and Riata TransAtlantic first agreed that they or their associates would participate in the private placement and provide the short-term loan to us.

We entered into a Registration Rights Agreement, as of April 8, 2008, as amended and restated as of December 30, 2008, with Riata Management (the “Riata Registration Rights Agreement”). Pursuant to the Riata Registration Rights Agreement, Riata Management has the right to request that we effect the qualification under Canadian securities laws of all or part of our common shares (and any of our securities issued on conversion of, in exchange for or in replacement of such common shares) owned or controlled by Riata Management, certain entities affiliated with Riata Management, the purchasers that participated in our December 2008 private placement, and Longfellow (the “Qualifiable Securities”), to permit the distribution of such Qualifiable Securities to the public in any or all of the provinces and territories of Canada (a “Demand Qualification”). We will not be obligated to effect any Demand Qualification for less than Cdn$5,000,000 or to effect more than two Demand Qualifications in any twelve-month period or until a period of at least 90 days has elapsed from the effective date of the most recent previous qualification. In addition to the Demand Qualification rights, subject to certain limitations, if we propose to file a prospectus under Canadian securities laws in order to permit the qualification of securities that are to be sold by us or by any of our shareholders, we will use all reasonable efforts to include in the proposed distribution such number of Qualifiable Securities as Riata Management shall request upon the same terms as such distribution.

In July 2008, Longfellow guaranteed the obligations of us and Longe under a farm-out agreement concerning our Ouezzane-Tissa and Asilah exploration permits in Morocco up to a maximum of $25.0 million. In addition, in July 2008, we received a reimbursement of expenses in the amount of $832,000 from Longe related to Longe’s participation in our Moroccan exploration permits.

In August 2008, we announced that we changed our operating strategy from a prospect generator to a vertically integrated project developer. To execute this new strategy, on December 30, 2008, we acquired 100% of the issued and outstanding shares of Longe from Longfellow in consideration for the issuance of 39,583,333 common shares and 10,000,000 common share purchase warrants. Each common share purchase warrant entitles the holder to purchase one common share at an exercise price of $3.00 per share through December 30, 2011. Concurrently, we issued 35,416,667 common shares at a price of $1.20 per share in a private placement with Dalea, Riata TransAtlantic, Mr. McCann and other purchasers that have business or familial relationships with Mr. Mitchell, resulting in gross proceeds of $42.5 million. Dalea and Riata TransAtlantic purchased an aggregate of 34,381,667 common shares, and Mr. McCann purchased 250,000 common shares. In addition, we paid $740,000 to Longfellow for additional drilling equipment delivered at closing of the Longe acquisition.

In November 2008, in connection with the pending acquisition of Longe, we agreed with Longe that we would suspend billing Longe for work that we were conducting for its Moroccan operations. As a result, we recorded approximately $1.0 million in related expenses that we would have billed to Longe had the Longe acquisition not been completed.

On November 28, 2008, we entered into a credit agreement with Dalea for the purpose of funding the all cash takeover offer by TransAtlantic Australia, our wholly-owned subsidiary, for all of the outstanding shares of Incremental. On April 28, 2009, we agreed with Dalea to increase the loan facility by $14.0 million to fund our oil and natural gas exploration and development activities. The total outstanding balance of the advances made under the credit agreement accrued interest at a rate of ten percent (10%) per annum, calculated daily and compounded quarterly. The loan was repaid in full on June 23, 2009, at which time the credit agreement was terminated. We borrowed an aggregate of $64.6 million under the loan and paid a total of $2.0 million in interest.

On December 31, 2008, we entered into bills of sale and assignment with Viking. Under the terms of the bills of sale and assignment, we purchased at Viking’s cost certain drilling and service equipment and other assets from Viking for use in Turkey, Morocco and Romania. We paid $8.3 million to Viking for the drilling and service equipment and other assets.

Effective January 1, 2009, our wholly-owned subsidiary, TransAtlantic Turkey, entered into a lease agreement under which it leases rooms, flats and office space at a resort hotel owned by a Turkish company controlled by Mr. Mitchell. Under the lease agreement, TransAtlantic Turkey pays the Turkish New Lira equivalent of $5,000 per month base rent and up to 45,000 Turkish New Lira per month (approximately $26,000 per month) in operating expense reimbursement. The lease agreement has a one-year term. The amounts paid under the lease agreement are included in amounts paid under the Service Agreement.

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On March 20, 2009, our wholly-owned subsidiary, TransAtlantic Australia, purchased 15,025,528 shares of Incremental from Mr. Mitchell at a price of AUD$1.085 per share, the same price per share and pursuant to the same terms as the shares acquired from Incremental’s other shareholders, none of whom had any relationship with us. Mr. Mitchell had purchased the Incremental shares between October 27, 2008 and December 23, 2008 at an average price of AUD$0.99 per share. The total consideration paid by TransAtlantic Australia for Mr. Mitchell’s Incremental shares was $11.5 million.

On June 22, 2009, Dalea purchased 41,818,000 common shares at a price of Cdn$1.65 per share in a private placement of our common shares in the U.S. In addition, on June 22, 2009, we entered into a Registration Rights Agreement with Canaccord Capital Corporation and Dalea, pursuant to which we agreed to register for resale under the Securities Act the 41,818,000 common shares purchased by Dalea and 56,559,300 common shares held by certain other investors. Under the registration rights agreement, we filed a registration statement with the SEC on July 20, 2009 to register 55,544,300 common shares for resale, which did not include the common shares held by Dalea. The registration statement was declared effective on September 29, 2009.

On July 27, 2009, our wholly-owned subsidiary, Viking International Limited (“Viking International”), purchased a drilling rig and associated equipment from Viking, an entity in which Dalea owns 85%. Viking International paid $1.5 million in cash for the drilling rig and entered into a note payable to Viking in the amount of $5.9 million. The note is due and payable on August 1, 2010, bears interest at a fixed rate of 10% per annum and is secured by the drilling rig and associated equipment. Interest under the note is payable quarterly on November 1, 2009, February 1, 2010, May 1, 2010 and August 1, 2010. As of December 16, 2009, $5.9 million was outstanding.

On November 24, 2009, Dalea purchased 4,255,400 common shares at a price of Cdn$2.35 per share in a private placement of our common shares in the U.S. In addition, on November 24, 2009, we entered into a Registration Rights Agreement with Canaccord Capital Corporation and Dalea, pursuant to which we agreed to register for resale under the Securities Act the 4,255,400 common shares purchased by Dalea and 44,043,390 common shares held by certain other investors. Under the registration rights agreement, we are required to use our commercially reasonable efforts to cause the SEC to declare this registration statement effective as soon as possible but no later than February 15, 2010. Under the registration rights agreement, our non-affiliates are entitled to have their common shares included in the registration statement prior to common shares held by our affiliates.

On December 15, 2009, Viking International entered into an Agreement for Management Services (“Management Services Agreement”) with Viking, an entity in which Dalea owns 85%. Pursuant to the Management Services Agreement, Viking International agreed to provide management, marketing, storage and personnel services (collectively, the “Rig Services”) from time to time as requested by Viking for the operation of certain rigs (the “Rigs”) owned by Viking that are located in Turkey. Under the terms of the Management Services Agreement, Viking will pay Viking International for all actual costs and expenses associated with the provision of the Rig Services. In addition, Viking will pay Viking International a distribution equal to 5% of the net profits of each Rig, which is calculated as the gross revenues of each Rig less any and all expenses attributable to such Rig, including, but not limited to, the payment for services and insurance under the Management Services Agreement and depreciation.

Mr. Mitchell and his wife own 100% of Riata and Dalea, and Mr. Mitchell is a manager and has sole voting and dispositive power over the common shares held by Riata TransAtlantic. In addition, Mr. Mitchell is a partner of Dalea and a manager of Dalea Management, LLC (“Dalea Management”), the general partner of Dalea. Mr. Mitchell, his wife and children indirectly own 100% of Longfellow. Prior to our acquisition of Longe, Longe was owned by Longfellow. Riata owns 100% of MedOil Supply, LLC. Dalea owns 85% of Viking.

Participating Interest Agreement

We entered into an agreement with Scott Larsen, a director and our President, under which we granted Mr. Larsen a participating interest in any compensation we receive pursuant to an agreement we entered into in June 2005 concerning the sale of our former Nigerian properties (the “Compensation Agreement”). Under the

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Compensation Agreement, Mr. Larsen will receive 3.87% of any “TWL Compensation” (as defined in the Compensation Agreement) we receive, provided that in no event will Mr. Larsen receive more than $600,000 of the TWL Compensation. We do not expect to receive any TWL Compensation.

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DESCRIPTION OF CAPITAL STOCK

Shares Generally

Pursuant to our Memorandum of Continuance and our Bye-Laws, we are authorized to issue 1,000,000,000 common shares of par value $0.01 each and 100,000,000 undesignated shares of par value $0.01 each. The Bye-Laws permit the board to authorize us to repurchase our shares whether for cancellation or to be held as treasury shares, provided we are, after the repurchase, able to pay our liabilities as they become due. The Bye-Laws permit us to issue redeemable shares.

Common Shares

Holders of our common shares are entitled to one vote per share on all matters submitted to a vote of the shareholders. The Bye-Laws do not provide for cumulative voting. Any action to be taken by the shareholders at any meeting at which a quorum is in attendance is decided by the affirmative vote of a majority of the votes cast at such meeting, except as otherwise set forth in the Bye-Laws or the Companies Act 1981 of Bermuda. An amendment of certain specified provisions of the Bye-Laws requires an affirmative vote of at least 80% of the issued and outstanding common shares entitled to vote, and any alteration or abrogation of any rights attached to any class of shares requires (i) consent in writing of 100% of the issued shares of that class or (ii) the approval of the holders of not less than 75% of the issued shares of that class. In addition, the following actions requires an affirmative vote of no less than two-thirds of the votes cast: changes to our Memorandum of Continuance or Bye-Laws, amalgamations, sale, lease or exchange of substantially all of our assets, voluntary winding up or continuance to a foreign jurisdiction. There are no limitations imposed by Bermuda law or the Bye-Laws on the right of shareholders who are not Bermuda residents to hold or vote their common shares. Holders of our common shares do not have any pre-emptive rights.

Under the Bye-Laws and Bermuda law, the board of directors may declare and pay dividends from time to time unless there are reasonable grounds for believing that we are, or after the payment would be, unable to pay our liabilities as they become due or that the realizable value of our assets would thereby be less than the aggregate of our liabilities and issued share capital and share premium accounts. Each common share is entitled to dividends only if, as and when dividends are declared by the board of directors. The payment of future dividends, if any, is determined by the board.

In the event of our liquidation, dissolution or winding up, holders of common shares are entitled to share rateably in proportion to their shareholding in our assets, if any, remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on any outstanding preference shares.

Undesignated Shares

The Memorandum of Continuance and the Bye-Laws authorize the issuance of 100,000,000 undesignated shares. The undesignated shares may be issued with such preferred, qualified or other special rights, privileges and conditions and subject to such restrictions, as the board of directors may determine, in one or more series. The issuance of shares with voting rights, conversion rights or preferential rights could adversely affect the voting power of our holders of common shares and could have the effect of delaying or preventing a change of control. Preferred shares could have preferences over common shares with respect to liquidation rights or dividends.

Registration Rights of Selling Shareholders

The selling shareholders have registration rights pursuant to a registration rights agreement (the “Registration Rights Agreement”) entered into by us on November 24, 2009. This agreement provides for the registration of up to 48,298,790 common shares (the “Registrable Securities”). In addition, any of our common shares acquired in the future by the selling shareholders upon any stock split, dividend or other distribution, recapitalization or similar event with respect to our common shares will be covered by the agreement. The registration statement, of which this prospectus forms a part, is filed in accordance with the Registration Rights Agreement.

Pursuant to the Registration Rights Agreement, we must use our commercially reasonable efforts to cause this registration statement to be declared effective by the SEC as soon as possible. Once any registration statement

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filed pursuant to the Registration Rights Agreement is declared effective by the SEC, we must, subject to certain customary limitations, maintain the effectiveness of the registration statement continuously until all of the common shares registered thereby have either been sold or may be sold by our non-affiliates under Rule 144 of the Securities Act, without limitation or condition. All Registrable Securities cease to be entitled to registration rights under the Registration Rights Agreement when such securities could be sold by a non-affiliate of us under Rule 144 of the Securities Act without limitation or condition.

If this registration statement is not declared effective by February 15, 2010, we are required to pay to the holders of the Registrable Securities liquidated damages in cash equal to 0.5% of the purchase price of the Registrable Shares held by the holders on February 15, 2010 (approximately $490,000 or Cdn$520,000), with an additional 1% if this registration statement is not declared effective by April 15, 2010 (approximately $975,000 or Cdn$1.0 million), and a further 1% if this registration statement is not declared effective by May 15, 2010 (approximately $975,000 or Cdn$1.0 million).

In addition, we will pay the holders of the Registrable Securities liquidated damages in cash equal to 1% of the purchase price of the Registrable Securities held by them on May 24, 2010 (approximately $975,000 or Cdn$1.0 million), if we (a) are not on such date subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (b) have not been for a period of at least 90 days immediately before such date, subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; or (c) have not filed all required reports under Section 13 or 15(d) of the Exchange Act, as applicable, during the twelve months preceding such date, other than Form 8-K reports, as a result of which the holders of Registrable Securities who are not affiliates of us would not be able to sell their Registrable Securities under Rule 144.

If we do not pay the liquidated damages amount in full within seven calendar days after the date payable, interest would accrue on the unpaid amount until paid in full at the rate of 12% per annum. Notwithstanding the foregoing, in no event will Dalea, an entity controlled by our chairman, Mr. Mitchell, be entitled to receive any liquidated damages under the Registration Rights Agreement.

We also agreed to use commercially reasonable efforts to include 750,000 common shares purchased in a simultaneous private placement in the U.S. in this registration statement, subject to pro rata cut back. The purchasers of these shares are not entitled to any liquidated damages under the Registration Rights Agreement.

Anti-Takeover Provisions

The broad discretion given to the board of directors to designate and issue shares from our undesignated shares could be deemed to have an anti-takeover affect, as could the super-majority requirements for certain shareholder votes as described above.

Director and Officer Indemnity

The Bye-Laws require us to indemnify our officers and directors against all liabilities, loss, damage or expense incurred or suffered by such person in such capacity or by reason of any act done, conceived or omitted in the conduct of our business or in the discharge of such person’s duties; provided that such indemnification shall not extend to any matter which would render it void pursuant to Bermuda law. Bermuda law permits us to indemnify directors and officers against liability attaching to them arising from their duties but such indemnification may not extend to acts of fraud or dishonesty. The Bye-Laws require us to advance funds to directors or officers for their defense upon receipt of an undertaking to repay the funds if any allegation of fraud or dishonesty is proved, and only if such advance is specifically authorized in accordance with Bye-Law 44.6. The Bye-Laws permit the purchase of indemnity insurance.

Foreign Exchange Control Regulations

We have been designated as a non-resident for Bermuda exchange control purposes by the Bermuda Monetary Authority. Because of this designation, there are no restrictions on our ability to transfer funds in and out of Bermuda.

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The transfer of shares between persons regarded as resident outside Bermuda for exchange control purposes and the sale of our common shares to or by such persons may take place without specific consent under the Exchange Control Act 1972. Issuances and transfers of shares involving any person regarded as resident in Bermuda for exchange control purposes require specific approval under the Exchange Control Act 1972.

As an “exempted company,” we are exempt from Bermuda laws which restrict the percentage of share capital that may be held by non-Bermuda residents, but as an exempted company, we may not participate in certain business transactions, including: (1) the acquisition or holding of land in Bermuda (except that required for our business and held by way of lease or tenancy for terms of not more than 50 years) without the express authorization of the Bermuda legislature, (2) the taking of mortgages on land in Bermuda to secure an amount in excess of $50,000 without the consent of the Minister of Finance, (3) the acquisition of any bonds or debentures secured by any land in Bermuda, other than certain types of Bermuda government securities or (4) the carrying on of business of any kind in Bermuda, except in furtherance of our business carried on outside Bermuda.

Bermuda Tax Considerations

The following describes a summary of some of the material tax consequences of an investment in our common shares under Bermuda laws. Each prospective investor should consult its own tax advisors regarding tax consequences of an investment in our common shares.

In Bermuda there are no taxes on profits, income or dividends, nor is there any capital gains tax, estate duty or death duty. Profits can be accumulated and it is not obligatory for a company to pay dividends. In addition, stamp duty is not chargeable to any shareholder in respect of the incorporation, registration or licensing of an exempted company, nor, subject to certain minor exceptions, on their transactions. No reciprocal tax treaty affecting us exists between Bermuda and the United States.

The Bermuda government has enacted legislation under which the Minister of Finance is authorized to give a tax assurance to an exempted company or a partnership that, in the event of there being enacted in Bermuda any legislation imposing tax computed on profits or income or computed on any capital asset, gain or appreciation, then the imposition of any such tax shall not be applicable to such entities or any of their operations. In addition, there may be included an assurance that any such tax or any tax in the nature of estate duty or inheritance tax, shall not be applicable to the share, debentures or other obligations of such entities.

On November 6, 2009, we received such a tax assurance from the Minster of Finance of Bermuda under the Exempted Undertakings Tax Protection Act, 1966. Pursuant to the tax assurance, we have been granted an exemption from the imposition of tax under any applicable Bermuda law computed on profits or income or computed on any capital asset, gain or appreciation, or on any tax in the nature of estate, duty or inheritance tax, provided that such exemption shall not prevent the application of any such tax or duty to such persons as are ordinarily resident in Bermuda and shall not prevent the application of any tax payable in accordance with the provisions of the Land Tax Act, 1967 or otherwise payable in relation to land in Bermuda leased to us. This tax exemption expires on March 28, 2016.

Indemnification of Directors and Officers

Our Bye-Laws require us to indemnify our officers and directors against all liabilities, loss, damage or expense incurred or suffered by such person in such capacity or by reason of any act done, conceived or omitted in the conduct of our business or in the discharge of such person’s duties; provided that such indemnification shall not extend to any matter which would render it void pursuant to Bermuda law. Bermuda law permits us to indemnify directors and officers against liability attaching to them arising from their duties but such indemnification may not extend to acts of fraud or dishonesty. The Bye-Laws require us to advance funds to directors or officers for their defense upon receipt of an undertaking to repay the funds if any allegation of fraud or dishonesty is proved, and only if such advance is specifically authorized in accordance with Bye-Law 44.6. The Bye-Laws permit the purchase of indemnity insurance.

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Disclosure of Commission Position on Indemnification for Securities Act Liabilities

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and persons controlling us, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

MANAGEMENT

The following sets forth the biographical background information for each of our directors and executive officers.

N. Malone Mitchell, 3^rd, age 48, has served as a director since April 2008 and as our chairman since May 2008. Since 2005, Mr. Mitchell has served as the president of Riata, an Oklahoma City-based private oil and gas exploration and production company. From June to December 2006, Mr. Mitchell served as president and chief operating officer of Sandridge Energy, Inc. (formerly Riata Energy, Inc.), an independent natural gas and oil company concentrating in exploration, development and production activities. Until he sold his controlling interest in the company in June 2006, Mr. Mitchell also served as president, chief executive officer and chairman of Riata Energy, Inc., which Mr. Mitchell founded in 1985 and built into one of the largest privately held energy companies in the United States.

Brian E. Bayley, age 56, has served as a director since 2001. Since May 2009, Mr. Bayley has served as president, chief executive officer and director of Quest, a publicly traded mortgage investment corporation listed on the TSX and NYSE Amex. From January 2008 until May 2009, Mr. Bayley served as co-chairman of Quest, and from June 2003 until January 2008 and during March 2008, Mr. Bayley served as president and chief executive officer, respectively. He has also served as the president and a director of Ionic Management Corp., a private management company that provides various consulting, administrative, management and related services to publicly traded companies, since December 1996.

Hilda D. Kouvelis, age 47, has served as our chief financial officer since January 2007 and as a vice president since May 2007. She served as our controller since joining us in July 2005 until January 2007. From November 2007 until May 2008, Ms. Kouvelis served as chief financial officer of Sky Petroleum Inc. and Southern Star Energy Inc. Prior to that, Ms. Kouvelis served as controller for Ascent Energy, Inc., an oil and natural gas exploration and development company, from 2001 to 2004.

Scott C. Larsen, age 57, has served as our president since March 2004 and served as our chief executive officer from March 2004 to January 2009. He has served as a director since May 2005. He previously served as our vice president—operations from July 2002 until March 2004 and has been involved in our international activities since their inception in 1994.

Matthew W. McCann, age 41, has served as our chief executive officer since January 2009 and has served as a director since May 2008. Since April 2007, Mr. McCann has also served as general counsel of Riata, an Oklahoma City-based private oil and gas exploration and production company. From December 2005 to April 2007, Mr. McCann served as vice president, legal & corporate secretary for Sandridge Energy, Inc. (formerly Riata Energy, Inc.), an independent oil and natural gas company concentrating in exploration, development and production activities and, from 2001 to December 2005, Mr. McCann served as general counsel for Riata Energy, Inc.

Jeffrey S. Mecom, age 43, has served as our corporate secretary since May 2006 and as a vice president since May 2007. Before joining us in April 2006, Mr. Mecom was an attorney in private practice in Dallas. Mr. Mecom served as vice president, legal and corporate secretary with Aleris International, Inc., a NYSE-listed international metals recycling and processing company, from 1995 until April 2005.

Alan C. Moon, age 64, has served as a director since 2004. Mr. Moon has been the president of Crescent Enterprises Inc., a private Calgary-based investment firm, since he formed that company in 1997. Prior to that, Mr. Moon was president and chief operating officer of TransAlta Energy Corporation, an international independent electric power generation and distribution company that had approximately $1 billion in assets and operated in Ontario, New Zealand, Australia, South America, and the United States during the period Mr. Moon served as an executive officer of the company.

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Mel G. Riggs, age 55, has served as a director since July 2009. Mr. Riggs has served as senior vice president—finance, secretary, treasurer, and chief financial officer since 1991, and as a director since 1994, of Clayton Williams Energy, Inc., an independent exploration and production company that develops and produces oil and natural gas. Since 1989, Mr. Riggs has served as manager of finance of the Williams Companies. From 1984 to 1989, Mr. Riggs was initially employed as senior vice president of finance and treasurer of ClayDesta Communications, Inc., and thereafter as vice president of finance of Advanced Telecommunications Corporation, which acquired ClayDesta Communications, Inc. in March 1989. The board has determined that Mr. Riggs is independent in accordance with the rules of the NYSE Amex and National Instrument 52-110 of the Canadian Securities Regulators.

Michael D. Winn, age 47, has served as a director since 2004. He has been the president of Terrasearch Inc., a private consulting company that provides analysis on mining and energy companies, since he formed that company in 1997. Prior to that, Mr. Winn spent four years as an analyst for a Southern California-based brokerage firm where he was responsible for the evaluation of emerging oil and gas and mining companies. Mr. Winn has worked in the oil and gas industry since 1983 and the mining industry since 1992.

Messrs. Winn, Bayley, and Moon serve on the board of directors of the public companies listed below:

Name of Director	Name of Company	Listing
Michael D. Winn	Alexco Resource Corp.	TSX
	Eurasian Minerals Inc.	TSX Venture Exchange
	Inca Pacific Resources Inc.	TSX Venture Exchange
	Iron Creek Capital Corp.	TSX Venture Exchange
	Lake Shore Gold Corp.	TSX
	Lara Exploration Ltd.	TSX Venture Exchange
	NGEx Resources Inc.	TSX Venture Exchange
	Reservoir Capital Corp.	TSX Venture Exchange
	Sanu Resources Ltd.	TSX Venture Exchange
	Sprott Resource Corp.	TSX
Brian E. Bayley	American Natural Energy Corp.	TSX Venture Exchange
	Columbian Mines Corporation	TSX Venture Exchange
	Cypress Hills Resource Corp.	TSX Venture Exchange
	Esperanza Silver Corp.	TSX Venture Exchange
	Eurasian Minerals Inc.	TSX Venture Exchange
	Golconda Capital Corp.	TSX Venture Exchange
	Greystar Resources Ltd.	TSX
	Kirkland Lake Gold Inc.	TSX
	Quest Capital Corp.	TSX
	Rocky Mountain Resources Corp.	TSX Venture Exchange
	Torque Energy Inc.	TSX Venture Exchange
Alan C. Moon	Avenir Diversified Income Trust	TSX
	Lake Shore Gold Corp.	TSX
	Maxy Gold Corp.	TSX Venture Exchange
	Northern Superior Resources Inc.	TSX Venture Exchange

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Our only outstanding class of equity securities is our common shares, no par value. The following table sets forth information known to us about the beneficial ownership of our common shares on December 16, 2009 by (i) each person or entity known to us to own beneficially more than five percent (5%) of our common shares, (ii) each director; (iii) each named executive officer; and (iv) all of our present executive officers and directors as a group.

Unless otherwise indicated in the footnotes, each person or entity listed in the following table has sole voting power and investment power over the common shares listed as beneficially owned by that person or entity. Percentages of beneficial ownership are based on 303,245,456 common shares outstanding on December 16, 2009. Unless otherwise indicated in the footnotes, the address for each listed person is c/o TransAtlantic Petroleum Ltd., 5910 N. Central Expressway, Suite 1755, Dallas, Texas 75206.

	Shares Beneficially Owned(1)
Name of Beneficial Owner	Number		Percent
N. Malone Mitchell, 3rd	152,739,535	(2)	48.8	%
Hilda Kouvelis	236,666	(3)		*
Scott C. Larsen	1,259,506	(4)		*
Matthew W. McCann	1,424,999	(5)		*
Jeffrey S. Mecom	366,666	(6)		*
Brian E. Bayley	307,802	(7)		*
Alan C. Moon	366,415	(8)		*
Mel G. Riggs	60,000			*
Michael D. Winn	717,802	(9)		*
All executive officers and directors as a group (9 persons)	157,479,391	(10)	50.0	%
Dalea Partners, LP	101,935,039	(11)	33.7	%
4801 Gaillardia Parkway
Suite 350
Oklahoma City, OK 73142
Longfellow Energy, LP	49,583,333	(12)	15.9	%
4801 Gaillardia Parkway
Suite 350
Oklahoma City, OK 73142
FMR LLC	20,828,551	(13)	6.9	%
82 Devonshire Street
Boston, MA 02109

* Less than 1% of the outstanding common shares.

(1) Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 under the Exchange Act and is not necessarily indicative of beneficial ownership for any other purpose, including under Canadian securities laws. The number of common shares shown as beneficially owned includes common shares which for Canadian securities law purposes may not be beneficially owned but over which a person would be deemed to exercise control or direction. The number of common shares shown as beneficially owned includes common shares subject to options, common share purchase warrants, and restricted stock units (RSUs) that are currently exercisable or vested (in the case of RSUs) or that will become exercisable or vested within 60 days of December 16, 2009. Restricted stock units that are vested within 60 days and common shares subject to options or common share purchase warrants exercisable within 60 days after December 16, 2009 are deemed outstanding for computing the percentage of the person or entity holding such securities but are not outstanding for computing the percentage of any other person or entity.

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(2) Based on a Schedule 13D/A filed on December 3, 2009. Includes 100,785,011 common shares held by Dalea and 1,150,028 common shares held by Riata TransAtlantic. Dalea Management is the general partner of Dalea. Mr. Mitchell is a partner of Dalea and a manager of Dalea Management. Dalea, Dalea Management and Mr. Mitchell share voting and investment power over the shares held by Dalea and may be deemed to beneficially own these shares. Riata TransAtlantic is managed by Mr. Mitchell, who has voting and investment power over the shares held by Riata TransAtlantic and may be deemed to beneficially own these shares. Also includes 39,583,333 common shares and 10,000,000 common share purchase warrants that are held by Longfellow. Mr. Mitchell, his wife and children indirectly own 100% of Longfellow and may be deemed to beneficially own these shares. Mr. Mitchell is our chairman. Also includes 16,667 common shares subject to options and 37,802 common shares subject to RSUs.

(3) Includes 200,000 common shares subject to options and 16,666 common shares subject to RSUs.

(4) Includes 820,000 common shares subject to options and 50,000 common shares subject to RSUs.

(5) Includes 33,333 common shares subject to options and 41,666 common shares subject to RSUs.

(6) Includes 300,000 common shares subject to options and 16,666 common shares subject to RSUs.

(7) Includes 110,000 common shares subject to options and 37,802 common shares subject to RSUs.

(8) Includes 110,000 common shares subject to options and 37,802 common shares subject to RSUs.

(9) Includes 285,000 common shares subject to options and 37,802 common shares subject to RSUs.

(10) Reflects the information in footnotes (1) through (9) above.

(11) Based on a Schedule 13D/A filed on December 3, 2009. Includes 1,150,028 common shares held by Riata TransAtlantic. Mr. Mitchell shares voting and investment power over the shares held by Dalea and may be deemed to beneficially own these shares. Mr. Mitchell is our chairman.

(12) Based on a Schedule 13D/A filed on December 3, 2009. Includes 10,000,000 common share purchase warrants. Mr. Mitchell, his wife and children indirectly own 100% of Longfellow and may be deemed to beneficially own these shares. Mr. Mitchell is our chairman.

(13) FMR LLC , 82 Devonshire Street, Boston, Massachusetts 02109, acting through its subsidiaries, is the beneficial owner of 20,828,551 common shares. Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 10,722,051 of our common shares as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. Pyramis Global Advisors, LLC (“PGALLC”), an indirect wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 9,798,900 of our common shares as a result of it serving as investment adviser to institutional accounts, non-U.S. mutual funds and investment companies registered under Section 8 of the Investment Company Act of 1940 owning such shares. Pyramis Global Advisors Trust Company (“PGATC”), an indirect wholly-owned subsidiary of FMR LLC and a bank as defined in Section 3(a)(6) of the Exchange Act, is the beneficial owner of 307,200 of our common shares as a result of it serving as investment adviser to institutional accounts owning such shares. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, PGALLC, PGATC and the funds and accounts managed by them (the “Fidelity Funds”), each has sole power to dispose of the 20,828,551 shares owned by the Fidelity Funds. Members of the family of Edward C. Johnson 3d, Chairman of FMR LLC, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family

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may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Edward C. Johnson 3d has the sole power to vote or direct the voting of our common shares owned directly by the Fidelity Funds, which power resides with the Fidelity Funds’ boards of trustees. Fidelity carries out the voting of our common shares under written guidelines established by the Fidelity Funds’ boards of trustees.

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SELLING SHAREHOLDERS

Pursuant to the Registration Rights Agreement dated November 24, 2009, we agreed to register for resale certain of our common shares owned by the selling shareholders named below and to indemnify the selling shareholders against certain liabilities related to the selling of such common shares, including liabilities arising under the Securities Act. Under the Registration Rights Agreement, we also agreed to pay the expenses associated with preparing and filing this registration statement; however, the selling shareholders will pay any legal fees, expenses, commissions or other expenses relating to the sale of their common shares.

The selling shareholders acquired the common shares on November 24, 2009 either in an offering conducted outside the United States in compliance with Regulation S under the Securities Act or inside the United States in compliance with Regulation D under the Securities Act. The common shares being offered hereby are being registered to permit public secondary trading. The selling shareholders may offer all or part of the common shares for resale from time to time. However, the selling shareholders are under no obligation to sell all or any portion of the common shares, nor are the selling shareholders obligated to sell any common shares immediately under this prospectus.

The following table sets forth the names of the selling shareholders, the number of common shares beneficially owned by them as of December 16, 2009, the number of common shares being offered by them, the number of common shares each selling shareholder will beneficially own if the shareholder sells all of the common shares being registered and the selling shareholder’s percentage ownership of our total outstanding common shares if all the common shares in the offering are sold. Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. The percentage of common shares beneficially owned after the offering is based on 303,245,456 common shares outstanding as of December 16, 2009. As used in this prospectus, “selling shareholders” includes the successors-in-interest, donees, transferees or others who may later hold the selling shareholders’ interests.

All information with respect to share ownership has been furnished by or on behalf of the selling shareholders and is as of the date of this prospectus. We believe, based on information supplied by the selling shareholders and subject to community property laws where applicable, that except as may otherwise be indicated in the footnotes to the table below, each selling shareholder has sole voting and dispositive power with respect to the common shares reported as beneficially owned by them. Because the selling shareholders may sell all, part or none of their common shares, no estimates can be given as to the number of common shares that will be held by each selling shareholder upon termination of any offering made hereby. For purposes of the table below, however, we have assumed that after termination of this offering, none of the common shares offered by this prospectus will be held by the selling shareholders.

None of the selling shareholders has had any position with, held any office of, or had any other material relationship with us during the past three years.

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Selling Shareholders	Number of Common Shares Owned Before the Offering		Number of Common Shares Being Offered		Number of Common Shares Owned After the Offering (1)		Percentage of Common Shares Owned After the Offering
1233171 Alberta Ltd. (2)	20,000		20,000		0		0
1991 Investment Company (3)	105,000		40,000		65,000			*
2035718 Ontario Inc. (4)	45,000		45,000		0		0
Adaly Opportunity Fund (5)	750,200	(6)	300,000	(7)	450,200	(8)		*
Adelphi Emerging Europe Fund (9)	623,828		620,000		3,828			*
Alex Cumming	10,000		10,000		0		0
Alex Glasenberg	20,000		20,000		0		0
Apogee Fund L.P. (10)	1,000,000		200,000		800,000			*
Ascend Partners Fund I LP (11)	1,350,000	(12)	1,350,000	(12)	0		0
Ascend Partners Fund I, Ltd. (11)	1,350,000	(12)	1,350,000	(12)	0		0
Ascend Partners Fund II LP (11)	1,350,000	(12)	1,350,000	(12)	0		0
Ascend Partners Fund II, Ltd. (11)	1,350,000	(12)	1,350,000	(12)	0		0
Atlas Allocation Fund L.P. (13)	631,000		450,000		181,000			*
BMO Guardian Global Energy Fund (14)	1,391,300	(15)	1,375,000	(16)	16,300	(17)		*
BMO Resource Fund (14)	1,391,300	(15)	1,375,000	(16)	16,300	(17)		*
BP Capital Energy Equity Fund Master II, LP (18)	2,000,000	(19)	2,000,000	(19)	0		0
BP Capital Energy Equity Fund, LP (18)	2,000,000	(19)	2,000,000	(19)	0		0
BP Capital Energy Equity International Holdings I, LP (18)	2,000,000	(19)	2,000,000	(19)	0		0
Bruce S. Simmonds	10,000		10,000		0		0
Cato Partners Management LLC (20)	1,007,000		200,000		807,000			*
Crossway Partners Master Fund LP (21)	500,000		500,000		0		0
Cumber International S.A. (22)	3,648,400	(23)	750,000	(24)	2,898,400	(25)	1.0	%
Cumberland Benchmarked Partners, L.P. (22)	3,648,400	(23)	750,000	(24)	2,898,400	(25)	1.0	%
Cumberland Partners (22)	3,648,400	(23)	750,000	(24)	2,898,400	(25)	1.0	%
Cumming Construction Ltd. (26)	20,000		20,000		0		0
David Bruce Dyck	5,000		5,000		0		0
Don Jack	10,000		10,000		0		0
Fidelity Canadian Asset Allocation Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Fidelity Canadian Disciplined Equity Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Fidelity Contrafund: Fidelity Advisor New Insights Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Fidelity Contrafund: Fidelity Contrafund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Fidelity Global Equity Open Fund (29)	18,100		18,100		0		0
Fidelity Global Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Fidelity Global Natural Resources Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Gary West (30)	1,813,600	(31)	200,000	(32)	1,613,600	(33)		*
Ian Cathery	45,000		45,000		0		0
IG FI Canadian Asset Allocation Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
IG FI Canadian Equity Class (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
IG FI Canadian Equity Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Ironman Energy Master Fund (34)	70,000		70,000		0		0
James Thomson	10,000		10,000		0		0
JANA Partners LLC (35)	6,383,000		6,383,000		0		0
JLD Investment Corporation (36)	5,000		5,000		0		0
Johnathan Bodnar Kachuk	500		500		0		0
Kurt Andrew Roberts	2,000		2,000		0		0
Longview Partners B, L.P. (22)	3,648,400	(23)	750,000	(24)	2,898,400	(25)	1.0	%
Los Angeles Board of Admin. of Water & Power Employees’ Retirement, Disability & Death Benefit Plan (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Mary West (30)	1,813,600	(31)	200,000	(32)	1,613,600	(33)		*
Midsummer Investment, Ltd. (37)	20,000		20,000		0		0
Minnesota State Board of Investment (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
MSD Energy Investments, L.P. (38)	15,000,000		2,766,000		12,234,000		4.0	%
Ohio Police & Fire Pension Fund (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
Quantum Partners Ltd. (39)	2,700,000		2,000,000		700,000			*
Ralph Gerstein	90,000		90,000		0		0
RCH Energy Opportunity Fund III, LP (40)	3,431,045	(41)	900,000		2,531,045	(42)		*
Schroder International Selection Fund Global Energy Fund (43)	10,638,300		10,638,300		0		0
Seabright Investment Consultants Inc. (44)	10,000		10,000		0		0
Shirley Battison	10,000		10,000		0		0
State Board of Administration of Florida (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
The Strategic Opportunities Master Fund (5)	750,200	(6)	300,000	(7)	450,200	(8)		*
The Strategic Retirement Fund (5)	750,200	(6)	300,000	(7)	450,200	(8)		*
Washington State Investment Board (27)	20,828,551	(27)	11,745,051	(28)	9,083,500		3.0	%
William Allan Coleman	500		500		0		0

* Less than 1%

(1) Represents the number of common shares that will be beneficially owned by the selling shareholders after completion of this offering based on the assumptions that: (i) all of the common shares registered for resale

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by the registration statement of which this prospectus is part will be sold and (ii) no other common shares will be acquired or sold by the selling shareholders prior to completion of this offering. However, the selling shareholders may sell all, part or none of their common shares offered pursuant to this prospectus and may sell some or all of their common shares pursuant to one or more exemptions from the registration provisions of the Securities Act.

(2) Lee Simpson, as director and sole shareholder of 1233171 Alberta Ltd., has sole voting and dispositive power over the common shares held by 1233171 Alberta Ltd.

(3) Paul Brett Combs, as the trustee of LC Vose 1965 Trust FBO Charles Vose, the general partner of 1991 Investment Company, has sole voting and dispositive power over the common shares held by 1991 Investment Company.

(4) Richard Kung, as president of 2035718 Ontario Inc., has sole voting and dispositive power over the common shares held by 2035718 Ontario Inc.

(5) Adaly Investment Management Corp. serves as the investment advisor and manager of Adaly Opportunity Fund and investment advisor of The Strategic Opportunities Master Fund and The Strategic Retirement Fund. Martin Braun, the president of Adaly Investment Management Corp., has sole voting and dispositive power over the common shares held by Adaly Opportunity Fund, The Strategic Opportunities Master Fund and The Strategic Retirement Fund.

(6) Includes (i) 246,800 common shares held by Adaly Opportunity Fund, (ii) 450,500 common shares held by The Strategic Opportunities Master Fund and (iii) 52,900 common shares held by The Strategic Retirement Fund.

(7) Includes (i) 98,800 common shares held by Adaly Opportunity Fund, (ii) 180,000 common shares held by The Strategic Opportunities Master Fund and (iii) 21,200 common shares held by The Strategic Retirement Fund.

(8) Includes (i) 148,000 common shares held by Adaly Opportunity Fund, (ii) 270,500 common shares held by The Strategic Opportunities Master Fund and (iii) 31,700 common shares held by The Strategic Retirement Fund.

(9) Lars Dollmann, as portfolio manager of Adelphi Emerging Europe Fund, has sole voting and dispositive power over the common shares held by Adelphi Emerging Europe Fund.

(10) Emmett M. Murphy, as general partner of Apogee Fund L.P., has sole voting and dispositive power over the common shares held by Apogee Fund L.P.

(11) Ascend Capital LLC is the sole general partner of Ascend Capital Limited Partnership, which is the sole general partner of Ascend Partners Fund I LP and Ascend Partners Fund II LP and is the sole investment manager of Ascend Partners Fund I, Ltd. and Ascend Partners Fund II, Ltd. Malcom Fairbairn, as Chief Investment Officer of Ascend Capital LLC, has sole voting and dispositive power over the common shares held by each of Ascend Partners Fund I LP, Ascend Partners Fund I, Ltd., Ascend Partners Fund II LP and Ascend Partners Fund II, Ltd.

(12) Includes (i) 4,780 common shares held by Ascend Partners Fund I LP, (ii) 50,290 common shares held by Ascend Partners Fund I, Ltd., (iii) 325,836 common shares held by Ascend Partners Fund II LP and (iv) 969,094 common shares held by Ascend Partners Fund II, Ltd.

(13) Atlas Capital Management is the general partner of Atlas Allocation Fund L.P. Robert H. Alpert, as the president of RHA. Inc., the general partner of Atlas Capital Management, has sole voting and dispositive power over the common shares held by Atlas Allocation Fund L.P.

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(14) BMO Guardian Global Energy Fund and BMO Resource Fund are indirect subsidiaries of BMO Nesbitt Burns, a registered broker-dealer. These common shares were purchased by BMO Guardian Global Energy Fund and BMO Resource Fund in the ordinary course of business and, at the time of purchase, BMO Guardian Global Energy Fund and BMO Resource Fund had no agreements or understandings, directly or indirectly, with any person to distribute the common shares. Jones Heward, as portfolio advisor to each of BMO Guardian Global Energy Fund and BMO Resource Fund, has sole voting and dispositive power over the common shares held by BMO Guardian Global Energy Fund and BMO Resource Fund.

(15) Includes (i) 40,300 common shares held by BMO Guardian Global Energy Fund and (ii) 1,351,000 common shares held by BMO Resource Fund.

(16) Includes (i) 24,000 common shares held by BMO Guardian Global Energy Fund and (ii) 1,351,000 common shares held by BMO Resource Fund.

(17) Includes 16,300 common shares held by BMO Guardian Global Energy Fund.

(18) T. Boone Pickens, as president and chief executive officer, and Ronald D. Bassett and Robert L. Stillwell as managing directors, of BP Capital Management, L.P., the general partner of each of BP Capital Energy Equity Fund, LP, BP Capital Energy Equity Fund Master II, LP and BP Capital Energy Equity International Holdings I, LP, share voting and dispositive power over the common shares held by BP Capital Energy Equity Fund, LP, BP Capital Energy Equity Fund Master II, LP and BP Capital Energy Equity International Holdings I, LP.

(19) Includes (i) 1,080,000 common shares held by BP Capital Energy Equity Fund, LP, (ii) 840,000 common shares held by BP Capital Energy Equity Fund Master II, LP and (iii) 80,000 common shares held by BP Capital Energy Equity International Holdings I, LP.

(20) Derk Cullinan, as managing member of Cato Partners Management LLC, has sole voting and dispositive power over the common shares held by Cato Partners Management LLC.

(21) Evan Claar, as managing member of CBI Capital LLC, the general partner of Crossway Partners Master Fund LP, has sole voting and dispositive power over the common shares held by Crossway Partners Master Fund LP.

(22) Gary Tynes, as the chief financial officer of Cumberland Associates LLC, the financial advisor to Cumber International S.A., has sole voting and dispositive power over the common shares held by Cumber International S.A. Mr. Tynes, as a member of Cumberland Benchmarked GP LLC, the general partner of Cumberland Benchmarked Partners, L.P., has sole voting and dispositive power over the common shares held by Cumberland Benchmarked Partners, L.P. Mr. Tynes, as a member of Cumberland GP LLC, the general partner of Cumberland Partners, has sole voting and dispositive power over the common shares held by Cumberland Partners. Mr. Tynes, as a member of Longview B GP LLC, the general partner of Longview Partners B, L.P., has sole voting and dispositive power over the common shares held by Longview Partners B, L.P.

(23) Includes (i) 223,771 shares held by Cumber International S.A., (ii) 907,241 shares held by Cumberland Benchmarked Partners, L.P., (iii) 1,923,545 shares held by Cumberland Partners and (iv) 593,843 shares held by Longview Partners B, L.P.

(24) Includes (i) 45,552 shares held by Cumber International S.A., (ii) 187,107 shares held by Cumberland Benchmarked Partners, L.P., (iii) 393,874 shares held by Cumberland Partners and (iv) 123,467 shares held by Longview Partners B, L.P.

(25) Includes (i) 178,219 shares held by Cumber International S.A., (ii) 720,134 shares held by Cumberland Benchmarked Partners, L.P., (iii) 1,529,671 shares held by Cumberland Partners and (iv) 470,376 shares held by Longview Partners B, L.P.

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(26) Tom Cumming, as owner of Cumming Construction Ltd., has sole voting and dispositive power over the common shares held by Cumming Construction Ltd.

(27) FMR LLC , 82 Devonshire Street, Boston, Massachusetts 02109, acting through its subsidiaries, is the beneficial owner of 20,828,551 common shares. Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 10,722,051 of our common shares as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. Pyramis Global Advisors, LLC (“PGALLC”), an indirect wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 9,798,900 of our common shares as a result of it serving as investment adviser to institutional accounts, non-U.S. mutual funds and investment companies registered under Section 8 of the Investment Company Act of 1940 owning such shares. Pyramis Global Advisors Trust Company (“PGATC”), an indirect wholly-owned subsidiary of FMR LLC and a bank as defined in Section 3(a)(6) of the Exchange Act, is the beneficial owner of 307,200 of our common shares as a result of it serving as investment adviser to institutional accounts owning such shares. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, PGALLC, PGATC and the funds and accounts managed by them (the “Fidelity Funds”), each has sole power to dispose of the 20,828,551 shares owned by the Fidelity Funds. Members of the family of Edward C. Johnson 3d, Chairman of FMR LLC, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Edward C. Johnson 3d has the sole power to vote or direct the voting of our common shares owned directly by the Fidelity Funds, which power resides with the Fidelity Funds’ boards of trustees. Fidelity carries out the voting of our common shares under written guidelines established by the Fidelity Funds’ boards of trustees. FMR LLC directly or indirectly owns and controls a number of registered broker-dealers, among other affiliates. These common shares were purchased by each of the selling shareholders in the ordinary course of business and, at the time of purchase, the selling shareholders had no agreements or understandings, directly or indirectly, with any person to distribute the common shares.

(28) Includes (i) 1,234,400 shares held by Fidelity Contrafund: Fidelity Advisor New Insights Fund; (ii) 6,578,651 shares held by Fidelity Contrafund: Fidelity Contrafund; (iii) 311,200 shares held by Fidelity Canadian Asset Allocation Fund; (iv) 2,500,000 shares held by Fidelity Canadian Disciplined Equity Fund; (28) 84,600 shares held by Fidelity Global Fund; (vi) 50,200 shares held by Fidelity Global Natural Resources Fund; (vii) 40,800 shares held by IG FI Canadian Asset Allocation Fund; (viii) 126,700 shares held by IG FI Canadian Equity Class; (ix) 583,100 shares held by IG FI Canadian Equity Fund; (x) 28,800 shares held by Los Angeles Board of Admin. of Water & Power Employees’ Retirement, Disability & Death Benefit Plan; (xi) 17,700 shares held by Minnesota State Board of Investment; (xii) 37,700 shares held by Ohio Police & Fire Pension Fund; (xiii) 84,200 shares held by the State Board of Administration of Florida; and (xiv) 67,000 shares held by Washington State Investment Board.

(29) FIL Limited (“FIL”), Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda, has sole voting and dispositive power over the common shares held by Fidelity Global Equity Open Fund. FIL is an indirect affiliate of FMR LLC. FMR LLC directly or indirectly owns and controls a number of registered broker-dealers, among other affiliates. These common shares were purchased by this selling shareholder in the ordinary course of business and, at the time of purchase, this selling shareholder had no agreements or understandings, directly or indirectly, with any person to distribute the common shares.

(30) West Family Investments, LLC is the investment manager to Gary West and Mary West. Randy Rochman, as chief executive officer, and Johnny Bubb, as vice president, respectively, of West Family Investments, LLC, have shared voting and dispositive power over the common shares held by Gary West and Mary West.

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(31) Includes (i) 906,800 common shares held by Gary West and (ii) 906,800 common shares held by Mary West.

(32) Includes (i) 100,000 common shares held by Gary West and (ii) 100,000 common shares held by Mary West.

(33) Includes (i) 806,800 common shares held by Gary West and (ii) 806,800 common shares held by Mary West.

(34) G. Bryan Dutt, as managing director of Ironman Energy Master Fund, has sole voting and dispositive power over the common shares held by Ironman Energy Master Fund.

(35) JANA Partners LLC, a Delaware limited liability company, is a private money management firm which holds our common shares in various funds and accounts under its management and control. The principals of JANA Partners LLC are Barry Rosenstein and Gary Claar, who share voting and investment control over such shares.

(36) Dean Jackson and Jill Glowicki, as secretary and president, respectively, of JLD Investment Corporation share voting and dispositive power over the common shares held by JLD Investment Corporation.

(37) Joshua Thomas and Michel Amsalem, as investment managers of Midsummer Investment, Ltd., share voting and dispositive power over the common shares held by Midsummer Investment, Ltd.

(38) MSD Capital, L.P. is the general partner of MSD Energy Investments, L.P. and may be deemed to have or share voting and dispositive power over, and/or beneficially own, the common shares held by MSD Energy Investments, L.P. MSD Capital Management LLC is the general partner of MSD Capital, L.P. and may be deemed to have or share voting and/or dispositive power over, and beneficially own, the common shares held by MSD Capital, L.P. Each of Glenn R. Fuhrman, John C. Phelan and Marc R. Lisker is a manager of MSD Capital Management LLC and may be deemed to have or share voting and/or dispositive power over, and beneficially own, the common shares owned by MSD Capital Management LLC. Each of Mr. Fuhrman, Mr. Phelan and Mr. Lisker disclaim beneficial ownership of such common shares, except to the extent of the pecuniary interest of such person in such shares.

(39) Soros Fund Management LLC (“SFM LLC”) serves as principal investment manager to Quantum Partners Ltd. As such, SFM LLC has been granted investment discretion over portfolio investments, including over common shares, held for the account of Quantum Partners Ltd. George Soros as chairman, Robert Soros as deputy chairman and Jonathan Soros as president and deputy chairman, of SFM LLC, share voting and dispositive power over the common shares held by Quantum Partners Ltd.

(40) RR Advisors, LLC is the investment advisor and ultimate general partner of RCH Energy Opportunity Fund III, L.P. Robert Raymond, as the sole member, and W. Mark Meyer, as the president, of RR Advisors, LLC, share voting and dispositive power over the common shares held by RCH Energy Opportunity Fund III, L.P.

(41) Includes (i) 1,566,667 common shares held by RCH Energy Opportunity Fund III, LP and (ii) 1,864,378 common shares held by RCH Energy Opportunity Fund II, LP.

(42) Includes (i) 666,667 common shares held by RCH Energy Opportunity Fund III, LP and (ii) 1,864,378 common shares held by RCH Energy Opportunity Fund II, LP.

(43) Schroder International Selection Fund Global Energy Fund (the “SISF Fund”) is managed by Schroder Investment Management Limited. Schroder Investment Management Limited retains the voting rights to the common shares held by SISF Fund and votes in its capacity as discretionary manager. John Coyle, as fund manager of the SISF Fund, has sole dispositive power over the common shares held by the SISF Fund.

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(44) James Kungle, as president of Seabright Investment Consultants Inc., has sole voting and dispositive power over the common shares held by Seabright Investment Consultants Inc.

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PLAN OF DISTRIBUTION

As used in this prospectus, “selling shareholders” includes the successors-in-interest, donees, transferees or others who may later hold the selling shareholders’ interests. In all cases, the selling shareholders will act independently of us in making decisions with respect to the timing, manner, size and price of each sale.

Each selling shareholder may, from time to time, sell any or all of their common shares on the stock exchange, market or trading facility on which the common shares are listed or quoted at the time of sale or in private transactions. These sales may be at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or negotiated prices. A selling shareholder may use any one or more of the following methods when selling shares:

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

• block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions;

• settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

• broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;

• through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

• through underwriters or dealers;

• through agents;

• directly to purchasers, including institutional investors;

• a combination of any such methods of sale; or

• any other method permitted pursuant to applicable law.

Broker-dealers engaged by the selling shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with Financial Industry Regulatory Authority (“FINRA”) Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the common shares, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common shares in the course of hedging the positions they assume. The selling shareholders may also sell common shares short after the effective date of the registration statement of which this prospectus is a part and deliver common shares registered hereby to close out their short positions and to return borrowed shares in connection with such short sales, or loan or pledge the common shares to broker-dealers that in turn may sell these securities. The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The selling shareholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any

71

commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each selling shareholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the common shares. In no event shall any broker dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).

We are required to pay certain fees and expenses incurred by us incident to the registration of the common shares. We have agreed to indemnify the selling shareholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. There is no underwriter or coordinating broker acting in connection with the proposed sale of the common shares by the selling shareholders.

We have agreed to keep this prospectus effective until the earlier of (i) the date on which common shares held by selling shareholders who are not our affiliates may resell such shares without registration and without regard to any limitations by reason of Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The common shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the common shares may not simultaneously engage in market making activities with respect to the common shares for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of common shares by the selling shareholders or any other person.

72

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The SEC allows us to “incorporate by reference” certain information we have filed with them, which means that we can disclose important information to you by referring you to documents we have filed with the SEC. The information incorporated by reference is considered to be part of this prospectus. We incorporate by reference the documents listed below, excluding any disclosures therein that are furnished and not filed:

• Annual Report of the Company on Form 10-K for the fiscal year ended December 31, 2008, filed on April 1, 2009;

• Quarterly Report of the Company on Form 10-Q for the fiscal quarter ended March 31, 2009, filed on May 27, 2009, as amended by Amendment No. 1 on Form 10-Q/A filed on September 24, 2009;

• Quarterly Report of the Company on Form 10-Q for the fiscal quarter ended June 30, 2009, filed on August 14, 2009, as amended by Amendment No. 1 on Form 10-Q/A filed on September 24, 2009;

• Quarterly Report of the Company on Form 10-Q for the fiscal quarter ended September 30, 2009, filed on November 16, 2009;

• Current Report of the Company on Form 8-K dated December 30, 2008 and filed on January 6, 2009, as amended by Amendment No. 1 on Form 8-K/A filed on March 18, 2009;

• Current Report of the Company on Form 8-K dated August 6, 2008 and filed on February 12, 2009;

• Current Report of the Company on Form 8-K dated February 4, 2009 and filed on February 26, 2009;

• Current Report of the Company on Form 8-K dated March 5, 2009 and filed on March 11, 2009, as amended by Amendment No. 1 on Form 8-K/A filed on May 21, 2009 and Amendment No. 2 on Form 8-K/A filed September 24, 2009;

• Current Report of the Company on Form 8-K dated April 28, 2009 and filed on May 4, 2009;

• Current Report of the Company on Form 8-K dated May 30, 2009 and filed on June 1, 2009;

• Current Report of the Company on Form 8-K dated June 16, 2009 and filed on June 22, 2009;

• Current Report of the Company on Form 8-K dated June 22, 2009 and filed on June 25, 2009;

• Current Report of the Company on Form 8-K dated July 21, 2009 and filed on July 24, 2009;

• Current Report of the Company on Form 8-K dated October 1, 2009 and filed on October 7, 2009;

• Current Report of the Company on Form 8-K dated October 20, 2009 and filed on October 21, 2009;

• Current Report of the Company on Form 8-K dated October 30, 2009 and filed on October 30, 2009, as amended by Amendment No. 1 on Form 8-K/A filed on November 16, 2009;

• Current Report of the Company on Form 8-K dated November 3, 2009 and filed on November 3, 2009;

73

• Current Report of the Company on Form 8-K dated November 4, 2009 and filed on November 5, 2009;

• Current Report of the Company on Form 8-K dated November 5, 2009 and filed on November 6, 2009;

• Current Report of the Company on Form 8-K dated November 24, 2009 and filed on November 24, 2009;

• Current Report of the Company on Form 8-K dated November 25, 2009 and filed on November 25, 2009;

• Definitive Proxy Statement for the Company’s Annual Meeting of Shareholders held on June 16, 2009, filed on April 30, 2009; and

• Definitive Proxy Statement for the Company’s Annual and Special Meeting of Shareholders held on July 14, 2009, filed on June 2, 2009.

We will provide, upon written or oral request, to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of these filings (other than exhibits to such documents unless such exhibits are specifically incorporated by reference in any such documents) at no cost. We can be contacted at the address and phone number indicated below:

TransAtlantic Petroleum Ltd.

5910 N. Central Expressway

Suite 1755

Dallas, Texas 75206

Attn: Secretary

Telephone (214) 220-4323

Our incorporated reports and other documents may be accessed at our website address: www.transatlanticpetroleum.com or by contacting the SEC as described below in “Where You Can Find More Information.”

The information contained on our website does not constitute a part of this prospectus, and our website address supplied above is intended to be an inactive textual reference only and not an active hyperlink to our website.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read these SEC filings, and this registration statement, over the Internet at the SEC’s web site at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

LEGAL MATTERS

The validity of the common shares offered hereby has been passed upon for us by Appleby.

74

EXPERTS

Our consolidated financial statements as of December 31, 2008 and 2007 and for each of the years in the two year period ended December 31, 2008, have been incorporated herein by reference to our Current Report on Form 8-K dated November 25, 2009 and filed on November 25, 2009 and our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, in reliance upon the report of KPMG LLP, the independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Incremental Petroleum Limited and subsidiaries as of and for the years ended December 31, 2008 and 2007 incorporated in this prospectus by reference from Amendment No. 1 to the Current Report on Form 8-K/A of Transatlantic Petroleum Corp. filed on May 21, 2009 have been audited by Deloitte Touche Tohmatsu, independent auditors, as stated in their report, which is incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The audited financial statements of Longe Energy Limited as of November 30, 2008 for the period from April 14, 2008 (inception) to November 30, 2008 included on exhibit 99.1 of TransAtlantic Petroleum Corp’s Current Report on Form 8-K/A dated March 18, 2009 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to Longe Energy Limited’s significant related party transactions as discussed in note 8 to the financial statements) of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

INDEPENDENT PETROLEUM ENGINEERS

RPS Energy Pty. Ltd., independent petroleum engineers, prepared the Proved Reserves estimates with respect to certain of our properties included in this prospectus in reliance upon the authority of said firm as experts in petroleum engineering.

75

TRANSATLANTIC PETROLEUM CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements give effect to the following transactions of TransAtlantic Petroleum Corp. (“TransAtlantic” or the “Company”).

TransAtlantic, pursuant to a purchase agreement dated September 19, 2008 (the “Purchase Agreement”) purchased all of the shares of Longe Energy Limited (“Longe”), which was controlled by N. Malone Mitchell, 3^rd, a shareholder and director of TransAtlantic, and concluded a private placement of TransAtlantic common shares (the “Private Placement”). The transactions closed on December 30, 2008 (the “Closing Date”). Longe was a development stage company whose activity prior to TransAtlantic’s acquisition consisted of the acquisition of oilfield service equipment and exploration licenses in Morocco. Longe, a private Bermuda limited company, was incorporated on April 14, 2008. Pursuant to the terms of the Purchase Agreement, TransAtlantic acquired 100% of the issued and outstanding shares of Longe in consideration for the issuance of 39,583,333 common shares and 10,000,000 common share purchase warrants of TransAtlantic. Consequently, Longe became an indirect wholly-owned subsidiary of TransAtlantic. The Company accounted for its acquisition of Longe in accordance with the provisions of Statement of Financial Accounting Standards No. 141, Business Combinations. Concurrently with the acquisition, TransAtlantic issued 35,416,667 of its common shares pursuant to the Private Placement. Both the acquisition of Longe and the Private Placement are reflected on TransAtlantic’s historical consolidated balance sheet as of September 30, 2009.

The purchase price of the Longe acquisition is as follows:

	(in thousands)
Fair value of TransAtlantic common shares	$	28,104
Fair value of TransAtlantic common share purchase warrants—net		5,228
Transaction costs		484
Total purchase price	$	33,816

The fair value of the Company’s common shares used in determining the purchase price was $0.71 per share based on the closing price of the Company’s common shares on December 30, 2008. The fair value of the 10 million common share purchase warrants was determined using the Black-Scholes Model with the following assumptions: stock price of $0.71; volatility of 169%; dividend rate of 0%; risk-free interest rate of 1.67%; and term of three years.

The allocation of net assets acquired is as follows:

	(in thousands)
Property and equipment	$	32,350
Deposits on equipment		2,508
Other		128
Accounts payable		(1,170	)
Total net assets acquired:	$	33,816

Under the terms of the purchase agreement, the Company assumed Longe’s existing work commitments for drilling and other exploratory activities under its exploration permits in Morocco.

F-1

TRANSATLANTIC PETROLEUM CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On October 27, 2008, the Company announced its intention to make an all cash takeover offer (the “Offer”) through TransAtlantic Australia Pty. Ltd., a wholly-owned subsidiary of the Company (“TransAtlantic Australia”), for all of the shares in Incremental Petroleum Limited (“Incremental”), an international oil and gas company publicly traded on the Australian Stock Exchange. The Offer closed on March 6, 2009, at which time TransAtlantic Australia and Mr. Mitchell owned or had received acceptances for approximately 96% of the Incremental shares. Incremental was delisted from the Australian Stock Exchange on March 26, 2009, and TransAtlantic Australia acquired the remaining outstanding Incremental shares pursuant to an Australian statutory procedure on April 20, 2009. The acquisition of all of the outstanding shares of Incremental is referred to herein as the “Incremental Acquisition”. In addition, pursuant to Australian law, TransAtlantic Australia purchased all of the outstanding options to acquire Incremental shares. On April 8, 2009, in exchange for the assignment of the Incremental options to TransAtlantic Australia, TransAtlantic Australia paid the Incremental option holders an aggregate of $721,000 in cash, and issued an aggregate of 101,585 TransAtlantic common shares and 829,960 TransAtlantic common share purchase warrants. Each warrant is exercisable until April 2, 2012 and entitles the holder to purchase one common share at an exercise price of $1.20 per share. The common shares and common share purchase warrants were issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended. The Company incurred a total of $463,000 in transaction costs through the closing of the Incremental Acquisition. The Company has accounted for the Incremental Acquisition as a business combination, which is discussed further in TransAtlantic’s consolidated financial statements for the nine months ended September 30, 2009, incorporated by reference into this prospectus.

The following tables summarize the consideration paid in the Incremental acquisition, and the preliminary purchase price allocation of assets acquired and liabilities assumed recognized at the acquisition dates, as well as the acquisition-date fair value of the non-controlling interests in Incremental (in thousands of U.S. Dollars, unless otherwise indicated):

Consideration:

Payment of cash amounting to $83,036,483 Australian Dollars for the acquisition of 76,532,473 shares of Incremental, translated into U.S. Dollars based on the exchanges rates in effect on the dates of the transactions, ranging from February 18, 2009 through March 20, 2009	$	53,942
Payment of cash to retire share-based payment arrangements of Incremental		721
Total cash consideration		54,663
Issuance of 101,585 common shares of the Company to retire share-based payment arrangements of Incremental		71
Issuance of 829,960 warrants to purchase the Company’s common shares to retire share-based payment arrangements of Incremental		207
Fair value of total consideration transferred	$	54,941

The fair value of the 101,585 common shares issued as part of the consideration paid in the Incremental acquisition was determined on the basis of the closing market price of the Company’s common shares on the acquisition date, or $0.70 per share. The fair value of the 829,960 warrants issued as part of the consideration paid in the Incremental acquisition was determined using the Black-Scholes Model using the following assumptions: strike price of $1.20 per share, expected life of three years based on management’s expectation that the warrants will not be exercised until near the end of the warrants’ 36 month contractual term, volatility of 40% based on a third party independent valuation of the warrants offered to the Incremental option holders, a 3.5% risk-free interest rate, and a forecasted dividend rate of 0% based on the Company’s historic dividends and future plans for paying dividends. The assumptions used in the Black-Scholes Model yielded a fair value of $0.25 per warrant.

F-2

TRANSATLANTIC PETROLEUM CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Acquisition-Related Costs:

Included in general and administrative expenses on the Company’s consolidated statement of operations for the nine months ended September 30, 2009, of which $181,000 was incurred in 2008 and recorded as a deferred charge as at December 31, 2008	$	779
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Financial Assets:
Cash, consisting of approximately $5.5 million Australian Dollars and 4.7 million Turkish Lira	$	6,057
Accounts receivable		3,990
Total financial assets		10,047
Deferred income tax assets		759
Other current assets, consisting primarily of prepaid expenses		880
Oil and gas properties
Unproved properties		4,533
Proved properties		60,310
Rigs and related equipment		2,802
Materials and supplies inventories		1,313
Total oil and gas properties		68,958
Financial Liabilities:
Accounts payable, consisting of normal trade obligations		(1,666	)
Accrued liabilities, consisting primarily of accrued compensated employee absences		(101	)
Current portion of long-term debt		(2,543	)
Deferred income taxes		(11,384	)
Long-term debt		(1,217	)
Asset retirement obligations, consisting of future plugging and abandonment liabilities on Incremental’s developed wellbores as of March 5, 2009, based on a third-party estimate of such costs, adjusted for historic Turkish inflation rates ranging from approximately 7% to 11%, and discounted to present value using the Company’s credit-adjusted risk-free rate of 6%		(5,716	)
Other		(315	)
Total financial liabilities		(22,942	)
Total Identifiable Net Assets	$	57,702
Fair Value of non-controlling interest in Incremental, based on the Company’s acquisition of such interest on April 20, 2009 for $3,475,399 Australian Dollars	$	2,761

The fair value assessment is a significant assumption and the purchase price allocation of assets is preliminary and subject to changes which may be material. On November 28, 2008, the Company entered into a credit agreement with Dalea Partners, LP (“Dalea”), a company owned and controlled by Mr. Mitchell. The purpose of the Dalea credit agreement was to fund the Incremental Acquisition. As of March 31, 2009, the Company had borrowed $59.0 million from Dalea pursuant to the credit agreement for the acquisition of 96% of the outstanding Incremental shares. Pursuant to the Dalea credit agreement, as amended, until May 30, 2009, the

F-3

TRANSATLANTIC PETROLEUM CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Company may request advances from Dalea of (i) up to $62.0 million to purchase shares of Incremental in connection with the Offer plus related transaction costs and expenses, and (ii) up to $14.0 million for general corporate purposes. Advances under the credit agreement in connection with the Incremental Acquisition are denominated in U.S. Dollars, but are advanced in Australian Dollars at an agreed upon currency exchange rate of $0.7024 US to AUD $1.00. Advances under the credit agreement in connection with funding general corporate activities are denominated and advanced in U.S. Dollars. Balances outstanding under the agreement bear interest at a fixed rate of 10% per annum. Borrowings under the Dalea credit agreement were repaid in full during June 2009.

TransAtlantic’s historical consolidated balance sheet as of September 30, 2009 reflects the transactions described above, and accordingly, no unaudited pro forma condensed combined balance sheet as of September 30, 2009 is presented. The Company has recorded the assets acquired and the liabilities assumed in the Incremental Acquisition at their estimated fair values, all of which are provisional amounts and subject to change as the Company gathers appraisals and other evidence needed to finalize the estimates of such fair values.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2008 gives effect to: i) the Longe Acquisition and Private Placement as if they were consummated on April 14, 2008 consistent with Longe’s date of incorporation; ii) the Incremental Acquisition as if the entire 100% interest was obtained on January 1, 2008; and iii) the effects of the borrowings under the Dalea credit agreement as if they had occurred on January 1, 2008. The unaudited pro forma condensed combined statement of operations combines the historical results of TransAtlantic, Longe and Incremental for the year ended December 31, 2008. The historical results of TransAtlantic were derived from its audited consolidated statements of operations and comprehensive loss for the year ended December 31, 2008. The historical results of Longe were derived from its audited statement of operations for the period from April 14, 2008 (inception) through November 30, 2008. The historical results of operations for Incremental were derived from its audited consolidated income statements incorporated by reference into this prospectus, though amounts reported on Incremental’s results of operations have been expressed in Australian Dollars, and have been translated into U.S. Dollars using the average exchange rates in effect over the year ended December 31, 2008, which amounted to approximately $0.85 per Australian Dollar. Incremental’s historic results of operations are presented in accordance with International Financial Reporting Standards (“IFRS”).

Incremental’s results of operations are included in TransAtlantic’s historic results of operations from March 5, 2009 through September 30, 2009. Longe’s results of operations have been included in TransAtlantic’s historic results of operations since December 31, 2008. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2009 gives effect to: i) the Incremental Acquisition as if the entire 100% interest was obtained on January 1, 2008; and ii) the effects of the borrowings under the Dalea credit agreement as if they had occurred on January 1, 2008. The unaudited pro forma condensed combined statement of operations combines the historical results of TransAtlantic and Incremental for the nine months ended September 30, 2009. The historical results of TransAtlantic were derived from its unaudited consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2009. The historical results of operations for Incremental for the period from January 1, 2009 through March 4, 2009 were derived from its accounting records.

The pro forma statements are prepared in accordance with Regulation S-X and the accounting policies used in the preparation of the pro forma statements are in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), which are consistent with those used in TransAtlantic’s audited financial statements as of and for the year ended December 31, 2008, except that the Incremental Acquisition reflects TransAtlantic’s adoption of Accounting Standards Codification Topic 805, Business Combinations (formerly SFAS No. 141R, Business Combinations), and Accounting Standards Codification Topic 810-10-65, Consolidation (formerly SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements).

F-4

TRANSATLANTIC PETROLEUM CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The unaudited pro forma condensed combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized had Longe and Incremental been consolidated with TransAtlantic during the periods shown. The pro forma adjustments are based on information available at the time of the preparation of these unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined financial statements, including the notes thereto, should be read in conjunction with the historical audited financial statements of Longe for the period ended November 30, 2008, the historical consolidated financial statements of TransAtlantic and the historic consolidated financial statements of Incremental incorporated by reference into this prospectus.

F-5

TRANSATLANTIC PETROLEUM CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2008

(Thousands of U.S. Dollars, except per share amounts)

	TransAtlantic Historical			Longe Historical			Incremental Historical (IFRS)			U.S. GAAP and Pro Forma Adjustments				Combined Pro Forma Amounts
Revenues:
Revenues	$	—		$	—		$	45,439		$	(1,051	)	A	$	—
											(44,388	)	B
Oil and gas sales		—			—			—			(5,520	)	G		38,868
											44,388		B
Total revenues		—			—			45,439			(6,571	)			38,868
Costs and Expenses:
Production		—			—			—			7,531		E		16,919
											9,388		H
Seismic and other exploration		7,901			—			—			3,798		C		11,797
											98		D
General and administrative		3,009			508			—			—				5,394
											1,877		F
Employee benefits expense		—			—			7,977			(7,531	)	E		—
											(446	)	F
Takeover defense		—			—			1,431			(1,431	)	F		—
International oil and gas activities		5,183			257			—			—				5,440
Royalty expense		—			—			5,520			(5,520	)	G		—
Raw materials and consumables used		—			—			7,113			(7,113	)	H		—
Field costs		—			—			2,275			(2,275	)	H		—
Stock-based compensation		583			—			—			—				583
Accretion of discount on asset retirement obligations		—			—			—			415		I		415
Finance costs		—			—			105			(105	)	J		—
Depreciation, depletion and amortization		59			—			4,123			545		K		4,727
Total costs and expenses		16,735			765			28,544			(769	)			45,275
Operating income (loss)		(16,735	)		(765	)		16,895			(5,802	)			(6,407	)
Other income (expense):
Interest and financing expense		(38	)		(132	)		—			(5,900	)	L		(6,070	)
Interest and other income		338			—			—			761		A		1,099
Foreign exchange loss		—			—			(853	)		(4,276	)	M		(5,129	)
Other		—			—			(678	)		290		A		(388	)
Income (loss) before income tax provision (benefit)		(16,435	)		(897	)		15,364			(14,927	)			(16,895	)
Income tax provision (benefit)		—			—			4,822			(931	)	N		3,891
Net income (loss)	$	(16,435	)	$	(897	)	$	10,542		$	(13,996	)		$	(20,786	)
Loss per share:
Basic and diluted	$	(0.25	)										O	$	(0.17	)
Weighted average shares outstanding:
Basic and diluted		66,524											O		120,110

See Accompanying Notes to these Unaudited Pro Forma Condensed Combined Financial Statements

F-6

TRANSATLANTIC PETROLEUM CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2009

(Thousands of U.S. Dollars, except per share amounts)

	TransAtlantic Historical			Incremental Historical (IFRS)			U.S. GAAP and Pro Forma Adjustments				Combined Pro Forma Amounts
Revenues:
Revenues	$	—		$	4,195		$	(41	)	A	$	—		A
								(4,154	)	B
Oil and gas sales		17,757			—			(212	)	G		21,699		A
								4,154		B
Oilfield Services		288			—			—				288		A
Total revenues		18,045			4,195			(253	)			21,987
Costs and Expenses:
Production		6,244			—			942		E		8,294		A
								1,108		H
Seismic and other exploration		11,426			—			73		C		11,499		A
General and administrative		8,932			—			919		F		9,851		A
Employee benefits expense		—			1,799			(942	)	E		—		A
								(857	)	F
Takeover defense		—			62			(62	)	F		—
International oil and gas activities		9,885			—			—				9,885		A
Royalty expense		—			212			(212	)	G		—
Raw materials and consumables used		—			893			(893	)	H		—
Field costs		—			215			(215	)	H		—
Stock-based compensation		1,158			—			—				1,158		A
Accretion of discount on asset retirement obligations		234			—			22		I		256		A
Finance costs		—			15			(15	)	J		—		A
Depreciation, depletion and amortization		6,147			652			(394	)	K		6,405		A
Total costs and expenses		44,026			3,848			(526	)			47,348
Operating income (loss)		(25,981	)		347			273				(25,361	)
Other income (expense):
Interest and financing expense		(2,324	)		—			(937	)	L		(3,261	)	A
Interest and other income		225			—			26		A		251		A
Foreign exchange loss		(4,258	)		8			—		M		(4,250	)	A
Other		—			(546	)		15		A		(531	)	A
Income (loss) before income tax provision (benefit)		(32,338	)		(191	)		(623	)			(33,152	)
Income tax provision (benefit)		1,427			107			63		N		1,597		A
Income (loss)		(33,765	)		(298	)		(686	)			(34,749	)
Income (loss) attributable to non-controlling interests		(235	)		—			235		P		—		A
Net income (loss)	$	(33,530	)	$	(298	)	$	(921	)		$	(34,749	)
Loss per share:
Basic and diluted	$	(0.18	)							O	$	(0.18	)
Weighted average shares outstanding:
Basic and diluted		191,533								O		191,568

See Accompanying Notes to these Unaudited Pro Forma Condensed Combined Financial Statements

F-7

TRANSATLANTIC PETROLEUM CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Description of U.S. GAAP and Pro Forma Adjustments

A Reclassifies interest and other income, which is included in revenue on Incremental’s Consolidated Income Statement, as presented under IFRS. Consistent with U.S. GAAP, these amounts should be included in other income (expense).

B Reclassifies oil and gas sales revenue, which is included in revenue on Incremental’s Consolidated Income Statement, as presented under IFRS. Consistent with U.S. GAAP, these amounts should be included in oil and gas sales revenue.

C Records exploration expense incurred by Incremental, which is capitalized under IFRS, but expensed under the U.S. GAAP successful efforts method. Such charges consist primarily of seismic data processing and related direct expenses incurred by Incremental to study such data, along with other geological and geophysical activities.

D Records dry hole expenses of Longe, which were capitalized under the full cost method but expensed under successful efforts. This adjustment is inapplicable to the pro forma condensed combined financial statements for the nine months ended September 30, 2009, as Longe’s results of operations are included in TransAtlantic’s historical results of operations for that period.

E Reclassifies costs related to those individuals directly associated with Incremental’s oil and gas producing operations. Such costs are included in employee benefits expense on Incremental’s Consolidated Income Statement, as presented under IFRS. Consistent with U.S. GAAP, these amounts should be included in production expense.

F Reclassifies employee benefits expense and takeover defense, which are shown separately on Incremental’s Consolidated Income Statement, as presented under IFRS. These charges represent general and administrative expenses as reported under U.S. GAAP.

G Reclassifies royalty expense which is shown as an expense on Incremental’s Consolidated Income Statement, as presented under IFRS. In conformance with TransAtlantic’s accounting policies, these amounts are shown as a reduction of revenue because Incremental was never entitled to these amounts.

H Reclassifies raw materials and consumables used and field costs, which are shown separately on Incremental’s Consolidated Income Statement, as presented under IFRS. These charges represent lease operating expenses as reported under U.S. GAAP, and would have been included in production expense on TransAtlantic’s consolidated statement of operations had the Incremental Acquisition occurred on January 1, 2008.

I Records accretion of discount on asset retirement obligations based on TransAtlantic’s estimate of the present value of those obligations.

J Finance costs on Incremental’s Consolidated Income Statement, as presented under IFRS, represent accretion of discount on asset retirement obligations. This adjustment reverses the historical amounts as the pro forma amounts have been contemplated in Note I above.

K Adjusts Incremental’s historic depletion and depreciation expense recorded in accordance with IFRS to amounts indicated based on the units-of-production method in accordance with U.S. GAAP computed from the amounts allocated to oil and gas properties and TransAtlantic’s estimated proved reserve quantities related to Incremental’s oil and gas properties. Depreciation of rigs and other equipment is provided using the straight-line method over estimated remaining useful lives of approximately seven years as of March 5,

F-8

TRANSATLANTIC PETROLEUM CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

2009. The Company has recorded the assets acquired and the liabilities assumed in the Incremental Acquisition at their estimated fair values, all of which are provisional amounts and subject to change as the Company gathers appraisals and other evidence needed to finalize the estimates of such fair values.

L Records interest expense on amounts borrowed under the Dalea credit agreement at the fixed contractual interest rate of 10% per annum as if those amounts had been outstanding since January 1, 2008. TransAtlantic borrowed $59,002 under the Dalea credit agreement to fund the Incremental Acquisition.

M Records the loss on borrowings under the Dalea credit agreement resulting from the embedded derivative. Under the terms of the Dalea credit agreement, the Company borrowed U.S. funds to purchase Incremental’s outstanding shares. The U.S. Dollar amounts borrowed were based on the Australian Dollar equivalent to purchase Incremental shares translated at $0.7024 per Australian Dollar. The existence of the fixed exchange rate constitutes an embedded derivative. Following is a summary of the loss:

U.S. Dollar obligations incurred	$	59,002
Less: U.S. Dollar Equivalents of Australian Dollars realized on borrowings based on exchange rates in effect on the dates of borrowings		54,726
Equals realized loss on borrowings under Dalea credit agreement based on fixed exchange rate of $0.7024 per Australian Dollar	$	4,276

This adjustment is inapplicable to the pro forma condensed combined financial statements for the nine months ended September 30, 2009, as the loss on borrowings under the Dalea credit agreement is included in TransAtlantic’s historical results of operations for that period.

N Provides income tax on the pro forma adjustments above related to Incremental’s Turkish operations using an expected statutory income rate of 20%. The tax effect of pro forma adjustments related to United States or Australian operations is zero because the Company has a net deferred tax asset which is reduced to zero by a valuation allowance. For results of operations in Turkey, the Company has a net deferred tax liability, with no valuation allowances deemed necessary in management’s judgment.

O Pro forma basic and diluted loss per share for the year ended December 31, 2008 is based on TransAtlantic’s weighted average shares outstanding and gives effect to the issuance of 75,000,000 common shares of TransAtlantic pursuant to the Longe acquisition and the Private Placement as if the shares had been issued on April 14, 2008 (inception), and the issuance of 101,585 common shares of TransAtlantic to retire share-based payment arrangements of Incremental as if those shares were issued on January 1, 2008, as follows (shares in thousands):

Numerator: pro forma combined net loss	$	(20,786	)
Denominator:
Weighted average shares outstanding as reported		66,524
Weighted average effect of shares issued in the Longe Acquisition and Private Placement		53,484
Shares issued to retire share-based payment arrangements of Incremental		102
Pro Forma Weighted Average Shares Outstanding		120,110
Pro Forma Loss Per Share	$	(0.17	)

Pro forma basic and diluted loss per share for the nine months ended September 30, 2009 is based on TransAtlantic’s weighted average shares outstanding and gives effect to the issuance of 101,585 common shares of TransAtlantic to retire share-based payment arrangements of Incremental as if those shares were issued on January 1, 2008. The effects of the issuance of 75,000,000 common shares of TransAtlantic

F-9

TRANSATLANTIC PETROLEUM CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

pursuant to the Longe acquisition and the Private Placement are included in TransAtlantic’s historical weighted average shares outstanding. Following is the computation of pro forma weighted average shares outstanding and basic and diluted loss per share (in thousands):

Numerator: pro forma combined net loss	$	(34,749	)
Denominator:
Weighted average shares outstanding as reported		191,533
Weighted average effect of shares issued in the Longe Acquisition and Private Placement		—
Weighted average effect of shares issued to retire share-based payment arrangements of Incremental		35
Pro Forma Weighted Average Shares Outstanding		191,568
Pro Forma Loss Per Share	$	(0.18	)

Common shares underlying the 829,960 TransAtlantic warrants issued in the Incremental Acquisition have not been included in dilutive weighted average shares outstanding as their effects were anti-dilutive, based on the pro forma net loss indicated.

P Removes net loss attributable to non-controlling interests in Incremental as such amounts would not have been recognized if the Incremental Acquisition had occurred on January 1, 2008.

2. STANDARDIZED MEASURE OF OIL AND GAS QUANTITIES

The following table presents certain unaudited information concerning Incremental’s proved oil and gas reserves. TransAtlantic had no proved reserves quantities on December 31, 2008, and accordingly, information presented below for Incremental also represents the pro forma information on a combined basis as if the Incremental Acquisition had occurred on January 1, 2008. There are numerous uncertainties inherent in estimating the quantities of proved reserves and projecting future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact. The proved oil and gas reserve information for TransAtlantic and Incremental is as of December 31, 2008 and reflects prices and costs as of that date (amounts in thousands of U.S. Dollars).

Total proved reserves
Oil (thousands of barrels)	9,370
Gas (MMcf)	790
Proved developed reserves
Oil (thousands of barrels)	4,104
Gas (MMcf)	—

Future cash inflows	$	365,950
Future production costs		154,740
Future development costs		39,130
Future income tax expense		34,270
Future net cash flows		137,810
10% annual discount for estimated timing of cash flows		50,220
Standardized measure of discounted future net cash flows related to proved reserves	$	87,590

* * * * * * *

F-10

42,838,451 shares

TransAtlantic Petroleum Ltd.

Common Shares

Prospectus

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses expected to be incurred by us in connection with the offering described in this registration statement. All amounts are estimates except the registration and filing fees.

Expenses	Amount
Securities and Exchange Commission registration fee	$	9,240
Printing and engraving expenses		0
Legal fees and expenses		150,000	*
Accounting fees and expenses		100,000	*
Engineering fees and expenses		5,000	*
Miscellaneous		0
Total	$	264,240	*

* Estimate.

Each selling shareholder will be responsible for any underwriting discounts, brokerage fees or commissions and taxes of any kind (including, without limitation, transfer taxes) with respect to any disposition, sale or transfer of the shares being registered and for any legal, accounting and other expenses incurred by such selling shareholder.

Item 14. Indemnification of Directors and Officers

The Bye-Laws require us to indemnify our officers and directors against all liabilities, loss, damage or expense incurred or suffered by such person in such capacity or by reason of any act done, conceived or omitted in the conduct of our business or in the discharge of such person’s duties; provided that such indemnification shall not extend to any matter which would render it void pursuant to Bermuda law. Bermuda law permits us to indemnify directors and officers against liability attaching to them arising from their duties but such indemnification may not extend to acts of fraud or dishonesty. The Bye-Laws require us to advance funds to directors or officers for their defense upon receipt of an undertaking to repay the funds if any allegation of fraud or dishonesty is proved, and only if such advance is specifically authorized in accordance with Bye-Law 44.6. The Bye-Laws permit the purchase of indemnity insurance.

Item 15. Recent Sales of Unregistered Securities

On November 24, 2009, we closed an offering of 48,298,790 common shares at a price of Cdn$2.35 per common share for gross proceeds of approximately Cdn$113.5 million. Canaccord Capital Corporation (“Canaccord”), Genuity Capital Markets (“Genuity”), Raymond James Ltd. (“Raymond James”) and Thomas Weisel Partners Canada Inc. (“Thomas Weisel”, together with Canaccord, Genuity and Raymond James, the “Underwriters”) offered and sold 21,415,939 of the common shares pursuant to an underwriting agreement to certain non-U.S. purchasers, and we offered and sold 22,627,451 common shares to certain U.S. purchasers and 4,255,400 common shares to Dalea Partners, LP (“Dalea”), an entity owned and controlled by our chairman, N. Malone Mitchell, 3rd. The Underwriters and their affiliates and agents received aggregate fees of approximately Cdn$5.7 million. Concurrently with the offering, we completed a private placement to two accredited investors (the “Investors”) in the U.S. of 750,000 common shares at Cdn$2.35 for gross proceeds to us of approximately Cdn$1.76 million. The common shares in these offerings that were issued to non-U.S. purchasers were issued pursuant to registration in Canada in accordance with Canadian securities laws and pursuant to an exemption from registration

II-1

in the United States under Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). Each non-U.S. purchaser certified that it was not a U.S. person and was not acquiring the shares for the account or benefit of a U.S. person. In addition, we implemented offering restrictions in accordance with the requirements of Regulation S and the common shares were issued with appropriate legends in accordance with Regulation S. The offer and sale of common shares to U.S. persons, Dalea and the Investors was conducted without general solicitation or advertising in reliance upon Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. Each of the U.S. purchasers, Dalea and Investors represented that it is an “accredited investor” as defined in Rule 501 of Regulation D and confirmed that the common shares were acquired for investment purposes and not with a view to resale or distribution. The common shares issued to U.S. persons also contained appropriate legends.

On June 22, 2009, we closed an offering of 98,377,300 common shares at a price of Cdn$1.65 per common share for gross proceeds of approximately Cdn$162.3 million. Canaccord and Genuity offered and sold 14,053,300 common shares pursuant to an underwriting agreement to certain non-U.S. purchasers, and we offered and sold 42,506,000 common shares to certain U.S. purchasers and 41,818,000 common shares to Dalea. Canaccord, Genuity and their affiliates and agents received aggregate fees of Cdn$5,599,371. The common shares that were issued to non-U.S. purchasers were issued pursuant to registration in Canada in accordance with Canadian securities laws and pursuant to an exemption from registration in the United States under Regulation S of the Securities Act. Each non-U.S. purchaser certified that it was not a U.S. person and was not acquiring the shares for the account or benefit of a U.S. person. In addition, we implemented offering restrictions in accordance with the requirements of Regulation S and the common shares were issued with appropriate legends in accordance with Regulation S. The offer and sale of common shares to U.S. persons and to Dalea was conducted without general solicitation or advertising in reliance upon Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. Each of the U.S. purchasers and Dalea represented that it is an “accredited investor” as defined in Rule 501 of Regulation D and confirmed that the common shares were acquired for investment purposes and not with a view to resale or distribution. The common shares issued to U.S. persons also contained appropriate legends.

In connection with our acquisition of Incremental Petroleum Limited (“Incremental”), on April 8, 2009, in exchange for the assignment of all outstanding options to acquire shares of Incremental to us, we paid the Incremental option holders an aggregate of $721,000 in cash and issued them an aggregate of 101,585 common shares and 829,960 common share purchase warrants. Each warrant is exercisable through April 2, 2012 and entitles the holder to purchase one common share at an exercise price of $1.20 per share. The common shares and common share purchase warrants were issued pursuant to an exemption from registration under Regulation S of the Securities Act. Each option holder certified that it was not a U.S. person and was not acquiring the securities for the account of a U.S. person. In addition, we implemented offering restrictions in accordance with the requirements of Regulation S and the securities were issued with appropriate legends in accordance with Regulation S.

On December 30, 2008, we closed a private placement (the “Private Placement”) in which we issued an aggregate of 35,416,667 common shares at a purchase price of $1.20 per common share, resulting in gross proceeds of $42,500,000. We issued common shares to the following purchasers: (i) 34,208,917 common shares to Dalea; (ii) 250,000 common shares to Matthew McCann; (iii) 200,000 common shares to Monte Bell; (iv) 85,000 common shares to Barbara and Terry Pope; (v) 172,750 common shares to Riata TransAtlantic, LLC; and (vi) 500,000 common shares to Gillco Energy, LP. To our knowledge, each of the purchasers paid for the common shares from its own funds. The offer of common shares in the Private Placement was conducted without general solicitation or advertising in reliance upon Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated under the Securities Act. Each of the purchasers represented that it is an “accredited investor” as defined in Rule 501 of Regulation D and confirmed that the common shares were acquired for investment purposes and not with a view to resale or distribution, and the common shares were issued with appropriate legends.

On September 19, 2008, we entered into a Purchase Agreement (the “Purchase Agreement”) with Longfellow Energy, LP, a Texas limited partnership (“Longfellow”), pursuant to which Longfellow agreed to sell to us all of the outstanding shares of Longe Energy Limited, a Bermuda limited company and wholly owned subsidiary of Longfellow (“Longe”), in exchange for (i) 39,583,333 of our common shares at a purchase price per common share of $1.20 and (ii) 10 million common share purchase warrants. The common share purchase warrants are exercisable until September 19, 2011 and, upon exercise, will entitle the holder to purchase one common share for each purchase warrant at an exercise price of $3.00 per common share. The offer of common shares and common share

II-2

purchase warrants was conducted without general solicitation or advertising in reliance upon Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated under the Securities Act. Longfellow represented that it is an “accredited investor” as defined in Rule 501 of Regulation D and confirmed that the common shares and common share purchase warrants were acquired for investment purposes and not with a view to resale or distribution, and the common shares were issued with appropriate legends.

On May 30, 2008 we closed the second stage of our private placement pursuant to that certain Investment Agreement (the “Investment Agreement”), dated March 28, 2008, by and between TransAtlantic and Riata Management, LLC (“Riata”), an affiliate of Longfellow. In the second stage of the private placement, we issued an aggregate of 25 million common shares at Cdn$0.36 per share for gross proceeds of Cdn$9 million. The shares were issued to Dalea and to certain friends and family of N. Malone Mitchell, 3^rd, the head of Riata. To our knowledge, each of the purchasers paid for the common shares from its own funds. We relied on the exemption from registration provided by Section 4(2) and Rule 506 of Regulation D under the Securities Act, for sales to “accredited investors” (as such term is defined in Rule 501 of Regulation D). Each purchaser represented to us that it is an “accredited investor,” and the common shares were issued with appropriate legends.

On April 8, 2008, we closed the first stage of our private placement pursuant to the Investment Agreement in which we issued 10 million common shares to Dalea at Cdn$0.30 per common share generating gross proceeds of Cdn$3 million. To our knowledge, Dalea paid for the common shares from its own funds. We relied on the exemption from registration provided by Section 4(2) and Rule 506 of Regulation D under the Securities Act, for sales to “accredited investors” (as such term is defined in Rule 501 of Regulation D). Dalea represented to us that it is an “accredited investor,” and the common shares were issued with appropriate legends.

In April 2007, we entered into a $3.0 million short-term standby bridge loan from Quest Capital Corp. (“Quest”). We issued 503,823 common shares to Quest at an aggregate value of approximately $359,000 as we drew on the loan. The common shares were issued pursuant to an exemption from registration under Regulation S of the Securities Act. Quest was not a U.S. person and was not acquiring the shares for the account or benefit of a U.S. person. In addition, we implemented offering restrictions in accordance with the requirements of Regulation S.

We completed a private placement in December 2006 whereby we issued 4.5 million Units at $0.85 per Unit for gross proceeds of $3.83 million. Each Unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at a price of $1.05 through December 4, 2008. Approximately 2.3 million of the Units were offered and sold in an overseas directed offering pursuant to an exemption from registration under Regulation S of the Securities Act as applicable to foreign private issuers. At the time of commencement of the offering, we believed that there was no substantial U.S. market interest in the Units or the common shares to be purchased upon exercise of the warrants. In addition, the offer and sale was made in an offshore transaction and no directed selling efforts were made in the United States. Approximately 2.2 million of the Units were issued without general solicitation or advertising in reliance upon Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. Each of such purchasers represented that it was an “accredited investor” as defined in Rule 501 of Regulation D and confirmed that the common shares were acquired for investment purposes and not with a view to resale or distribution.

Item 16. Exhibits and Financial Statement Schedules

A list of exhibits filed herewith is contained in the Exhibit Index that immediately precedes such exhibits and is incorporated by reference herein.

Item 17. Undertakings

The undersigned registrant hereby undertakes:

1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

i. To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

ii. To reflect in the prospectus any facts or events arising after the effective date of the

II-3

registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

4. That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

i. If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

5. That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

i. Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

ii. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

iii. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

6. To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Dallas, State of Texas, on December 23, 2009.

TransAtlantic Petroleum Ltd.
By:	/S/    MATTHEW W. MCCANN
	Matthew McCann
	Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Matthew McCann and Jeffrey S. Mecom, each with full power to act alone, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and on his behalf and in his name, place and stead, in any and all capacities, to execute any and all amendments (including post-effective amendments) to this Registration Statement, including, without limitation, additional registration statements filed pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same, as fully and to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or their substitute or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/S/    MATTHEW W. MCCANN	Director and Chief Executive Officer	December 23, 2009
Matthew W. McCann	(Principal Executive Officer)
/S/    SCOTT C. LARSEN	Director and President	December 23, 2009
Scott C. Larsen
/S/    HILDA KOUVELIS	Vice President and Chief Financial Officer	December 23, 2009
Hilda Kouvelis	(Principal Financial Officer and Principal Accounting Officer)
/S/    JEFFREY S. MECOM	Vice President and Corporate Secretary	December 23, 2009
Jeffrey S. Mecom
/S/    N. MALONE MITCHELL, 3rd	Chairman of the Board of Directors	December 23, 2009
N. Malone Mitchell, 3rd
/S/    BRIAN E. BAYLEY	Director	December 23, 2009
Brian E. Bayley
/S/    ALAN C. MOON	Director	December 23, 2009
Alan C. Moon
/S/    MICHAEL D. WINN	Director	December 23, 2009
Michael D. Winn
/S/    MEL G. RIGGS	Director	December 23, 2009
Mel G. Riggs

EXHIBIT INDEX

2.1	Purchase Agreement, dated September 19, 2008, by and between Longfellow Energy, LP and TransAtlantic Petroleum Corp. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 19, 2008, filed with the SEC on September 25, 2008).
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	Memorandum of Continuance of TransAtlantic Petroleum Ltd., dated October 1, 2009 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated October 1, 2009, filed with the SEC on October 7, 2009).
3.3	Bye-Laws of TransAtlantic Petroleum Ltd., dated July 14, 2009 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K dated October 1, 2009, filed with the SEC on October 7, 2009).
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	Common Share Purchase Warrant, dated December 30, 2008, by and between TransAtlantic Petroleum Corp. and Longfellow Energy, LP (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated December 30, 2008, filed with the SEC on January 6, 2009).
4.3	Registration Rights Agreement, dated June 22, 2009, by and between TransAtlantic Petroleum Corp., Dalea Partners, LP and Canaccord Capital Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 22, 2009, filed with the SEC on June 25, 2009).
4.4	Registration Rights Agreement, dated November 5, 2009, by and between TransAtlantic Petroleum Ltd., Dalea Partners, LP and Canaccord Capital Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 24, 2009, filed with the SEC on November 24, 2009).
5.1*	Opinion of Appleby regarding validity of common shares.
10.1	Service Agreement, effective as of May 1, 2008, by and among TransAtlantic Petroleum Corp., Longfellow Energy, LP, Viking Drilling, LLC, Longe Energy Limited and Riata Management, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 6, 2008, filed with the SEC on February 12, 2009).
10.2	Amendment to Service Agreement, effective as of October 1, 2008, by and among TransAtlantic Petroleum Corp., Longfellow Energy, LP, Viking Drilling, LLC, Longe Energy Limited, MedOil Supply LLC and Riata Management, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated August 6, 2008, filed with the SEC on February 12, 2009).
10.3†	Executive Employment Agreement, effective July 1, 2005, by and between TransAtlantic Petroleum Corp. and Scott C. Larsen (incorporated by reference to Exhibit 1.5 to the Company’s Registration Statement on Form 20-F, filed with the SEC on October 9, 2007).
10.4†	Management Agreement, effective April 1, 2006, by and between TransAtlantic Worldwide, Ltd. and Charles Management, Inc. (incorporated by reference to Exhibit 1.6 to the Company’s Registration Statement on Form 20-F, filed with the SEC on October 9, 2007).

10.5†	Participating Interest Agreement, effective July 11, 2005, by and among TransAtlantic Worldwide Ltd., TransAtlantic Petroleum Corp. and Scott C. Larsen (incorporated by reference to Exhibit 1.7 to the Company’s Registration Statement on Form 20-F, filed with the SEC on October 9, 2007).
10.6†	Amended and Restated Stock Option Plan (2006) (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form 20-F, filed with the SEC on October 9, 2007).
10.7	Warrant Indenture, dated December 1, 2006, by and between TransAtlantic Petroleum Corp. and Computershare Trust Company of Canada (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form 20-F, filed with the SEC on October 9, 2007).
10.8	Investment Agreement, dated March 28, 2008, by and between TransAtlantic Petroleum Corp. and Riata Management, LLC (incorporated by reference to Exhibit 4.6 to the Company’s Annual Report on Form 20-F, filed with the SEC on May 14, 2008).
10.9†	Executive Employment Agreement, effective January 1, 2008, by and between TransAtlantic Petroleum Corp. and Jeffrey S. Mecom (incorporated by reference to Exhibit 4.8 to the Company’s Annual Report on Form 20-F, filed with the SEC on May 14, 2008).
10.10†	Executive Employment Agreement, effective May 1, 2008, by and between TransAtlantic Petroleum Corp. and Hilda Kouvelis (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form 20-F, filed with the SEC on May 14, 2008).
10.11	Form of Common Share Purchase Warrant, dated April 2, 2009, by and between TransAtlantic Petroleum Corp. and holders of options to purchase shares of Incremental Petroleum Limited (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 27, 2009).
10.12†	TransAtlantic Petroleum Corp. 2009 Long-Term Incentive Plan (incorporated by reference from Appendix B to the Definitive Proxy Statement filed by TransAtlantic Petroleum Corp. with the Securities and Exchange Commission on April 30, 2009).
10.13†	Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 16, 2009, filed with the SEC on June 22, 2009.
10.14†	Form of Share Option Agreement (incorporated by reference to Exhibit 99.3 to the Company’s Registration Statement on Form S-8, filed with the SEC on November 2, 2009.
10.15*	Credit Agreement among DMLP, Ltd., Talon Exploration, Ltd., TransAtlantic Turkey, Ltd. and Petroleum Exploration Mediterranean International Pty. Ltd., as borrowers, Incremental Petroleum (Selmo) Pty. Ltd., TransAtlantic Worldwide, Ltd., TransAtlantic Petroleum (USA) Corp. and TransAtlantic Petroleum Ltd., as guarantors, the lenders party thereto from time to time, and Standard Bank PLC, as LC issuer, administrative agent, collateral agent and technical agent, dated as of December 21, 2009.
21.1*	Subsidiaries of the Company.
23.1*	Consent of KPMG LLP.
23.2*	Consent of Deloitte Touche Tohmatsu.
23.3*	Consent of Pricewaterhouse Coopers LLP.
23.4*	Consent of RPS Energy Pty. Ltd.
24.1	Power of attorney (included on signature page).

† Management contract or compensatory plan arrangement

* Filed herewith.

EX-5.1

Exhibit 5.1

	e-mail:
	jbodi@applebyglobal.com
	direct dial:
	Tel 441.298.3240
TransAtlantic Petroleum Ltd.	Fax 441.298.3398
Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

23 December 2009

Dear Sirs

TransAtlantic Petroleum Ltd. (the “Company”)

We act as legal counsel in Bermuda to the Company. The Company has requested that we provide this opinion in connection with the preparation and filing of a Registration Statement on Form S-1 (the “Registration Statement”), with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder, of up to 42,838,451 common shares of the Company (the “Shares”) as described in the Registration Statement.

For the purposes of this opinion we have examined and relied upon the documents listed, and in some cases defined, in the Schedule to this opinion (the “Documents”) together with such other documentation as we have considered requisite to this opinion.

Assumptions

In stating our opinion we have assumed:

(a) the authenticity, accuracy and completeness of all Documents and other documentation submitted to us as originals and the conformity to authentic original documents of all Documents and other such documentation submitted to us as certified, conformed, notarised, faxed or photostatic copies;

(b) that each of the Documents and other such documentation which was received by electronic means is complete, intact and in conformity with the transmission as sent;

(c) the genuineness of all signatures on the Documents;

(d) the authority, capacity and power of each of the persons signing the Documents (other than the Company, its directors and its officers); and

(e) that any representation, warranty or statement of fact or law, other than as to the laws of Bermuda, made in any of the Documents is true, accurate and complete.

Opinion

Based upon and subject to the foregoing and subject to the reservations set out below and to any matters not disclosed to us, we are of the opinion that the Shares are validly issued, fully paid, non-assessable shares of the Company.

Reservations

We have the following reservations:

(a) We express no opinion as to any law other than Bermuda law and none of the opinions expressed herein relates to compliance with or matters governed by the laws of any jurisdiction except Bermuda. This opinion is limited to Bermuda law as applied by the Courts of Bermuda at the date hereof.

(b) Any reference in this opinion to shares being “non-assessable” shall mean, in relation to fully-paid shares of the Company and subject to any contrary provision in any agreement in writing between such Company and the holder of shares, that: no shareholder shall be obliged to contribute further amounts to the capital of the Company, either in order to complete payment for their shares, to satisfy claims of creditors of the Company, or otherwise; and no shareholder shall be bound by an alteration of the Memorandum of Continuance or Bye-Laws of the Company after the date on which he or she became a shareholder, if and so far as the alteration requires him or her to take, or subscribe for additional shares, or in any way increases his or her liability to contribute to the share capital of, or otherwise to pay money to, the Company.

Disclosure

This opinion is addressed to you in connection with the registration of the Shares with the Securities and Exchange Commission and is not to be made available to, or relied on by any other person or entity (other than selling shareholders as named in the Registration Statement and investors in the Shares), or for any other purpose, nor quoted or referred to in any public document nor filed with any governmental agency or person (other than the Securities and Exchange Commission in connection with the Registration Statement), without our prior written consent except as may be required by law or regulatory authority. We consent to the filing of this opinion as an exhibit to the Registration Statement of the Company.

Further, this opinion speaks as of its date and is strictly limited to the matters stated herein and we assume no obligation to review or update this opinion if applicable laws or the existing facts or circumstances should change.

This opinion is governed by and is to be construed in accordance with Bermuda law. It is given on the basis that it will not give rise to any legal proceedings with respect thereto in any jurisdiction other than Bermuda.

Yours faithfully

/s/ Appleby

SCHEDULE

1. Certified copies of the Certificate of Continuance, Memorandum of Continuance and Bye-Laws for the Company (collectively referred to as the “Constitutional Documents”).

2. Scanned copy of the Registration Statement on Form S-1.

EX-10.15

Exhibit 10.15

[Execution]

$250,000,000

CREDIT AGREEMENT

among

DMLP, LTD.

TALON EXPLORATION, LTD.,

TRANSATLANTIC TURKEY, LTD. and

PETROLEUM EXPLORATION MEDITERRANEAN INTERNATIONAL PTY. LTD.,

as Borrowers,

INCREMENTAL PETROLEUM (SELMO) PTY. LTD.,

TRANSATLANTIC WORLDWIDE, LTD.,

TRANSATLANTIC PETROLEUM (USA) CORP. and

TRANSATLANTIC PETROLEUM LTD.,

as Guarantors,

THE LENDERS PARTY HERETO

FROM TIME TO TIME

as Lenders,

and

STANDARD BANK PLC,

as LC Issuer, Administrative Agent,

Collateral Agent and Technical Agent

Dated as of December 21, 2009

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS	1
1.1	Defined Terms	1
1.2	Other Definitional Provisions	25
1.3	Cross References	26
ARTICLE 2	THE COMMITMENTS AND CREDIT EXTENSIONS	26
2.1	Establishment of the Credit Facility	26
2.2	Loans	26
2.3	Borrowings and Continuations of Loans	26
2.4	Letters of Credit	29
2.5	Prepayments	33
2.6	Termination or Reduction of Commitments; Increase of Commitments	35
2.7	Repayment of Loans	36
2.8	Interest	36
2.9	Fees	37
2.10	Computation of Interest and Fees	37
2.11	Payment Procedures; Clawback	37
2.12	Evidence of Indebtedness	38
2.13	Sharing of Payments by Lenders	39
ARTICLE 3	BORROWING BASE	39
3.1	Initial Borrowing Base	39
3.2	Scheduled Redeterminations	39
3.3	Interim Redeterminations	41
3.4	Standards for Redetermination	42
3.5	Borrowing Base Deficiency	42
3.6	Operational Lock-Up	42
ARTICLE 4	TAXES AND YIELD PROTECTION	43
4.1	Taxes	43
4.2	Increased Costs	43
4.3	Mitigation Obligations	45
4.4	Breakage Costs	45
4.5	Survival	45
ARTICLE 5	CONDITIONS PRECEDENT	45
5.1	Conditions to Closing	45
5.2	All Loans	48
ARTICLE 6	REPRESENTATIONS AND WARRANTIES	49
6.1	Existence; Subsidiaries	49
6.2	Capacity; Authorization; Non-Contravention	49
6.3	Governmental Authorizations; Other Consents	49
6.4	Binding Effect	49
6.5	Financial Statements; No Material Adverse Effect	50
6.6	Disclosure	50
6.7	Litigation	50
6.8	No Default	50
6.9	Ownership of Properties	50
6.10	Indebtedness; Liens	51
6.11	Compliance with Law	51

-i-

TABLE OF CONTENTS

		Page
6.12	Environmental Compliance	51
6.13	Insurance	51
6.14	Use of Proceeds	51
6.15	Investment Company Act	51
6.16	Taxes	51
6.17	Pension Plans	52
6.18	Solvency	52
6.19	Hedge Agreements	52
6.20	Eligible Contracts; Hydrocarbon Licenses	52
6.21	Accounts	52
6.22	Status of Obligations	52
6.23	Immunity from Suit	52
ARTICLE 7	AFFIRMATIVE COVENANTS	53
7.1	Financial Statements; Reporting	53
7.2	Information on Hydrocarbon Interests	54
7.3	Notices	56
7.4	Payment of Obligations	57
7.5	Preservation of Existence	57
7.6	Compliance with Contractual Obligations and Law	57
7.7	Maintenance of Properties	57
7.8	Maintenance of Insurance	58
7.9	Books and Records; “Know-Your-Client” Information	58
7.10	Inspection Rights	58
7.11	Use of Proceeds	59
7.12	Additional Collateral; Additional Subsidiaries, etc.	59
7.13	Collection Accounts	61
7.14	Hydrocarbon Hedge Agreement	63
7.15	Status of Obligations	63
ARTICLE 8	NEGATIVE COVENANTS	63
8.1	Indebtedness	63
8.2	Liens	64
8.3	Agreements Restricting Liens	66
8.4	Merger or Consolidation; Fundamental Changes	66
8.5	Disposals	66
8.6	Restricted Payments	67
8.7	Investments	67
8.8	Transactions with Affiliates	68
8.9	Sales and Leasebacks	68
8.10	Change of Business; Change of Country Focus	68
8.11	Change in Organic Documents	68
8.12	Change in Fiscal Periods or Accounting Principles	68
8.13	Modification of Certain Agreements	68
8.14	Limits on Speculative Hedges	69
8.15	Restrictions on Accounts	69
8.16	Financial Covenants	69
ARTICLE 9	EVENTS OF DEFAULT	70
9.1	Events of Default	70
9.2	Automatic Acceleration	72
9.3	Optional Acceleration	73

-ii-

TABLE OF CONTENTS

		Page
9.4	Application of Funds	73
ARTICLE 10	GUARANTEE	75
10.1	Guarantee	75
10.2	Obligations Unconditional	75
10.3	Waiver of Presentment	76
10.4	Reinstatement	76
10.5	Subrogation	76
10.6	Continuing Guarantee	76
10.7	Instrument for the Payment of Money	76
10.8	General Limitation on Guarantee Obligations	76
10.9	Joint and Several Liability of Borrowers	77
ARTICLE 11	AGENCY PROVISIONS	77
11.1	Appointment and Authority	77
11.2	Rights as a Lender	77
11.3	Exculpatory Provisions	77
11.4	Reliance by Agents	78
11.5	Delegation of Duties	78
11.6	Resignation of Agents	79
11.7	Non-Reliance on Agents and Other Lenders	79
11.8	No Other Duties	79
11.9	Indemnification	80
11.10	Indemnified Matters	80
11.11	Administrative Agent May File Proofs of Claim	80
11.12	Collateral and Guarantee Matters	81
ARTICLE 12	MISCELLANEOUS	81
12.1	Amendments	81
12.2	Notices	83
12.3	No Waiver; Cumulative Remedies	85
12.4	Survival of Representations and Warranties	85
12.5	Payment of Expenses and Taxes	85
12.6	Indemnification	85
12.7	Successors and Assigns	86
12.8	Right of Set-off	88
12.9	Delinquent Lenders	88
12.10	Counterparts	89
12.11	Severability	89
12.12	Other Transactions	89
12.13	Integration	89
12.14	GOVERNING LAW	90
12.15	SUBMISSION TO JURISDICTION; WAIVERS	90
12.16	Acknowledgments	91
12.17	USA PATRIOT Act Notice	91
12.18	Confidential Information	91
12.19	Public Information	92
12.20	WAIVER OF JURY TRIAL	92
12.21	Judgment Currency	93

-iii-

SCHEDULES:
Schedule I	Commitments
Schedule II	Funding Office and Wire Instructions
Schedule III	Disclosure Schedule
Schedule IV	Organization Chart
Schedule V	Hydrocarbon Licenses
EXHIBITS:
EXHIBIT A	Form of Note
EXHIBIT B	Form of Notice of Borrowing
EXHIBIT C	Form of Letter of Credit
EXHIBIT D	Form of Compliance Certificate
EXHIBIT E	Form of Assignment Agreement

-iv-

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of December 21, 2009 among (1) DMLP, LTD., a Bahamas international business company (“DMLP”), (2) PETROLEUM EXPLORATION MEDITERRANEAN INTERNATIONAL PTY. LTD. (ABN 35 121 104 167), an Australian proprietary company (“PEMI”), (3) TALON EXPLORATION, LTD., a corporation duly organized and validly existing under the laws of Bahamas (“Talon”), (4) TRANSATLANTIC TURKEY, LTD., a corporation duly organized and validly existing under the laws of Bahamas (“TAT”, and together with DMLP, PEMI and Talon, each a “Borrower” and, collectively, the “Borrowers”)), (5) the Guarantors (as defined herein), (6) each of the lenders party hereto from time to time (the “Lenders”), (7) STANDARD BANK PLC, as the letter of credit issuer (in such capacity, the “LC Issuer”) and (8) STANDARD BANK PLC, as administrative agent (in such capacity, the “Administrative Agent”), collateral agent (in such capacity, the “Collateral Agent”) and technical agent (in such capacity, the “Technical Agent”).

ARTICLE 1

DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings specified in this Section 1.1.

“Abandonment Date” means (i) in respect of the Borrowers’ Selmo field operations, December 31, 2023 and (ii) in respect of the Borrowers’ Thrace Basin operations, December 31, 2012.

“Affiliate” means, as to a specified Person, another Person that directly or indirectly is in Control of, is Controlled by, or is under common Control with, such specified Person.

“Aggregate Facility Exposure” means, at any time, the sum of (a) the principal amounts of all Loans made by all Lenders and outstanding at such time and (b) the aggregate amount of the LC Outstandings (if any) at such time.

“Agents” means, collectively, the Administrative Agent, the Collateral Agent and the Technical Agent.

“Agreement” means this Credit Agreement, together with all exhibits and schedules hereto, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Applicable Law” means, as to any Person, property or transaction, all present and future laws, treaties, statutes, regulations, judgments and decrees (in each case, whether international, foreign, federal, state, provincial, territorial or local) applicable to or binding upon such Person, property or transaction and all applicable requirements, directives, orders and policies of any Governmental Authority having or purporting to have authority over such Person, property or transaction.

“Applicable Margin” means 6.25% per annum.

“Arrangers” means, collectively, Standard Bank Plc and BNP Paribas.

“Assignment Agreement” is defined in Section 12.7(c).

“Australian Security Documents” means the following documents, each governed by the laws of Australia, and in form and substance satisfactory to the Collateral Agent (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time):

(a) an equitable mortgage over all of the issued shares in PEMI;

(b) a fixed and floating charge over all of the assets and undertaking of PEMI;

(c) a fixed and floating charge over all of the assets and undertaking of Incremental Petroleum (Selmo); and

(d) any other document reasonably required by the Collateral Agent to be executed in connection with the creation, attachment and/or perfection of the security interests to be granted pursuant to the foregoing.

“Authorized Officer” means, relative to any Person, those of its officers, or the officers of its general partners or managing members (as applicable), whose signatures and incumbency shall have been certified to the Administrative Agent pursuant to Section 5.1(k) or Section 7.12(b)(iv).

“Bahamas Security Documents” means the following documents, each governed by the laws of The Bahamas, and in form and substance satisfactory to the Collateral Agent (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time):

(a) pledge agreements granting Security Interests in all of the Equity Interests in each of DMLP; Talon and TAT, respectively; and

(b) any other document reasonably required by the Collateral Agent to be executed in connection with the creation, attachment and/or perfection of the security interests to be granted pursuant to the foregoing.

“BNP Paribas” means BNP Paribas (Suisse) SA.

“Borrowers” is defined in the introductory paragraph hereto.

“Borrowing” means a borrowing consisting of Loans, having the same Interest Period, made by each Lender on the same Borrowing Date and pursuant to the same Notice of Borrowing in accordance with ARTICLE 2.

“Borrowing Base” means:

(a) at any time prior to the Commitment Reduction Date, the lesser of (i) $250,000,000 and (ii) the Present Value at such time (as further reduced if necessary to meet the requirements of Section 3.4); and

(b) at any time on or after the Commitment Reduction Date, the lesser of (i) $250,000,000 (but only if the Supermajority Lenders consent to such amount and subject to Section 12.1(b)), (ii) the aggregate Commitments of all Lenders in effect at such time (but only if the Supermajority Lenders do not consent to such amount in clause (i)) and (iii) the Present Value at such time (as further reduced if necessary to meet the requirements of Section 3.4).

2

“Borrowing Base Deficiency” means, on any date of determination, a situation where (a) the aggregate outstanding amount of the Loans plus the LC Outstandings (if any) at such time, exceeds (b) the Borrowing Base then in effect.

“Borrowing Base Deficiency Notice” is defined in Section 3.5.

“Borrowing Base Deficiency Cure Notice” is defined in Section 3.5.

“Borrowing Date” means any Business Day requested by a Borrower as a date on which Loans are to be made pursuant to this Agreement.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in (a) Istanbul, Turkey, (b) London, England or (c) New York, New York are authorized or required by law to close; provided that with respect to payments of principal and interest on Loans, such day is also a day for trading by and between banks in Dollar deposits in the London interbank market.

“Capital Expenditure” means, for the Borrowers and their respective Subsidiaries for any period, the sum of, without duplication, all items of expenditure that are capital in nature made, directly or indirectly, by such Person or any of its Subsidiaries during such period in connection with the exploration, development and/or production of Hydrocarbons or the acquisition or replacement of plant, equipment and fixed assets that have been or should be capitalized on the balance sheet of such Person in accordance with GAAP.

“Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, to the extent such obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person in accordance with GAAP.

“Cash Collateral Account” means an interest-bearing cash collateral account established by a Borrower with the Collateral Agent into which cash collateral for any Letter of Credit shall be deposited from time to time, and in respect of which the Collateral Agent shall have sole dominion and control and exclusive rights of withdrawal therefrom.

“Cash Collateralize” means, with respect to any Letter of Credit, the deposit in a Cash Collateral Account of cash denominated in the same currency as such Letter of Credit as security for the LC Obligations in respect of such Letter of Credit in an amount not less than 105% of the then undrawn face amount of such Letter of Credit.

“Casualty Event” means, with respect to the assets or property of any Borrower or its Subsidiaries, any loss of or damage to, or any condemnation or other taking of, such assets or property which results in a reduction of the Borrowers’ Proved Reserves and for which such Borrower or its Subsidiaries receives Casualty Proceeds.

“Casualty Proceeds” means all proceeds of insurance and other monetary compensation received by a Borrower or any of its Subsidiaries in connection with a Casualty Event.

“Casualty Reinvestment Deferred Amount” means, with respect to a Casualty Event, any portion of the Casualty Proceeds that, as a result of the delivery of a Casualty Reinvestment Notice, is not applied to prepay the Loans pursuant to Section 2.5(b)(ii).

3

“Casualty Reinvestment Notice” means, in connection with a Casualty Event, a written notice executed by a Responsible Officer of the relevant Borrower certifying to the Collateral Agent that (a) no Default or Event of Default has occurred and is continuing as of the date of such notice, (b) the assets or property that have suffered loss or damage are necessary for the business of such Borrower or its Subsidiaries and (c) such Borrower or its Subsidiaries intend to use all or part of the Casualty Proceeds to replace or repair such assets or property.

“Casualty Reinvestment Prepayment Amount” means, with respect to a Casualty Event, any Casualty Reinvestment Deferred Amount relating thereto minus any amount spent by the relevant Borrower or its Subsidiaries prior to the Casualty Reinvestment Prepayment Date to replace or repair assets or property that have suffered loss or damage as a result of such Casualty Event.

“Casualty Reinvestment Prepayment Date” means, with respect to any Casualty Event, the earlier of (a) the date falling one hundred and eighty (180) days after such Casualty Event and (b) the date on which a Borrower shall have determined not to, or failed to, or shall have otherwise ceased to, replace or repair assets or property that suffered loss or damage as a result of such Casualty Event.

“Change of Control” means the occurrence of any of the following events:

(a) the failure by the Parent to own, of record and beneficially, all of the Equity Interests in PEMI, DMLP, Talon and TAT or to exercise, directly or indirectly, day-to-day management and operational control of PEMI, DMLP, Talon and TAT;

(b) the failure by PEMI, DMLP, Talon and TAT to own or hold, directly or indirectly, all of the interests granted to each respective Borrower pursuant to any Hydrocarbon License set forth on Schedule V hereto (excluding, for the avoidance of doubt, any royalty or other interests therein retained by the GDPA, EMRA or any Governmental Authority issuing such Hydrocarbon License); or

(c) (i) N. Malone Mitchell, 3rd shall cease for any reason to be the executive chairman of the board of directors of the Parent at any time, (ii) the Permitted Investors shall cease to own of record and beneficially at least 35% of the common equity interests of the Parent or (iii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), excluding the Permitted Investors, shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d) 5 under the Exchange Act), directly or indirectly, of more than 35% of the outstanding common Equity Interests of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis.

“Closing Date” means the date on which all of the conditions precedent specified in Section 5.1 have been satisfied or waived by the Administrative Agent, acting on the directions of the Majority Lenders.

“Collateral” means all assets subject to a Lien pursuant to each Security Document.

“Collection Accounts” means the Local Collection Account and the Offshore Collection Account.

“Combined” refers to the consolidation of financial reporting in accordance with GAAP.

4

“Combined Current Assets” means, for any Measurement Period, the aggregate of the Borrowers’ and their Subsidiaries’ unrestricted aggregate cash on hand, marketable securities, prepaid deposits refundable on demand, receivables and oil and gas inventory expected to be realized within twelve (12) months, minus all trade receivables more than ninety (90) days past due, all as determined on a Combined basis in accordance with GAAP; provided that (a) for the purposes of determining the Current Ratio, the aggregate unused and uncancelled portion of the Commitments (if any) at such time shall be added to, and constitute part of, the Combined Current Assets, (b) the portion of any oil and gas inventory to which any Person (other than an Obligor) is entitled shall be excluded from the calculation of Combined Current Assets and (c) non-cash gains arising from unliquidated Hedge Agreements shall be excluded from the calculation of Combined Current Assets.

“Combined Current Liabilities” means, for any Measurement Period, the aggregate of the Borrowers’ and their Subsidiaries’ aggregate liabilities falling due within twelve (12) months (including, without limitation, any long term debt falling due within twelve (12) months, accounts payable, taxes, and payments in lieu of taxes and required dividends), all as determined on a Combined basis in accordance with GAAP, provided that non-cash losses arising from unliquidated Hedge Agreements shall be excluded from the calculation of Combined Current Liabilities.

“Combined Net Income” means, for any Measurement Period, the net income (or loss) of the Borrowers’ and their Subsidiaries but excluding any extraordinary items (including any net non-cash gains or losses during such Measurement Period arising from the sale, exchange, retirement or other Disposal of capital assets other than in the ordinary course of business, and any write up or write down of assets during such Measurement Period), all as determined on a Combined basis in accordance with GAAP.

“Commitment” means, as to each Lender, the obligation of such Lender to advance Loans or to participate in LC Issuances in an aggregate principal or face amount at any time outstanding up to but not exceeding:

(a) as to each Lender party to this Agreement as of the Closing Date, the amount set forth opposite the name of such Lender in Schedule I under the caption “Commitment Amount”; and

(b) as to any other Lender, the aggregate amount of the Commitments of the other Lenders acquired by it pursuant to Section 12.7 of this Agreement,

as the same may be increased or reduced from time to time pursuant to this Agreement.

“Commitment Fee Rate” means, as to each Lender, 3.125% per annum of the unused and uncancelled portion of its Commitment.

“Commitment Period” means the period from and including the Closing Date to the Commitment Termination Date.

“Commitment Reduction Date” means March 21, 2011, the date falling fifteen (15) months after the Closing Date.

“Commitment Reduction Amount” means an amount (rounded upwards to the nearest Dollar) equal to 14.3% of (a) the aggregate Commitments of all Lenders in effect on the Commitment Reduction Date or (b) if the Commitments have been terminated, the outstanding principal amount of the Loans plus the LC Outstandings (if any) at such time (as the same may be further effected by the provisions of Section 3 hereunder).

5

“Commitment Termination Date” means, the earliest of:

(a) the Maturity Date;

(b) the date on which the Commitments are terminated in full or reduced to zero pursuant to this Agreement; and

(c) the date on which any Commitment Termination Event occurs.

“Commitment Termination Event” means any of the following:

(a) the occurrence of any Event of Default described in Section 9.1(f); or

(b) the occurrence of any other Event of Default and either (i) all or any portion of the Loans shall have been declared to be due and payable pursuant to ARTICLE 9 or (ii) the Administrative Agent, acting on the direction of the Majority Lenders, shall have given notice to the Borrowers that the Commitments have been terminated.

“Compliance Certificate” means a certificate duly completed and executed by a Responsible Officer of the Borrowers substantially in the form of Exhibit D or in such other form as the Administrative Agent, acting on the directions of the Majority Lenders, may from time to time approve for the purpose of monitoring the Borrowers’ compliance with the financial covenants contained herein.

“Confidential Information” is defined in Section 12.18.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the Equity Interests having ordinary voting power for the election of directors, managing directors, managing general partners or any equivalent body or (b) veto, direct or cause the direction of the management and policies of such Person.

“Credit Extension” means (a) a Loan by any Lender and (b) an LC Issuance by the LC Issuer.

“Credit Facility” means the credit facility established under this Agreement pursuant to which (a) each Lender shall advance Loans and participate in LC Issuances in accordance with this Agreement and (b) the LC Issuer shall issue Letters of Credit for the account of a Borrower in accordance with this Agreement.

“Current Ratio” means, for any Measurement Period, the ratio of (a) Combined Current Assets to (b) Combined Current Liabilities.

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“Default” means any Event of Default or any condition, occurrence or event that, after the giving of notice or the lapse of time (or both), would constitute an Event of Default.

“Delinquent Credit” means, with respect to any Lender, any Loan or LC Participation required to be funded by such Lender hereunder and not funded by the required date (after giving effect to any applicable grace period).

“Delinquent Lender” means, at any time, any Lender (a) with a Delinquent Credit at such time, (b) with a Delinquent Payment at such time, (c) as to which (i) a voluntary or involuntary case (or comparable proceeding under Applicable Law) has been commenced and is in effect with respect to such Lender at such time, (ii) an administrator, administrative receiver, receiver, receiver and manager, liquidator, provisional liquidator, trustee, custodian, conservator or other similar official has been appointed under Applicable Law with respect to such Lender or for all or any substantial part of such Lender’s assets at such time or (iii) such Lender or its parent company has made a general assignment for the benefit of its creditors or has otherwise been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Lender, its parent company or their respective assets to be, insolvent or bankrupt or (d) that has notified the Borrowers, any Agent or the LC Issuer Bank in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under any other agreement in which it has previously committed to extend credit.

“Delinquent Payment” means, with respect to any Lender, any amount required to be paid over by such Lender to any Agent, the LC Issuer or any other Lender hereunder or under any other Loan Document and not paid by the required date (after giving effect to any applicable grace period).

“Delinquent Period” means, with respect to any Delinquent Lender:

(a) obligated in respect of a Delinquent Credit, the period commencing on the date the applicable Delinquent Credit was required to be extended to a Borrower under this Agreement (after giving effect to any applicable grace period) and ending on the earlier of the following: (i) the date on which such Delinquent Credit has been funded or reduced to zero and (ii) the date on which the Borrowers and the Majority Lenders agree, in their sole discretion, to waive the application of Section 12.9 with respect to such Delinquent Credit;

(b) obligated in respect of a Delinquent Payment, the period commencing on the date the applicable Delinquent Payment was required to have been paid to any Agent, the LC Issuer or other Lender hereunder or under any other Loan Document (after giving effect to any applicable grace period) and ending on the earlier of the following: (i) the date on which such Delinquent Payment is paid to such Agent, the LC Issuer or such Lender together with any applicable accrued interest thereon and (ii) the date on which such Agent, the LC Issuer or such Lender (as applicable) agrees, in its sole discretion, to waive the application of Section 12.9 with respect to such Delinquent Payment; and

(c) as to which any event referred to in clause (c) of the definition of “Delinquent Lender” has occurred, the period commencing on the date such event occurred and ending on the earlier of the following: (i) the date on which such event is determined by the Majority Lenders in their reasonable good faith judgment to no longer exist and (ii) the date on which the Borrowers and the Majority Lenders agree, in their sole discretion, to waive the application of Section 12.9 with respect to such Delinquent Lender.

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“Designated Hedge Agreement” means each Hedge Agreement entered into by a Borrower or any of its Subsidiaries with a Designated Hedge Counterparty.

“Designated Hedge Counterparty” means, at the time a Borrower or any of its Subsidiaries enters into a Hedge Agreement and so long as Standard Bank Plc or BNP Paribas (as applicable) is a Lender at such time, Standard Bank Plc, BNP Paribas or any of their respective Affiliates counterparty to such Hedge Agreement.

“Designated Hedge Obligations” means all obligations of a Borrower or any of its Subsidiaries under each Designated Hedge Agreement (including obligations under any transaction entered into pursuant to the terms thereof).

“Disclosure Schedule” means Schedule III.

“Dispose” means, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, farm-out, license, transfer or other disposition of all or any part of such property, and “Disposal” shall have a correlative meaning.

“Dollar” and “$” mean the lawful currency of the United States.

“Dollar Equivalent” shall mean, with respect to a non-Dollar denominated amount at any time, the amount in Dollars required to purchase such non-Dollar denominated amount for delivery at such time, as determined by an Agent on the basis of the Spot Rate.

“EBITDAX” means, for any Measurement Period and without duplication, Combined Net Income for such Measurement Period plus, to the extent deducted in calculating such Combined Net Income, the sum of the following for such Measurement Period: (a) Interest Expense, (b) income tax expense, (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring non-cash expenses or losses, (f) any other non-cash charges, minus, to the extent included in calculating such Combined Net Income, the sum of (i) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise specified as a separate item in calculating such Combined Net Income, gains on the sales of assets outside of the ordinary course of business) and (ii) any other non-cash income or gains, all as determined on a Combined basis in accordance with GAAP, and (g) expenses incurred in connection with oil and gas exploration activities entered into in the ordinary course of business, and (h) transaction costs, expenses and fees incurred in connection with the negotiation, execution, and delivery of this Agreement and the other Loan Documents.

“Edirne Gas Sale Agreement” means that certain Natural Gas Sales Agreement dated December 14, 2009 between Petroleum Exploration Mediterranean International Pty. Ltd., as seller, Petrako Petro, Dogal Gaz, Isaat, Taahhut Isleri v. Dis Ticaret Ltd., Şti Edirne Enerji Petrol Arma Uretim ve Ticaret AŞ., as gas owners, and AKSA Dogalgaz Toptan Satis, as buyer.

“Eligible Assignee” means (a) any Lender, (b) any Subsidiary or Affiliate of a Lender or (c) any other commercial bank or financial institution approved by the Administrative Agent and the LC Issuer in their sole discretion; provided that at no time shall an Obligor, a Delinquent Lender or a Subsidiary or Affiliate of a Delinquent Lender be considered an “Eligible Assignee”.

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“Eligible Contract” means:

(a) each Eligible Contract specified in Item 6.20 of the Disclosure Schedule;

(b) any other purchase agreement entered into between any Borrower or any of its Subsidiaries and an Eligible Offtaker that provides for the purchase by such Eligible Offtaker of Hydrocarbons produced pursuant to the Hydrocarbon Licenses and has a minimum offtake term of twelve (12) months; and

(c) any other Person approved by the Majority Lenders in writing.

“Eligible Offtaker” shall mean:

(a) each of Turkiye Petrolleri A.O., Turkiye Petrol Rafinerileri A.S., and AKSA Dogalgaz Toptan Satis;

(b) in the case of Hydrocarbon Interests operated by any Borrower or its Subsidiaries, any buyer required by Applicable Law;

(c) in the case of Hydrocarbon Interests not operated by a Borrower or its Subsidiaries, any buyer approved by the operator thereof; and

(d) any other Person approved by the Majority Lenders in writing.

“EMRA” shall mean the Energy Market Regulatory Authority of Turkey, and any successor thereto.

“English Security Documents” means the following documents, each governed by English law, and in form and substance satisfactory to the Collateral Agent (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time):

(a) a security over cash agreement granting a Security Interest in the Offshore Collection Account; and

(b) any other document reasonably required by the Collateral Agent to be executed in connection with the creation, attachment and/or perfection of the security interests to be granted pursuant to the foregoing.

“Environment” means, without limitation, all of the following media:

(a) land, including surface land, sub-surface strata, sea bed and riverbed under water (as defined in clause (b) below) and any natural or man-made structures;

(b) water, including coastal and inland waters, navigable water, surface water, ground water, drinking water supplies and waters in surface and sub-surface strata; and

(c) air, including indoor and outdoor air and air within buildings and other man-made or natural structure above or below ground, and includes any living organism or systems supported by any such media.

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“Environmental Law” means all applicable federal, state, provincial, territorial, local and foreign laws, statutes, ordinances, codes, rules, standards and regulations, now or hereafter in effect, and any applicable judicial or administrative interpretation thereof, including any applicable judicial or administrative order, consent decree, order or judgment, in each case above, to the extent imposing liability or standards of conduct for or relating to the regulation and protection of human health, the environment and natural resources (including ambient air, surface water, groundwater, land surface and subsurface strata).

“Environmental Liability” means any and all liabilities, obligations, penalties, claims, damages (including consequential damages), costs and/or expenses of any kind (including attorneys’ fees reasonably incurred at tribunal, trial and appellate levels, experts’ fees and disbursements and expenses incurred in investigating, defending or prosecuting any action, claim or proceeding) in connection with or arising from:

(a) any misrepresentation, inaccuracy or breach of any warranty, contained or referred to in Section 6.12;

(b) any violation or purported violation by any Borrower or any of its Subsidiaries of any Environmental Law;

(c) any Release or threatened Release or presence of any Hazardous Material on, at, in, under, from or in the vicinity of any property owned or formerly owned by any Borrower or any of its Subsidiaries; or

(d) any removal, remediation, cleanup, closure, restoration, reclamation, landscape rehabilitation or other response activity under any Environmental Law on, at, in, under, from or in the vicinity of any property owned or formerly owned by any Borrower or any of its Subsidiaries or occupied or used by any Borrower or any of its Subsidiaries in connection with their respective oil and gas and/or mining-related activities.

“Equipment” means any drilling rig and its substructure, engine, braking system, drill pipe, drill collar and related equipment and parts.

“Equity Interests” means, as to any Person, (a) any and all shares, interests, participations, rights or other equivalents (however designated, whether voting or non-voting) of or interests in corporate or capital stock, including shares of preferred or preference stock of such Person, (b) all partnership interests (whether general or limited) of such Person, (c) all membership interests or limited liability company interests in such Person, (d) all beneficial interests in a trust or similar entity, (e) all other equity or ownership interests in such Person of any other type and (f) all warrants, rights or options to purchase or otherwise acquire any of the foregoing.

“Event of Default” means any of the events specified in Section 9.1.

“Facility Exposure” means, for any Lender at any time, the sum of (a) the principal amount of Loans made by such Lender and outstanding at such time and (b) such Lender’s share of the LC Outstandings (if any) at such time.

“Fee Letter” means the letter agreement dated as of the Closing Date between the Arrangers and the Parent.

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“Fiscal Quarter” means any period of three (3) consecutive calendar months ending on the last day of March, June, September or December.

“Fiscal Year” means any period of twelve (12) consecutive calendar months ending on December 31.

“Funded Debt” means, for any Person, the sum of, without duplication, (a) the outstanding principal amount of all of such Person’s obligations, whether current or long-term, for borrowed money and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, plus (b) the outstanding principal amount of all purchase money Indebtedness of such Person, plus (c) all direct obligations of such Person arising under letters of credit, bankers’ acceptances, bank guaranties, surety bonds and similar instruments, plus (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), plus (e) Indebtedness of such Person in respect of capital leases and Synthetic Obligations, plus (f) all Guarantee Obligations of such Person with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of other Persons, plus (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.

“Funding Office” means the office specified in Schedule II as the funding office of the Administrative Agent, the LC Issuer and each Lender, or such other office as may be specified from time to time by each of them as its funding office upon giving no less than five (5) Business Days’ prior written notice thereof to the Administrative Agent and the Borrowers.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, consistently applied and as in effect from time to time. If any “Accounting Change” (as defined below) occurs that results in a change in the method of calculating financial covenants or other standards in this Agreement, the Obligors and the Administrative Agent, acting on the directions of the Majority Lenders, shall enter into good faith negotiations to amend the applicable provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating a Borrower’s or any of its Subsidiaries’ financial condition shall be the same after giving effect to such Accounting Changes, as if such Accounting Changes had not occurred. Until such time as such amendments shall have been effected, all financial covenants and standards in this Agreement shall continue to be calculated as if such Accounting Changes had not occurred. “Accounting Changes” means any change in accounting principles required or promulgated by the Accounting Principles Board, the American Institute of Certified Public Accountants and the Financial Accounting Standards Board (or any generally recognized successor to each such organization).

“Governmental Authority” means any nation, government, state, province, territory or municipality or any political subdivision, agency, authority, instrumentality, regulatory body, court, central bank of any of the foregoing or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government.

“GDPA” means the Turkish General Directorate of Petroleum Affairs, an agency of the Ministry of Energy and Natural Resources of the Government of Turkey, and any successor thereto.

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“Guarantee Obligation” means, as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, or otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lesser of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Collateral Agent in good faith.

“Guarantors” means (a) Incremental Petroleum (Selmo), (b) TransAtlantic Worldwide, Ltd., (c) TransAtlantic Petroleum (USA) Corp., (d) the Parent and (e) the Subsidiary Guarantors.

“Hazardous Material” means, without limitation, any petroleum product, raw material, physical agent, airborne contaminant, biological agent, assayable biological contaminant, chemical product or intermediate, chemical by-product, flammable material, explosive, radioactive substances, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, polychlorinated biphenyls, chemicals defined under Environmental Law as hazardous substances, hazardous wastes, extremely hazardous wastes, solid wastes, toxic substances, pollutants, contaminants or words of similar meaning that are now or hereafter defined, prohibited, limited or regulated in any way under any Environmental Law.

“Hedge Agreement” means any transaction or agreement to provide or obtain any option, future, swap, forward, cap, floor, collar or analogous arrangement (or any combination of the foregoing) in respect of interests rates, exchange rates, commodity prices, bond indices, bond prices, equity indices, equity prices, or any other subject matter, either generally or subject to specific contingencies.

“Hedge Agreement Value” means, for each Hedge Agreement on any date of determination, an amount equal to: (a) in the case of a Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published by the International Swap and Derivatives Association, Inc. (the “Master Agreement”), the amount, if any, that would be payable by any Obligor or any of its Subsidiaries to its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement were being terminated early on such date of determination and (ii) such Obligor or Subsidiary were the sole “Affected Party”; (b) in the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Obligor or Subsidiary of an Obligor party to such Hedge Agreement based on the settlement price of such Hedge Agreement on such date of determination; or (c) in all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Obligor or Subsidiary of an Obligor party to such Hedge Agreement determined as the amount, if any, by which (i) the present value of the future cash flows to be paid by such Obligor or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Obligor or Subsidiary pursuant to such Hedge Agreement. Capitalized terms used and not otherwise defined in this definition shall have the respective meanings specified in the above described Master Agreement.

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“Hydrocarbon Hedge Agreement” means a Hedge Agreement between any Borrower or any of its Subsidiaries and one or more financial institutions, providing such Borrower or any of its Subsidiaries with protection against fluctuations in the price of Hydrocarbons.

“Hydrocarbon Interests” means, to the extent any Borrower or any of its Subsidiaries may now or hereafter have any right, title or interest therein, fee mineral interests, term mineral interests, farm-out interests, royalties, overriding royalties, net profit interests, carried interests, working interests, production payments and similar mineral interests, interests in Hydrocarbon storage and/or transportation facilities, and all unsevered and unextracted Hydrocarbons in, under, or attributable to such properties and interests arising from any Hydrocarbon License.

“Hydrocarbon Licenses” means any concession, lease, license, permit or other agreement, contract, conveyance or instrument pursuant to which any Borrower or any of its Subsidiaries is entitled to enter upon any property to prospect, explore or develop such property for the production of Hydrocarbons or to produce Hydrocarbons from such property, and shall be deemed to include (a) any permit granted by the GDPA, EMRA or any other Governmental Authority to conduct geological investigations concerning the presence of Hydrocarbons in any area, (b) any license granted by the GDPA, EMRA or any other Governmental Authority to explore for Hydrocarbons in any area and (c) any lease granted by the GDPA, EMRA or any other Governmental Authority to produce Hydrocarbons from any area.

“Hydrocarbons” means oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore, and all products, by-products and other substances derived therefrom or the processing thereof, and all other minerals and substances produced in conjunction with such substances (including sulfur, geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of value and the products therefrom).

“Incremental Petroleum (Selmo)” means, Incremental Petroleum (Selmo) Pty. Ltd. (ACN 106 568 432), an Australian proprietary company.

“Indebtedness” means, as to any Person on any date of determination, without duplication:

(a) all indebtedness of such Person for borrowed money and all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments;

(b) all obligations of such Person, contingent or otherwise, in respect of the face amount of all (i) letters of credit (whether or not drawn) or (ii) bankers’ acceptances or similar facilities, in each case issued for the account of such Person;

(c) all Capital Lease Obligations of such Person;

(d) all Synthetic Obligations of such Person;

(e) all obligations of such Person under Hedge Agreements, each valued at the Hedge Agreement Value thereof;

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(f) all obligations of such Person to pay the deferred purchase price of property or services (other than current trade payables that are incurred in the ordinary course of such Person’s business and are not overdue for a period of more than ninety (90) days);

(g) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person;

(h) the liquidation value of all redeemable preferred Equity Interests or other preferred Equity Interests of such Person;

(i) all obligations of such Person owing in connection with any volumetric or production prepayments;

(j) any obligations of such Person which would be required to be disclosed on such Person’s balance sheet as a liability in accordance with GAAP and which would be payable more than twelve (12) months from the date of creation thereof (other than reserves for taxes and for contingent obligations);

(k) all obligations of the kind referred to in clauses (a) through (j) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation; and

(l) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (k) above.

For the avoidance of doubt, the Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Independent Reserves Engineer” means (a) William M. Cobb & Associates, Inc., (b) RPS Energy, (c) DeGolyer & McNaughton or (d) such other firm of independent petroleum engineers, acceptable to the Technical Agent and the Majority Lenders, with adequate expertise in the matters required in connection with the preparation and delivery of an Independent Reserves Report.

“Independent Reserves Report” means a report prepared by the Independent Reserves Engineer, in form and substance reasonably satisfactory to the Technical Agent and the Majority Lenders, with respect to the Hydrocarbon Interests in Turkey which are included in the Borrowing Base. Without prejudice to the foregoing, the Independent Reserves Report shall (a) specify the location, quantity, and type of the Proved Reserves attributable to such Hydrocarbon Interests, (b) contain a projection of the rate of production of such Hydrocarbon Interests, (c) contain an estimate of the net operating revenues to be derived from the production and sale of Hydrocarbons from such Proved Reserves based on product price and cost escalation assumptions provided by the Technical Agent, (d) take into account any “over-produced” status under gas balancing arrangements, (e) be prepared utilizing the price assumptions used by the Technical Agent at such time in evaluating its oil and gas loans generally and taking into account any Designated Hedge Agreement that is a Hydrocarbon Hedge Agreement (or any other Designated Hedge Agreement providing a Borrower or any of its Subsidiaries with protection against fluctuations in respect of the net operating revenues referred to in

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paragraph (c) of this definition) then in effect and the characteristics of the Hydrocarbons being produced from such Hydrocarbon Interests and (f) contain such other information as is customarily obtained from and provided in such reports or is otherwise reasonably requested by the Technical Agent.

“Interest Coverage Ratio” means, for any Measurement Period, the ratio of (a) EBITDAX for such Measurement Period minus Non-Discretionary Capital Expenditure, to (b) Interest Expense for such Measurement Period.

“Interest Expense” means, for any Measurement Period, the total interest expense of the Borrowers and their Subsidiaries accrued for such Measurement Period (calculated without regard to any limitations on the payment thereof, and including all interest and fees incurred in connection with any Indebtedness, all capitalized interest, all commitment fees, all fees, commissions and discounts owed in respect of letters of credit and bankers’ acceptance financing, net amounts payable under any Interest Hedge Agreement (other than caps or collars)), but excluding any interest paid in kind or non-cash interest expense and any interest incurred on subordinated intercompany debt between or among any of the Obligors or interest on equity that has been recapitalized into subordinated debt), all as determined on a Combined basis in accordance with GAAP.

“Interest Hedge Agreement” means a Hedge Agreement between any Borrower or any of its Subsidiaries and one or more financial institutions, providing for the exchange of nominal interest obligations between the Borrower or any of its Subsidiaries and such financial institution or the cap of the interest rate on any Indebtedness of such Borrower or any of its Subsidiaries.

“Interest Payment Date” means:

(a) as to any Loan, the last day of its Interest Period; and

(b) the date of any repayment or prepayment of any Loan.

“Interest Period” means, as to any Loan:

(a) initially, the period commencing on the Borrowing Date of such Loan and ending on the last day of the calendar month in which such Borrowing Date occurs; and

(b) thereafter, each period commencing on the last day of the preceding Interest Period applicable to such Loan and ending three (3) months thereafter;

provided that:

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (unless the result of such extension would be to carry such Interest Period into another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day);

(ii) no Interest Period shall extend beyond the Commitment Termination Date;

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(iii) each Loan advanced as part of the same Borrowing shall have the same Interest Period; and

(iv) the Administrative Agent shall be entitled to adjust the length of an Interest Period to ensure that it ends on a day which coincides with a Repayment Date.

“Internal Reserves Report” means a report prepared by the Borrowers, certified by a Responsible Officer of the Borrowers and reviewed and approved by the Independent Reserves Engineer, in form and substance satisfactory to the Technical Agent and the Majority Lenders, with respect to the Hydrocarbon Interests in Turkey which are included in the Borrowing Base. Without prejudice to the foregoing, the Internal Reserves Report shall (a) specify the location, quantity, and type of the Proved Reserves attributable to such Hydrocarbon Interests, (b) contain a projection of the rate of production of such Hydrocarbon Interests, (c) contain an estimate of the net operating revenues to be derived from the production and sale of Hydrocarbons from such Proved Reserves based on product price and cost escalation assumptions provided by the Technical Agent, (d) take into account any “over-produced” status under gas balancing arrangements and (e) contain such other information as is customarily obtained from and provided in such reports or is otherwise reasonably requested by the Technical Agent.

“Investments” means, as to a specified Person, (a) any advance, loan or extension of credit (by way of entry into of a Guarantee Obligation or otherwise) or capital contribution to another Person, including through the purchase of any bonds, notes, debentures or other debt securities, (b) any acquisition or purchase of Equity Interests in another Person, (c) any acquisition, whether by purchase, merger or otherwise, of the assets of another Person, or a business line or unit or a division of another Person and (d) any acquisition or purchase of a fee mineral interest, term mineral interest, farm-out interest, royalty interest, net profit interest, carried interest, working interest, production payment or similar mineral interest, whether pursuant to a farm-in agreement, production sharing agreement, joint venture arrangement or otherwise.

“LC Application” means any request by a Borrower for the issuance of a Letter of Credit duly completed and executed on the LC Issuer’s standard form letter of credit application submitted to the LC Issuer (with a copy to the Administrative Agent) and accepted by the LC Issuer.

“LC Documents” means all Letters of Credit, LC Applications, and all other agreements, documents, and instruments entered into in connection with or relating thereto.

“LC Honor Date” is defined in Section 2.4(d).

“LC Issuance” means the issuance of any Letter of Credit by the LC Issuer for the account of a Borrower in accordance with this Agreement, and shall include any extension thereof or any amendment thereto that increases the face amount or extends the expiry date of such Letter of Credit.

“LC Obligations” means all obligations of a Borrower owed in connection with each Letter of Credit at such time, including any Unpaid Drawings.

“LC Outstandings” means, on any date of determination, the sum of (a) the aggregate undrawn maximum face amount of all Letters of Credit at such time, plus (b) the aggregate amount of all Unpaid Drawings at such time.

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“LC Participant” means each Lender that acquires an LC Participation pursuant to the terms of this Agreement.

“LC Participation” means an undivided interest and participation in a Letter of Credit purchased by an LC Participant from the LC Issuer pursuant to the terms of this Agreement.

“Letter of Credit” means any standby letter of credit or documentary letter of credit issued by the LC Issuer for the account of a Borrower pursuant to Section 2.4 substantially in the form of Exhibit C or in such other form as the LC Issuer may from time to time approve in writing.

“Leverage Ratio” means, for any Measurement Period, the ratio of (a) the aggregate Funded Debt of the Borrowers and their Subsidiaries (whether incurred pursuant to this Agreement or otherwise) as at the end of such Measurement Period, to (b) that portion of EBITDAX attributable to the Borrowers and their Subsidiaries only for such Measurement Period.

“LIBOR” means with respect to each day during each Interest Period, the rate per annum determined by the Administrative Agent as the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period (a) appearing on Reuters LIBOR 01 page as of 11:00 a.m. (London, England time) two (2) Business Days prior to the beginning of such Interest Period or (b) if such rate does not appear on Reuters LIBOR 01 page, the rate per annum (rounded upwards to the nearest 1/16 of 1%) determined by reference to (x) such other comparable publicly available service for displaying an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equal to such period as may be selected by the Administrative Agent and determined as of 11:00 a.m. (London, England time) two (2) Business Days prior to the beginning of such Interest Period or (y) in the absence of such availability, by reference to the rate at which the Administrative Agent is offered deposits in Dollars at or about 11:00 a.m. (London, England time), two (2) Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien or right of subrogation or analogous right (statutory or other), charge, collateral or non-accessory security or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Liquid Investments” means:

(a) marketable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Federal Government of the United States and backed by the full faith and credit of the United States maturing within one hundred and eighty (180) days from the date of any acquisition thereof;

(b) negotiable certificates of deposit, time deposits, or other similar banking arrangements maturing within one hundred and eighty (180) days from the date of acquisition thereof (“bank debt securities”), issued by (i) any Lender (or any Affiliate of any Lender), (ii) any other bank or trust company so long as such certificate of deposit is pledged to secure a

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Borrower’s or any of its Subsidiaries’ ordinary course of business bonding requirements or (iii) any other bank or trust company which has combined capital and surplus and undivided profit of not less than $500,000,000, if at the time of deposit or purchase, such bank debt securities are rated not less than “AA” (or the then equivalent) by the rating service of Standard & Poor’s Ratings Group or not less than “Aa” (or the then equivalent) by the rating service of Moody’s Investors Service, Inc.;

(c) commercial paper issued by (i) any Lender (or any Affiliate of any Lender) or (ii) any other Person if at the time of purchase such commercial paper is rated not less than “A-1” (or the then equivalent) by the rating service of Standard & Poor’s Ratings Group or not less than “P-1” (or the then equivalent) by the rating service of Moody’s Investors Service, Inc.;

(d) deposits in money market funds investing exclusively in investments described in clauses (a), (b) and (c) above;

(e) repurchase agreements having a term of not more than thirty (30) days relating to investments described in clauses (a), (b) and (c) above with a market value at least equal to the consideration paid in connection therewith, with any Person who regularly engages in the business of entering into repurchase agreements and has a combined capital and surplus and undivided profit of not less than $500,000,000, if at the time of entering into such agreement the debt securities of such Person are rated not less than “AAA” (or the then equivalent) by the rating service of Standard & Poor’s Ratings Group or not less than “Aaa” (or the equivalent) by the rating service of Moody’s Investors Service, Inc.; and

(f) such other instruments as the Administrative Agent may from time to time approve in writing.

“Loan” means each loan advanced to a Borrower pursuant to Section 2.3 as part of a Borrowing, or the principal amount outstanding for the time being of that loan.

“Loan Documents” means this Agreement, the LC Documents, the Security Documents, the Notes, the Fee Letter, each Designated Hedge Agreement, each Notice of Borrowing, each Compliance Certificate and each other agreement, certificate, document or instrument executed and delivered in connection with this Agreement or any other Loan Document, whether or not specifically mentioned herein or therein.

“Local Blocked Account” means the commercial deposit account (A/C No. TR 31-0006-4000-0014-2400-3708-10) established with Turkiye Is Bankasi A.S. for the purpose of receiving Turkish Lira-denominated payments owing to Talon under any Eligible Contract.

“Local Collection Account” means the collective reference to (i) the commercial deposit account (A/C No. 6299149) and (ii) the commercial deposit account (A/C No. 6297527) established with the Local Collection Account Bank for the purpose of receiving Turkish Lira-denominated payments due to each of PEMI and DMLP, respectively, and any of their respective Subsidiaries under each Eligible Contract.

“Local Collection Account Bank” means Turkiye Garanti Bankasi A.S. or any other depository bank in Turkey acceptable to the Collateral Agent.

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“Majority Lenders” means, at any time, (a) Lenders holding in aggregate at least 51% of the Commitments at such time or (b) if the Commitments have been terminated, Lenders holding in aggregate at least 51% of the outstanding principal amount of the Loans plus the LC Outstandings (if any) at such time; provided that, for purposes of determining the “Majority Lenders” while any Delinquent Period is in effect, the Commitments of, and the aggregate outstanding principal amount of the Loans plus the LC Outstandings (if any) held or deemed held by, the relevant Delinquent Lender shall be excluded.

“Material Adverse Effect” means a material adverse effect on, or a material adverse change in, (a) the business, assets (including Hydrocarbon Interests in Turkey), condition (financial or otherwise), or results of operations of the Parent, the Borrowers and their Subsidiaries, taken as a whole, (b) any Obligor’s ability to perform its material obligations under any Loan Document or (c) the validity and enforceability of any Loan Document or the rights and remedies of any Secured Party hereunder or under any other Loan Document.

“Material Contract” means any contract (other than the Hydrocarbon Licenses) to which any Borrower or any of its Subsidiaries is a party which (a) involves an aggregate consideration payable to or by either Borrower or any Subsidiary of $1,000,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof) or (b) if breached or terminated, could reasonably be expected to have a Material Adverse Effect.

“Maturity Date” means the earlier of (a) the Scheduled Maturity Date and (b) the Reserve Tail Date.

“Measurement Period” means, on any date of determination, the most recently completed four (4) Fiscal Quarters of the Borrowers; provided that, for the purposes of determining the amount of any item included in the calculation of a financial ratio or financial covenant set forth in Section 8.16, (a) for the first Fiscal Quarter ending after the Closing Date, such amount for the Measurement Period then ended shall equal such item for such Fiscal Quarter multiplied by four (4), (b) for the second Fiscal Quarter ending after the Closing Date, such amount for the Measurement Period then ended shall equal such item for the two Fiscal Quarters then ended multiplied by two (2) and (c) for the third Fiscal Quarter ending after the Closing Date, such amount for the Measurement Period then ended shall equal such item for the three Fiscal Quarters then ended multiplied by one and one-third (1 ¹/3).

“Net Cash Proceeds” means, in connection with any sale, lease, sale and leaseback, assignment, conveyance, transfer or other Disposal of any property or any sale or issuance of Equity Interests by any Borrower or its Subsidiaries, the proceeds received therefrom in the form of cash or cash equivalents, net of attorneys’ fees reasonably incurred, transaction fees, banking fees and other customary out-of-pocket fees and expenses actually incurred by such Borrower or its Subsidiaries in connection therewith.

“Non-Discretionary Capital Expenditure” means, at any time, Capital Expenditure incurred by the Borrowers and their Subsidiaries to replace or repair existing fixed assets so as to maintain then current levels of profitability of their respective businesses in accordance with prudent market practice by Persons engaged in a similar business, owning similar assets and operating in similar localities to the Borrowers and their Subsidiaries, but excluding Capital Expenditure incurred to improve existing assets or increase production from existing assets (whether through the drilling of additional wells, the drilling of horizontal wells, the drilling of sidetrack wells in existing fields, or otherwise).

“Note” means a promissory note of the Borrowers payable to each Lender, substantially in the form of Exhibit A (as such promissory note may be amended, endorsed or otherwise modified from time to time), evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting from outstanding Loans, and all other promissory notes accepted from time to time by such Lender in substitution therefor or renewal thereof.

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“Notice of Borrowing” means a request for Loans substantially in the form of Exhibit B signed by a Responsible Officer of the Borrowers.

“Obligations” means, (a) the unpaid principal of and interest on the Loans (including interest accruing after the maturity of the Loans, after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or similar proceeding relating to any Borrower), (b) the LC Obligations, (c) the Designated Hedge Obligations and (d) all other obligations and liabilities of any Obligor, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, that may arise under, out of, or in connection with any Loan Document, whether on account of principal, interest, fees, reimbursements, indemnities, costs, expenses or otherwise.

“Obligors” means, collectively, the Borrowers and the Guarantors.

“Offshore Collection Account” means the collective reference to (i) commercial deposit account (A/C No. 100131528), (ii) commercial deposit account (A/C No. 100131498), (iii) commercial deposit account (A/C No. 100131501) and (iv) commercial deposit account (A/C No. 100131517) established by each of PEMI, DMLP, Talon and TAT, respectively, with the Offshore Collection Account Bank for the purpose of receiving Dollar denominated payments due to each respective Borrower and its Subsidiaries under any Eligible Contract.

“Offshore Collection Account Bank” means Standard Bank Plc or any other depository bank acceptable to the Collateral Agent in its discretion.

“Operating Budget” is defined in Section 7.2(d).

“Operational Lock-Up Event” means (a) the occurrence and continuation of an Event of Default or (b) the occurrence and continuation of a Borrowing Base Deficiency.

“Organic Document” means, relative to any Obligor, as applicable, its certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation, deed of foundation, deed of association, articles of association, articles of incorporation, articles of amalgamation, limited liability company agreement or operating agreement and all shareholder agreements, voting trusts and similar arrangements applicable to shares, partnership interests, limited liability company interests or other Equity Interests in any such Obligor.

“Original Reserves” means, in relation to each Hydrocarbon Interest in Turkey, the quantities of Hydrocarbons forecast in the Independent Reserves Report delivered under Section 5.1(h) and included in the determination of Present Value to be produced from such Hydrocarbon Interest from the Closing Date up to (and including) the Abandonment Date shown in such Independent Reserves Report for such Hydrocarbon Interest.

“Parent” means Transatlantic Petroleum Ltd. (Registered No. 43496), a company organized under the laws of Bermuda.

“Participant” is defined in Section 12.7(b).

“Permitted Investors” means N. Malone Mitchell, 3rd and any other Person that, directly or indirectly, is Controlled by him and primarily engages in making equity or debt investments in one or more entities.

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“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“Present Value” means, on any date of determination, the present value (using the average of the discount rates then customarily utilized by the Technical Agent for reserve valuation purposes, which, as at the Closing Date, is a 10% discount rate) of the projected future net revenues attributable to production of oil or gas (measured by volume unit or BOE (barrels of oil) equivalent, and not sales price) from Hydrocarbon Interests in Turkey that constitute Proved Developed Producing Reserves or Proved Undeveloped Reserves (as selected by the Technical Agent in its discretion) as set forth in the most recent Independent Reserves Report delivered pursuant to Section 3.2 as at such date, calculated by the Technical Agent pursuant to ARTICLE 3 based on the price assumptions used by the Technical Agent as at such date in evaluating its oil and gas loans generally and adjusted to give effect to applicable commodity prices (or caps or floors) under Hydrocarbon Hedge Agreements permitted hereunder and covering such production.

“Pro Rata Share” means, as to each Lender at any time, the ratio (expressed as a percentage) of (a) such Lender’s Commitment to the aggregate Commitments of all Lenders at such time or (b) if the Commitments have been terminated, the outstanding principal amount of the Loans plus the LC Outstandings (if any) owed to such Lender to the aggregate outstanding principal amount of the Loans plus the LC Outstandings (if any) owed to all Lenders at such time.

“Proved Developed Producing Reserves” means, on any date of determination, Proved Developed Reserves in respect of which Hydrocarbons are being extracted through existing wells with existing equipment and operating methods as at such date pursuant to the terms of a Hydrocarbon License and in accordance with Applicable Law, where such Turkey Hydrocarbon License is expressed to be effective for a period of no less than thirty-six (36) months from such date of determination.

“Proved Developed Reserves” means, on any date of determination, Proved Reserves which are expected to be recovered through existing wells with existing equipment and operating methods. Additional Hydrocarbons expected to be recovered through the application of fluid injection or other improved recovery techniques for supplementing the natural forces and mechanisms of primary recovery shall be included as Proved Developed Reserves only after testing by a pilot project or after operation of an installed program has confirmed through production response, in each case to the Technical Agent’s reasonable satisfaction, that increased recovery will be achieved.

“Proved Reserves” means, on any date of determination, the quantities of Hydrocarbons demonstrated by geological and engineering data with a high degree of certainty to be recoverable in future years under existing economic and operating conditions and from known reservoirs attributable to Hydrocarbon Interests in Turkey, as determined in accordance with the standards set forth in National Instrument 51-101 “Standards of Disclosure for Oil and Gas Activities” (NI 51-101) established by the Canadian Securities Administrators and Rule 4-10 of Regulation S-X (17 CFR 210) promulgated by the United States Securities and Exchange Commission.

“Proved Undeveloped Reserves” means, on any date of determination, Proved Reserves which are expected to be recovered from new wells on undrilled acreage for which the existence and recoverability of such reserves can be estimated with reasonable certainty, or from existing wells where a relatively major expenditure is required for recompletion.

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“Register” is defined in Section 12.7(d).

“Release” means, without limitation, any release, spilling, emission, leaking, pumping, pouring, injecting, depositing, disposal, discharge, dispersal, leaching, dumping or migration into the indoor or outdoor Environment, including the movement of Hazardous Materials through ambient air, soil, surface water, groundwater, wetlands, land or subsurface strata.

“Remaining Reserves” means, in relation to each Hydrocarbon Interest in Turkey and any date, the quantities of Hydrocarbons forecast in the then current Reserve Report to be produced by that Hydrocarbon Interest in the period from that date up to (and including) the Abandonment Date shown in such Reserve Report for such Hydrocarbon Interest.

“Repayment Date” means each of the following dates:

(a) June 21, 2011;

(b) September 21, 2011;

(c) December 21, 2011;

(d) March 21, 2012;

(e) June 21, 2012;

(f) September 21, 2012; and

(g) the Maturity Date,

provided that if any Repayment Date would otherwise fall on a day that is not a Business Day, such Repayment Date shall instead occur on the next succeeding Business Day.

“Reserve Tail Date” means the last day of the period for which the Borrowing Base was most recently redetermined in accordance with Section 3.2 immediately preceding the first date (reflected in the then current Reserve Report) on which the aggregate Remaining Reserves for all Hydrocarbon Interests in Turkey is forecast to be 25% (or less) of the aggregate Original Reserves for such Hydrocarbon Interests.

“Reserves Report” means either an Independent Reserves Report or an Internal Reserves Report.

“Responsible Officer” means, as to any Person that is a corporate entity, such Person’s chief executive officer, president, chief financial officer and any vice-president or such other equivalent office holder as the Administrative Agent may reasonably approve; provided that, with respect to financial matters, the chief financial officer of such Person shall be the Responsible Officer.

“Restricted Payment” means, with respect to any Person, (a) any direct or indirect dividend or distribution (whether in cash, securities or other property), or any direct or indirect payment of any kind (whether in cash, securities or other property) in consideration for, or otherwise in connection with, any purchase, redemption, defeasance, retirement or other acquisition or ownership of any Equity Interest of such Person, or any options, warrants or rights to acquire or purchase any Equity Interest of such Person and (b) any

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principal or interest payments on, or redemptions of, subordinated debt of such Person; provided that the term “Restricted Payment” shall not include any dividend or distribution payable solely in Equity Interests of such Person or warrants, options or other rights to purchase such Equity Interests.

“Scheduled Maturity Date” means December 21, 2012.

“Secured Parties” shall mean the Lenders, the LC Issuer, each Designated Hedge Counterparty, each Agent and each of their respective successors and permitted assigns from time to time.

“Security Documents” means the Australian Security Documents, the Bahamas Security Documents, the English Security Documents, the Turkish Security Documents and all other security documents granting a Security Interest on any property of any Person to secure the obligations and liabilities of any Obligor under any Loan Document.

“Security Interest” in any property means a Lien which (a) exists in favor of the Collateral Agent for the ratable benefit of the Secured Parties, (b) is superior to all Liens or rights of any other Person in the property encumbered thereby (subject only to Liens permitted under Section 8.2), (c) secures the payment in full of the Obligations and (d) is legal, valid, enforceable and perfected.

“Solvent” means, as to any Person on any date of determination, that on such date (a) the fair value of the total assets of such Person (both at fair valuation and at present fair saleable value) is greater than the total liabilities of such Person (including contingent liabilities), (b) the present fair saleable value of the total assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations, and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts and other liabilities beyond such Person’s ability to pay such debts and other liabilities as they mature and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s assets would constitute unreasonably small capital after giving due consideration to current and anticipated future capital requirements and current and anticipated future business conduct and prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, such liabilities shall be computed in the amount which, in light of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Spot Rate” means, on any date of determination, the rate quoted by Standard Bank Plc or any Lender to an Agent as its spot rate for the purchase of any non-Dollar currency with Dollars through its principal foreign exchange trading office at approximately 11.00 a.m. (London, England time) on such date of determination (or at such other time on such date of determination if such Agent reasonably determines that the volume of trades at approximately 11.00 a.m. (London, England time) in respect of such currency is insufficient to permit the establishment of an appropriate spot rate for the purchase of such non-Dollar currency with Dollars).

“Subsidiary” of a Person means any corporate entity of which more than 50% of the outstanding Equity Interests having ordinary voting power to elect or appoint a majority of the board of directors or similar governing body of such corporate entity is at the time directly or indirectly owned or Controlled by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

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“Subsidiary Guarantor” means each Subsidiary of a Borrower that becomes a Guarantor under this Agreement in accordance with Section 7.12(b)(iii).

“Supermajority Lenders” means, at any time, (a) Lenders holding in aggregate at least 66 ²/3% of the Commitments at such time or (b) if the Commitments have been terminated, Lenders holding in aggregate at least 66 ²/3% of the outstanding principal amount of the Loans plus the LC Outstandings (if any) at such time; provided that, for purposes of determining the “Supermajority Lenders” while any Delinquent Period is in effect, the Commitments of, and the aggregate outstanding principal amount of the Loans plus the LC Outstandings (if any) held or deemed held by, the relevant Delinquent Lender shall be excluded.

“Synthetic Obligations” means as to any Person, the obligations of such Person to pay rent or other amounts under any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is not a capital lease in accordance with GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for federal income tax purposes, other than any such lease under which such Person is the lessor.

“TransAtlantic Petroleum (USA) Corp.” means TransAtlantic Petroleum (USA) Corp., a Colorado corporation, the sole limited partner of TAT.

“TransAtlantic Worldwide, Ltd.” means TransAtlantic Worldwide, Ltd., a Bahamas corporation, the sole general partner of TAT and the sole stockholder of Talon.

“Turkish Lira” means the lawful currency of Turkey.

“Turkish Security Documents” means the following documents, each governed by the laws of Turkey, and in form and substance satisfactory to the Collateral Agent (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time):

(a) a receivables pledge agreement granting a Security Interest over all of the present and future receivables payable to the relevant Borrower and its Subsidiaries under each Eligible Contract, and the receivables payable under each property insurance policy required to be maintained by such Borrower and its Subsidiaries pursuant to Section 7.8;

(b) each receivables payment instruction letter, instructing the Eligible Offtaker named therein to make payments due to the relevant Borrower and its Subsidiaries under the applicable Eligible Contract to the applicable Local Collection Account;

(c) a pledge agreement in respect of all of the rights of the relevant Borrower and its Subsidiaries under the Hydrocarbon Licenses and the Hydrocarbon Interests pertaining thereto (the “Turkey License Pledge Agreement”);

(d) an account pledge agreement granting a Security Interest over all of the present and future receivables payable to the relevant Borrower and its Subsidiaries under each Eligible Contract, including provisions pursuant to which the Local Collection Account Bank agrees to hold all monies deposited in the Local Collection Account in accordance with the instructions of the Collateral Agent (for the ratable benefit of the Secured Parties) following the Local Collection Account Bank’s receipt of a notice to such effect from the Collateral Agent delivered in accordance with the terms thereof;

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(e) a commercial enterprise pledge agreement granting a Security Interest over substantially all of the present and future movable assets of the Borrowers; and

(f) any other document reasonably required by the Collateral Agent to be executed in connection with the creation, attachment and/or perfection of the security interests to be granted pursuant to the foregoing.

“Unpaid Drawing” means, with respect to any Letter of Credit, the aggregate amount of all draws made on such Letter of Credit that have not been reimbursed by the Borrowers or converted to a Loan pursuant to Section 2.4(d), and, in each case, all interest that accrues on each such draw pursuant to this Agreement.

“Viking” means Viking International Limited, a company duly incorporated and validly existing under the laws of Bermuda.

“Viking Equipment” means certain drilling rigs and related equipment the ownership of which is transferred from Viking to a Borrower or a Subsidiary of a Borrower.

1.2 Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents and any certificate or other document made or delivered pursuant hereto or thereto:

(i) accounting terms relating to the Borrowers and their Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP;

(ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”;

(iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), and

(iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties (whether real or personal), including cash, Equity Interests, securities, revenues, accounts, leasehold interests and contract rights.

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(c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Article, Schedule, Exhibit and analogous references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

1.3 Cross References. Unless otherwise specified, references in a Loan Document to any Article, Section, Schedule, Exhibit or Annex are references to such Article or Section of, or Schedule, Exhibit or Annex to, such Loan Document, and references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

ARTICLE 2

THE COMMITMENTS AND CREDIT EXTENSIONS

2.1 Establishment of the Credit Facility. On the Closing Date, and subject to and upon the terms and conditions of this Agreement and the other Loan Documents, the Lenders and the LC Issuer agree to establish the Credit Facility for the benefit of the Borrowers.

2.2 Loans. During the Commitment Period, each Lender agrees to advance Loans to the Borrowers from time to time pursuant to such Lender’s Commitment subject to the terms and conditions of this Agreement; provided that no Loan shall be made or continued if, after giving effect thereto, (a) the Aggregate Facility Exposure would exceed the lesser of (i) the aggregate Commitments of all Lenders at such time and (ii) the Borrowing Base or (b) the Facility Exposure of any Lender would exceed the aggregate amount of such Lender’s Commitment. Each Loan shall be denominated in Dollars, and each Lender will advance its share of the Loan requested in each Borrowing ratably in accordance with such Lender’s Pro Rata Share of such Borrowing. Within the limits of each Lender’s Commitment, the Borrower may repay, prepay and re-borrow Loans during the Commitment Period in accordance with the provisions hereof.

2.3 Borrowings and Continuations of Loans.

(a) Borrowings.

(i) Notice of Borrowing. Each Borrowing shall be made pursuant to a duly completed and executed irrevocable Notice of Borrowing delivered to the Administrative Agent not later than noon (London, England time) at least three (3) Business Days prior to the requested Borrowing Date (or, in respect of the initial Borrowing to be made on the Closing Date, such shorter period as the Administrative Agent may in its sole discretion agree to). Each Borrowing shall be in a minimum amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Promptly after receipt of a Notice of Borrowing, the Administrative Agent shall notify each Lender thereof. Each Lender shall make available to the Administrative Agent not later than 3:00 p.m. (London, England time) on the requested Borrowing Date in same day funds an amount equal to its Pro Rata Share of such Borrowing. Subject to fulfillment of the applicable conditions precedent in ARTICLE 5, the Administrative Agent shall, following its receipt of such funds, make the same available to the Borrowers at their account with the Administrative Agent or with such other financial institution reasonably approved by the Administrative Agent.

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(ii) Lender Obligations Several. The failure of any Lender to advance a Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation to do so. No Lender shall be responsible for the failure of any other Lender to advance a Loan on the requested Borrowing Date.

(b) Certain Limitations. Notwithstanding anything in this Agreement to the contrary:

(i) (x) at no time shall there be more than five (5) different Interest Periods applicable to outstanding Loans and (y) if two (2) or more Loans have an Interest Period ending on the same date and the Borrowers do not specify that such Loans will be continued as separate Loans in a notice of continuation delivered to the Administrative Agent in accordance with Section 2.3(b)(ii), such Loans will be consolidated into a single Loan on the last day of the then current Interest Period and, if continued, treated as a single Loan in any subsequent Interest Periods;

(ii) the Borrowers may elect to continue any Loan having a rate of interest based on LIBOR by delivering a notice of continuation to the Administrative Agent not later than noon (London, England time) at least three (3) Business Days prior to the end of the relevant Interest Period for such Loan. Promptly after receipt of a notice of continuation, the Administrative Agent shall advise each Lender that it has received such a notice and notify each Lender of its determination of LIBOR and the applicable interest rate with respect to such Loan; provided that if no such notice of continuation is delivered, the Borrowers shall be deemed to have elected to continue such Loan with an Interest Period of three (3) months, and provided further that no Loan may be continued beyond its then existing Interest Period if a Default under Section 9.1(a) or 9.1(f) or any Event of Default has occurred and is continuing, in which case such Loan shall bear interest in accordance with Section 2.8(c);

(iii) if prior to the first day of any Interest Period, any Lender reasonably determines (which determination shall be conclusive and binding on the Borrowers) that the introduction of or any change in or in the interpretation of any Applicable Law makes it unlawful, or any Governmental Authority asserts that it is unlawful, for such Lender to make or continue any Loan having a rate of interest based on LIBOR, then the Borrowers’ right to continue any such Loan and (if the Commitment Termination Date has not then occurred) such Lender’s obligation to advance any such Loan shall be suspended and each such outstanding Loan of that Lender having a rate of interest based on LIBOR shall be converted to and maintained as a Loan whose interest rate is based on a rate readily ascertainable by the Administrative Agent on the last day of its then existing Interest Period as the cost of funding such Loan (and which may include (x) the rate certified by such Lender to the Administrative Agent as the rate that reflects such Lender’s cost of funding its Loan or (y) the average of the rates determined by Standard Bank Plc and BNP Paribas to be their internal prime or similar interest rate for such day, with any change in the rate made by Standard Bank Plc or BNP Paribas taking effect on the Business Day following such change) until such Lender notifies the Borrowers that the circumstances causing such suspension no longer exist, whereupon the provisions of this Agreement otherwise applicable to the continuation or (if the Commitment Termination Date has not then occurred) advance of Loans having a rate of interest based on LIBOR shall again apply;

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(iv) if prior to the first day of any Interest Period, the Administrative Agent reasonably determines (which determination shall be conclusive and binding on the Borrowers) that by reason of circumstances affecting the London interbank market, adequate and reasonable means do not exist for ascertaining LIBOR for such Interest Period, then the Borrowers’ right to continue any Loan having a rate of interest based on LIBOR and (if the Commitment Termination Date has not then occurred) each Lender’s obligation to advance any such Loan shall be suspended and each such outstanding Loan shall be converted to and maintained as a Loan whose interest rate is based on a rate readily ascertainable by the Administrative Agent on the last day of its then existing Interest Period as the cost of funding such Loan (and which may include (x) the rate certified by such Lender to the Administrative Agent as the rate that reflects such Lender’s cost of funding its Loan or (y) the average of the rates determined by Standard Bank Plc and BNP Paribas to be their internal prime or similar interest rate for such day, with any change in the rate made by Standard Bank Plc or BNP Paribas taking effect on the Business Day following such change) until the Administrative Agent, acting on the direction of the Majority Lenders, notifies the Borrowers that the circumstances causing such suspension no longer exist, whereupon the provisions of this Agreement otherwise applicable to the continuation or (if the Commitment Termination Date has not then occurred) advance of Loans having a rate of interest based on LIBOR shall again apply; and

(v) if prior to the first day of any Interest Period, the Majority Lenders notify the Administrative Agent that in their reasonable determination (which determination shall be conclusive and binding on the Borrowers), LIBOR does not adequately and fairly reflect the cost to the Majority Lenders of advancing or maintaining any Loan having a rate of interest based on LIBOR for such Interest Period, then the Borrowers’ right to continue any such Loan and (if the Commitment Termination Date has not then occurred) each Lender’s obligation to advance any such Loan shall be suspended and each such outstanding Loan shall be converted to and maintained as a Loan whose interest rate is based on a rate readily ascertainable by the Administrative Agent on the last day of its then existing Interest Period as the cost of funding such Loan (and which may include (x) the rate certified by such Lender to the Administrative Agent as the rate that reflects such Lender’s cost of funding its Loan or (y) the average of the rates determined by Standard Bank Plc and BNP Paribas to be their internal prime or similar interest rate for such day, with any change in the rate made by Standard Bank Plc or BNP Paribas taking effect on the Business Day following such change) until the Administrative Agent, acting on the direction of the Majority Lenders, notifies the Borrowers that the circumstances causing such suspension no longer exist, whereupon the provisions of this Agreement otherwise applicable to the continuation or (if the Commitment Termination Date has not then occurred) advance of Loans having a rate of interest based on LIBOR shall again apply.

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2.4 Letters of Credit.

(a) LC Issuances. Subject to the terms and conditions of this Agreement, the LC Issuer agrees to issue from time to time on any Business Day from the Closing Date to (but excluding) the Commitment Termination Date, Letters of Credit for the account of a Borrower, and to amend or extend Letters of Credit previously issued by it in accordance with this Agreement and to honor drawings thereunder, and the Lenders severally agree to participate in Letters of Credit issued for the account of such Borrower and any drawings thereunder; provided that no LC Issuance will be made:

(i) if such LC Issuance would cause the LC Outstandings (if any) to exceed the lesser of (A) $10,000,000 and (B) the aggregate unused and uncancelled portion of the Commitments;

(ii) if such LC Issuance would cause the Facility Exposure of any Lender to exceed such Lender’s Commitment;

(iii) if such Letter of Credit has an expiration date later than one (1) year after the date of issuance thereof; provided that, if any Letter of Credit has an expiration date that occurs after the Commitment Termination Date, such Borrower shall Cash Collateralize its LC Obligations in respect of such Letter of Credit promptly and in any event no later than sixty (60) days prior to the Commitment Termination Date, and provided further that such Letter of Credit may contain language providing for its automatic renewal for an additional term of one (1) year upon its scheduled expiration date in the absence of prior written notice from the LC Issuer to the relevant Borrower stating that such Letter of Credit will not be renewed upon its then scheduled expiration date;

(iv) unless such Letter of Credit and the other LC Documents in respect thereof are in form and substance acceptable to the LC Issuer in its sole discretion;

(v) unless such Letter of Credit is a standby letter of credit not supporting the repayment of indebtedness for borrowed money of any Person;

(vi) unless such Letter of Credit is denominated and payable in Dollars;

(vii) in the case of an LC Issuance involving an amendment to an existing Letter of Credit, if the LC Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or if the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit;

(viii) unless such Borrower has delivered to the LC Issuer and the Administrative Agent a duly completed and executed irrevocable LC Application;

(ix) unless such Letter of Credit is governed by (1) if a standby letter of credit, the International Standby Practices (1998) published by the Institute of International Banking Law & Practice (or any successor to such publication) or (2) if a documentary letter of credit, the Uniform Customs and Practice for Documentary Credits (2007 Revision) published by the International Chamber of Commerce (or any successor to such publication); or

(x) if any LC Participant is a Delinquent Lender or is then in default of its obligation to fund its LC Participation under Section 2.4(d) in respect of any Letter of Credit, unless (i) the LC Issuer is reasonably satisfied that one or more Lenders will assume the entire LC Participation of such Delinquent Lender or (ii) such Delinquent Lender has provided cash collateral or other credit support or made other arrangements to the LC Issuer’s reasonable satisfaction to ensure its ability to fund its LC Participation in respect of the relevant Letter of Credit.

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Within the foregoing limits, and subject to the terms and conditions hereof, such Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly such Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. For the avoidance of doubt, if the terms of any LC Application conflict with this Agreement, this Agreement shall prevail.

(b) LC Issuances. Each LC Issuance shall be effected pursuant to a duly completed and executed irrevocable LC Application, given by a Borrower not later than noon (London, England time), four (4) Business Days before the date of the proposed LC Issuance. In the case of a request for an initial issuance of a Letter of Credit, such LC Application shall specify in form and substance satisfactory to the LC Issuer: (i) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day), (ii) the amount thereof, (iii) the expiry date thereof, (iv) the name and address of the beneficiary thereof, (v) the documents to be presented by such beneficiary in case of any drawing thereunder, (vi) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder and (vii) such other matters as the LC Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and substance satisfactory to the LC Issuer, (1) the Letter of Credit to be amended, (2) the proposed date of amendment thereof (which shall be Business Day), (3) the nature of the proposed amendment and (4) such other matters as the LC Issuer may require. Additionally, such Borrower shall furnish to the LC Issuer and the Administrative Agent such other documents and information pertaining to such required amendment, including any LC Documents, as the LC Issuer or the Administrative Agent may require. Promptly after receipt of such LC Application, the LC Issuer shall notify each other Lender and the Administrative Agent thereof and, subject to fulfillment of the applicable conditions in ARTICLE 5, shall make such LC Issuance on the date of the proposed LC Issuance.

(c) LC Participations. Upon the date of each LC Issuance, the LC Issuer shall be deemed to have sold to each other Lender having a Commitment, and each such Lender (an “LC Participant”) having a Commitment shall be deemed irrevocably and unconditionally to have purchased and received from the LC Issuer, without recourse or warranty, an undivided interest and participation in such Letter of Credit equal to such Lender’s Pro Rata Share at such date of the face amount of such Letter of Credit (an “LC Participation”). The LC Issuer shall promptly notify the Administrative Agent and each LC Participant of each LC Issuance and the amount of its LC Participation and each Lender’s Commitment shall be deemed to have been utilized and reduced by the amount of its LC Participation; provided that if any Letter of Credit (i) has been Cash Collateralized or (ii) is backed by a standby letter of credit from a financial institution acceptable to the LC Issuer in its sole discretion, such standby letter of credit to be on terms satisfactory to the Administrative Agent and the Lenders, then each Lender’s Commitment shall be deemed not to have been utilized to the extent of such Lender’s Pro Rata Share of the amount of such Cash Collateralization or the undrawn amount of the standby letter of credit from time to time (as the case may be).

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(d) Drawings and Reimbursements. Upon receipt from the beneficiary of any Letter of Credit of any draw request under such Letter of Credit, the LC Issuer shall notify the Borrowers and the Administrative Agent thereof. Not later than 11:00 a.m. (London, England time) on the date of any payment by the LC Issuer under a Letter of Credit (each such date, an “LC Honor Date”), the Borrowers shall reimburse the LC Issuer in an amount equal to that paid by the LC Issuer to the beneficiary pursuant to such draw request. If the LC Issuer makes a payment pursuant to such draw request and the Borrowers fail to reimburse the LC Issuer in respect thereof by 11:00 a.m. (London, England time) on the LC Honor Date, the LC Issuer shall give the Administrative Agent notice of the Borrowers’ failure and the Administrative Agent shall promptly notify each LC Participant of the amount necessary to reimburse the LC Issuer in full for such payment and each LC Participant’s Pro Rata Share thereof. In such event, the Borrowers shall be deemed to have requested a Borrowing of Loans to be disbursed three (3) Business Days after the LC Honor Date in an amount equal to the unreimbursed amount, without regard to the minimum and multiples specified in Section 2.3(a)(i) for the principal amount of Loans, and upon such notice from the Administrative Agent to each LC Participant, each LC Participant shall make a Loan to the Borrowers not later than 3:00 p.m. (London, England time) on the date that is three (3) Business Days after the LC Honor Date, which Loan shall be in same day funds in an amount equal to such LC Participant’s Pro Rata Share of such Borrowing and otherwise in accordance with the provisions of Section 2.3(a). The proceeds of each such Loan shall be paid from each LC Participant to the Administrative Agent who, in turn, will disburse such proceeds to the LC Issuer to reimburse the LC Issuer for such LC Participant’s Pro Rata Share of the amount necessary to reimburse the LC Issuer in full. If such reimbursement is not made by any LC Participant to the LC Issuer by 3:00 p.m. (London, England time) on the third Business Day after the LC Honor Date, such LC Participant shall pay interest on its Pro Rata Share thereof to the LC Issuer at a rate per annum equal to the interest that would have then accrued if the payment so made by the LC Issuer pursuant to such draw request was instead a Loan from the LC Issuer to such LC Participant pursuant to the terms hereof. The Borrowers hereby unconditionally and irrevocably authorize, empower, and direct the Administrative Agent and the LC Participants to record and otherwise treat such reimbursements by the LC Participants to the LC Issuer initially as Loans with a three (3) month Interest Period under a Borrowing requested by the Borrowers to reimburse the LC Issuer which have been transferred to the LC Participants at the Borrowers’ request.

(e) Repayment of Participations. (i) At any time after the LC Issuer has made a payment under any Letter of Credit and has received from any LC Participant reimbursement for such LC Participant’s Pro Rate Share of the payment so made by the LC Issuer, if the Administrative Agent receives for the account of the LC Issuer any payment in respect of the related payment by the LC Issuer under the relevant draw request or interest thereon (whether directly from the Borrowers or otherwise, and including payments under any standby letter of credit issued to back a Letter of Credit and proceeds of cash collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such LC Participant its Pro Rata Share thereof in the same funds as those received by the Administrative Agent.

(f) Obligations Unconditional. The obligations of the Borrowers under this Agreement in respect of each Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with this Agreement under all circumstances, including:

(i) any lack of validity or enforceability of any LC Document;

(ii) any amendment or waiver of, or any consent to or departure from, any LC Document;

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(iii) the existence of any claim, set off, defense, or other right which the Borrowers may have at any time against any beneficiary or transferee of such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the LC Issuer, or any other person or entity, whether in connection with this Agreement, the transactions contemplated by this Agreement or in any LC Document, or any unrelated transaction;

(iv) any statement or any other document presented under such Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment by the LC Issuer under such Letter of Credit against presentation of a draw request or other document which does not comply with the terms of such Letter of Credit; or

(vi) any other circumstance whatsoever, whether or not similar to any of the foregoing,

provided, however, that nothing contained in this clause (f) shall be deemed to constitute a waiver of any remedies of the Borrowers in connection with such Letter of Credit or the Borrowers’ rights under Section 2.4(g).

(g) Liability of LC Issuer. The Borrowers assume all risks of any act or omission of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. Neither the LC Issuer, any LC Participant nor any of their respective officers or directors shall be liable or responsible for:

(i) the use which may be made of any Letter of Credit or any act or omission of any beneficiary or transferee in connection therewith;

(ii) the validity, sufficiency, or genuineness of any document, or of any endorsement thereon, even if such document should prove to be in any or all respects invalid, insufficient, fraudulent, or forged;

(iii) payment by the LC Issuer against presentation of any document which does not comply with the terms of a Letter of Credit, including failure of any document to bear any reference or adequate reference to the relevant Letter of Credit; or

(iv) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit (including the LC Issuer’s own negligence),

provided that the Borrowers shall have a claim against the LC Issuer, and the LC Issuer shall be liable to the Borrowers, to the extent of any direct, as opposed to consequential, damages suffered by the Borrowers which are found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted by reason of the LC Issuer’s willful misconduct or gross negligence in determining whether documents presented under a Letter of Credit were in compliance with the terms of such Letter of Credit (and in such case the reimbursement obligations of the LC Participants to the

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LC Issuer under Section 2.5(d) shall be suspended). Notwithstanding anything in the foregoing to the contrary, the LC Issuer may accept any document that appears on its face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

(h) Cash Collateral Account.

(i) If a Borrower is required to deposit funds in the Cash Collateral Account pursuant to this Agreement or any Loan Document, then such Borrower shall establish the Cash Collateral Account and shall execute any document and Security Agreement, including the LC Issuer’s standard form assignment of deposit accounts, that the LC Issuer requests in connection therewith to grant in favor of the Collateral Agent, for the benefit of the LC Issuer, a first priority Lien in respect of the Cash Collateral Account and the funds therein as security for the payment in full of the Obligations.

(ii) So long as no Event of Default exists, (A) the Collateral Agent may apply the funds held in the Cash Collateral Account only to the reimbursement of any LC Obligations and (B) the Collateral Agent shall release to the relevant Borrower at such Borrower’s written request any funds held in the Cash Collateral Account in an amount up to but not exceeding the excess, if any (immediately prior to the release of any such funds), of the total amount of funds held in the Cash Collateral Account over the LC Outstandings (if any). Following the occurrence and at any time during the continuation of any Event of Default, the Collateral Agent may, subject to Section 2.13 and Section 9.4(e), and in consultation with the LC Issuer and the Majority Lenders, apply any funds held in the Cash Collateral Account to the Obligations regardless of any LC Outstandings (if any) that may remain outstanding.

(iii) The Collateral Agent shall exercise reasonable care in the custody and preservation of any funds held in the Cash Collateral Account and shall be deemed to have exercised such care if such funds are accorded treatment substantially equivalent to that which the Collateral Agent accords its own property, it being understood that the Collateral Agent shall not have any responsibility for taking any necessary steps to preserve rights against any parties with respect to any such funds.

2.5 Prepayments.

(a) Optional. Each Borrower may at any time and from time to time voluntarily prepay the Loans, in whole or in part, by delivering to the Administrative Agent no later than 11:00 a.m. (London, England time) at least three (3) Business Days prior to the proposed prepayment date, irrevocable written notice specifying the proposed prepayment date and the aggregate principal amount of such prepayment. Each such voluntary prepayment shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the aggregate outstanding principal amount of the Loans, as the case may be). If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein.

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(b) Mandatory. Each Borrower shall make a mandatory prepayment of the Loans in each of the following circumstances:

(i) Disposal. If a Borrower or any of its Subsidiaries Disposes of any property pursuant to Section 8.5(d), which results in the realization by such Person of Net Cash Proceeds in excess of $500,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof calculated as of the date of receipt) whether as a single Disposal or a series of related Disposals, such Borrower shall (and shall ensure that such Subsidiary will), no later than the last day of the Interest Period in which such Net Cash Proceeds are realized (A) apply an amount equal to such Net Cash Proceeds to prepay the Loans and (B) if such prepayment occurs during the Commitment Period and if so required by the Majority Lenders, reduce the aggregate Commitments by an amount equal to such Net Cash Proceeds.

(ii) Casualty Event. If a Borrower or any of its Subsidiaries receives Casualty Proceeds in excess of $500,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof calculated as of the date of receipt), such Borrower shall (and shall ensure that such Subsidiary will) no later than the last day of the Interest Period in which such Casualty Proceeds are received (A) apply an amount equal to such Casualty Proceeds to prepay the Loans and (B) if such prepayment occurs during the Commitment Period and if so required by the Majority Lenders, reduce the aggregate Commitments by an amount equal to such Casualty Proceeds; provided that if a Casualty Reinvestment Notice has been delivered in respect of the relevant Casualty Event, then such Borrower shall (and shall ensure that such Subsidiary will) no later than the last day of the Interest Period in which the Casualty Reinvestment Prepayment Date occurs (C) apply an amount equal to the Casualty Reinvestment Prepayment Amount to prepay the Loans and (D) if such prepayment occurs during the Commitment Period and if so required by the Majority Lenders, reduce the aggregate Commitments by an amount equal to the Casualty Reinvestment Prepayment Amount.

(iii) Illegality. If any Lender notifies the Administrative Agent and the Borrowers that the introduction of or any change in or in the interpretation of any Applicable Law makes it unlawful, or any Governmental Authority asserts that it is unlawful, for such Lender to maintain any Loan outstanding hereunder, then such Lender’s Commitment shall be reduced to zero and the Borrowers shall (if not prohibited by Applicable Law) prepay all outstanding Loans of such Lender no later than 11:00 a.m. (London, England time) on the last day of the then existing Interest Period for such Loans (or within such earlier time as may be required by Applicable Law).

(iv) Loans Exceed Commitments. On the date of each reduction of the aggregate Commitments pursuant to the provisions of this Agreement (including any reduction of the Commitments pursuant to Section 2.6), the Borrowers shall prepay the Loans to the extent, if any, that the aggregate unpaid principal amount of all Loans plus the LC Outstandings (if any) exceeds the lesser of (A) the aggregate Commitments as so reduced and (B) the Borrowing Base.

(v) Acceleration. Immediately upon any acceleration of the maturity of any Loans pursuant to Section 9.2 or Section 9.3, the Borrowers shall prepay all Loans in full unless, pursuant to Section 9.3, only a portion of all the Loans is so accelerated (in which case the portion so accelerated shall be so prepaid).

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(c) No Additional Right; Interest; Ratable Prepayment. The Borrowers shall have no right to prepay any Loan except as provided in this Section 2.5, and all notices given pursuant to this Section 2.5 shall be irrevocable and binding upon each Borrower. Each prepayment of any Loan shall be accompanied by accrued interest on the principal amount prepaid to the date of such prepayment and breakage costs, if any, required to be paid pursuant to Section 4.4. Subject to Section 12.9(b), the amount of each prepayment shall be applied ratably to the principal amount of each Lender’s Loans in accordance with its Pro Rata Share and each prepayment occurring on or after the Commitment Reduction Date shall be applied to reduce in inverse order the remaining amortization payments required in respect of the then outstanding principal amount of the Loans pursuant to Section 2.7.

2.6 Termination or Reduction of Commitments; Increase of Commitments.

(a) Optional. The Borrowers may, upon at least three (3) Business Days’ irrevocable notice to the Administrative Agent, voluntarily terminate the unused and uncancelled portion of the Commitments in whole or reduce in part any unused and uncancelled portion of the Commitments. Unless otherwise stated in this Agreement, each such reduction of the Commitments shall be in a minimum amount of $1,000,000 and in a whole multiple of $250,000 in excess thereof. Any such termination or reduction of the Commitments shall be permanent, and shall be applied to each Lender’s Commitment in accordance with its Pro Rata Share; provided that while a Delinquent Period is in effect, the Borrowers may exercise their rights under Section 12.9(d) to reduce the Commitments of the relevant Delinquent Lender before reducing each other Lender’s Commitment in accordance with its Pro Rata Share.

(b) Mandatory. Notwithstanding anything in this Agreement to the contrary, on each Repayment Date, the aggregate Commitments of all Lenders then in effect shall be permanently reduced by an amount equal to the Commitment Reduction Amount (or, if the amount of the aggregate Commitments at such time is less than the Commitment Reduction Amount, an amount equal to such Commitments). Each such reduction shall be applied to each Lender’s Commitment in accordance with its Pro Rata Share at such time, and shall take effect without any further action on the part of such Lender, any Borrower, any Obligor, any Secured Party or any other Person.

(c) Increase of Commitments. The Borrowers shall have the right to increase the aggregate Commitments by obtaining additional funding commitments either from one or more of the Lenders (it being understood that no Lender shall have, or be deemed to have, an obligation to provide a portion of any such increase in the Commitments merely by reason of being a party hereto) or any other commercial bank or financial institution generally engaged in the business of providing corporate loans on a revolving basis; provided that (i) the aggregate amount of all such increases hereunder shall not result in the aggregate Commitments exceeding $250,000,000 at any time, (ii) any Person that provides such increase shall be subject to the approval of the Majority Lenders and the LC Issuer, such approval not to be unreasonably withheld, conditioned or delayed, (iii) any such Person assumes all of the rights and obligations of a “Lender” hereunder on terms substantially similar to those contained in the Assignment Agreement but otherwise pursuant to an assumption agreement in form and substance reasonably satisfactory to the Administrative Agent (acting on the directions of the Majority Lenders) between such Person, the Borrowers and the Administrative Agent and (iv) as a condition precedent to any such increase, the Borrowers shall deliver to the Administrative Agent a certificate of each Obligor signed by a Responsible Officer of such Obligor certifying and attaching the resolutions adopted by such Obligor approving or consenting to such increase, and certifying that,

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before and after giving effect to such increase, the representations and warranties contained in this Agreement and the other Loan Documents are true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

2.7 Repayment of Loans. Subject to Section 12.9(b), on each Repayment Date, the Borrowers shall repay to the Administrative Agent, for the ratable benefit of the Lenders, an outstanding principal amount of the Loans equal to the Commitment Reduction Amount.

2.8 Interest.

(a) Loans. On each Interest Payment Date, the Borrowers shall pay interest in respect of the outstanding principal amount of each Loan at a rate per annum equal at all times during the Interest Period for such Loan to LIBOR for such Interest Period plus the Applicable Margin; provided that if any circumstance in Section 2.3(b)(iii), Section 2.3(b)(iv) or Section 2.3(b)(v) occurs which results in any Loan being maintained on a basis other than LIBOR, the Borrowers shall pay interest in respect of the outstanding principal amount of such Loan at a rate per annum equal to the alternative rate identified in Section 2.3(b)(iii), Section 2.3(b)(iv) or Section 2.3(b)(v), as applicable plus the Applicable Margin at the end of each Fiscal Quarter or at such other times as may be reasonably determined by the Administrative Agent.

(b) Additional Interest; Mandatory Costs. If any Lender is required to maintain any reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (as defined in Regulation D of the Board of Governors of the Federal Reserve System of the United States of America) or to comply with any applicable requirements of the European Central Bank, the Bank of England, the Financial Services Authority or any other Governmental Authority in connection with the advance or continuation of any Loan (including any marginal, special, emergency or supplemental reserves), then the Borrowers shall pay to such affected Lender additional interest on the unpaid principal amount of such Loan from its effective date until its repayment in full, to compensate such Lender for its cost of compliance therewith. Such additional interest shall be determined by such Lender and notified to the Borrowers through the Administrative Agent (such notice to include the calculation of such additional interest, which calculation shall be conclusive in the absence of manifest error). Any additional interest shall be due and payable on each Interest Payment Date following the date of the Administrative Agent’s notice to the Borrowers to pay any such amount.

(c) Default Interest. If a Default under Section 9.1(a) or 9.1(f) or an Event of Default shall have occurred and be continuing, then all Loans (whether or not then due) shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to this Section 2.8 plus an additional 2.00% per annum. In addition, all amounts (other than the principal amount of the Loans) not paid when due hereunder (including, to the extent permitted by Applicable Law, all overdue interest and fees) shall bear interest at a rate per annum equal to the rate that would have been payable if such overdue amount had been deemed to constitute a Loan with an Interest Period of three (3) months initially borrowed on the date such amount became overdue, plus an additional 2.00% per annum.

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2.9 Fees. The Borrowers shall pay the following fees, all of which shall be fully earned and nonrefundable when paid (regardless of whether any Borrowing contemplated by this Agreement is requested), shall be paid in immediately available funds when due, shall not be subject to any counterclaim or set off and shall be in addition to, and not in lieu of, and any other fees, reimbursements of out-of-pocket costs and expenses payable by any Borrower under this Agreement or any other Loan Document:

(a) Commitment Fee. Subject to Section 12.9(e), the Borrowers shall pay to the Administrative Agent for the account of each Lender a commitment fee at a per annum rate equal to the Commitment Fee Rate on the average daily unused and uncancelled portion of such Lender’s Commitment, from the Closing Date until the Commitment Termination Date. The commitment fees shall be due and payable in arrears on the last day of each Fiscal Quarter after the Closing Date (and continuing thereafter through and including the Commitment Termination Date) and shall be fully earned and nonrefundable when paid, regardless of whether any Borrowing contemplated by this Agreement is requested.

(b) Letter of Credit Fees. Subject to Section 12.9(e), the Borrowers shall pay to the Administrative Agent for the pro rata benefit of the LC Issuer and the LC Participants a per annum letter of credit fee for each Letter of Credit issued hereunder in an amount equal to the Applicable Margin multiplied by the face amount of such Letter of Credit for the period such Letter of Credit is to be outstanding; provided that, for any Letter of Credit that is (i) Cash Collateralized or (ii) backed by a standby letter of credit issued by a financial institution acceptable to the LC Issuer in its sole discretion, then the per annum letter of credit fee for such Letter of Credit shall be an amount equal to 1.00% multiplied by the face amount of such Letter of Credit for the period such Letter of Credit is outstanding. On each date of issuance of any Letter of Credit, the Borrowers shall pay to the LC Issuer, solely for its own account, a fronting fee in an amount equal to 0.25% of the original maximum amount available to be drawn under such Letter of Credit. Each letter of credit fee shall be payable in advance on the date of the issuance of the Letter of Credit, and, in the case of an increase in the face amount or extension of the expiry date of such Letter of Credit only, on the date of such increase or extension. Without prejudice to the foregoing, the Borrowers also shall pay to the LC Issuer, solely for its own account, promptly on demand such other usual and customary fees associated with any transfers, amendments, drawings, negotiations or re-issuances of any Letter of Credit. Such fees and charges shall be due and payable on demand and shall be nonrefundable.

2.10 Computation of Interest and Fees. All computations of interest and fees shall be made by the Administrative Agent, on the basis of a year of three hundred and sixty (360) days, in each case for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest or fees are payable. Each determination by the Administrative Agent of an interest rate or fee shall be conclusive and binding for all purposes, absent manifest error.

2.11 Payment Procedures; Clawback.

(a) Payments by Borrowers. The Borrowers and each other Obligor shall make each payment required of it under this Agreement and under any other Loan Document not later than 11:00 a.m. (London, England time) on the date due in Dollars to the Administrative Agent at its Funding Office, or such other location as the Administrative Agent may designate in writing to the Borrowers or such Obligor in same day funds without deduction, set off, or counterclaim of any kind. Upon its actual receipt of such payment in same day funds without deduction, set off, or counterclaim of any kind, the Administrative Agent shall promptly thereafter calculate and cause to be distributed ratably to each Lender in accordance with such Lender’s Pro Rata Share at each Lender’s respective Funding Office

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or to an account of such Lender at a bank in New York City as notified to the Administrative Agent at least five (5) Business Days prior to such distribution, like funds relating to the payment of principal, interest, fees or any other amounts (other than amounts payable solely to the Administrative Agent, the LC Issuer, or a specific Lender), and like funds relating to the payment of interest, fees or any other amounts payable to the LC Issuer for its account at its Funding Office, in each case to be applied in accordance with this Agreement. If the Administrative Agent makes a payment to a Lender or the LC Issuer in circumstances where the Administrative Agent was for any reason not in actual receipt of same day funds for such payment without deduction, set off or counterclaim (it being understood that the Administrative Agent shall have no obligation to make such a payment unless and until it actually receives such funds from the Borrowers), then such Lender or the LC Issuer (as the case may be) shall on demand therefor promptly refund such payment to the Administrative Agent together with accrued interest thereon from the date of its receipt of such payment to the date such refund is received by the Administrative Agent, such interest to be based on the rate determined by the Administrative Agent as its cost of funding for such payment.

(b) Non-Business Day Payments. If any payment of principal on a Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal on a Loan pursuant to the preceding sentence, interest thereon shall be payable at the applicable interest rate during such extension as determined by the Administrative Agent in its reasonable discretion. In the case of fees or any other amount under a Loan Document (other than principal or interest) that becomes due and payable on a day other than a Business Day, such amount shall be payable on the next succeeding Business Day.

2.12 Evidence of Indebtedness.

(a) Records of Loans. The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in accordance with its usual practice in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

(b) Records of Letters of Credit. Without prejudice to Section 2.12(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice in the ordinary course of business, one or more accounts or records evidencing each purchase and sale by such Lender of participations in Letters of Credit. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

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2.13 Sharing of Payments by Lenders.

(a) General. Subject to Section 2.13(b), if any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set off, or otherwise) on account of its Loans or LC Outstandings (if any) in excess of its Pro Rata Share, such Lender (the “Purchasing Lender”) shall promptly notify the Administrative Agent to such effect and shall be deemed to have forthwith purchased from the other Lenders (other than any Delinquent Lender) participations in their Loans or LC Outstandings (if any) as shall be necessary to cause the Purchasing Lender to share the excess payment received ratably with such other Lenders; provided that if all or any portion of such excess payment is thereafter recovered by each of such Lenders, the Purchasing Lender’s purchase from such Lender shall be rescinded and such Lender shall repay to the Purchasing Lender the purchase price to the extent of its Pro Rata Share of such recovery. The Borrowers agree that any Purchasing Lender that is deemed to have purchased a participation from another Lender may, to the fullest extent permitted by Applicable Law, exercise all its rights (including the right of set off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of such participation.

(b) Exceptions. Section 2.13(a) shall not apply to (i) any payment made by an Obligor to a Lender pursuant to and in accordance with the express terms of this Agreement or any other Loan Document, (ii) any consideration received by a Lender in relation to any participation granted by it or any assignment made by it in accordance with and pursuant to Section 12.7 and (iii) any payment obtained by a Lender in accordance with and pursuant to Section 12.9. In addition, nothing in this Section 2.13 shall at any time require a Lender to share with a Delinquent Lender any payment received by such Lender during the relevant Delinquent Period.

ARTICLE 3

BORROWING BASE

3.1 Initial Borrowing Base. The initial Borrowing Base in effect on the Closing Date shall be $30,000,000. Such initial Borrowing Base shall be subject to redetermination from time to time in accordance with this ARTICLE 3.

3.2 Scheduled Redeterminations.

(a) Independent Reserves Report.

(i) Closing Date Delivery. On the Closing Date, the Borrowers shall deliver to the Technical Agent and each Lender a reserves report dated as of May 7, 2009 from RPS Energy with respect to the Hydrocarbon Interests included or to be included in the Borrowing Base.

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(ii) Subsequent Deliveries. Within ninety (90) days after December 31 in each year, commencing with December 31, 2009, the Borrowers shall deliver to the Technical Agent an Independent Reserves Report dated effective as of such December 31, and such other information as may be reasonably requested by the Technical Agent or any Lender with respect to the Hydrocarbon Interests included or to be included in the Borrowing Base. Within thirty (30) days after the Technical Agent’s receipt of such Independent Reserves Report and other information, the Technical Agent shall deliver to each Lender the Technical Agent’s recommendation for the redetermined Borrowing Base. Within ten (10) days after the Lenders’ receipt of the Technical Agent’s recommendation, the Technical Agent and the Majority Lenders shall redetermine the Borrowing Base in accordance with Section 3.4, and the Technical Agent shall promptly notify the Administrative Agent, the Borrowers and the Lenders of the amount of the Borrowing Base as so redetermined provided that if the Majority Lenders do not agree on a redetermined Borrowing Base, the lowest redetermined amount among the Lenders will prevail. If the redetermined amount is lower than the Borrowing Base existing prior to such redetermination, the Borrowing Base shall be equal to the redetermined amount one (1) Business Day after such notification. If the redetermined amount is greater than the Borrowing Base existing prior to such redetermination, the express written approval of the Supermajority Lenders shall be required before the redetermined amount may take effect, failing which the Borrowing Base shall remain the same as that existing prior to such redetermination.

(b) Internal Reserves Reports. Within forty-five (45) days after June 30 in each year, commencing with June 30, 2010, the Borrowers shall deliver to the Technical Agent and the Independent Reserves Engineer an Internal Reserves Report dated effective as of such June 30, and such other information as may be reasonably requested by the Technical Agent, the Independent Reserves Engineer or any Lender with respect to the Hydrocarbon Interests included or to be included in the Borrowing Base. Within thirty (30) days after the Technical Agent’s receipt of such Internal Reserves Report and other information and the completion of the Independent Reserves Engineer’s review of such Report and other information, the Technical Agent shall deliver to each Lender the Technical Agent’s and Independent Engineer’s recommendation for the redetermined Borrowing Base. Within ten (10) days after the Lenders’ receipt of the Technical Agent’s and Independent Engineer’s recommendation, the Technical Agent and the Majority Lenders shall redetermine the Borrowing Base in accordance with Section 3.4, and the Technical Agent shall promptly notify the Administrative Agent, the Borrowers and the Lenders of the amount of the Borrowing Base as so redetermined provided that if the Majority Lenders do not agree on a redetermined Borrowing Base, the lowest redetermined amount among the Lenders will prevail. If the redetermined amount is lower than the Borrowing Base existing prior to such redetermination, the Borrowing Base shall be equal to the redetermined amount one (1) Business Day after such notification. If the redetermined amount is greater than the Borrowing Base existing prior to such redetermination, the express written approval of the Supermajority Lenders shall be required before the redetermined amount may take effect, failing which the Borrowing Base shall remain the same as that existing prior to such redetermination.

(c) Late Delivery. If the Borrowers do not furnish to the Technical Agent and the Lenders the Independent Reserves Report, Internal Reserves Report or other information specified in clauses (a) or (b) above by the required date, (i) the obligation of the Lenders to advance a Loan hereunder and the obligation of the LC Issuer to issue a Letter of Credit hereunder shall be only at the option of any such Lender or LC Issuer, respectively and (ii) the Technical Agent and the Lenders may nonetheless

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redetermine the Borrowing Base from time to time thereafter in their sole discretion until the Technical Agent and the Lenders receive the relevant Independent Reserves Report, Internal Reserves Report, or other information, as applicable, whereupon the Technical Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this ARTICLE 3.

(d) Representation and Warranty. Each delivery of an Internal Reserves Report by the Borrowers to the Technical Agent and the Lenders shall constitute a representation and warranty by the Borrowers to the Technical Agent and the Lenders that (i) the Borrowers have rights with respect to the Hydrocarbon Interests specified therein pursuant to the terms of the Hydrocarbon Licenses and (ii) on and as of the date of such Reserves Report each Hydrocarbon Interest described as “proved developed” therein was developed for oil and/or gas, and the wells pertaining to such Hydrocarbon Interests described therein as “producing wells” were each producing oil and gas in paying quantities, except for wells that were utilized as water or gas injection wells or as water disposal wells. Concurrently with the delivery of each Independent Reserves Report to the Technical Agent, the Borrowers shall deliver a certificate of the Borrowers, signed by a Responsible Officer of the Borrowers, representing and warranting as to the truth, completeness and accuracy of the statements set forth in clauses (i) and (ii) of the immediately preceding sentence in respect of such matters as covered in such Independent Reserves Report.

3.3 Interim Redeterminations. With effect from the first anniversary of the Closing Date, and in addition to the scheduled redeterminations of the Borrowing Base provided for in Section 3.2, the Majority Lenders shall have the right to require one (1) interim redetermination of the Borrowing Base during any period of twelve (12) consecutive months upon giving the Technical Agent and the Borrowers at least ten (10) days’ prior written notice to such effect, and the Borrowers shall have the right to require one (1) interim determination of the Borrowing Base during any period of twelve (12) consecutive months upon giving the Technical Agent and the Lenders at least ten (10) days’ prior written notice to such effect. In connection with any redetermination of the Borrowing Base under this Section 3.3, the Borrowers shall provide the Technical Agent with such supporting information regarding the Borrowers’ business (including the Hydrocarbon Interests, the Proved Reserves, and production relating thereto) as the Technical Agent or any Lender may reasonably request, including, in the case of requests for an increase to the Borrowing Base of $1,000,000 or more, an updated Independent Reserves Report. Within thirty (30) days after the Technical Agent’s receipt of a request for an interim determination under this Section 3.3 together with such supporting information (if any) referred to in the previous sentence, the Technical Agent shall deliver to each Lender the Technical Agent’s recommendation for the redetermined Borrowing Base. Within ten (10) days after the Lenders’ receipt of the Technical Agent’s recommendation, the Technical Agent and the Majority Lenders shall redetermine the Borrowing Base in accordance with Section 3.4, and the Technical Agent shall promptly notify the Administrative Agent, the Borrowers and the Lenders of the amount of the Borrowing Base as so redetermined provided that if the Majority Lenders do not agree on a redetermined Borrowing Base, the lowest redetermined amount among the Lenders will prevail. If the redetermined amount is lower than the Borrowing Base existing prior to such redetermination, the Borrowing Base shall be equal to the redetermined amount one (1) Business Day after such notification. If the redetermined amount is greater than the Borrowing Base existing prior to such redetermination, express written approval of the Supermajority Lenders shall be required before the redetermined amount may take effect, failing which the Borrowing Base shall remain the same as that existing prior to such redetermination.

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3.4 Standards for Redetermination. Each redetermination of the Borrowing Base by the Technical Agent and the Majority Lenders pursuant to this ARTICLE 3 shall be made (i) in the sole discretion of the Technical Agent and the Majority Lenders (but in accordance with the other provisions of this Section 3.4), (ii) in accordance with the Technical Agent’s and the Majority Lenders’ customary internal standards and practices for valuing and redetermining the value of Hydrocarbon Interests in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Reserves Report or Internal Reserves Report (as applicable) or other information received by the Technical Agent or any Lender relating to the Hydrocarbon Interests, the Proved Reserves and production relating thereto and (iv) based upon the estimated Present Value pursuant to the terms of the Hydrocarbon Licenses as determined by the Technical Agent and the Majority Lenders. In valuing and redetermining the Borrowing Base, the Technical Agent and the Majority Lenders may also consider the business, financial condition, and Indebtedness of the Borrowers and any of their Subsidiaries, any Hydrocarbon Hedge Agreements and such other factors as the Technical Agent and the Majority Lenders customarily deem appropriate, and shall be satisfied that the Present Value is at least equal to 125% of the projected future net cash flows attributable to Proved Developed Producing Reserves at such time and that such projected future net revenues will be sufficient to meet scheduled payments of principal, interest and fees under this Agreement and the other Loan Documents as and when they become due. In that regard, the Borrowers acknowledge that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Technical Agent and the Lenders. No Proved Reserves shall be included or considered for inclusion in the Borrowing Base unless the Technical Agent shall have received, at the Borrowers’ expense, Security Documents, filings, legal opinions and such other appropriate documentary evidence satisfactory in form and substance to the Technical Agent confirming the existence of a Security Interest in the Hydrocarbon Licenses and the Hydrocarbon Interests pertaining thereto (to the fullest extent permissible under the laws of Turkey). At all times after the Technical Agent has given the Borrowers notification of a redetermination of the Borrowing Base under this ARTICLE 3, the Borrowing Base shall be equal to the redetermined amount until the Borrowing Base is again redetermined in accordance with this ARTICLE 3.

3.5 Borrowing Base Deficiency. If a Borrowing Base Deficiency occurs, the Technical Agent shall deliver to the Administrative Agent, the Borrowers and the Lenders as soon as reasonably practicable thereafter a notice to such effect (the “Borrowing Base Deficiency Notice”). The Borrowers shall cure the Borrowing Base Deficiency within forty-five (45) days after receipt of such Borrowing Base Deficiency Notice. In addition, the Borrowers shall deliver to the Technical Agent and the Administrative Agent (for delivery to the Lenders) within fifteen (15) days after receipt of such Borrowing Base Deficiency Notice, a written statement (the “Borrowing Base Deficiency Cure Notice”) indicating which one or combination of the following actions it intends to take to cure the Borrowing Base Deficiency:

(a) a prepayment of all or any part of the Loans pursuant to Section 2.5(a);

(b) Cash Collateralizing the LC Outstandings (if any) then in existence; or

(c) a security interest in additional Collateral, such security interest and such additional Collateral to be acceptable to the Collateral Agent and each Lender in its sole discretion.

3.6 Operational Lock-Up. Following the occurrence of a Borrowing Base Deficiency, all amounts deposited in the Collection Accounts shall be retained therein, and no withdrawals may be made therefrom except in accordance with Section 7.13.

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ARTICLE 4

TAXES AND YIELD PROTECTION

4.1 Taxes.

(a) No Deduction for Certain Taxes. Any and all payments by each Obligor shall be made free and clear of and without deduction for any and all present and future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Secured Party, taxes imposed on its income by the jurisdiction under the laws of which such Secured Party is organized or any political subdivision of the jurisdiction (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”) and, in the case of each Secured Party, Taxes by the jurisdiction of such Secured Party’s Funding Office or any political subdivision of such jurisdiction. If any Obligor shall be required by law to deduct any Taxes from or in respect of any sum payable to any Secured Party, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 4.1), such Secured Party receives an amount equal to the sum it would have received had no such deductions been made; (ii) such Obligor shall make such deductions; and (iii) such Obligor shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with Applicable Law.

(b) Other Taxes. In addition, each Obligor shall pay (i) any present and future stamp or documentary taxes or any other excise or property taxes, intangible or mortgage recording taxes, charges or similar levies and (ii) any value added taxes imposed by the jurisdiction in which the Obligor is resident, in each of (i) and (ii) arising from any payment made or from the execution, delivery, enforcement or registration of, or otherwise with respect to, this Agreement, the Notes, or the other Loan Documents (hereinafter referred to as “Other Taxes”).

(c) Indemnification for Taxes. Each Obligor indemnifies each Secured Party for the full amount of Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.1) paid by such Secured Party and any liability (including interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Each payment required to be made by an Obligor in respect of this indemnification shall be made to the Administrative Agent for the benefit of any party claiming such indemnification within thirty (30) days from the date such Obligor receives written demand therefor from the Administrative Agent on behalf of itself as Administrative Agent or any such Secured Party. If any Secured Party receives a refund in respect of any Taxes paid by an Obligor under this clause (c), such Secured Party shall promptly pay to such Obligor such Obligor’s share of such refund as reasonably determined by such Secured Party.

4.2 Increased Costs.

(a) Change in Law. If, due to either (i) the introduction of or any change in or in the interpretation of any Applicable Law after the Closing Date or (ii) the compliance with any guideline or request from any Governmental Authority (whether or not having the force of law) that becomes effective after the Closing Date, there shall be any increase in the cost to any Secured Party of agreeing to make or making, funding, or maintaining any Credit Extension (whether as a result of any consequent change in its basis of taxation, any consequent introduction of additional regulatory fees or

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deposits or otherwise), then each Borrower shall from time to time, upon demand by such Secured Party (with a copy of such demand to the Administrative Agent), immediately pay to the Administrative Agent for the account of such Secured Party such additional amounts as shall be sufficient to compensate such Secured Party for such increased cost. A certificate as to the amount of such increased cost and detailing the calculation of such cost submitted to such Borrower and the Administrative Agent by such Secured Party shall be conclusive and binding for all purposes, absent manifest error.

(b) Capital Adequacy. If any Lender determines in good faith that compliance with any Applicable Law or any guideline or request from any Governmental Authority (whether or not having the force of law) that becomes effective after the Closing Date affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender’s Commitment or the LC Issuer’s commitment to issue Letters of Credit, then, upon ten (10) days’ prior written notice by such Lender or the LC Issuer (with a copy of any such demand to the Administrative Agent), each Borrower shall immediately pay to the Administrative Agent for the account of such Lender or the LC Issuer from time to time as specified by it, such additional amounts as shall be sufficient to compensate such Lender or the LC Issuer, in light of such circumstances, (i) with respect to such Lender, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender’s Commitment and (ii) with respect to the LC Issuer, to the extent that the LC Issuer reasonably determines such increase in capital to be allocable to the issuance or maintenance of the Letters of Credit. A certificate as to such amounts and detailing the calculation of such amounts submitted to such Borrower by such Lender or the LC Issuer shall be conclusive and binding for all purposes, absent manifest error.

(c) Letters of Credit. If any change in any law or regulation or in the interpretation thereof by any Governmental Authority charged with the administration thereof that becomes effective after the Closing Date shall either (i) impose, modify, or deem applicable any reserve, special deposit, or similar requirement against letters of credit issued by, or assets held by, or deposits in or for the account of, the LC Issuer or (ii) impose on the LC Issuer any other condition regarding any Letter of Credit or any LC Outstandings (if any), and the result of any event referred to in the preceding clause (i) or (ii) shall be to increase the cost to the LC Issuer of issuing or maintaining any Letter of Credit (which increase in cost shall be determined by the LC Issuer’s reasonable allocation of the aggregate of such cost increases resulting from such event), then, upon demand by the LC Issuer, each Borrower shall pay to the LC Issuer, from time to time as specified by the LC Issuer, such additional amounts as shall be sufficient to compensate the LC Issuer for such increased cost. A certificate as to such increased cost incurred by the LC Issuer, as a result of any event mentioned in the preceding clause (i) or (ii), and detailing the calculation of such increased costs submitted by the LC Issuer to such Borrower, shall be conclusive and binding for all purposes, absent manifest error.

(d) Clawback Limitation. Failure or delay on the part of any Lender or the LC Issuer to demand compensation pursuant to this Section 4.2 shall not constitute a waiver of such Lender’s or the LC Issuer’s right to demand such compensation; provided that no Borrower shall be required to compensate a Lender or the LC Issuer pursuant to this Section 4.2 for any increased costs incurred or reductions suffered more than one hundred and eighty (180) days prior to the date that such Lender or the LC Issuer, as the case may be, notifies such Borrower of the event giving rise to such increased costs or reductions and of such Lender’s or the LC Issuer’s intention to claim compensation therefor (except that, if the event giving rise to such increased costs or reductions is retroactive, then the one hundred and eighty (180) day period referred to above shall be extended to include the period of retroactive effect thereof).

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4.3 Mitigation Obligations. If any Lender or the LC Issuer requests compensation under Section 4.1 or Section 4.2, then such Lender or the LC Issuer shall use reasonable efforts to designate a different Funding Office for funding or booking its Loans or Letters of Credit, or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the LC Issuer, such designation or assignment (i) would eliminate or reduce amounts payable by each Borrower pursuant to Section 4.1 or Section 4.2 in the future and (ii) would not subject such Lender or the LC Issuer to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the LC Issuer, as the case may be. Each Borrower hereby agrees to pay all costs and expenses incurred by any Lender or the LC Issuer in connection with any such designation or assignment; provided that such costs and expenses incurred by any Lender or the LC Issuer in connection with any such designation or assignment are not greater than amounts payable under Section 4.1 or Section 4.2.

4.4 Breakage Costs. Each Borrower agrees to indemnify each Lender on demand for, and to hold each Lender harmless from, any Tax, loss or expense that such Lender may sustain or incur as a consequence of (a) each Borrower’s failure to borrow or continue any Loan after requesting the same, (b) each Borrower’s failure to make any prepayment of Loans after such Borrower has given a notice thereof, (c) the making of a prepayment of Loans on a day that is not the last day of an Interest Period with respect thereto or (d) receipt by an LC Participant pursuant to Section 2.4(e) of its Pro Rata Share of the amount necessary to reimburse the LC Issuer in full for any payment made by it under a Letter of Credit. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed or continued, for the period from the date of such prepayment or of such failure to borrow or continue to the last day of such Interest Period (or, in the case of a failure to borrow or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the London interbank market. A certificate as to any amounts payable pursuant to this Section 4.4 submitted by such Lender to each Borrower through the Administrative Agent shall be conclusive absent manifest error.

4.5 Survival. All of the Borrowers’ obligations under this ARTICLE 4 shall survive the termination of the Commitments and the payment in full of the Obligations.

ARTICLE 5

CONDITIONS PRECEDENT

5.1 Conditions to Closing. The agreement of the LC Issuer and each Lender to make its initial Credit Extension to any Borrower other than Talon hereunder is subject to the satisfaction of the following conditions precedent:

(a) Credit Agreement. This Agreement shall have been duly executed and delivered by the parties thereto.

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(b) Notes. The Notes shall have been duly executed and delivered by the Borrowers.

(c) Security Documents. The Security Documents (other than the Turkey License Pledge Agreement and the applicable commercial enterprise pledge agreement) shall have been duly executed and delivered by the parties thereto, together with (to the extent applicable) share certificates, direction letters, acknowledgement notices, public registrations and any other documents in connection with the attachment, perfection or priority of the Liens created thereby as the Collateral Agent may reasonably require and any consents required in connection therewith (including, without limitation, all consents from the Gas Owners (as defined in the Edirne Gas Sale Agreement) to the assignment of receivables by PEMI under the Edirne Gas Sale Agreement) shall have been obtained.

(d) Loan Documents; Fee Letter. (i) The Fee Letter shall have been duly executed and delivered by the parties thereto, and (ii) each other Loan Document to be delivered on the Closing Date shall have been duly executed and delivered by the parties thereto in form and substance satisfactory to the Majority Lenders.

(e) Hydrocarbon Licenses; Eligible Contracts. The Collateral Agent shall have received (i) a copy of each Hydrocarbon License held by the Borrowers in effect on the Closing Date and (ii) a duly executed copy of each Eligible Contract (and, if such Eligible Contract is not in the English language, a certified English language translation thereof if requested by the Collateral Agent) in respect of which the rights to the receivables payable thereunder shall have been duly pledged for the benefit of the Collateral Agent in accordance with the relevant Security Document.

(f) Governmental Authorizations. The Administrative Agent and the Collateral Agent shall have received evidence to their reasonable satisfaction that all governmental authorizations (including, if necessary, written approval from the GDPA and EMRA) and third-party consents necessary in connection with the transactions contemplated by the Loan Documents have been obtained and are in full force and effect.

(g) Independent Reserves Report. The Technical Agent and the Lenders shall have received a reserves report, in form and substance satisfactory to them, in respect of the Hydrocarbon Interests dated as of May 7, 2009 from RPS Energy, together with such other information as may be reasonably requested by them with respect to the Hydrocarbon Interests included or to be included in the Borrowing Base.

(h) Insurance Policies. The Collateral Agent shall have received a certificate of insurance in respect of each insurance policy required to be maintained by the Borrowers and their Subsidiaries pursuant to Section 7.8.

(i) Process Agent. The Administrative Agent shall have received evidence to its reasonable satisfaction that (i) CT Corporation System shall have agreed to act as agent for service of process on behalf of each Obligor in the State of New York and (ii) Law Debenture Trust Services shall have agreed to act as agent for service of process on behalf of each Obligor in England.

(j) Event of Default. The Administrative Agent shall have received from a Responsible Officer of the Borrowers a certificate stating that no Default or Event of Default has occurred and is continuing as of the Closing Date or could reasonably be expected to occur as a result of the transactions contemplated on the Closing Date.

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(k) Officer’s Certificates; Resolutions, etc. The Administrative Agent shall have received from each Obligor, as applicable, (1) a copy of a good standing certificate (or, if such concept does not exist under the laws of such Obligor’s jurisdiction of organization, an equivalent thereof reasonably acceptable to the Administrative Agent to the extent available or practicable) in respect of such Obligor, dated a date reasonably close to the Closing Date and (2) a certificate, dated the Closing Date, duly executed and delivered by an Authorized Officer for such Obligor as to:

(i) resolutions of each such Obligor’s board of directors or managing director(s) (or other managing body) then in full force and effect authorizing the execution, delivery and performance of each Loan Document to be executed by such Obligor and the transactions contemplated hereby and thereby and any other resolutions of each such Obligor’s board of directors or managing director(s) (or other managing body) or Affiliates then in full force and effect authorizing any other action necessary or desirable in the sole discretion of the Administrative Agent to effectuate such transactions;

(ii) the incumbency and signatures of those of its officers authorized to act with respect to each Loan Document to be executed by such Obligor; and

(iii) the full force and validity of each Organic Document of such Obligor and attaching copies thereof.

(l) Due Diligence. The Administrative Agent shall have completed, and be satisfied in all respects with the scope and results of, its ongoing due diligence investigation of the business, assets (including the Hydrocarbon Interests), management, operations and prospects of the Obligors and contingent liabilities and obligations of the Obligors.

(m) Fees, Expenses, etc. The Administrative Agent shall have received for its own account and for the account of each Lender, as applicable, (i) all fees, costs and expenses due and payable pursuant to the Fee Letter and Section 2.9 and (ii) all costs and expenses due and payable pursuant to Section 12.5 for which invoices have been presented.

(n) Legal Opinions. The Administrative Agent shall have received a favorable legal opinion, each to be dated on or about the Closing Date and in form and substance satisfactory to the Administrative Agent, from (i) Mallesons Stephen Jaques, Australian counsel to the Administrative Agent, (ii) Higgs &Johnson, Bahamas counsel to the Administrative Agent, (iii) Conyers Dill and Pearman, Bermuda counsel to the Parent, (iv) Pekin & Bayar, Turkish counsel to the Administrative Agent, (v) Holme Roberts & Owen LLP, special Colorado counsel to Transatlantic Petroleum (USA) Corp., and (vi) Jones Day, special New York and English counsel to the Administrative Agent.

(o) Financial Statements. The Administrative Agent shall have received a copy of the audited consolidated balance sheet and statement of income and of cash flows of the Parent and its Subsidiaries for the Fiscal Year ending December 31, 2008 and shall be satisfied with the contents thereof.

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(p) Know your Customer Documentation. The Administrative Agent shall have received, and be reasonably satisfied in form and substance with, all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, the United Kingdom Proceeds of Crime Act 2002 and the United Kingdom Money Laundering Regulations 2003.

(q) Turkiye Garanti Bankasi A.S. The Administrative Agent and the Collateral Agent shall be satisfied that the credit facility with Turkiye Garanti Bankasi A.S. and all extensions of credit thereunder and Liens in respect thereof shall have been effectively terminated and cancelled under applicable law.

(r) Collection Accounts. The Collateral Agent shall be satisfied that the Collection Accounts have been established.

(s) Edirne Gas Sale Agreement. The Edirne Gas Sale Agreement shall be in full force and effect.

(t) Use of Proceeds. The Lenders shall have received a statement from the Parent setting forth (in detail reasonably satisfactory to the Lenders) the intended uses of proceeds of the Extensions of Credit hereunder.

(u) Miscellaneous. Each of the Administrative Agent and the Collateral Agent shall have received such other documents and information reasonably requested by it in connection with the transactions contemplated by the Loan Documents.

5.2 All Loans. The obligation of each Lender to make or continue any Loan, and the obligation of the LC Issuer to make any LC Issuance, shall be subject to the satisfaction of each of the following additional conditions precedent:

(a) Compliance with Warranties, No Default, etc. Both before and after giving effect to any Loan or any LC Issuance (as the case may be) to be made or continued, the following statements shall be true and correct:

(i) as to the initial Credit Extension hereunder, the representations and warranties in each Loan Document shall, in each case, be true and correct with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date);

(ii) as to any subsequent Credit Extension hereunder, the representations and warranties in each Loan Document shall, in each case, be true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); and

(iii) no Default or Event of Default shall have then occurred and be continuing.

(b) Satisfactory Legal Form; Delivery. All documents required to be delivered pursuant to Section 2.3(a)(i) and Section 2.4(b), respectively, shall have been duly executed and delivered to the Administrative Agent in accordance with the provisions thereof by or on behalf of the Borrowers (including, without limitation, any Notice of Borrowing and LC Application) and shall be reasonably satisfactory in form and substance to the Administrative Agent; and the Administrative Agent shall have received all information, approvals, opinions, documents or instruments as it may have reasonably requested.

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5.3 Conditions to Credit Extensions to Talon. In addition to the conditions set forth in Sections 5.1 and 5.2, the agreement of the LC Issuer and each Lender to make any Credit Extension to Talon hereunder is subject to the Administrative Agent having received evidence to its satisfaction of Talon having registered with the GDPA the change of name from “Energy Operations Turkey, LLC-Ankara, Turkey Branch” to “Talon Exploration, Ltd.-Ankara, Turkey Branch”.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

To induce the Lenders, the LC Issuer and each Agent to enter into this Agreement, each Obligor hereby makes the following representations and warranties in this ARTICLE 6:

6.1 Existence; Subsidiaries. Each Obligor is duly organized, validly existing and in good standing (if such concept exists under the laws of such Obligor’s jurisdiction of organization) under the laws of its jurisdiction of formation, and qualified to do business in each jurisdiction where its ownership or lease of property or conduct of its business requires such qualification. As at the Closing Date, each Borrower has no Subsidiaries. Schedule IV sets forth the name and jurisdiction of organization of each Obligor and, as to each Obligor that is a Subsidiary of a Borrower, the percentage of each class of Equity Interests owned directly or indirectly by each Borrower.

6.2 Capacity; Authorization; Non-Contravention. The execution, delivery, and performance by each Obligor of each Loan Document to which it is a party and the consummation of the transactions contemplated thereby (a) are within such Obligor’s corporate powers, (b) have been duly authorized by all necessary corporate action, (c) do not contravene such Obligor’s constitutional documents or any Applicable Law or Contractual Obligation of such Obligor and (d) will not result in the creation or imposition of any Lien prohibited by this Agreement.

6.3 Governmental Authorizations; Other Consents. Other than any filing required to be made in connection with the perfection of the Liens under the Security Documents, no consent, order, authorization, or approval or other action by, and no notice to or filing with, any Governmental Authority (including the GDPA and EMRA) or any other Person is required for the due execution and delivery by each Obligor of each Loan Document to which it is a party, the performance of its obligations thereunder or the consummation of the transactions contemplated thereby.

6.4 Binding Effect. Each Loan Document to which an Obligor is a party has been duly executed and delivered by such Obligor, and constitutes a legal, valid, and binding obligation of such Obligor, enforceable against it in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally and by general principles of equity.

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6.5 Financial Statements; No Material Adverse Effect. The Borrowers have delivered to the Administrative Agent a copy of the audited Consolidated balance sheet and statement of income and of cash flows of the Parent and its Subsidiaries for the Fiscal Year ending December 31, 2008, and such financial statements are accurate and complete in all material respects and present fairly the financial condition of the Parent and its Subsidiaries in accordance with GAAP. As of the Closing Date, there has been no material adverse change in the business, assets, condition (financial or otherwise), results of operations or prospects of the Parent and its Subsidiaries, taken as a whole, since December 31, 2008. As of the date of the financial statements most recently delivered pursuant to Section 7.1, there were no material contingent obligations, liabilities for taxes, unusual forward or long term commitments, or unrealized or anticipated losses of the Borrowers (except as disclosed therein) for which adequate reserves have not been set aside in accordance with GAAP. Since the date of the financial statements most recently delivered pursuant to Section 7.1, no event or circumstance has occurred that could reasonably be expected to have a Material Adverse Effect.

6.6 Disclosure. All written information (excluding projections, estimates and pro forma financial information) furnished by or on behalf of any Obligor to any Secured Party in connection with this Agreement or any other Loan Document is accurate and complete in all material respects on the date as of which such information was furnished, and does not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements contained therein not misleading at such time. All projections, estimates and pro forma financial information furnished by or on behalf of any Obligor to any Secured Party were prepared on the basis of assumptions, data, information, tests, or conditions believed in good faith to be reasonable at the time such projections, estimates, and pro forma financial information were furnished.

6.7 Litigation. Except as specified in Item 6.7 of the Disclosure Schedule, to the best of each Obligor’s knowledge after due inquiry, there is no pending or threatened action or proceeding involving any Obligor before any court, Governmental Authority or arbitrator which could reasonably be expected to have a Material Adverse Effect or which purports to affect the legality, validity, binding effect or enforceability of any Loan Document. To the best of each Obligor’s knowledge after due inquiry, there is no pending or threatened action or proceeding instituted against any Obligor which seeks to adjudicate such Obligor as bankrupt or insolvent, or which seeks its liquidation, administration, winding up, reorganization, or which seeks a composition of its debts under any Applicable Law relating to bankruptcy, administration, insolvency, reorganization or relief of debtors, or which seeks the entry of an order for the appointment of an administrator, administrative receiver, receiver, receiver and manager, liquidator, provisional liquidator, trustee, custodian, conservator or other similar official for such Obligor or for any substantial part of its property.

6.8 No Default. No Obligor is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

6.9 Ownership of Properties. Each Obligor has good and indefeasible title to, or valid license, leasehold or other rights in, all of its properties necessary for the conduct of its business as is customary in the oil and gas industry, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each property of the Obligor necessary for the ordinary conduct of its business is in good repair, working order and condition (ordinary wear and tear excepted) and such property has not been materially and adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, hurricane, accident, strike or other labor disturbance, embargo, requisition, expropriation, cancellation of contracts, permits, or concessions (including any Hydrocarbon License) by a Governmental Authority, riot, activities of armed forces, acts of god or any public enemy.

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6.10 Indebtedness; Liens. Other than as permitted pursuant to Section 8.1, the Borrowers and their Subsidiaries have no Indebtedness. Other than as permitted pursuant to Section 8.2, none of the properties of the Borrowers and their Subsidiaries is subject to any Lien. All filings, recordings, registrations, third party consents and other actions to be taken by the Obligors that are necessary to create and perfect the Liens provided for in the Security Documents have been or will be made, obtained and taken in all relevant jurisdictions in a timely manner, and the provisions of the Security Documents are effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a Security Interest (subject to the Liens permitted by Section 8.2) on all right, title and interest of each Obligor in the Collateral described therein.

6.11 Compliance with Law. Each Obligor is in compliance with all Applicable Law, except to the extent non-compliance could not reasonably be expected to have a Material Adverse Effect.

6.12 Environmental Compliance. Without prejudice to Section 6.11, each Obligor has obtained all permits under Environmental Law necessary for the exercise of its rights with respect to, and operation of, its properties and the conduct of its business, and has at all times been and is in compliance with all applicable Environmental Law, except to the extent noncompliance could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the best of each Obligor’s knowledge after due inquiry, none of the present or previously owned or operated properties of such Obligor has been investigated or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Law or has been the site of any Release of Hazardous Materials from present or past activities.

6.13 Insurance. The properties of the Borrowers and their Subsidiaries are insured with financially sound and reputable insurance companies (not being Affiliates thereof), in such amounts, with such deductibles and covering such risks as are customarily maintained by Persons engaged in the oil and gas exploration and production industry and owning or operating in similar localities where the Borrowers and their Subsidiaries are based.

6.14 Use of Proceeds. Each Credit Extension will be used by the Borrowers for the purposes described in Section 7.11. The Borrowers are not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no Credit Extension will be used to purchase or carry any margin stock in violation of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

6.15 Investment Company Act. No Obligor is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended from time to time.

6.16 Taxes. All tax returns required to be filed by or on behalf of each Obligor have been duly filed on a timely basis or appropriate extensions have been obtained except where the failure to so file could not reasonably be expected to have a Material Adverse Effect, and are true, complete and correct. All taxes shown to be payable on such tax returns or on subsequent assessments with respect thereto have been paid in full on a timely basis, and no other taxes are payable by each Obligor with respect to items or periods covered by such tax returns, except in each case to the extent of any taxes that are being contested in good faith and for which adequate reserves in accordance with GAAP shall have been set aside.

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6.17 Pension Plans. Each Obligor is in compliance in all material respects with all Applicable Law relating to any pension plans or employee benefit plans. Without prejudice to the foregoing, no “reportable event,” as defined in Section 4043 of the Employee Retirement Income Security Act of 1974 (“ERISA”), has occurred or is reasonably expected to occur and no Obligor maintains any employee pension benefit plan which is subject to the provisions of Title IV of ERISA.

6.18 Solvency. Both before and after giving effect to any Credit Extension, each Obligor is and will be, together with its Subsidiaries on a Consolidated basis, Solvent.

6.19 Hedge Agreements. Item 6.19 of the Disclosure Schedule contains a true, correct and complete list of all Hydrocarbon Hedge Agreements, Interest Hedge Agreements and any other Hedge Agreement to which each Borrower and any of its Subsidiaries is a party as of the date hereof.

6.20 Eligible Contracts; Hydrocarbon Licenses. Item 6.20 of the Disclosure Schedule contains a true, correct and complete list of all Eligible Contracts in effect and all Hydrocarbon Licenses to which each Borrower and its Subsidiaries has rights, and a copy of each such duly executed Eligible Contract and Hydrocarbon License, certified by a Responsible Officer of the relevant Borrower as being true, complete and in full force and effect, has been delivered to the Collateral Agent, together with, (if requested by the Collateral Agent) a certified English language translation thereof to the extent such Eligible Contract or Hydrocarbon License is not in the English language).

6.21 Deposit Accounts. Item 6.21 of the Disclosure Schedule contains a true, correct and complete list of all deposit accounts, securities accounts and commodities accounts in which each Borrower and any of its Subsidiaries has an interest. The Local Collection Account and the other deposit accounts set forth on Item 6.21 and identified as accounts maintained in Turkey are the only deposit accounts of any Borrower maintained in Turkey.

6.22 Status of Obligations. The Obligations constitute direct, secured, unsubordinated and unconditional obligations of the Borrowers and the Guarantors, ranking at least pari passu with the claims of all of the Borrowers’ and the Guarantor’s other creditors, except those creditors whose claims are mandatorily preferred under Applicable Law.

6.23 Immunity from Suit. Neither the Obligors nor any of their respective assets is entitled to immunity from suit, execution, attachment or other legal process in any jurisdiction. The entry by each Obligor into this Agreement and the other Loan Documents to which it is party constitutes, and the exercise of its respective rights and performance of and compliance with its respective obligations under this Agreement and the other Loan Documents will constitute, private and commercial acts done and performed for private and commercial purposes.

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ARTICLE 7

AFFIRMATIVE COVENANTS

Each Obligor covenants with the Secured Parties that, until all Commitments have been terminated and all Obligations (other than contingent Obligations not then due and payable) have been paid in full, it shall, and shall cause each of its Subsidiaries to, perform the obligations in this ARTICLE 7.

7.1 Financial Statements; Reporting.

(a) Annual Financial Statements. As soon as available, but in any event within ninety (90) days after the end of each Fiscal Year, commencing with the Fiscal Year ending December 31, 2009, the Borrowers shall deliver to the Administrative Agent (with sufficient copies for each Lender) a copy of (i) the audited consolidated balance sheet of the Parent and the related audited consolidated statements of income and of cash flows for such Fiscal Year and (ii) the audited Combined balance sheet of the Borrowers (which shall include their Subsidiaries) as at the end of such Fiscal Year and the related audited Combined statements of income and of cash flows for such Fiscal Year, in the case of each of (i) and (ii) setting forth in comparative form the figures for the previous Fiscal Year, reported on without a going concern or like qualification or exception, or qualification arising out of the scope of the audit, by KPMG LLP or another “Big Four” US firm of independent certified public accountants otherwise reasonably acceptable to the Administrative Agent.

(b) Quarterly Financial Statements. As soon as available, but in any event not later than forty-five (45) days after the end of each of the first three (3) Fiscal Quarters of each Fiscal Year, commencing with the Fiscal Quarter ending March 31, 2010, the Borrowers shall deliver to the Administrative Agent (with sufficient copies for each Lender) a copy of (i) the unaudited consolidated balance sheet of the Parent and the related unaudited consolidated statements of income and of cash flows for such Fiscal Quarter and the portion of the Fiscal Year through the end of such Fiscal Quarter and (ii) the unaudited Combined balance sheet of the Borrowers (which shall include their Subsidiaries) as at the end of such Fiscal Quarter and the related unaudited Combined statements of income and of cash flows for such Fiscal Quarter and the portion of the Fiscal Year through the end of such Fiscal Quarter, in the case of each of (i) and (ii) setting forth in comparative form the figures for such Fiscal Quarter in the previous Fiscal Year, certified by a Responsible Officer of the Borrowers as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes).

(c) GAAP Reporting. All financial statements required to be delivered pursuant to Section 7.1(a) and Section 7.1(b) shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein.

(d) Compliance Certificate. Concurrently with the delivery of the financial statements pursuant to Section 7.1(a) and Section 7.1(b), the Borrowers shall deliver to the Administrative Agent (with sufficient copies for each Lender) a Compliance Certificate containing the information and calculations necessary for determining compliance by the Borrowers and their Subsidiaries with the provisions of Section 8.16 and certifying as to the truth and correctness in all material respects of the representations and warranties in each Loan Document (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) and that no Default or Event of Default shall have then occurred and be continuing.

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(e) Reporting. Unless the same shall be publicly available, promptly after the same becomes available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Parent, and copies of all annual, regular, periodic and special reports and registration statements which the Parent may file or be required to file with the Canadian Securities Administrators or the United States Securities and Exchange Commission under Applicable Law.

(f) Local Collection Account. Not later than ten (10) days after the end of each calendar month, the Borrowers shall deliver to the Administrative Agent (i) a statement from the Local Collection Account Bank displaying, as of the last day of such calendar month, the overall balance in each Local Collection Account and all credits and debits in respect of such Local Collection Account in such calendar month, (ii) a statement, prepared by the Borrowers, detailing the aggregate amount withdrawn by the Borrowers in such calendar month, and (iii) a statement as to the purposes for which such withdrawals were applied by the Borrowers, in each case certified by a Responsible Officer of the Borrowers as being true, correct and complete.

(g) Other Information. Promptly upon request therefor, any other information regarding the business, assets (including Hydrocarbon Interests in Turkey), condition (financial or otherwise), results of operations or prospects of the Borrowers and their Subsidiaries or any other Obligor, to the extent such information is reasonably required by the Administrative Agent or the Majority Lenders in connection with their assessment of the ability of any Obligor to comply with the terms of this Agreement and any other Loan Document. All costs and expenses incurred in connection with the provision of such information shall be borne by the Borrowers.

7.2 Information on Hydrocarbon Interests.

(a) Reserves Reports.

(i) Independent Reserves Report. The Borrowers shall deliver to the Technical Agent an Independent Reserves Report in accordance with Section 3.2(a).

(ii) Internal Reserves Reports. The Borrowers shall deliver to the Technical Agent an Internal Reserves Report in accordance with Section 3.2(b).

(iii) Accuracy of Reserves Reports. The Borrowers hereby undertake to ensure that the information contained in each Internal Reserves Report and any other information delivered in connection therewith is true and correct in all material respects.

(b) Hydrocarbon Production Forecast. As soon as available, but in any event no later than twenty (20) days after the end of each month, commencing with the month ending January 31, 2010, the Borrowers shall deliver to the Technical Agent and each Lender that requests a copy thereof, a Hydrocarbon production forecast in form and substance reasonably satisfactory to the Technical Agent. Such production forecast shall contain the Borrowers’ good faith projections for production volumes, revenues, expenses, taxes and Capital Expenditure in respect of the Hydrocarbon Interests for the immediately following twelve (12) month period, and the underlying assumptions and data used in preparing the same.

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(c) Hydrocarbon Production Report. As soon as available but in any event no later than twenty (20) days after the end of each month, commencing with the month ending January 31, 2010, the Borrowers shall deliver to the Technical Agent and each Lender that requests a copy thereof, a Hydrocarbon production report in form and substance reasonably satisfactory to the Technical Agent. Such production report shall contain information regarding the production volumes, revenues, expenses, taxes and Capital Expenditure in respect of the Hydrocarbon Interests for the Fiscal Quarter most recently ended.

(d) Field Development Plan / Annual Budget. Concurrently with the delivery of the financial statements pursuant to Section 7.1(a), the Borrowers shall deliver to the Technical Agent (with sufficient copies for each Lender) a field development plan and annual budget (the “Operating Budget”) in respect of the business and operations of the Borrowers and their Subsidiaries for the twelve (12) month period commencing from the end of the previous Fiscal Year, such Operating Budget to contain the Borrowers’ good faith estimates relating to (i) general corporate overhead and administrative expenses, (ii) Capital Expenditure in respect of Hydrocarbon Interests, (iii) Hydrocarbons to be sold under Eligible Contracts, (iv) EBITDAX and (v) taxes and royalties for such period, in each case broken down on a calendar month basis, as well as the underlying assumptions and data used in preparing the same, such Operating Budget to be otherwise in form and substance reasonably satisfactory to the Technical Agent.

(e) Site Visits. The Borrowers shall, and shall cause each of their Subsidiaries to, permit representatives of each Agent (at their sole risk) to visit and inspect any location that is the subject of a Hydrocarbon License upon giving no less than twenty (20) Business Days’ prior written notice and to discuss the business, assets (including the Hydrocarbon Interests in Turkey), condition (financial or otherwise), results of operations or prospects of the Borrowers and any of their Subsidiaries, with any applicable officers and employees of the Borrowers who participate in such site visits and, consistent with the provisions of Section 7.10, to follow up with its certificated public accountants. The Borrowers shall, and shall cause each of their Subsidiaries to, bear all costs and expenses incurred by such Agent in connection with any such visit, inspection or examination; provided, that so long as no Event of Default shall have occurred and be continuing, the Borrowers shall not be obliged to bear such costs and expenses for more than one (1) such visit, inspection or examination in any calendar year.

(f) Eligible Contracts. No later than sixty (60) days before the expiry of any Eligible Contract, the Borrowers shall notify the Collateral Agent, the Technical Agent and the Lenders as to whether or not it proposes to renew such Eligible Contract and, if so, the material terms on which it proposes to effect such renewal. No later than fourteen (14) days prior to executing the definitive documentation for any renewed Eligible Contract, the Borrowers shall provide the Technical Agent, the Collateral Agent and the Lenders with a copy thereof (and if such documentation is not in the English language, a certified English language translation thereof), together with any other information relating thereto as the Collateral Agent or the Technical Agent may reasonably request.

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(g) Other Reports. Each Borrower shall, and shall cause each of its Subsidiaries to, deliver the reports required pursuant to Article 63 of the Petroleum Communiqué published in the Turkish Official Gazette dated July 17, 1989 (No. 20224).

7.3 Notices. The Borrowers shall, through the Administrative Agent, furnish to the Secured Parties the following notices within the time periods specified below:

(a) notice of any Default, Event of Default or default under, termination of, entry into or renewal of, any Hydrocarbon License, Eligible Contract or Material Contract, as soon as possible after the occurrence thereof and in any event within five (5) Business Days after any Borrower or any other Obligor knows of such occurrence;

(b) notice of any proposed amendment, restatement, supplement, waiver or other modification to, the terms contained in any Hydrocarbon License, Eligible Contract or Material Contract, as soon as possible and in any event within five (5) Business Days after any Borrower or any other Obligor knows of such proposal;

(c) notice of the commencement of, or any material adverse development with respect to, any litigation, investigation or proceeding involving an Obligor, that if adversely determined, could reasonably be expected to have a Material Adverse Effect, as soon as possible and in any event within five (5) Business Days after any Borrower or any other Obligor knows of such occurrence;

(d) notice of the receipt of any summons, order or citation concerning any violation or alleged violation of Environmental Law involving an Obligor that could reasonably be expected to have a Material Adverse Effect, or which seeks to impose any Environmental Liability on an Obligor that could reasonably be expected to have a Material Adverse Effect, as soon as possible and in any event within five (5) Business Days after any Borrower or any other Obligor receives any such summons, order or citation;

(e) notice of any other development or event that has had or could reasonably be expected to have a Material Adverse Effect, as soon as possible and in any event within five (5) Business Days after any Borrower or any other Obligor obtains knowledge thereof;

(f) notice of any incident, event or circumstance that could reasonably be expected to result in:

(i) the production, recovery or transportation of Hydrocarbons with respect to any Hydrocarbon Interest being suspended or interrupted for a period of five (5) consecutive days or more;

(ii) material physical damage to any plant or equipment being used in the production, recovery or transportation of Hydrocarbons with respect to any Hydrocarbon Interest;

(iii) any amendment, restatement, supplement or modification to the most recent Operating Budget; or

(iv) any enlargement of, or reduction in, the percentage interest of any Borrower or any of its Subsidiaries in any Hydrocarbon Interest, in each case, as soon as possible and in any event within five (5) Business Days after any Borrower or any other Obligor obtains knowledge thereof;

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(g) within thirty (30) days prior to renewal thereof, renewal notices in respect of all insurance policies required to be maintained by any Borrower or any of its Subsidiaries pursuant to Section 7.8; and

(h) notice of the occurrence of any event that could reasonably be expected to give rise to an obligation to make a mandatory prepayment pursuant to Section 2.5(b), as soon as possible and in any event within five (5) Business Days after any Borrower or any other Obligor knows of such occurrence.

Each notice pursuant to this Section 7.3 shall be accompanied by a statement of a Responsible Officer of the Borrowers setting forth details of the occurrence referred to therein and stating what action each Borrower or the relevant Obligor proposes to take with respect thereto. In addition, each notice delivered pursuant to this Section 7.3 shall also include, to the extent requested by the Administrative Agent, copies of all material documentation relating to the applicable occurrence or event.

7.4 Payment of Obligations. Each Obligor shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except to the extent any amount or validity thereof is being contested in good faith and for which adequate reserves in accordance with GAAP shall have been set aside.

7.5 Preservation of Existence. Except as otherwise expressly permitted under this Agreement, each Obligor shall preserve, renew and keep in full force and effect its existence and take all reasonable action to maintain all rights necessary or desirable in the normal conduct of its business.

7.6 Compliance with Contractual Obligations and Law. Each Obligor shall comply with its Contractual Obligations (including its obligations under each Hydrocarbon License, Eligible Contract and Material Contract) and all Applicable Law (including all Environmental Law and, to the extent relevant, under each Hydrocarbon License), except to the extent that failure to comply therewith could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

7.7 Maintenance of Properties.

(a) Each Obligor shall maintain, preserve, protect and keep all of its and their respective properties (other than properties that such Obligor determines in its commercially reasonable, good faith judgment to be obsolete, worn out, depleted or economically inefficient) in good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by such Obligor may be properly conducted at all times;

(b) The Borrowers shall, and shall ensure that their Subsidiaries will, maintain in effect Eligible Contracts in respect of all Hydrocarbons produced pursuant to the Hydrocarbon Licenses; and

(c) Subject to Section 8.13, the Borrowers shall at all times be the licensees under the Hydrocarbon Licenses.

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7.8 Maintenance of Insurance. Each Obligor shall maintain insurance in respect of its business with financially sound and reputable insurance companies (not being Affiliates of any Obligor), in such amounts, with such deductibles and covering such risks as are customarily maintained by Persons in a similar business, operating in similar localities to the Obligor. Without limiting the foregoing, all such insurance policies shall name the Collateral Agent as loss payee in the case of property insurance and designate the Collateral Agent as an additional insured in the case of liability insurance and if requested by the Collateral Agent) provide that no cancellation or modification of the policies will be made without thirty (30) days’ prior written notice to the Collateral Agent and be in addition to any requirements to maintain specific types of insurance contained in the other Loan Documents.

7.9 Books and Records; “Know-Your-Client” Information.

(a) Each Borrower shall, and shall ensure that each of its Subsidiaries will, maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be.

(b) Each Obligor shall promptly provide the Administrative Agent from time to time upon request with all documentation and other information required by any Lender or bank regulatory authority under applicable “know-your-customer” and anti-money laundering statutes, rules and regulations, including without limitation the USA PATRIOT Act, the United Kingdom Proceeds of Crime Act 2002 and the United Kingdom Money Laundering Regulations 2003.

7.10 Inspection Rights.

(a) General. Without prejudice to Section 7.2(e), each Borrower shall, and shall ensure that each of its Subsidiaries will, permit representatives and independent contractors of each Agent or any Lender to visit and inspect any of its properties to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of such Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired upon reasonable advance notice to such Borrower (but, so long as no Event of Default shall have occurred and be continuing, no more than twice in any calendar year); provided that if an Event of Default has occurred and is then continuing, each Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours.

(b) Hydrocarbon Interests. If the Majority Lenders at any time determine that the production, recovery or transportation of Hydrocarbons with respect to any Hydrocarbon Interest may be impeded or prejudiced in a manner that could reasonably be expected to have a Material Adverse Effect, they shall be entitled to obtain such reports, conduct such investigations and consult with such professional advisors as they may reasonably require (including, without limitation, appointing an independent environmental expert, insurance advisor or legal advisors) with a view to assessing the ability of the Borrowers and any other Obligor to comply with the terms of this Agreement and any other Loan Document. All costs and expenses incurred by the Majority Lenders in connection with such reports, investigations or consultations shall be borne by the Borrowers; provided that, if no Event of Default has occurred or is then continuing, the Borrowers shall only bear such costs and expenses up to an aggregate amount not to exceed US$50,000 in each Fiscal Year. Each Borrower shall, and shall ensure that each of its Subsidiaries will, co-operate fully with any Person preparing such report, or carrying out such investigation.

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7.11 Use of Proceeds. The Borrowers shall apply the proceeds of each Credit Extension solely as follows:

(a) for the working capital, general and administrative purposes of the Borrowers and their Subsidiaries provided that general and administrative expenses will be funded from direct or indirect capital contributions from the Parent until the Administrative Agent and Technical Agent are reasonably satisfied that the Borrowing Base supports the funding of such expenses;

(b) to finance development, production, storage, marketing, processing and/or transportation activities of the Borrowers and their Subsidiaries in respect of Hydrocarbon Interests in Turkey; and

(c) to pay the closing costs and fees owed by any Obligor to each Arranger, each Agent, the LC Issuer and the Lenders in connection with the transactions contemplated by this Agreement and the Loan Documents.

7.12 Additional Collateral; Additional Subsidiaries; Further Assurances, etc.

(a) New Property. With respect to any Hydrocarbon Interests acquired or owned after the Closing Date by any Borrower or any of its Subsidiaries (including, without limitation, any Eligible Contract, any receivables payable under such Eligible Contract, any property insurance policy and any proceeds payable thereunder) as to which the Collateral Agent does not have a Security Interest and in respect of which such Borrower or such Subsidiary is legally entitled to grant a Security Interest to the Collateral Agent, such Borrower or such Subsidiary shall promptly notify the Collateral Agent in writing thereof, and if requested by the Collateral Agent:

(i) execute and deliver to the Collateral Agent such additional Security Documents and/or amendments to the Security Documents or such other documents (including a certified English language translation, to the extent such documents are not in the English language) as the Collateral Agent deems necessary or advisable to grant to the Collateral Agent, a Security Interest in such Hydrocarbon Interests;

(ii) take all actions necessary or reasonably requested by the Collateral Agent, to grant in favor of the Collateral Agent a Security Interest in such Hydrocarbon Interests; and

(iii) deliver to the Collateral Agent customary legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Collateral Agent.

(b) New Subsidiaries. With respect to any new Subsidiary created or acquired after the Closing Date by any Borrower or any of its Subsidiaries, such Borrower or such Subsidiary shall promptly:

(i) execute and deliver to the Collateral Agent such amendments to the Security Documents or such other documents as the Collateral Agent deems necessary or advisable to grant in favor of the Collateral Agent, a Security Interest in all Equity Interests of such new Subsidiary that are owned by such Borrower or such Subsidiary;

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(ii) deliver to the Collateral Agent the certificates (if any) representing such Equity Interests, together with undated stock or other analogous powers, in blank, executed and delivered by an Authorized Officer of such Borrower or such Subsidiary, as the case may be;

(iii) cause such new Subsidiary to become a party to this Agreement as a Subsidiary Guarantor, and take such actions as the Collateral Agent deems necessary or advisable to grant in favor of the Collateral Agent, a Security Interest in the property of such new Subsidiary in respect of which such new Subsidiary is legally entitled to grant a Security Interest to the Collateral Agent;

(iv) deliver to the Collateral Agent a certificate of the Secretary or an Assistant Secretary of such new Subsidiary as to the matters set forth in Section 5.1(k) (together with appropriate attachments) and a copy of a good standing certificate for such new Subsidiary (or, if such concept does not exist under the laws of such new Subsidiary’s jurisdiction of organization, a reasonable equivalent to the extent available or practicable), dated a date reasonably acceptable to the Collateral Agent; and

(v) deliver to the Collateral Agent customary legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Collateral Agent.

(c) Viking Equipment. In the event ownership of any Viking Equipment is transferred to any Borrower or any Subsidiary thereof, (i) such Viking Equipment shall be free and clear of all Liens upon such transfer, (ii) such Viking Equipment shall be located in Turkey and (iii) such Borrower or Subsidiary will (1) cause such Viking Equipment to be subject to a commercial enterprise pledge in favor of the Collateral Agent under the laws of Turkey which will be registered with the applicable Trade Registry in Turkey within thirty (30) days of the effective date of such transfer of ownership and (y) if a subsequent filing becomes necessary, within thirty (30) days after written request from the Collateral Agent to do so and (2) in each case (1)(x) and (1)(y), the Lenders shall have received a satisfactory opinion of their Turkish counsel as to the duly perfected security interest in and Lien on the collateral thereunder.

(d) Further Assurances. Each Obligor shall, after notice thereof from any Agent, do all such further acts and things and execute and deliver all such further documents as shall be reasonably requested by such Agent in order to give effect to this Agreement, the Security Documents and any other Loan Document and shall cause the same to be registered wherever, in the opinion of such Agent, such registration may be required or advisable to preserve, perfect or validate or continue the perfected status of any deemed or other Lien granted pursuant to a Security Document or to enable each Lender to exercise and enforce its rights hereunder with respect to such deemed or other Lien. In the case of the applicable commercial enterprise pledge agreements, (i) the Obligors will ensure that (x) each such commercial enterprise pledge agreement pursuant to which Equipment of a Borrower shall be pledged will be duly executed and submitted for registration with the applicable Trade Registry in Turkey within twenty (20) days of the Closing Date and (y) if a subsequent filing becomes necessary, within twenty (20) days after written request from the Collateral Agent to do so and (ii) in each case (i)(x) and (i)(y), the Lenders shall have received a satisfactory opinion of their Turkish counsel as to the duly perfected security interest in and Lien on the collateral thereunder. In the event

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that such a pledge is not capable of being registered due to the actions of the applicable Governmental Authorities (including the GDPA), and a written evidence of the refusal decision obtained from the applicable Governmental Authorities (including the GDPA) is provided to the Lenders, then the Obligors shall be released from their obligation to establish such a commercial enterprise pledge.

(e) Turkey License Pledge Agreement. If, due to either a change in market practice or GDPA practice or policy or the introduction of or any change in or in the interpretation of any Applicable Law or guidelines or requests of the GDPA after the Closing Date, the GDPA accepts for registration pledge agreements in respect of the rights of debtors under hydrocarbon licenses, the Borrowers will enter into the Turkey License Pledge Agreement (or such relevant agreement in the form required by the applicable provisions of the Applicable Law at such time) and provide written evidence which shall be obtained from the GDPA that the Agreement has been submitted to be registered with the GDPA within sixty (60) days of such change.

(f) Change of Registered Branch Name. On or before January 31, 2010, Talon shall submit for registration with the GDPA the change of name from “Energy Operations Turkey, LLC-Ankara, Turkey Branch” to “Talon Exploration, Ltd.-Ankara, Turkey Branch”. To the extent necessary or desirable, in the reasonable discretion of the Administrative Agent, any Hydrocarbon License registered in the name of Energy Operations Turkey, LLC (formerly a Delaware limited liability company and continued as Talon) shall be modified, or Talon shall take any action necessary or desirable, in the reasonable discretion of the Administrative Agent, to properly reflect Talon as the holder thereof, either directly or through its Ankara, Turkey Branch.

7.13 Collection Accounts.

(a) Establishment. The Borrowers shall (or shall cause their Subsidiaries to) establish and maintain the following deposit accounts on or before the Closing Date:

(i) the Local Collection Account; and

(ii) the Offshore Collection Account.

The Borrowers shall not open any deposit account in replacement of any Collection Account except with the Collateral Agent’s prior written consent, it being acknowledged and agreed that such consent may be conditioned upon the Collateral Agent’s receipt of a deposit account control agreement and/or such other Security Document as the Collateral Agent may require in respect of the proposed replacement deposit account. In addition, unless a Security Interest exists with respect to each such account no later than three (3) Business Days following its opening, no Borrower shall, nor permit any of its Subsidiaries to, open or maintain any deposit account, securities account or commodity account with any Person except for the accounts specified in Item 6.21 of the Disclosure Schedule provided that no Borrower shall open or maintain a deposit account in Turkey other than the Local Collection Account and the accounts specified in Item 6.21.

(b) Payments into Collection Accounts.

(i) Pursuant to instruction letters in form and substance satisfactory to the Collateral Agent, the Borrowers shall (or shall cause their Subsidiaries to) instruct each Eligible Offtaker via notary public or registered mail to deposit all Turkish Lira denominated

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amounts due to the Borrowers and any of their Subsidiaries under each Eligible Contract in the applicable Local Collection Account, submit evidence to the Administrative Agent that such instruction has been served as stated above, and shall use its best efforts to ensure that each such Eligible Offtaker provides written acknowledgement of its agreement to do so in form and substance satisfactory to the Collateral Agent.

(ii) Pursuant to instruction letters in form and substance satisfactory to the Collateral Agent, the Borrowers shall (or shall cause their Subsidiaries to) instruct each Eligible Offtaker via notary public or registered mail to deposit all Dollar denominated amounts due to the Borrowers and any of their Subsidiaries under each Eligible Contract in the applicable Offshore Collection Account, submit evidence to the Administrative Agent that such instruction has been served as stated above, and shall use its best efforts to ensure that each such Eligible Offtaker provides written acknowledgement of its agreement to do so in form and substance satisfactory to the Collateral Agent.

(c) No Operational Lock-Up Event. If so requested, the Collateral Agent shall, on a weekly basis, transfer all amounts standing to the credit of a Collection Account into another deposit account designated by the Borrowers by way of a written request (or written standing instruction). Unless the Collateral Agent otherwise agrees, all such transfers shall occur on or after 11:00 a.m. (London, England time) on each Monday (or if such day is not a Business Day, the immediately following Business Day), and all costs and expenses incurred by the Collateral Agent in connection with such transfers shall be borne by the Borrowers; provided that no such transfer shall be made if an Operational Lock-Up Event or Event of Default has then occurred and is continuing, or could reasonably be expected to result therefrom.

(d) Operational Lock-Up Event. If an Operational Lock-Up Event or Event of Default has occurred and is continuing, the Borrowers shall cease to have the right to request any transfer from any Collection Account and no amounts standing to the credit of any Collection Account may be withdrawn except with the prior written consent of the Collateral Agent and the Lenders; provided that for each calendar month during the continuation of a Borrowing Base Deficiency, the Collateral Agent may permit the Borrowers to withdraw an amount not exceeding 110% of their general corporate overhead and administrative expenses for such month as set forth in the most recent Operating Budget, and provided further that the Collateral Agent may, in its sole and absolute discretion, upon receipt of tax invoices or other supporting documentary evidence to its reasonable satisfaction, permit withdrawals for the purpose of paying royalties or other amounts due to the applicable Governmental Authority in respect of any Hydrocarbon License or any third party (not being an Obligor) under any farm-in, farm-out, production sharing agreement or analogous contractual arrangement in respect of the Hydrocarbon Licenses.

(e) Resolution of Operational Lock-Up Event. If (i) an Operational Lock-Up Event has occurred, and thereafter a sixty (60) day period shall have passed during which no Default or Event of Default shall have occurred and any Borrowing Base Deficiency giving rise to such Operational Lock-Up Event shall have been cured or (ii) an Event of Default has occurred, but is thereafter remedied or waived, then in the case of each of (i) and (ii) above, any amounts standing to the credit of any Collection Account may again be transferred in accordance with Section 7.13(c) as if no Operational Lock-Up Event or Event of Default had occurred in the first place.

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(f) Collection Accounts as Collateral. For the avoidance of doubt, each Borrower acknowledges and agrees that the Collection Accounts and all amounts standing to the credit thereof from time to time shall constitute Collateral for the payment in full of the Obligations.

7.14 Hydrocarbon Hedge Agreement. At least one of the Borrowers shall maintain a Designated Hedge Agreement providing commodity price support in respect of at least 30% of the anticipated production volumes attributable to Proved Developed Producing Reserves (as determined by the Technical Agent with reference to the most recent Independent Reserves Report delivered to the Technical Agent under Section 3.2(a)(ii)) and shall maintain such commodity price support at all times from the initial delivery of the Independent Reserves Report under Section 3.2(a)(ii) until the Scheduled Maturity Date, such commodity price support and such Designated Hedge Agreement to be otherwise satisfactory to the Majority Lenders. If required by the Majority Lenders, the Borrowers shall promptly execute a Security Document granting a Security Interest in respect of all of its right, title and interest in such Designated Hedge Agreement.

7.15 Status of Obligations. The Obligors shall ensure that the Obligations constitute direct, secured, unsubordinated and unconditional obligations of the Borrowers and the Guarantors, ranking at least pari passu with the claims of all of each Borrower’s and each Guarantor’s other creditors, except those creditors whose claims are mandatorily preferred under Applicable Law.

7.16 Designated Hedge Agreement. A Designated Hedge Agreement shall have been duly executed and delivered by the parties thereto on or before December 23, 2009, providing commodity price support at all times from the date entered into until the date of initial delivery to the Technical Agent of the Independent Reserves Report under Section 3.2(a)(ii), in respect of anticipated production volumes attributable to Proved Developed Producing Reserves at (i) 800 bbl/day for 2010, (ii) 700 bbl/day for 2011 and (iii) 600 bbl/day for 2012, such agreement to be in form and substance satisfactory to the Majority Lenders and, if required by the Majority Lenders, a Security Document shall have been executed granting a Security Interest in respect of all of the relevant Borrower’s right, title and interest in such Designated Hedge Agreement.

7.17 Local Blocked Account. Upon or before establishing a Collection Account with the Local Collection Account Bank in accordance with Section 7.13(a) for the purpose of receiving Turkish Lira-denominated payments under any Eligible Contract, Talon shall have closed the Local Blocked Account and transferred any balances therein at the direction of the Collateral Agent.

ARTICLE 8

NEGATIVE COVENANTS

Each Obligor covenants with the Secured Parties that, until all Commitments have been terminated and all Obligations (other than contingent Obligations not then due and payable) have been paid in full, it shall, and shall cause each of its Subsidiaries to, perform the obligations in this ARTICLE 8.

8.1 Indebtedness. Each Borrower shall not, and shall not permit any of its Subsidiaries to, create, issue, incur, assume, become liable in respect of or permit to exist any Indebtedness, except:

(a) Indebtedness in respect of the Obligations;

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(b) Indebtedness evidencing the deferred purchase price of any newly acquired specific fixed asset consisting of personal property, or incurred to finance all or part of the acquisition of equipment of such Borrowers or any of its Subsidiaries (pursuant to purchase money security interest Indebtedness or otherwise, whether owed to the seller or a third party); provided that such Indebtedness is incurred within ninety (90) days of the acquisition of such property and in respect of Capital Lease Obligations; and provided further that the aggregate amount of all Indebtedness outstanding pursuant to this clause (b) shall not at any time exceed $5,000,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof calculated as of the date of such acquisition);

(c) Indebtedness pursuant to any Hydrocarbon Hedge Agreement or Interest Hedge Agreement (in each case, not being a Designated Hedge Agreement); provided that such Hedge Agreement otherwise complies with the terms of Section 8.14;

(d) Indebtedness of an Obligor to another Obligor that is subordinated in priority and right of payment to the Obligations on terms reasonably satisfactory to the Majority Lenders;

(e) Indebtedness of the Borrowers with respect to standby letters of credit, bank guarantees, indemnities, sureties or bonds provided to any Governmental Authority or other Person and assuring payment of contingent liabilities of the Borrowers and their Subsidiaries in connection with the operations of their respective businesses or the operation of the Hydrocarbon Interests, including with respect to plugging, facility removal, environmental remediation and abandonment of its Hydrocarbon Interests, in an aggregate amount not to exceed $2,500,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof calculated as of the date of such incurrence) at any time; and

(f) Indebtedness described in Item 8.1(f) of the Disclosure Schedule.

For the avoidance of doubt, nothing in this Section 8.1 shall restrict the Parent or its Subsidiaries (other than the Borrowers and their respective Subsidiaries) from issuing, incurring, assuming, or becoming liable in respect of any Indebtedness.

8.2 Liens. Each Borrower shall not, and shall not permit any of its Subsidiaries to, create, assume, incur, or permit to exist any Lien upon any of its property (including Hydrocarbon Interests, accounts receivable and Equity Interests in Subsidiaries or other Persons), whether now owned or hereafter acquired, except:

(a) Liens securing payment of the Obligations;

(b) purchase money Liens securing Indebtedness of the type permitted under Section 8.1(b) incurred to finance the acquisition of specific fixed assets or equipment; provided that (i) such Lien is created within sixty (60) days of the incurrence of such Indebtedness, (ii) the principal amount of the Indebtedness secured thereby does not exceed the lesser of the cost or the fair market value of such fixed assets or equipment, (iii) such Lien encumbers only the fixed assets or equipment that are financed by such Indebtedness and does not attach to any other assets of such Borrower or any of its Subsidiaries and (iv) the amount of Indebtedness secured thereby is not increased;

(c) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent (provided that no foreclosure, sale or other enforcement proceedings in respect thereof have been initiated) or that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside;

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(d) carrier’s, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords’ or other similar Liens arising by operation of law in the ordinary course of business in respect of obligations that are not yet due or that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside;

(e) Liens in favor of operators and non-operators under joint operating agreements arising in the ordinary course of business to secure amounts owing by such Borrower or any of its Subsidiaries that are not yet due or that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside;

(f) obligations of such Borrower or any of its Subsidiaries in respect of royalty payments, overriding royalty payments, net profit interests, production payments, reversionary interests, calls on production, preferential purchase rights and other deductions from the proceeds of Hydrocarbon production, that do not secure Indebtedness for borrowed money and that are taken into account in computing the net revenue interests and working interests of such Borrower or any of its Subsidiaries warranted in the Security Documents;

(g) Liens created by, or arising under any Applicable Law (in contrast with Liens voluntarily granted) in the ordinary course of business of such Borrower or any of its Subsidiaries in connection with workers’ compensation, unemployment insurance, employers’ health tax or other social security or statutory obligations that secure amounts that are not yet due or that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside;

(h) Liens arising under operating agreements, unitization and pooling agreements and orders, farm-out agreements, gas balancing agreements and other related agreements, in each case that are customary in the oil, gas and mineral production business and that are entered into by such Borrower or any of its Subsidiaries in the ordinary course of business that are taken into account in computing the net revenue interests and working interests of such Borrower or any of its Subsidiaries warranted in the Security Documents, to the extent that any such Lien does not materially detract from the value of the property encumbered by such Lien or materially impair the use thereof in the operation of the business of such Borrower or any of its Subsidiaries;

(i) Liens arising pursuant to deposits to secure the performance of bids, trade contracts, Hydrocarbon Licenses, or performance bonds and other obligations of a like nature incurred in the ordinary course of business of such Borrower or any of its Subsidiaries;

(j) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and temporary investments on deposit in one or more accounts maintained by such Borrower or any of its Subsidiaries (other than the Collection Accounts), in each case granted in the ordinary course of business in favor of the bank or financial institution with which such accounts are maintained, securing amounts owing to such bank or financial institution with respect to cash management and operating account arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(k) judgment Liens in existence for less than forty-five (45) days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies and that do not otherwise result in an Event of Default under Section 9.1(g);

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(l) easements, rights-of-way, zoning restrictions and other similar encumbrances, and minor defects in the chain of title that are customarily accepted in the oil and gas financing industry, none of which materially detracts from the value of the property encumbered thereby or materially impairs the use thereof in the operation of the business of such Borrower or any of its Subsidiaries;

(m) Liens, if any, granted in favor of the LC Issuer to cash collateralize or otherwise secure the obligations of an LC Participant that is a Delinquent Lender to fund risk participations hereunder; and

(n) Liens specified in Item 8.2 of the Disclosure Schedule.

8.3 Agreements Restricting Liens. Except as permitted by this Agreement, each Borrower shall not, and shall not permit any of its Subsidiaries to, enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of such Borrower or such Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, other than this Agreement and the Loan Documents and any other agreement giving rise to a Lien permitted under Section 8.2(b), or which requires the consent of or notice to other Persons in connection therewith.

8.4 Merger or Consolidation; Fundamental Changes. Each Borrower shall not, and shall not permit any of its Subsidiaries to, enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) or otherwise change its corporate form, except that (a) any Borrower may be merged or consolidated with or into another Borrower, (b) any Subsidiary of such Borrower may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving Person), (c) any Subsidiary of such Borrower may be merged or consolidated with or into a Subsidiary Guarantor, and (d) the Reorganization (as defined in Section 12.22) shall be permitted on the terms set forth in Section 12.22 hereof.

8.5 Disposals. Each Borrower shall not, and shall not permit any of its Subsidiaries to, Dispose of any of its property (including the Hydrocarbon Interests, accounts receivable and Equity Interests in Subsidiaries or other Persons) or business, except for:

(a) any sale of Hydrocarbons pursuant to Eligible Contracts entered into in the ordinary course of its business;

(b) any Disposal of equipment that is (i) obsolete, worn out, depleted or economically inefficient, (ii) no longer necessary for the business of such Person or (iii) contemporaneously replaced by equipment of at least comparable value and use;

(c) any entry into an operating agreement, unitization and pooling agreement, farm-out agreements and any other analogous agreements, in each case that is customary in the oil, gas and mineral production business and that is entered into in the ordinary course of its business;

(d) Disposals of property having a fair market value not to exceed $1,000,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof calculated as of the date of such Disposal) in any single transaction or series of related transactions in any Fiscal Year, provided that such property does not constitute Collateral included in the Borrowing Base or (to the extent not constituting Collateral) Hydrocarbon Interests included in the Borrowing Base;

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(e) Disposals of Hydrocarbon Interests not constituting Proved Reserves pursuant to farm-ins and farm-outs and transfers of royalty interests, overriding royalty interests, net revenue interests and other similar transfers, all pursuant to exploration and development activity in the ordinary course of business of such Borrower and its Subsidiaries;

(f) Disposals of Viking Equipment to Viking or any Subsidiary of the Parent provided that, upon such Disposals (i) no Borrower or Subsidiary (as applicable) shall have any payment or other obligations (actual, contingent or otherwise) in respect of such Viking Equipment, (ii) if such Borrower or Subsidiary (as applicable) retains title to such Viking Equipment, such Viking Equipment shall at all times be free and clear of all Liens other than any Lien in favor of the Collateral Agent, and (iii) to a Subsidiary of a Parent which is not an Obligor, and in which case such transferring Borrower or Subsidiary (as applicable) does not retain title to such Viking Equipment, all Liens on such Viking Equipment in favor of the Collateral Agent shall automatically terminate upon the consummation of such Disposals;

(g) Disposals consisting of transfers of ownership of Equipment located in Turkey from one Borrower to another Borrower on terms reasonably satisfactory to the Collateral Agent provided that, after giving effect to such Disposals, (i) such Equipment remains in Turkey and (ii) (x) a commercial enterprise pledge agreement or amendment thereto, as applicable, will have been duly executed by the applicable Borrower and registered with the applicable Trade Registry in Turkey within thirty (30) days and (y) if a subsequent filing becomes necessary, within thirty (30) days after written request from the Collateral Agent to do so and (iii) in each case (ii)(x) and (ii)(y), the Lenders shall have received a satisfactory opinion of their Turkish counsel as to the duly perfected security interest in and Lien on the collateral thereunder; and

(h) the Reorganization.

8.6 Restricted Payments. Each Borrower shall not, and shall not permit any of its Subsidiaries to, make any Restricted Payments; provided that each Subsidiary of a Borrower may make Restricted Payments to such Borrower.

8.7 Investments. Each Borrower shall not, and shall not permit any of its Subsidiaries to, purchase, make, incur, assume or permit to exist any Investment, except:

(a) Liquid Investments;

(b) trade and customer accounts receivable which are for goods furnished or services rendered in the ordinary course of business and are payable in accordance with customary trade terms;

(c) creation of any additional Subsidiaries in accordance with Section 7.12(b);

(d) acquisition of Hydrocarbon Interests, provided that such Hydrocarbon Interests are subject to a Security Interest;

(e) Investments existing on the Closing Date and specified in Item 8.7(d) of the Disclosure Schedule; and

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(f) the Collection Accounts and the accounts listed on Item 6.21 and Item 8.15 of the Disclosure Schedule.

8.8 Transactions with Affiliates. Except as expressly permitted under this Agreement, each Borrower shall not, and shall not permit any of its Subsidiaries to, be party with or enter into any transaction with any Affiliate unless such transaction is entered into on fair and reasonable terms comparable to the terms that would be available to such Borrower or such Subsidiary in an arm’s length transaction with a Person that is not an Affiliate.

8.9 Sales and Leasebacks. Each Borrower shall not, and shall not permit any of its Subsidiaries to, enter into any arrangement with any Person providing for the Disposal of any property to such Person if, at the time or thereafter, such Borrower or any of its Subsidiaries leases back such property or any part thereof which such Borrower or any of its Subsidiaries intends to use for substantially the same purpose as the property that was Disposed.

8.10 Change of Business; Change of Country Focus. Each Borrower shall not, and shall not permit any of its Subsidiaries to (i) engage in any business or business activity, own any assets or assume any liabilities or obligations except as necessary in connection with, or reasonably related to, its business as an independent oil and gas exploration and production company and (ii) without the prior written consent of the Majority Lenders, operate or carry on business in any jurisdiction other than its jurisdiction of formation and Turkey.

8.11 Change in Organic Documents. Each Borrower shall not, and shall not permit any of its Subsidiaries to, amend, supplement, modify or restate its Organic Documents, or to amend its name or change its jurisdiction of organization, in each case without the prior written consent of the Majority Lenders, unless any such change, as advised to the Majority Lenders, could not reasonably be expected to have a Material Adverse Effect.

8.12 Change in Fiscal Periods or Accounting Principles. Each Borrower shall not, and shall not permit any of its Subsidiaries to, (i) permit its Fiscal Year to end on a day other than December 31 or change its method of determining Fiscal Quarters or (ii) alter the accounting principles used by it on the Closing Date in calculating financial covenants or other standards in this Agreement.

8.13 Modification of Certain Agreements. Each Borrower shall not, and shall not permit any of its Subsidiaries to, terminate any Hydrocarbon License, Eligible Contract or Material Contract other than those Hydrocarbon Licenses whose value is determined, in such Borrower’s reasonable business judgment, to be immaterial to warrant their continuation and are terminated in the ordinary course of such Borrower’s business. Without the prior written consent of the Majority Lenders, each Borrower shall not, and shall not permit any of its Subsidiaries to, amend, restate, supplement, waive or otherwise modify, or consent or agree to any amendment, restatement, supplement, waiver or other modification to or, the terms contained in:

(a) the Hydrocarbon Licenses, except to the extent any amendments or modifications thereto are required by any applicable Governmental Authority;

(b) each Eligible Contract; and

(c) each Material Contract,

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unless any such amendment, restatement, supplement, waiver or other modification, as advised to the Majority Lenders, could not reasonably be expected to have a Material Adverse Effect and the Majority Lenders are promptly notified of such amendment, restatement, supplement, waiver or other modification and, if requested by them, are promptly provided with a copy of the same.

8.14 Limits on Speculative Hedges. Each Borrower shall not, and shall not permit any of its Subsidiaries to create, incur or assume a speculative position in any commodities market or futures market or enter into any Hedge Agreement for speculative purposes. Without prejudice to the foregoing, each Borrower shall not, and shall not permit any of its Subsidiaries to enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement or any other Hedge Agreement:

(a) other than as part of its normal business operations, as a risk management strategy and/or as a hedge against changes resulting from market conditions related to the operations of such Borrower or any of its Subsidiaries;

(b) being a Hydrocarbon Hedge Agreement that, when aggregated with any other Hydrocarbon Hedge Agreement then in effect, covers notional volumes in excess of 75% of the reasonably projected production volumes attributable to Proved Developed Reserves for the period from and including the Closing Date to the Maturity Date; or

(c) that is longer than three (3) years in duration.

8.15 Restrictions on Accounts. Unless a Security Interest exists with respect to each such account and is otherwise permitted to be opened and maintained hereunder, each Borrower shall not, and shall not permit any of its Subsidiaries to, open or maintain any deposit account, securities account or commodity account with any Person except for the Collection Accounts, the accounts set forth in Item 6.21 and the accounts specified in Item 8.15 of the Disclosure Schedule.

8.16 Local Blocked Account. Talon shall not withdrawal or transfer any funds in the Local Blocked Account received pursuant to any Eligible Contract, except for transfers to a Collection Account or a deposit account established in accordance with Section 7.13(a).

8.17 Financial Covenants.

(a) Current Ratio. The Borrowers shall not permit the Current Ratio to be less than 1.10 to 1.00 as of the last day of any Measurement Period occurring on or after March 31, 2010.

(b) Leverage Ratio. The Borrowers shall not permit the Leverage Ratio to be greater than 2.50 to 1.00 as of the last day of any Measurement Period occurring on or after March 31, 2010.

(c) Interest Coverage Ratio. The Borrowers shall not permit the Interest Coverage Ratio to be less than 4.00 to 1.00 as of the last day of any Measurement Period occurring on or after March 31, 2010.

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ARTICLE 9

EVENTS OF DEFAULT

9.1 Events of Default. Each of the following events or occurrences shall constitute an “Event of Default”:

(a) Non-Payment of Obligations. Each Borrower or any Guarantor shall fail to pay (i) the principal amount of any Loan when the same is due and payable, (ii) any interest on any Loan or any fee hereunder within five (5) days of the date in which the same became due and payable or (iii) any other amount payable to any Secured Party hereunder or under any other Loan Document within five (5) days of the date in which the same became due and payable (other than, in the cases of (ii) and (iii) above, any default in a payment owing to any Agent for its own account, which in each case (ii) and (iii) shall be an immediate Event of Default upon such failure provided that any such default resulting solely from a technical or administrative error shall not constitute an Event of Default unless such default continues unremedied for a period of five (5) days);

(b) Breach of Representation or Warranty. Any representation or warranty made or deemed made by any Obligor herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made;

(c) Non-Performance of Certain Covenants and Obligations. Any Obligor shall default in the observance or performance of any covenant or obligation contained in Section 3.5, Section 7.3, Section 7.5, Section 7.11, Section 7.12(c), Section 7.12 (d), Section 7.12 (e), Section 7.12(f), Section 7.13 , Section 7.16 or ARTICLE 8;

(d) Non-Performance of Other Covenants and Agreements. Any Obligor shall default in the observance or performance of any other covenant or obligation contained in this Agreement or any other Loan Document (other than as provided in clauses (a) through (c) of this Section 9.1) and if capable of remedy, such default shall remain unremedied for five (5) Business Days after the occurrence thereof;

(e) Cross-Default. Each Borrower, any Guarantor or any of their respective Subsidiaries shall fail to pay any principal of, or premium or interest on its Indebtedness which is outstanding in a principal amount of at least $1,000,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof), individually or when aggregated with all such Indebtedness of such Borrower, any Guarantor or any of their respective Subsidiaries so in default (but excluding Indebtedness evidenced by the Notes) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; (ii) any other event shall occur or condition shall exist under any agreement or instrument relating to Indebtedness which is outstanding in a principal amount of at least $1,000,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof), individually or when aggregated with all such Indebtedness of such Borrower, such Guarantor or any of their Subsidiaries so in default, and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness; or (iii) any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof;

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(f) Bankruptcy, Insolvency, etc.

(i) Any Obligor shall (A) commence any case, proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, administration, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking a moratorium, reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts or (B) apply for, consent to or acquiesce in the appointment of an administrator, administrative receiver, receiver, receiver and manager, liquidator, provisional liquidator, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets or (C) make a general assignment for the benefit of its creditors; or

(ii) there shall be commenced against any Obligor any case, proceeding or other action of a nature referred to in clause (i)(A) above or any Obligor shall permit or suffer to exist the appointment of an administrator, administrative receiver, receiver, receiver and manager, liquidator, provisional liquidator, trustee, custodian, conservator or other similar official described in clause (i)(B) above that, in either case, (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed or undischarged for a period of fifteen (15) days or (C) is consented to or acquiesced in by such Obligor; or

(iii) there shall be commenced against any Obligor, whether before a court or other Governmental Authority, any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof;

(iv) any Obligor shall become insolvent under Applicable Law or generally fail to pay, or shall admit in writing or otherwise its inability or unwillingness generally to pay, its debts as they become due; or

(v) any Obligor shall take any action authorizing or in furtherance of, any of the acts described in clause (i), (ii), (iii) or (iv) above;

(g) Judgments. Any judgment or order for the payment of money in excess of $1,000,000 (or, if denominated in a non-Dollar currency, the Dollar Equivalent thereof) shall be rendered against any Obligor and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

(h) Change of Control. Any Change of Control shall occur provided that, if N. Malone Mitchell, 3rd ceases to be the executive chairman of the board of directors of the Parent by reason of death or disability, such event shall constitute an immediate Default, but shall not constitute and Event of Default unless the Parent shall not have appointed a successor reasonably acceptable to the Lenders within 60 days of the occurrence of such event;

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(i) Loan Document. Any provision of any Loan Document shall for any reason cease to be valid and binding on any Obligor party thereto, or any Obligor shall so assert in writing;

(j) Impairment of Security, etc. The Collateral Agent shall fail to have, not less than five (5) Business Days after any request therefor by the Collateral Agent to the Borrowers, a Security Interest in any portion of the Collateral in respect of which the Borrowers or any of their Subsidiaries having rights therein, or the power to transfer rights therein to a third party, is entitled to grant a Security Interest to the Collateral Agent, or any Security Document shall at any time and for any reason cease to create the Lien on the Collateral purported to be subject to such Security Document in accordance with the terms thereof, or cease to be in full force and effect, or shall be contested by any Obligor thereto, or any Obligor shall create or purport to create any Lien (other than a Lien permitted under Section 8.2(b)) in any portion of the Collateral in favor of any third party or effects or purports to effect any Disposal other than as expressly permitted by this Agreement;

(k) Casualty. Loss, theft, substantial damage or destruction of a material portion of the Collateral the subject of any Security Document not fully covered by insurance (except for deductibles and allowing for the depreciated value of such Collateral) shall have occurred;

(l) Other Material Events. Other than those permitted under Section 8.13, any (i) suspension, revocation, termination or material adverse modification of any Hydrocarbon License (or any action authorizing or made in furtherance of any such suspension, revocation, termination or material adverse modification), including pursuant to any seizure, compulsory acquisition, expropriation or nationalization by or under the direction of any Governmental Authority or (ii) military, governmental or other occupation of any Borrower’s or any of its Subsidiaries’ oil and gas production facilities in Turkey by force for a period exceeding thirty (30) days; and

(m) Material Adverse Effect. The occurrence of any event or circumstance having a Material Adverse Effect.

At any time after the occurrence of an Event of Default, the Administrative Agent shall at the request of, or may with the consent of, the Majority Lenders deliver to the Borrowers a notice specifying that an Event of Default has occurred and is continuing, and for purposes of the Security Documents, such notice shall be conclusive and binding evidence of the occurrence and continuation of an Event of Default. For the avoidance of doubt, an Event of Default shall be deemed to be continuing unless it has been remedied (if capable of remedy) or waived in accordance with this Agreement.

9.2 Automatic Acceleration. If an Event of Default specified in Section 9.1(f) occurs, then:

(a) the obligation of each Lender and the LC Issuer to make any further Credit Extension shall (if the Commitment Termination Date has not then occurred) terminate, and all principal, interest, fees and other amounts payable under this Agreement and the other Loan Documents shall be and become forthwith due and payable in full, without notice of intent to demand, demand, presentment for payment, notice of nonpayment, protest, notice of protest, grace, notice of dishonor, notice of intent to accelerate, notice of acceleration, and all other notices, all of which are hereby expressly waived by the Borrowers;

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(b) the Borrowers shall Cash Collateralize their LC Obligations in respect of all outstanding Letters of Credit (if any) at such time; and

(c) the Collateral Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Security Documents and any other Loan Document for the ratable benefit of the Secured Parties.

9.3 Optional Acceleration. If an Event of Default (other than an Event of Default specified in Section 9.1(f)) occurs, then:

(a) the Administrative Agent (i) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrowers (if the Commitment Termination Date has not then occurred), terminate the obligation of each Lender and the LC Issuer to make any further Credit Extension, whereupon the same shall forthwith terminate with effect from the date of such notice and (ii) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrowers, declare all principal, interest, fees and other amounts payable under this Agreement and the other Loan Documents to be and become forthwith due and payable in full (which declaration shall be conclusive evidence that the amounts determined therein as due and payable have become due and payable), whereupon all such amounts shall be and become forthwith due and payable in full with effect from the date of such notice, without notice of intent to demand, demand, presentment for payment, notice of nonpayment, protest, notice of protest, grace, notice of dishonor, notice of intent to accelerate, notice of acceleration, and all other notices, all of which are hereby expressly waived by the Borrowers;

(b) the Borrowers shall, upon demand of the Administrative Agent (acting at the request of, or with the consent of, the Majority Lenders), Cash Collateralize their LC Obligations in respect of all outstanding Letters of Credit (if any) at such time; and

(c) the Collateral Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Security Documents and any other Loan Document for the ratable benefit of the Secured Parties.

9.4 Application of Funds. After the exercise of remedies pursuant to Section 9.3 (or after the Loans have automatically become immediately due and payable and the LC Obligations have automatically been required to be Cash Collateralized pursuant to Section 9.2), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

(a) first, to satisfy that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of legal counsel and other professional advisors to each Agent) payable to each Agent in its capacity as such;

(b) second, to satisfy that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the LC Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the LC Issuer) and amounts payable under ARTICLE 4, ratably among them in proportion to their respective Pro Rata Shares;

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(c) third, to satisfy of that portion of the Obligations constituting accrued and unpaid letter of credit fees and interest on the Loans, LC Outstandings (if any) and other Obligations, ratably among the Lenders and the LC Issuer in proportion to their respective Pro Rata Shares;

(d) fourth, to satisfy that portion of the Obligations constituting unpaid principal of the Loans, LC Outstandings (if any) and amounts owing under Designated Hedge Agreements, ratably among the Lenders and the LC Issuer in proportion to their respective Pro Rata Shares and the Designated Hedge Counterparties;

(e) fifth, to the Collateral Agent for deposit into the Cash Collateral Account to Cash Collateralize the portion of the LC Obligations comprised of the aggregate undrawn amount of the then outstanding Letters of Credit (if any) and to be applied to satisfy drawings under such Letters of Credit as and when they occur; provided that if any amount remains in the Cash Collateral Account after all Letters of Credit have either been fully drawn, expired or terminated, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above; and

(f) sixth, the balance, if any, after all of the Obligations have been paid in full, to the Borrowers or the relevant Obligor or as otherwise required by Applicable Law.

9.5 Borrowers’ Right to Cure.

(a) Notwithstanding anything to the contrary in Section 8.16 (and the definitions related thereto) and Section 9.1, in the event of any Event of Default under any covenant set forth in Section 8.16(b) or Section 8.16(c), the Borrowers may at their option cure such Event of Default with an injection of cash by way of equity contribution or loans into any Borrower or Borrowers, directly or indirectly, from the Parent (provided that if such cash injection is in the form of a loan, such loan is subordinated to the Obligations on terms reasonably satisfactory to the Majority Lenders) (such equity contribution and/or loans, an “Equity Cure Injection”) in an amount which, when added to EBITDAX for the applicable Measurement Period, would result in the Borrowers complying with Section 8.16(b) or 8.16(c) (as applicable), provided that the Borrowers’ rights under this Section 9.5 may not be exercised on more than two (2) occasions per year during the period from the Closing Date until the Maturity Date.

(b) Each Equity Cure Injection must be made within ten (10) Business Days of the delivery of the relevant Compliance Certificate under Section 7.1(d) which shows the Borrowers’ failure to comply with Section 8.16(b) or Section 8.16(c).

(c) To the extent that any Equity Cure Injection is made in a particular period to enable the cure of a breach under Section 8.16(b) or Section 8.16(c) in respect of a previous Measurement Period, only that portion of the Equity Cure Injection necessary to cure such Event of Default under Section 8.16 for such applicable Measurement Period shall be treated as increasing EBITDAX for the purpose of calculating the financial covenants in Section 8.16 in respect of that Measurement Period by an amount equal to such portion of the relevant Equity Cure Injection. The parties hereby acknowledge that this clause (c) shall not be relied on for purposes of calculating any financial ratios other than as applicable to Section 8.16(b) or Section 8.16(c) and shall not result in any adjustment to EBITDAX or any other amounts, other than the amount of EBITDAX referred to in the immediately preceding sentence.

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(d) If, after giving effect to the recalculation referred to in Section (c), the relevant test under Section 8.16 is met, then the requirements thereof shall be deemed to have been satisfied as at the relevant original date of testing as though there has been no failure to comply with such test and any Default or Event of Default occasioned thereby shall be deemed to have been remedied for the purposes of this Agreement and the other Loan Documents.

(e) The proceeds of each Equity Cure Injection may be used by the Borrowers for general corporate purposes provided that in the period commencing on the date on which an Equity Cure Injection is made and ending on the first date thereafter on which a Compliance Certificate delivered by the Borrowers to the Administrative Agent in accordance with Section 7.1(d) demonstrates that the Borrowers are in compliance with Section 8.16, the Borrowers shall not make or pay, or permit to be made or paid, any dividend or distribution (whether in cash or in kind) in relation to their respective share capital, any redemption or reduction of their respective share capital, any payments in respect of any loans made available to them by any Affiliate or any other distribution to any of their respective shareholders.

ARTICLE 10

GUARANTEE

10.1 Guarantee. The Guarantors hereby jointly and severally guarantee to the Secured Parties the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the Obligations strictly in accordance with the terms thereof. The Guarantors hereby further jointly and severally agree that if any Borrower shall fail to pay in full when due any of the Obligations, the Guarantors shall promptly pay the same, without any demand or notice whatsoever, and that if any extension of time is given for the payment of any of the Obligations, the same shall be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) strictly in accordance with the terms thereof. Any and all payments made by the Guarantors shall be made in accordance with the terms of Section 4.1, mutatis mutandis.

10.2 Obligations Unconditional. The obligations of each Guarantor under Section 10.1 are absolute and unconditional, joint and several, irrespective of the value, validity or enforceability of the obligations of each Borrower under this Agreement or any other Loan Document and irrespective of any other circumstance which might otherwise constitute a legal or equitable discharge or defense in favor of any Guarantor or such Borrower (other than payment in full of the Obligations), it being the intent of this Section 10.2 that the obligations of each Guarantor hereunder shall be absolute and unconditional, joint and several, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall, to the fullest extent permitted by Applicable Law, not alter or impair the obligations of each Guarantor hereunder which shall remain absolute and unconditional as described above:

(a) any waiver or any grant of an extension of time in respect of the performance of the Obligations or any part thereof;

(b) any acceleration of the maturity of the Obligations or any part thereof;

(c) any act or omission carried out in respect of any provision of this Agreement and any Loan Document;

(d) any amendment, restatement or modification of the Obligations or any part thereof;

(e) any waiver by a Secured Party of any right under this Agreement or any Loan Document in respect of the Obligations or any part thereof;

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(f) any failure to perfect any Lien in respect of any Collateral, or any failure of such Lien to constitute a valid and enforceable security interest in respect of such Collateral;

(g) any substitution, release or exchange effected in respect of any Collateral; or

(h) any additional guarantee given in favor of the Secured Parties in respect of the Obligations or any part thereof.

10.3 Waiver of Presentment. Each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any Secured Party first exhaust any right, power or remedy it may have against any Borrower or any Guarantor under this Agreement or any other Loan Document, or against any other Person under any other guarantee of, or security for, any of the Obligations. Each Guarantor agrees that its obligations pursuant to this ARTICLE 10 shall not be affected by any assignment or participation entered into by any Bank pursuant to Section 12.7.

10.4 Reinstatement. The obligations of each Guarantors under this ARTICLE 10 shall automatically be reinstated if for any reason any payment by or on behalf of any Borrower or any Guarantor in respect of the Obligations is rescinded, or must be otherwise restored by any Secured Party, whether as a result of any proceedings in bankruptcy or reorganization or otherwise. Each Guarantor jointly and severally agrees to indemnify each Secured Party on demand for all costs and expenses (including, without limitation, attorney’s fees) incurred by it in connection with such rescission or restoration, including any such costs and expenses incurred in defending any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

10.5 Subrogation. Until all Commitments have been terminated and all Obligations (other than contingent Obligations not then due and payable) have been paid in full, each Guarantor hereby waives all rights of subrogation or contribution it may have in respect of any Borrower or any Guarantor, whether arising by contract or operation of law or otherwise by reason of any payment made by it pursuant to this ARTICLE 10.

10.6 Continuing Guarantee. The guarantee in this ARTICLE 10 is a continuing guarantee, and shall apply to all Obligations whenever arising.

10.7 Instrument for the Payment of Money. Each Guarantor hereby acknowledges that the guarantee in this ARTICLE 10 constitutes an instrument for the payment of money, and agrees that any Secured Party, at its sole option, in the event of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to bring motion-action under New York CPLR Section 3213.

10.8 General Limitation on Guarantee Obligations. In any action or proceeding involving any bankruptcy, insolvency, reorganization or other Applicable Law in the jurisdiction of organization of any Guarantor affecting the rights of creditors generally, if the obligations of any Guarantor under this ARTICLE 10 would otherwise be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, then, notwithstanding anything in this Agreement to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Secured Party or any other Person, be automatically limited and reduced to the highest amount that would be valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

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10.9 Joint and Several Liability of Borrowers. Without prejudice to the provisions of this ARTICLE 10 but subject to any Applicable Law in the jurisdiction of organization of any Borrower affecting the rights of creditors generally, in consideration of the financial accommodation to be provided by the Lenders under this Agreement and the Designated Hedge Counterparties under the Designated Hedge Agreements, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of each Borrower to accept joint and several liability for the obligations of each other Borrower, each Borrower hereby irrevocably and unconditionally accepts joint and several liability with each other Borrower with respect to the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the Obligations of, each Borrower and all other amounts from time to time owing to the Secured Parties by each Borrower under this Agreement and all of the other Loan Documents, in each case strictly in accordance with the terms hereof and thereof.

ARTICLE 11

AGENCY PROVISIONS

11.1 Appointment and Authority. Each of the Lenders and the LC Issuer hereby irrevocably appoints Standard Bank Plc to act on its behalf as the Administrative Agent, the Collateral Agent and the Technical Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent, the Collateral Agent and the Technical Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent, the Collateral Agent and the Technical Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this ARTICLE 11 are solely for the benefit of the Secured Parties, and neither the Borrowers nor any other Obligor shall have rights as a third party beneficiary of any of such provisions. Each of the Secured Parties hereby irrevocably appoints and authorizes the Collateral Agent to act as the agent of such Secured Party for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any Obligor to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto.

11.2 Rights as a Lender. Each Agent shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include Standard Bank Plc serving as the Administrative Agent, as the Collateral Agent or as the Technical Agent hereunder in its individual capacity. Standard Bank Plc and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Obligor or any Subsidiary or other Affiliate thereof as if it were not an Agent and without any duty to account therefor to the Lenders.

11.3 Exculpatory Provisions. No Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, each Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that an Agent is required to exercise as directed in writing by the Majority Lenders (or

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such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or Applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower or any of its Affiliates that is communicated to or obtained by Standard Bank Plc or any of its Affiliates in any capacity.

No Agent shall be liable for any action taken or not taken by it (i) with the consent or at the request of the Majority Lenders or (ii) in the absence of its own gross negligence or willful misconduct. No Agent shall be deemed to have knowledge of any Default unless and until notice describing such Default is given to such Agent by an Obligor, a Lender or the LC Issuer. No Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Security Documents, (v) the value or the sufficiency of any Collateral or (v) the satisfaction of any condition precedent set forth in ARTICLE 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to such Agent.

11.4 Reliance by Agents. Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Each Agent may also rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. Without prejudice to the foregoing, in determining compliance with any condition hereunder to any Credit Extension that by its terms must be fulfilled to the satisfaction of a Lender or the LC Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the LC Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the LC Issuer prior to the making of such Credit Extension. Each Agent may engage, rely on and consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other professional advisors or experts selected by it, in its sole discretion and at the cost of the Borrowers, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants, professional advisors or experts.

11.5 Delegation of Duties. Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by such Agent. Each Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Affiliates. The exculpatory provisions of Section 11.3 and this ARTICLE 11 shall apply to any such sub-agent and to the Affiliates of such Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities performed as an Agent.

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11.6 Resignation of Agents. Each Agent may at any time give notice of its resignation to the Borrowers and the Secured Parties. Upon receipt of any such notice of resignation, the Majority Lenders shall have the right, in consultation with the Borrowers, to appoint another Person or an Affiliate of a Lender to succeed such Agent. If no such successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of the Secured Parties, appoint a successor Agent meeting the qualifications set forth above; provided that if the retiring Agent shall notify the Borrowers and the Secured Parties that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that if the retiring Agent is the Collateral Agent, the Collateral Agent shall continue to hold any Collateral held by it on behalf of the Secured Parties under any of the Loan Documents until such time as a successor Collateral Agent is appointed) and (b) all payments, communications and determinations to be made by, to or through such Agent shall instead be made by or to the relevant Obligor or Secured Party directly, until such time as a successor Agent is appointed as provided for above in this Section 11.6. Upon the acceptance of a successor’s appointment as an Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder and under any other Loan Document (if not already discharged therefrom as provided above), and the retiring Agent shall cooperate in good faith to effectuate the transfer of its role to the successor Agent, including the execution and delivery of such assignments, modifications, documents, certificates and further assurances as such successor Agent may reasonably request. The fees payable by the Borrowers to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this ARTICLE 12, ARTICLE 5 and Section 11.4 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Affiliates in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting as an Agent. In addition, if any Lender serving as an Agent is or becomes a Delinquent Lender, the Majority Lenders or (so long as no Default or Event of Default has then occurred and is continuing) the Borrowers, may, but shall not be obligated to, require the resignation of such Agent in accordance with the terms of this Section 11.6; provided that such Agent shall not be required to resign if, as a result of the expiry of the Delinquent Period prior thereto, the circumstances entitling the Majority Lenders or the Borrowers to require such resignation cease to apply.

11.7 Non-Reliance on Agents and Other Lenders. Each Lender and the LC Issuer acknowledges that it has, independently and without reliance upon any Agent or any other Lender or any of their Affiliates and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and to make Credit Extensions hereunder. Each Lender and the LC Issuer also acknowledges that it will, independently and without reliance upon any Agent or any other Lender or any of their Affiliates and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

11.8 No Other Duties. Notwithstanding anything in this Agreement to the contrary, the Arrangers shall have no powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as an Agent, a Lender or the LC Issuer hereunder.

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11.9 Indemnification. The Lenders shall indemnify each Agent in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably according to their respective Pro Rata Shares in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Pro Rata Shares immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans and other Obligations) be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein, or the other transactions contemplated hereby or thereby or any action taken or omitted by such Agent under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from such Agent’s gross negligence or willful misconduct. The agreements in this Section shall survive the termination of this Agreement and the payment in full of all Obligations.

11.10 Indemnified Matters. Notwithstanding anything to the contrary in this Agreement, each Agent shall be entitled to include as part of any amount payable to it under Section 11.9, Section 12.5 and/or Section 12.6, a sum representing the cost to such Agent in terms of management time and other resources calculated on the basis of such reasonable daily or hourly rates as such Agent may notify to the Borrower or the Lenders (as the case may be) for such purpose, and such sum shall be in addition to any fees or other amounts paid or payable to such Agent under this Agreement or the other Loan Documents. Each Borrower shall promptly on demand reimburse any Lender for amounts actually paid by such Lender pursuant to this Section 11.10.

11.11 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any judicial proceeding relative to any Obligor, the Administrative Agent (irrespective of whether the principal of any Loan or LC Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the LC Issuer and the Administrative Agent (including any claim for the compensation, expenses, disbursements and advances of the Lenders, the LC Issuer and the Administrative Agent and their respective agents and counsel) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same,

and any administrator, administrative receiver, receiver, receiver and manager, liquidator, provisional liquidator, trustee, custodian, conservator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the LC Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the LC Issuer, to pay to the Administrative Agent any amount due for the compensation, expenses, disbursements and

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advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under this Agreement and any other Loan Document. Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the LC Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the LC Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the LC Issuer or in any such proceeding.

11.12 Collateral and Guarantee Matters. The Lenders and the LC Issuer irrevocably authorize the Collateral Agent, at its option and in its discretion:

(a) to release any Lien on any property granted to or held by the Collateral Agent under any Loan Document (i) upon the termination of the Commitments and the payment in full of all Obligations (other than contingent Obligations not then due and payable), (ii) that is Disposed or to be Disposed as part of or in connection with any Disposal permitted hereunder or under any other Loan Document or (iii) if approved, authorized or ratified in writing in accordance with Section 12.1;

(b) to release any Guarantor from its guarantee of the Obligations if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder; and

(c) to subordinate any Lien granted to or held by the Collateral Agent under any Loan Document to the holder of any Lien on such property that is permitted under Section 8.2.

Upon request by the Collateral Agent at any time, the Majority Lenders will confirm in writing the Collateral Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its guarantee of the Obligations pursuant to this Section 11.12. In each case as specified in this Section 11.12, the Collateral Agent will, at the Borrowers’ expense, execute and deliver to the applicable Obligor such documents as such Obligor may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Security Documents or to subordinate its interest in such item, or to release such Guarantor from its guarantee of the Obligations, in each case in accordance with the terms of the Loan Documents and this Section 11.12.

ARTICLE 12

MISCELLANEOUS

12.1 Amendments. No amendment or waiver of any provision of this Agreement or any other Loan Document (except the Fee Letter), and no consent to any departure by any Borrower or any other Obligor therefrom, shall be effective unless made in writing signed by the Majority Lenders and the Borrowers or the applicable Obligor (and in the case of the other Loan Documents (except the Fee Letter) all other parties thereto), as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. If the Administrative Agent receives notice of any amendment or waiver requested by the Borrowers with respect to this Agreement or any other Loan Document, it shall give notice to the Lenders accordingly. Unless the Administrative Agent advises otherwise, the Lenders shall have ten (10) Business Days to respond to the request for such amendment or waiver. If no response is received from a Lender within such time, the Administrative Agent shall be entitled to treat such failure to respond as a rejection by such Lender of the requested amendment or waiver. Notwithstanding anything in this Agreement to the contrary, no such amendment, waiver or consent shall:

(a) waive any condition precedent specified in ARTICLE 5, without the written consent of each Lender;

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(b) extend or increase the Commitment of any Lender, without the written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to each Lender hereunder or under such other Loan Document, without the written consent of each Lender entitled to such amount;

(d) reduce the principal of, or the rate of interest specified herein on, any Loan or LC Participation, or any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender entitled to such amount;

(e) change Section 9.4 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or the order of application thereof without the written consent of each Lender entitled to such amount;

(f) change any provision of this Section 12.1, Section 12.9 or the definition of “Eligible Assignee” or “Majority Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

(g) amend, modify or waive any provision of ARTICLE 3 or ARTICLE 11 or any other provision hereunder or under any other Loan Document that affects the rights or duties of any Agent without the written consent of such Agent;

(h) amend, modify or waive any provision of Section 2.4 without the written consent of the LC Issuer;

(i) except as permitted by Section 11.12, release all or any part of the Collateral, without the written consent of each Secured Party; or

(j) except as permitted by Section 11.12, release any Guarantor from its guarantee of the Obligations, without the written consent of each Secured Party.

Notwithstanding anything in this Agreement to the contrary, no Delinquent Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that (i) the Commitment of such Delinquent Lender may not be increased or extended without its prior written consent and (ii) any amendment, waiver or consent requiring the consent of all Lenders or each affected Lender that by its terms affects any Delinquent Lender in a manner that is materially and disproportionately adverse to such Delinquent Lender compared with the other affected Lenders shall require the consent of such Delinquent Lender.

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12.2 Notices.

(a) Communications in writing. Unless otherwise stated, any communication to be made under or in connection with this Agreement and (unless otherwise provided therein) the other Loan Documents shall be made in writing and may be made by fax, letter or, subject to Section 12.2(d), e-mail, and any communications made in accordance with this Section 12.2 shall constitute admissible and legally valid written evidence in any investigation, litigation or other proceeding based hereon, or arising out of, under, or in connection with this Agreement or any other Loan Document. All such communications shall either be in the English language or, if not in English and if so required by the Administrative Agent, be accompanied by a certified English translation thereof in which case the certified English translation shall prevail in the event of any inconsistency or ambiguity with the original communication to the fullest extent permitted by applicable law.

(b) Addresses. The address, fax number or e-mail address (and the department or officer, if any, for whose attention the communication is to be made) of each party for any communication or document to be made or delivered under or in connection with this Agreement and the other Loan Documents is:

(i) in the case of any Obligor, as specified below the name of such Obligor on the signature pages hereof;

(ii) in the case of the Administrative Agent, the Collateral Agent or the Technical Agent, as specified below its name on the signature pages hereof;

(iii) in the case of the LC Issuer and any Lender, as specified below its name on the signature pages hereof or as notified in writing to the Administrative Agent on or prior to the date on which it becomes a party,

or any substitute address, fax number or e-mail address or department or officer as such party may notify to the Administrative Agent (or as the Administrative Agent may notify to the other parties, if a change is made by the Administrative Agent) by not less than five (5) Business Days’ prior notice. Promptly upon receipt of notification of a change in address, fax number or e-mail pursuant to this Section 12.2, the Administrative Agent shall notify the other parties of such change.

(c) Delivery. Any communication or document made or delivered by one party to another under or in connection with this Agreement or the other Loan Documents will only be effective:

(i) if by way of fax, when received in legible form;

(ii) if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

(iii) if by way of e-mail, when a delivery receipt is received by the sender confirming that the e-mail has been delivered to the recipient’s correct e-mail address (including, without limitation, by means of the “return receipt requested” function or a return e-mail acknowledgment); and

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(iv) if a particular department or officer is specified as part of its address details provided under Section 12.2(b), if addressed to that department or officer.

Any communication or document delivered in accordance with this Section 12.2 after 4:00 p.m. (London, England time) on a Business Day, or on a day which is not a Business Day, will be deemed to have been delivered at 10:00 a.m. (London, England time) on the next Business Day. Any communication or document to be made or delivered to an Agent will be effective only when actually received by such Agent and then only if it is expressly marked for the attention of or delivered to the e-mail address of the department or officer identified with such Agent’s signature below (or any substitute department or officer as such Agent shall specify for this purpose). All notices from an Obligor to any Secured Party or from any Secured Party to an Obligor shall be sent through the Administrative Agent. Any communication or document made or delivered to an Obligor in accordance with this Section 12.2 will be deemed to have been made or delivered to such Obligor.

(d) Limitation on use of e-mail. Electronic mail (“e-mail”) shall not be used by any Obligor for any of the following communications to be made under or in connection with this Agreement or the other Loan Documents (except where the Administrative Agent expressly requires that an Obligor provide electronic versions of such communications, in which case the relevant Obligor shall promptly do so without prejudice to its obligations to deliver the same in paper form):

(i) delivery of a Notice of Borrowing;

(ii) provision of any financial statements under Section 7.1, unless, within five (5) Business Days of their being provided, hard copies of such financial statements are delivered to the Administrative Agent;

(iii) delivery of a Compliance Certificate;

(iv) provision of any notice or other information under Section 7.3;

(v) any other notice or correspondence in respect of which an Agent, acting reasonably, requires a hard-copy signature; or

(vi) any Secured Party which has notified the Administrative Agent that it does not wish to receive any notice or other communication by e-mail.

(e) Use of websites. Except as provided below, each Agent may deliver any information under this Agreement or the other Loan Documents to the Secured Parties and/or the Obligors by posting it on to an electronic website if such Agent designates a website for this purpose and supplies each Secured Party and/or each Obligor (as applicable) with the address of and any relevant password specifications for the website and notifies the Secured Parties and/or the Obligors (as applicable) if the relevant password specifications for the website are changed. Such Agent must promptly upon becoming aware of its occurrence, notify the Secured Parties and/or the Obligors (as applicable) if the website or any information on the website is infected by any electronic virus or similar malicious software, in which event such Agent may make available to the Secured Parties and/or the Obligors (as applicable) any information to be delivered under this Agreement in paper form.

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12.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Secured Party, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law or contract.

12.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Credit Extensions hereunder.

12.5 Payment of Expenses and Taxes. Each Borrower agrees (a) to pay or reimburse each Secured Party for all out-of-pocket costs and expenses reasonably incurred in connection with the negotiation, preparation, execution and delivery of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the fees and disbursements of counsel and notarization, filing and recording fees and expenses, (b) to pay or reimburse each Secured Party for all costs and expenses incurred in connection with (i) the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents and (ii) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (c) to pay, indemnify, and hold each Secured Party harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement and any other Loan Documents. All amounts due under this Section 12.5 shall be payable not later than ten (10) days after written demand therefor. Statements of amounts payable by each Borrower pursuant to this Section 12.5 shall be submitted to the Borrower at the “Address for Notices” specified below the name of such Borrower on the signature pages hereof, and to the attention of the contact person specified therein, or to such other contact person or address as may be hereafter designated by such Borrower in a written notice to each Secured Party. The agreements in this Section 12.5 shall survive the making of the Credit Extensions hereunder, the payment in full of the Obligations and the termination of all Commitments.

12.6 Indemnification. In consideration of the execution and delivery of this Agreement by the Secured Parties, each Borrower hereby indemnifies, exonerates and holds each of them and each of their respective officers, directors, employees and agents in their capacities as such (each, an “Indemnitee”) free and harmless from and against any and all actions, causes of action, suits, claims, losses, costs, liabilities and damages, and all expenses incurred in connection with any of the foregoing (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), including attorneys’ fees and disbursements reasonably incurred, whether incurred in connection with actions between or among the parties hereto or the parties hereto and third parties, and agrees to reimburse each Indemnitee upon demand for all legal and other expenses reasonably incurred by it in connection with investigating, preparing to defend or defending, or providing evidence in or preparing to serve or serving as a witness with respect to, any claim, litigation, investigation or proceeding relating to any of the foregoing (collectively, the “Indemnified Liabilities”), incurred by the Indemnitees or any of them as a result of, or arising out of, or relating to:

(i) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Credit Extension;

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(ii) the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any agreement executed and delivered in connection therewith;

(iii) any investigation, litigation or proceeding related to any environmental cleanup, audit, noncompliance with or liability under any Environmental Law or other matter relating to the protection of the environment applicable to the operations of such Borrower or any of its Subsidiaries or any of the Hydrocarbon Interests;

(iv) the presence on or under, or the Releases from, any property owned or operated by any Obligor of any Hazardous Material regardless of whether caused by, or within the control of, such Obligor; or

(v) any Environmental Liability arising as a result of property owned, leased or operated by any Obligor (the indemnification herein shall survive the payment in full of the Obligations and the termination of all Commitments, regardless of whether such Environmental Liability is caused by, or within the control of, such Obligor);

except to the extent that Indemnified Liabilities arising for the account of a particular Indemnitee are found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted by reason of such Indemnitee’s gross negligence or willful misconduct. Without limiting the foregoing, and to the extent permitted by Applicable Law, each Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to so waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Law, that any of them might have by statute or otherwise against any Indemnitee. It is expressly understood and agreed that to the extent that any Indemnitee is strictly liable under any Environmental Law, each Obligor’s obligation to such Indemnitee under this indemnity shall likewise be without regard to fault on the part of any Obligor with respect to the violation or condition that results in any Environmental Liability of an Indemnitee. If and to the extent that the foregoing undertaking may be unenforceable for any reason, each Obligor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under Applicable Law. The agreements in this Section 12.6 shall survive the making of the Credit Extensions hereunder, the payment in full of the Obligations and the termination of all Commitments.

12.7 Successors and Assigns.

(a) Successors and Assigns Generally. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns, provided that (i) no Obligor may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of all of the Lenders and (ii) any assignment or participation by a Lender of any of its rights and obligations hereunder shall be effected in accordance with this Section 12.7.

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(b) Participations. Each Lender may at any time grant participations in any of its rights under this Agreement or under any of the Notes to any Person (a “Participant”), provided that in the case of any such participation:

(i) the Participant shall not have any rights under this Agreement or any of the other Loan Documents, including rights of consent, approval or waiver (the Participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto);

(ii) such Lender’s obligations under this Agreement (including, without limitation, its Commitments hereunder) shall remain unchanged;

(iii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations;

(iv) such Lender shall remain the holder of the Obligations owing to it and of any Note issued to it for all purposes of this Agreement; and

(v) the Borrowers, the Agents, and the other Lenders shall continue to deal solely and directly with the selling Lender in connection with such Lender’s rights and obligations under this Agreement, and all amounts payable by the Borrowers hereunder shall be determined as if such Lender had not sold such participation,

and provided further that no Lender shall transfer, grant or sell any participation under which the Participant shall have rights to approve any amendment to or waiver of this Agreement or any other Loan Document.

(c) Assignments by Lender. Each Lender (the “Assignor”) may assign all or any part of its Loans, LC Participations and/or Commitments and its rights and obligations hereunder to one or more Eligible Assignees, each of which shall become a party to this Agreement as a Lender by execution of an assignment and acceptance agreement in substantially the form attached hereto as Exhibit E (an “Assignment Agreement”) to be executed by the Assignor, an Eligible Assignee and acknowledged by the Administrative Agent; provided, that (i) if such assignment is in respect of less than all of the rights and obligations of the Assignor, then, unless otherwise agreed to by the Administrative Agent, such assignment shall be in an aggregate principal amount of at least $5,000,000 or a whole multiple of $500,000 in excess thereof and (ii) each Borrower shall cooperate with the Assignor, such Eligible Assignee and the Administrative Agent to facilitate such assignment, including, if instructed by the Assignor or the Administrative Agent, providing to such Eligible Assignee copies of all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, the United Kingdom Proceeds of Crime Act 2002 and the United Kingdom Money Laundering Regulations 2003. Upon its receipt of an Assignment Agreement executed by the Assignor and an Eligible Assignee, together with a registration and processing fee of $3,500 for its own account, the Administrative Agent shall promptly record the information contained therein in the Register (as defined in clause (d) below). Upon such execution, delivery, acceptance and recording, then, from and after the settlement date specified in such Assignment Agreement, the Assignee thereunder shall be a party to this Agreement and, to the extent provided in the Assignment Agreement, shall have the

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rights and obligations of the Assignor hereunder with Loans and/or Commitments as specified therein and y) the Assignor thereunder shall, to the extent provided in the assignment and acceptance agreement, be released from its obligations under this Agreement.

(d) Register. The Administrative Agent shall maintain a register (the “Register”) on which the Administrative Agent shall record the name and address of each Lender, and the Commitments of, and principal amounts of the Loans and LC Obligations owing to, each Lender pursuant to the terms hereof from time to time. The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as the owner thereof for all purposes of this Agreement, notwithstanding notice to the contrary; provided that the Administrative Agent’s failure to make any recording, or any error by the Administrative Agent in making such recording, shall not affect each Borrower’s or any other Obligor’s liabilities in respect of the Loans and LC Obligations.

12.8 Right of Set-off. In addition to any rights now or hereafter granted under Applicable Law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, each Agent, each Lender and the LC Issuer is hereby authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind to any Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Agent, such Lender or the LC Issuer (including, without limitation, by branches, agencies and Affiliates of such Agent, such Lender or the LC Issuer wherever located) to or for the credit or the account of any Borrower against and on account of the Obligations, regardless of whether or not such Agent, such Lender or the LC Issuer shall have made any demand hereunder and regardless of whether or not such Obligations shall be contingent or unmatured. Each Agent, each Lender and the LC Issuer agrees to promptly notify the relevant Borrower after any such set off and application, but failure to give such notice shall not affect the validity of such set off and application.

12.9 Delinquent Lenders. Notwithstanding anything in this Agreement to the contrary, if any Lender becomes a Delinquent Lender, then, to the extent permitted by Applicable Law:

(a) while the relevant Delinquent Period is in effect, such Delinquent Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 12.1;

(b) until such time as all Delinquent Credits with respect to such Delinquent Lender have been funded, its Pro Rata Share of any repayment or prepayment of the Loans shall be applied to satisfy its obligation to fund such Delinquent Credits;

(c) until such time as all Delinquent Payments with respect to such Delinquent Lender have been paid in full together with any applicable accrued interest thereon, the Administrative Agent shall apply any amounts thereafter received by the Administrative Agent for the account of such Delinquent Lender to satisfy such Delinquent Lender’s obligation to make such Delinquent Payments;

(d) while the relevant Delinquent Period is in effect, the Borrowers may reduce all or any portion of the unused Commitments of such Delinquent Lender under Section 2.6(a) before reducing the unused Commitments of any other Lender;

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(e) any Delinquent Lender with a Delinquent Credit shall not be entitled to receive any commitment fee pursuant to Section 2.9(a) during its Delinquent Period, and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to such Delinquent Lender during its Delinquent Period;

(f) any Delinquent Lender with a Delinquent Credit shall not be entitled to receive its share of any letter of credit fee pursuant to Section 2.9(b) during its Delinquent Period and such fee shall instead be paid to the LC Issuer (or if the entire LC Participation of such Delinquent Lender has been assumed by one or more Lenders, such fee shall be ratably allocated among such Lenders as their interests may appear), unless such Delinquent Lender has provided cash collateral or other credit support or made other arrangements to the LC Issuer’s satisfaction to ensure its ability to fund its future LC Participation in respect of any relevant Letter of Credit; and

(g) the Borrowers may, at their sole expense and effort, upon ten (10) Business Days’ notice to such Delinquent Lender and the Administrative Agent, require the Delinquent Lender to assign and delegate all of its rights, interests and obligations under this Agreement to an Eligible Assignee; provided that if the Borrowers elect to exercise such right with respect to a Delinquent Lender, (i) such Delinquent Lender shall have received payment of an amount equal to the outstanding principal of its Loans and LC Participations, accrued interest thereon, accrued fees and all other amounts then payable to it hereunder and the other Loan Documents, net of any amounts owing to any Agent, Lender or the LC Issuer, from the Eligible Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts), (ii) the Eligible Assignee shall have paid in full all amounts then due and payable by the Delinquent Lender to any Agent, Lender or the LC Issuer hereunder and the other Loan Documents, (iii) such Delinquent Lender shall execute and deliver an Assignment Agreement and (iv) such Delinquent Lender shall not be required to make any such assignment if, as a result of the expiry of the Delinquent Period prior thereto, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

12.10 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

12.11 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

12.12 Other Transactions. Nothing contained herein shall preclude any Secured Party or any of its Affiliates from engaging in any transaction, in addition to those contemplated by the Loan Documents, with each Borrower or any of its Affiliates in which such Borrower or such Affiliate is not restricted hereby from engaging with any other Person.

12.13 Integration. This Agreement and the other Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and thereof and supersede any prior agreements, written or oral, with respect thereto.

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12.14 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

12.15 SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH OBLIGOR HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, AND APPELLATE COURTS FROM ANY THEREOF, IN ANY LITIGATION OR OTHER PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF A SECURED PARTY OR AN OBLIGOR IN CONNECTION HEREWITH OR THEREWITH; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE SECURED PARTY’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND; PROVIDED FURTHER THAT NOTHING HEREIN SHALL LIMIT THE RIGHT OF A SECURED PARTY TO BRING PROCEEDINGS AGAINST AN OBLIGOR IN THE COURTS OF ANY OTHER JURISDICTION.

(b) EACH OBLIGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 12.2. EACH OBLIGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO IN CLAUSE (a) ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT EACH OBLIGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH OBLIGOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS. EACH OBLIGOR HEREBY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THAT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

(c) TO THE EXTENT THAT ANY OBLIGOR MAY, IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BEFORE A COURT OF TURKEY OR ELSEWHERE ARISING OUT OF OR IN CONNECTION WITH ANY FINANCE DOCUMENT, BE ENTITLED TO THE BENEFIT OF ANY PROVISIONS OF LAW REQUIRING ANY FINANCE PARTY IN SUCH SUIT, ACTION OR PROCEEDING TO POST SECURITY FOR THE COSTS OF ANY OBLIGOR, AS THE CASE MAY BE (CAUTIO JUDICATUM SOLVI), OR TO POST A BOND OR TO TAKE SIMILAR ACTION, THE OBLIGORS HEREBY IRREVOCABLY WAIVE SUCH BENEFIT, IN EACH CASE TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED UNDER THE LAWS OF TURKEY OR, AS THE CASE MAY BE, SUCH OTHER JURISDICTION.

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(d) WITHOUT LIMITING THE GENERALITY OF ANY OF THE FOREGOING, EACH OBLIGOR AGREES, WITHOUT PREJUDICE TO THE ENFORCEMENT OF A JUDGMENT OBTAINED IN THE COURTS OF ANY UNITED STATES FEDERAL OR NEW YORK STATE AND APPELLATE COURTS FROM ANY THEREOF, ACCORDING TO THE PROVISIONS OF ARTICLE 54 OF THE INTERNATIONAL PRIVATE AND PROCEDURE LAW OF TURKEY (LAW NO. 5718), THAT, IN THE EVENT THAT SUCH OBLIGOR IS SUED IN A COURT IN TURKEY IN CONNECTION WITH ANY LOAN DOCUMENT, SUCH JUDGMENT SHALL CONSTITUTE CONCLUSIVE EVIDENCE OF THE EXISTENCE AND AMOUNT OF THE CLAIM AGAINST IT PURSUANT TO THE PROVISIONS OF THE SECOND SENTENCE OF ARTICLE 287 OF CIVIL PROCEDURE CODE OF TURKEY (LAW NO. 1086) AND ARTICLES 58 AND 59 OF THE INTERNATIONAL PRIVATE AND PROCEDURE LAW OF TURKEY (LAW NO. 5718).

12.16 Acknowledgments. Each Obligor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(b) each Agent and each other Secured Party has no fiduciary relationship with or duty to it arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between each Agent and each other Secured Party, on the one hand, and each Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among each Obligor and the Lender.

12.17 USA PATRIOT Act Notice. Each Lender, the LC Issuer and each Agent hereby notifies the Obligors that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), the United Kingdom Proceeds of Crime Act 2002 and the United Kingdom Money Laundering Regulations 2003 (as amended) or similar legislation in another country, it is required to obtain, verify and record information (and, if applicable, to provide such information particularly to an assignee) that identifies each Obligor and each of its shareholders, directors and/or officers, which information includes or may include the name and address of each such Person, the Organic Documents of each Obligor and such other information that will allow each Secured Party to comply with its obligations under the Patriot Act, the United Kingdom Proceeds of Crime Act 2002 and the United Kingdom Money Laundering Regulations 2003(as amended) or such similar legislation in another country.

12.18 Confidential Information. Each Secured Party agrees to hold all Confidential Information provided to it by any Obligor pursuant to this Agreement in accordance with its customary procedures for handling confidential information of this nature; provided, that nothing herein shall prevent each Lender from disclosing any such information (a) to any Participant or Eligible Assignee (or any prospective Participant or Eligible Assignee) that agrees to be bound by this Section 12.18, (b) on a confidential basis to its employees, directors, agents, attorneys, accountants and other professional advisers or those of any of its Affiliates, (c) upon the request or demand of any Governmental Authority, (d) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Applicable Law, (e) if requested or required to do so in connection with any litigation or similar proceeding, (f) that has been publicly disclosed without violation of this Section 12.18, (g) to the National Association of Insurance Commissioners or any similar organization or other regulatory body or any nationally recognized rating agency, in each case, in any

91

country or other jurisdiction, that requires access to information about the Lender’s investment portfolio in connection with ratings issued with respect to the Lender or (h) in connection with the exercise of any if its rights, powers or remedies hereunder or under any other Loan Document. Except as may be required by an order of a court of competent jurisdiction and to the extent specified therein, each Lender shall not be obligated or required to return any materials furnished to it pursuant to any Loan Document by any Obligor. For purposes of this Section, “Confidential Information” means all information received from any Obligor or any Affiliate thereof relating to any Obligor or any Affiliate thereof or their respective businesses, other than any such information that is available to each Lender on a nonconfidential basis prior to disclosure by any Obligor or any Affiliate thereof, provided that, in the case of information received from an Obligor or any such Affiliate after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Confidential Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Confidential Information as such Person would accord to its own confidential information.

12.19 Public Information. The Parent hereby acknowledges that each Agent may make available to the Lenders and the LC Issuer materials and/or information provided by or on behalf of the Parent, the Borrowers or any other Obligor (collectively, the “Materials”) by posting such Materials on IntraLinks or another similar electronic system (the “Platform”) and that certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Parent or its securities, and who may be engaged in investment and other market-related activities with respect to the Parent’s securities. The Parent hereby agrees that (w) all Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking any Materials “PUBLIC,” the Parent shall be deemed to have authorized each Agent and the Lenders to treat such Materials as not containing any material non-public information (although the parties acknowledge that such information may still be confidential, sensitive and/or proprietary) with respect to the Parent or its securities for purposes of United States federal and state securities laws, (y) all Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Side Information”, and (z) each Agent shall be entitled to treat any Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform that is not designated as “Public Side Information.” For purposes of clarification, (i) any materials not marked “PUBLIC” shall be deemed to be material non-public information and (ii) notwithstanding the foregoing, the Parent shall be under no obligation to mark any particular Material “PUBLIC”.

12.20 WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION THEREWITH. EACH OBLIGOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH LENDER TO ENTER INTO THE LOAN DOCUMENTS.

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12.21 Judgment Currency. If, under any Applicable Law and whether pursuant to a judgment being made or registered against an Obligor or the bankruptcy of the Obligor or for any other reason, any payment under or in connection with this Agreement or any Loan Document is made or falls to be satisfied in a currency (the “Payment Currency”) other than Dollars, then to the extent that the amount of such payment actually received by an Agent or any Secured Party when converted into Dollars at the applicable rate of exchange at such time, falls short of the amount due under or in connection with this Agreement or such Loan Document, the Obligors, as a separate and independent obligation, shall indemnify and hold harmless such Agent and such Secured Party against the amount of such shortfall. For the purposes of this Section, “rate of exchange” means the rate at which an Agent or the relevant Secured Party is able on or about the date of such payment to purchase Dollars with the Payment Currency and shall take into account any premium and other costs of exchange actually incurred with respect thereto.

12.22 Australian Entities Reorganization. Notwithstanding any other provision of this Agreement, each of Incremental Petroleum (Selmo) and PEMI may be reorganized under Bahamian law (such transaction, the “Reorganization”) provided that (i) such Reorganization will be consummated in compliance with all applicable laws (including the laws of Australia and the Bahamas) and all necessary or desirable (in the reasonable discretion of the Agents) consents, approvals and filings shall have been obtained in compliance with such laws, (ii) the Collateral Agent will continue at all times following such Reorganization to have under all applicable laws (and all jurisdictions as the Collateral Agent reasonably requests) a valid, legal and first priority perfected security interest in all the assets of, and (in the case of PEMI) all of the equity interests in, Incremental Petroleum (Selmo) and PEMI for the benefit of the Secured Parties, (iii) all documents and instruments, including all filings required by law or reasonably requested by the Collateral Agent to be executed, filed, registered or recorded to create or continue the Liens intended to be created by the Security Documents (in each case, including any supplements thereto) and perfect such Liens to the extent required by, and with the priority required by, the Security Documents, shall have been filed, registered or recorded, (iv) each Obligor shall have obtained all consents and approvals required to be obtained by it in connection with (a) the execution and delivery of all Security Documents (or supplements thereto) to which it is a party and the granting by it of the Liens thereunder and (b) the performance of its obligations thereunder, (v) no Default or Event of Default exists at the time of the Reorganization or is expected to occur or continue as a result thereof, (vi) no security interest purported to be created by any Security Document shall cease to be a valid and perfected security interest (perfected as or having the priority required by this Agreement or the relevant Security Document and subject to such limitations and restrictions as are set forth herein and therein) in the securities, assets or properties covered thereby as a result of the Reorganization, (vii) the Guarantees of any of the Obligations shall continue to be in full force and effect, (viii) the Obligations shall continue to constitute senior secured indebtedness of the Obligors and continue to be legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms, (ix) no Material Adverse Effect could result from the Reorganization and (x) the Lenders shall have received legal opinions from all applicable counsel to the Obligors, acceptable in form and substance to the Lenders, confirming the matters set forth in clauses (iii), (iv), (v), (vi), (vii), (viii) and (ix) above.

[Remainder of page left blank intentionally.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

DMLP, LTD., as Borrower
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Chief Executive Officer
Address for Notices:
Trident Corporate Services (Bahamas) Limited 1st Floor Kings Court Bay Street P.O. Box N-3944 Nassau Bahamas Attention: Manager Tel: +1 242 322 6154 Fax: +1 242 328 1064 E-mail: bahamas@tridenttrust.com With a copy to: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel.: +1 214 265 4795 Fax: +1 214 265 4711 Email: jeff.mecom@tapcor.com

D-10

PETROLEUM EXPLORATION MEDITERRANEAN INTERNATIONAL PTY. LTD., as Borrower
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Director
Address for Notices: 20 Howard Street Perth Western Australia 6000 Australia Tel: +1 214 265 4795 Fax: +1 214 265 4711 E-mail: jeff.mecom@tapcor.com With a copy to: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel.: +1 214 265 4795 Fax: +1 214 265 4711 Email: jeff.mecom@tapcor.com

D-11

TALON EXPLORATION, LTD., as Borrower
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Chief Executive Officer
By:	/s/ Jeffrey S. Mecom
	Name:	Jeffrey S. Mecom
	Title:	Vice President & Secretary
Address for Notices: Trident Corporate Services (Bahamas) Limited 1st Floor Kings Court Bay Street P.O. Box N-3944 Nassau Bahamas Attention: Manager Tel: +1 242 322 6154 Fax: +1 242 328 1064 E-mail: bahamas@tridenttrust.com With a copy to: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel.: +1 214 265 4795 Fax: +1 214 265 4711 Email: jeff.mecom@tapcor.com

D-12

TRANSATLANTIC TURKEY. LTD., as Borrower
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Chief Executive Officer
By:
	Name:	Jeffrey S. Mecom
	Title:	Vice President & Secretary
Address for Notices: Trident Corporate Services (Bahamas) Limited 1st Floor Kings Court Bay Street P.O. Box N-3944 Nassau Bahamas Attention: Manager Tel: +1 242 322 6154 Fax: +1 242 328 1064 E-mail: bahamas@tridenttrust.com With a copy to: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel.: +1 214 265 4795 Fax: +1 214 265 4711 Email: jeff.mecom@tapcor.com

D-13

TRANSATLANTIC WORLDWIDE, LTD., as Guarantor
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Chief Executive Officer
Address for Notices: Trident Corporate Services (Bahamas) Limited 1st Floor Kings Court Bay Street P.O. Box N-3944 Nassau Bahamas Attention: Manager Tel: +1 242 322 6154 Fax: +1 242 328 1064 E-mail: bahamas@tridenttrust.com With a copy to: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel.: +1 214 265 4795 Fax: +1 214 265 4711 Email: jeff.mecom@tapcor.com

D-14

TRANSATLANTIC PETROLEUM (USA) CORP., as Guarantor
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Chief Executive Officer
Address for Notices: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel: +1 214 265 4795 Fax: +1 214 265 4711 E-mail: jeff.mecom@tapcor.com

D-15

INCREMENTAL PETROLEUM (SELMO) PTY. LTD., as Guarantor
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Director
Address for Notices: 20 Howard Street Perth Western Australia 6000 Australia Tel: +1 214 265 4795 Fax: +1 214 265 4711 E-mail: jeff.mecom@tapcor.com With a copy to: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel.: +1 214 265 4795 Fax: +1 214 265 4711 Email: jeff.mecom@tapcor.com

D-16

TRANSATLANTIC PETROLEUM LTD., as Guarantor
By:	/s/ Matthew W. McCann
	Name:	Matthew W. McCann
	Title:	Chief Executive Officer
Address for Notices: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda Tel: +1 214 265 4795 Fax: +1 214 265 4711 With a copy to: 5910 N. Central Expressway Suite 1755 Dallas, Texas 75206 USA Attention: Jeffrey S. Mecom Tel.: +1 214 265 4795 Fax: +1 214 265 4711 Email: jeff.mecom@tapcor.com With an additional copy to: Porter & Hedges, L.L.P. 1000 Main Street, 36th Floor Houston, Texas 77002 Attention: Nick H. Sorensen Tel.: +1 713-226-6677 Fax: +1 713-226-6277 Email: nsorensen@porterhedges.com

D-17

STANDARD BANK PLC, as LC Issuer and a Lender
By:	/s/ Martin Revoredo
	Name:	Martin Revoredo
	Title:	Director
By:	/s/ Richard M. Noritake
	Name:	Richard M. Noritake
	Title:	Managing Director
Address for Notices: Standard Bank Plc c/o Standard Americas, Inc. 320 Park Avenue 19th Floor New York, NY 10022 United States of America Attention: Robert Anastasio Tel: +(1) 212 407 5061 Fax: +(1) 212 407 5178 Email: NewYork-BATM@standardny.com With a copy to: Standard Americas, Inc. 320 Park Avenue 19th Floor New York, NY 10022 United States of America Attention: Fred Baloutch Tel: +1 (212) 407 5130 Fax: +1 (212) 407 5178 Email: fred.baloutch@standardny.com

D-18

STANDARD BANK PLC, as Administrative Agent
By:	/s/ Giovanni Palazzo
	Name:	Giovanni Palazzo
	Title:	Manager, Agency
By:	/s/ Mark Heptinstall
	Name:	Mark Heptinstall
	Title:	Manager, Agency
Address for Notices: Standard Bank Plc 20 Gresham Street London EC2V 7JE Phone: +44 (0) 20 3145 8823 Telefax: +44 (0) 20 3189 8828 Email: London-LoansAdmin@standardbank.com Attention: Head of Loans Administration Contact for credit purposes: Standard Bank Plc 20 Gresham Street London EC2V 7JE 19th Floor Phone: +44 (0) 20 3145 8745 Telefax: +44 (0) 20 3189 8828 Email: London.Agency@standardbank.com Attention: Ann Turner Maynard

D-19

STANDARD BANK PLC, as Collateral Agent
By:	/s/ Martin Revoredo
	Name:	Martin Revoredo
	Title:	Director
By:	/s/ Richard M. Noritake
	Name:	Richard M. Noritake
	Title:	Managing Director
Address for Notices: Standard Bank Plc c/o Standard Americas, Inc. 320 Park Avenue 19th Floor New York, NY 10022 United States of America Attention: Robert Anastasio Tel: +(1) 212 407 5061 Fax: +(1) 212 407 5178 Email: NewYork-BATM@standardny.com With a copy to: Standard Americas, Inc. 320 Park Avenue 19th Floor New York, NY 10022 United States of America Attention: Fred Baloutch Tel: +1 (212) 407 5130 Fax: +1 (212) 407 5178 Email: fred.baloutch@standardny.com

D-20

STANDARD BANK PLC, as Technical Agent
By:	/s/ Martin Revoredo
	Name:	Martin Revoredo
	Title:	Director
By:	/s/ Richard M. Noritake
	Name:	Richard M. Noritake
	Title:	Managing Director
Address for Notices: Standard Bank Plc c/o Standard Americas, Inc. 320 Park Avenue 19th Floor New York, NY 10022 United States of America Attention: Robert Anastasio Tel: +(1) 212 407 5061 Fax: +(1) 212 407 5178 Email: NewYork-BATM@standardny.com With a copy to: Standard Americas, Inc. 320 Park Avenue 19th Floor New York, NY 10022 United States of America Attention: Fred Baloutch Tel: +1 (212) 407 5130 Fax: +1 (212) 407 5178 Email: fred.baloutch@standardny.com

D-21

BNP PARIBAS, as Lender
By:	/s/ Amber Chi
	Name:	Amber Chi
	Title:	Director
By:	/s/ Christophe Nerguararian
	Name:	Christophe Nerguararian
	Title:
Address for Notices: BNP Paribas (Suisse) SA Energy & Commodities Structured Debt /Middle Office Place de Hollande 2, Geneva CH-1211 Switzerland Attention: Philippe Riboni / Johnny Akiki Tel: +41 58 212 2454 / +41 58 212 2661 Fax: +41 58 212 2150 E-mail: philippe.riboni@bnpparibas.com /              johnny.akiki@bnpparibas.com With a copy to: BNP Paribas (Suisse) SA Energy & Commodities Structured Debt Place de Hollande 2, Geneva CH-1211 Switzerland Attention: Christophe Nerguararian / Amber Chi Tel.: +41 58 212 2932 / +41 58 212 2430 Fax: +41 58 212 2371 Email: christophe.nerguararian@bnpparibas.com /             amber.chi@bnpparibas.com

D-22

EX-21.1

EXHIBIT 21.1

Subsidiaries of TransAtlantic Petroleum Ltd.

December 23, 2009

Subsidiary	Jurisdiction of Organization
TransAtlantic (Holdings) Australia Pty. Ltd.	Australia
TransAtlantic Australia Pty. Ltd.	Australia
Incremental Petroleum Limited	Australia
Incremental Petroleum (Iraq) Pty. Ltd.	Australia
Incremental Petroleum (Butmah) Pty. Ltd.	Australia
Incremental Petroleum (Qara Chauk) Pty. Ltd.	Australia
Incremental Petroleum (Selmo) Pty. Ltd.	Australia
Petroleum Exploration Mediterranean International Pty. Ltd.	Australia
DMLP, Ltd.	Bahamas
Talon Exploration, Ltd.	Bahamas
TransAtlantic Worldwide, Ltd.	Bahamas
TransAtlantic Maroc Ltd.	Bahamas
TransAtlantic Turkey, Ltd.	Bahamas
Viking Geophysical Services, Ltd.	Bahamas
Longe Energy Limited	Bermuda
Riata Energy Turkiye Ltd.	Bermuda
Viking International Limited	Bermuda
DMLP GP Inc.	British Virgin Islands
DMLP LP Inc.	British Virgin Islands
Incremental Petroleum (USA) Inc.	California
Incremental Petroleum KMD LLC	California
Incremental Petroleum MCF LLC	California
Incremental Petroleum SEKND LLC	California
TransAtlantic Petroleum (USA) Corp.	Colorado
TransAtlantic Petroleum Cyprus Limited	Cyprus
Longe Energy Cyprus Limited	Cyprus
MOS Viking SRL	Morocco
TransAtlantic Worldwide Romania SRL	Romania
Viking Oilfield Services SRL	Romania

EX-23.1

Exhibit 23.1

KPMG LLP
Chartered Accountants	Telephone	(403) 691-8000
2700 205 – 5th Avenue SW	Telefax	(403) 691-8008
Calgary AB T2P 4B9	Internet	www.kpmg.ca

Consent of Independent Registered Public Accounting Firm

The Board of Directors

TransAtlantic Petroleum Ltd.:

We consent to the use of our report dated March 31, 2009 (November 25, 2009 for notes 2, 3, 5, 6, 7, 8, 10, 11, 12, 16 and 17) to the board of directors of TransAtlantic Petroleum Corp. on the consolidated balance sheets as at December 31, 2008 and 2007 and consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for the years then ended, incorporated herein by reference and to the reference to our firm under the heading “Experts” in the prospectus. Our report refers to a change in accounting for oil and gas exploration and development activities from full cost to the successful efforts method.

Chartered Accountants

Calgary, Canada

December 23, 2009

EX-23.2

Exhibit 23.2

	Deloitte Touche Tohmatsu
	ABN 74 490 121 060
	Woodside Plaza
	Level 14
	240 St Georges Terrace
	Perth WA 6000
	GPO Box A46
	Perth WA 6837 Australia
	DX 206
	Tel: +61 (0) 8 9365 7000
	Fax: +61 (0) 8 9365 7001
	www.deloitte.com.au

INDEPENDENT AUDITORS’ CONSENT

We consent to the incorporation by reference in this Registration Statement on Form S-1 by TransAtlantic Petroleum Ltd. of our report dated 13 May 2009, relating to the consolidated financial statements of Incremental Petroleum Limited appearing in the Amendment No. 1 to the Current Report on Form 8-K/A of TransAtlantic Petroleum Ltd. filed on 21 May 2009 and to the reference to us under the heading “Experts” in the Prospectus, which is part of this Registration Statement.

DELOITTE TOUCHE TOHMATSU

23 December 2009

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration Statement on Form S-1 of TransAtlantic Petroleum Ltd. of our report dated January 20, 2009 relating to the financial statements of Longe Energy Limited, which appears in the Current Report on Form 8-K/A of TransAtlantic Petroleum Ltd. dated March 18, 2009. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

December 23, 2009

EX-23.4

Exhibit 23.4

Our Ref: RPSE — 122

E-mail: guised@rpsgroup.com.au

Telephone: 61 (0)8 9211 1111

Date: 23 December 2009

LETTER OF CONSENT

TO: United States Securities and Exchange Commission

We refer to the Registration Statement on Form S-i under the Securities Act of 1933, dated December 23, 2009 (the “Prospectus”) of TransAtlantic Petroleum Ltd. (the “Corporation”) relating to the registration for resale of 42,838,451 common shares.

We were engaged by the Corporation to prepare an independent reserves evaluation as at December 31, 2008 of:

(a) the Selmo oil field and the Edirne gas fields in which the Corporation has an interest as evaluated by RPS in a report titled “Evaluation of the Selmo Oil Field and Edirne Gas Fields” dated 17th September 2009 (the “RPS Report”).

We consent to being named in and the use in the above-mentioned Prospectus of summaries of and excerpts from the RPS Report.

We confirm that we have read the Prospectus and that we have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that are derived from the RPS Report or that are within our knowledge as a result of the services performed by us in connection with the RPS Report.

Yours faithfully

RPS Energy Pty Ltd.

David R. Guise

Managing Director - Consulting

Australia and S.E. Asia

Dated: December, 23, 2009

Perth, Western Australia

AUSTRALIA

United Kingdom Europe USA Australia SEAsia Canada

RPS Energy Ply Lid (ABN 44 072 504 299)

a member of the RPS Group Rc. rpsgroup.com

RPS Group Plc