10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: March 31, 2012

OR

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

For the transition period from                 to                

Commission file number: 001-34574

TRANSATLANTIC PETROLEUM LTD.

(Exact name of registrant as specified in its charter)

Bermuda	None
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
Akmerkez B Blok Kat 6 Nispetiye Caddesi 34330 Etiler, Istanbul, Turkey	None
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: +90 212 317 25 00

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant is required to submit and post such files).    Yes  x    No  ¨

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

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

As of May 8, 2012, the registrant had 366,534,449 common shares outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
		Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011	1
		Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2012 and 2011	2
		Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2012	3
		Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011	4
		Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		29
Item 4.	Controls and Procedures		29
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		31
Item 1A.	Risk Factors		31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		32
Item 3.	Defaults Upon Senior Securities		32
Item 4.	Mine Safety Disclosures		32
Item 5.	Other Information		32
Item 6.	Exhibits		33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TRANSATLANTIC PETROLEUM LTD.

Consolidated Balance Sheets

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

	March 31, 2012			December 31, 2011
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	15,087		$	15,116
Accounts receivable
Oil and natural gas sales, net		37,507			35,702
Other		6,233			6,992
Prepaid and other current assets		10,750			8,810
Deferred income taxes		3,179			2,124
Assets held for sale		134,972			128,117
Total current assets		207,728			196,861
Property and equipment:
Oil and natural gas properties (successful efforts method)
Proved		194,736			174,577
Unproved		77,370			70,180
Equipment and other property		45,484			40,403
		317,590			285,160
Less accumulated depreciation, depletion and amortization		(62,434	)		(49,436	)
Property and equipment, net		255,156			235,724
Other long-term assets:
Other assets		3,886			4,673
Goodwill		9,071			8,514
Total other assets		12,957			13,187
Total assets	$	475,841		$	445,772
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	23,985		$	25,733
Accounts payable — related party		—			323
Accrued liabilities		18,560			16,450
Loans payable		4,542			7,732
Loan payable — related party		84,000			73,000
Derivative liabilities		8,256			3,716
Asset retirement obligations		3,605			3,031
Liabilities held for sale — related party		1,863			3,677
Liabilities held for sale		24,076			23,037
Total current liabilities		168,887			156,699
Long-term liabilities:
Asset retirement obligations		11,111			10,503
Accrued liabilities		5,631			5,503
Deferred income taxes		15,562			15,508
Loan payable		78,000			78,000
Derivative liabilities		9,775			3,355
Total long-term liabilities		120,079			112,869
Total liabilities		288,966			269,568
Commitments and contingencies
Shareholders’ equity:
Common shares, $0.01 par value, 1,000,000,000 shares authorized; issued and outstanding 366,534,449 as of March 31, 2012 and 365,790,492 as of December 31, 2011		3,665			3,658
Additional paid-in capital		535,203			534,117
Accumulated other comprehensive loss		(36,241	)		(50,615	)
Accumulated deficit		(315,752	)		(310,956	)
Total shareholders’ equity		186,875			176,204
Total liabilities and shareholders’ equity	$	475,841		$	445,772

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

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TRANSATLANTIC PETROLEUM LTD.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

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

	For the Three Months Ended March 31,
	2012			2011
Revenues:
Oil and natural gas sales	$	34,661		$	28,676
Other		274			403
Total revenues		34,935			29,079
Costs and expenses:
Production		3,635			4,102
Exploration, abandonment and impairment		2,796			7,232
Seismic and other exploration		664			2,252
General and administrative		9,748			9,085
Depreciation, depletion and amortization		9,169			4,630
Accretion of asset retirement obligations		252			214
Total costs and expenses		26,264			27,515
Operating income		8,671			1,564
Other (expense) income:
Interest and other expense		(3,259	)		(3,597	)
Interest and other income		273			157
Loss on commodity derivative contracts		(12,435	)		(9,311	)
Foreign exchange gain		4,272			4
Total other (expense) income		(11,149	)		(12,747	)
Loss from continuing operations before income taxes		(2,478	)		(11,183	)
Current income tax expense		(2,020	)		(2,538	)
Deferred income tax benefit		1,859			1,874
Loss from continuing operations		(2,639	)		(11,847	)
Loss from discontinued operations, net of taxes		(2,157	)		(9,308	)
Net loss	$	(4,796	)	$	(21,155	)
Other comprehensive income:
Foreign currency translation adjustment		14,374			2,299
Comprehensive income (loss)	$	9,578		$	(18,856	)
Net loss per common share:
Basic and diluted net loss attributable to common shareholders, per common share
From continuing operations	$	(0.01	)	$	(0.03	)
From discontinued operations	$	(0.01	)	$	(0.03	)
Basic and diluted weighted average number of shares outstanding		366,436			341,142

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

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TRANSATLANTIC PETROLEUM LTD.

Consolidated Statements of Equity

(Unaudited)

(U.S. dollars and shares in thousands)

	Common Shares		Common Shares ($)		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Shareholders’ Equity
Balance at December 31, 2011		365,790	$	3,658	$	534,117		$	(50,615	)	$	(310,956	)	$	176,204
Exercise of stock options		600		6		594			—			—			600
Issuance of restricted stock units		144		1		(1	)		—			—			—
Share-based compensation		—		—		493			—			—			493
Foreign currency translation adjustments		—		—		—			14,374			—			14,374
Net loss attributable to common shareholders		—		—		—			—			(4,796	)		(4,796	)
Balance at March 31, 2012		366,534	$	3,665	$	535,203		$	(36,241	)	$	(315,752	)	$	186,875

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

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TRANSATLANTIC PETROLEUM LTD.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands of U.S. dollars)

	For the Three Months Ended March 31,
	2012			2011
Operating activities:
Net loss	$	(4,796	)	$	(21,155	)
Adjustment for net loss from discontinued operations		2,157			9,308
Net loss from continuing operations		(2,639	)		(11,847	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation		493			557
Foreign currency gain		(6,653	)		(1,425	)
Unrealized loss on commodity derivative contracts		10,960			8,607
Amortization of loan financing costs		225			730
Deferred income tax benefit		(1,859	)		(1,874	)
Amortization of warrants — related party		—			1,224
Exploration, abandonment and impairment		1,493			6,437
Depreciation, depletion and amortization		9,169			4,630
Accretion of asset retirement obligations		252			214
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(1,658	)		(2,945	)
Prepaid expenses and other assets		1,290			2,842
Accounts payable and accrued liabilities		223			(3,466	)
Net cash provided by operating activities from continuing operations		11,296			3,684
Net cash (used in) provided by operating activities from discontinued operations		(4,322	)		527
Net cash provided by operating activities		6,974			4,211
Investing activities:
Acquisitions, net of cash		—			(2,088	)
Additions to oil and natural gas properties		(13,355	)		(14,485	)
Additions to equipment and other properties		(824	)		(1,457	)
Restricted cash		1,062			—
Net cash used in investing activities from continuing operations		(13,117	)		(18,030	)
Net cash used in investing activities from discontinued operations		(1,208	)		(8,056	)
Net cash used in investing activities		(14,325	)		(26,086	)
Financing activities:
Exercise of stock options and warrants		600			173
Loan proceeds		4,284			8,110
Loan proceeds — related party		11,000			—
Loan repayment		(7,497	)		(2	)
Loan financing costs		(250	)		—
Net cash provided by financing activities from continuing operations		8,137			8,281
Net cash used in financing activities from discontinued operations		(1,519	)		(1,044	)
Net cash provided by financing activities		6,618			7,237
Effect of exchange rate changes on cash		704			162
Net decrease in cash and cash equivalents		(29	)		(14,476	)
Cash and cash equivalents, beginning of year		15,116			34,676
Cash and cash equivalents, end of period	$	15,087		$	20,200
Supplemental disclosures:
Cash paid for interest	$	2,747		$	1,272
Cash paid for income taxes	$	2,007		$	881

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

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TRANSATLANTIC PETROLEUM LTD.

Notes to Consolidated Financial Statements

1. General

Nature of operations

TransAtlantic Petroleum Ltd. (together with its subsidiaries, “we,” “us,” “our,” the “Company” or “TransAtlantic”) is an international oil and natural gas company engaged in acquisition, exploration, development and production. We have focused our operations in countries that are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing, royalty and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey, Bulgaria and Romania. As of March 31, 2012, approximately 40% of our outstanding common shares were beneficially owned by N. Malone Mitchell, 3rd, the chairman of our board of directors and chief executive officer.

Basis of presentation

Our consolidated financial statements are expressed in U.S. Dollars and have been prepared by management in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). All amounts in these notes to the consolidated financial statements are in U.S. Dollars unless otherwise indicated. We have prepared the accompanying unaudited interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, and in the opinion of management, such financial statements reflect all adjustments necessary to present fairly the consolidated financial position of TransAtlantic at March 31, 2012 and its results of operations and cash flows for the periods presented. We have omitted certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP pursuant to those rules and regulations, although we believe that the disclosures we have made are adequate to make the information presented not misleading. These unaudited interim financial statements should be read in conjunction with our audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2011. Certain prior year amounts have been reclassified to conform to current year presentation.

In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures. The results of operations for the interim periods are not necessarily indicative of the results we expect for the full year.

2. Going concern

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern. These principles assume that we will be able to realize our assets and discharge our obligations in the normal course of operations for the foreseeable future.

We incurred a net loss of $4.8 million for the three months ended March 31, 2012, which includes a net loss from discontinued operations of $2.2 million. At March 31, 2012, the outstanding principal amount of our debt was $170.2 million, of which $3.7 million was classified as held for sale. Excluding assets held for sale of $135.0 million and total liabilities held for sale of $25.9 million, we had a working capital deficit from continuing operations of $70.2 million. Of our outstanding debt, $73.0 million under our credit agreement (the “Dalea Credit Agreement”) with Dalea Partners, LP (“Dalea”) is due upon the earlier of (i) June 30, 2012 or (ii) the later of (x) two business days after demand by Dalea or (y) the closing of the sale of our oilfield services business, which is substantially comprised of our wholly owned subsidiaries Viking International Limited (“Viking International”) and Viking Geophysical Services, Ltd. (“Viking Geophysical”). Dalea is 100% owned by Mr. Mitchell and his wife. On March 15, 2012, we entered into a stock purchase agreement to sell Viking International and Viking Geophysical. We also entered into a $15.0 million credit facility with Dalea (the “Dalea Credit Facility”), of which $11.0 million was outstanding at March 31, 2012, to provide us with additional liquidity for general corporate purposes. Should we be unable to consummate the sale, raise additional financing or extend the maturity date of the Dalea Credit Agreement, we will not have sufficient funds to continue operations beyond June 30, 2012. As a result of the recurring losses from operations and a working capital deficiency, there is substantial doubt regarding our ability to continue as a going concern. The continuing application of the going concern assumption is dependent upon our continuing ability to obtain the necessary financing to discharge our existing obligations, fund ongoing exploration, development and operations and ultimately achieve profitable operations.

Management believes the going concern assumption to be appropriate for these financial statements. If the going concern assumption was not appropriate, adjustments would be necessary to the carrying values of assets and liabilities, reported revenues and expenses and in the balance sheet classifications used in these consolidated financial statements.

3. Recent accounting policies

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-

5

04”). ASU 2011-04 amends Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosures (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the ASC 820 disclosure requirements, particularly for Level 3 fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. We adopted ASU 2011-04 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In June 2011, FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. In December 2011, FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05 (“ASU 2011-12”). ASU 2011-12 deferred the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The amendments will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We adopted ASU 2011-05 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In September 2011, FASB issued ASU 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment (“ASU 2011-08”). ASU 2011-08 allows both public and nonpublic entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity would no longer be required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU 2011-08 allows early adoption and will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted ASU 2011-08 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In December 2011, FASB issued ASU No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 will require entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. Application of ASU 2011-11 is required for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. We are currently evaluating the effects of adopting ASU 2011-11.

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.

4. Pro forma results of operations

The following table presents the unaudited pro forma results of operations as though the acquisitions of Direct Petroleum Morocco, Inc. (“Direct Morocco”), Anschutz Morocco Corporation (“Anschutz”), Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”) and Thrace Basin Natural Gas (Turkiye) Corporation (“TBNG”) had occurred as of January 1, 2011 (see our Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of these acquisitions):

	For the Three Months Ended March 31, 2011
	(in thousands, except per share data)
Total revenues	$	36,415
Loss from continuing operations before income taxes		(9,249	)
Loss from continuing operations		(10,300	)
Loss from discontinued operations		(9,926	)
Net loss		(20,226	)
Net loss per common share from continuing operations
Basic	$	(0.03	)
Diluted	$	(0.03	)
Net loss per common share from discontinued operations
Basic	$	(0.03	)
Diluted	$	(0.03	)

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5. Discontinued operations

Discontinued operations in Morocco

On June 27, 2011, we decided to discontinue our operations in Morocco. We have transferred our oilfield services equipment from Morocco to Turkey and are in the process of winding down our operations in Morocco. We have presented the Moroccan segment operating results as discontinued operations for all periods presented.

Discontinued operations of oilfield services business

On September 30, 2011, we engaged a financial advisor to assist with the sale, transfer or other disposition of our oilfield services business. On March 15, 2012, we entered into a stock purchase agreement with Dalea to sell Viking International and Viking Geophysical for an aggregate purchase price of $164.0 million, subject to adjustments in certain circumstances. The sale of Viking International and Viking Geophysical is subject to the approval of regulatory authorities, the receipt of equity financing by Dalea and other customary closing conditions. We have presented the oilfield services segment operating results as discontinued operations for all periods presented.

The assets and liabilities held for sale of the Moroccan and oilfield services segments at March 31, 2012 were as follows (in thousands):

	Morocco		Oilfield Services		Total Held for Sale
Cash	$	196	$	2,335	$	2,531
Receivables, net		—		7,575		7,575
Property and equipment, net		1,029		116,200		117,229
Other assets		1,526		6,111		7,637
Total assets held for sale	$	2,751	$	132,221	$	134,972
Accrued expenses and other liabilities	$	5,569	$	18,507	$	24,076
Liabilities held for sale related party		—		1,863		1,863
Total liabilities held for sale	$	5,569	$	20,370	$	25,939

The assets and liabilities held for sale of the Moroccan and oilfield services segments at December 31, 2011 are as follows (in thousands):

	Morocco		Oilfield Services		Total Held for Sale
Cash	$	95	$	1,090	$	1,185
Receivables, net		—		8,098		8,098
Property and equipment, net		1,026		113,497		114,523
Other assets		1,652		2,659		4,311
Total assets held for sale	$	2,773	$	125,344	$	128,117
Accrued expenses and other liabilities	$	6,154	$	16,883	$	23,037
Liabilities held for sale related party		—		3,677		3,677
Total liabilities held for sale	$	6,154	$	20,560	$	26,714

Operating results of discontinued operations are summarized as follows for the three months ended (in thousands):

	Morocco			Oilfield Services			Total			Morocco			Oilfield Services			Total
	March 31, 2012									March 31, 2011
Total revenues	$	—		$	10,284		$	10,284		$	48		$	3,117		$	3,165
Total costs and expenses		470			9,056			9,526			4,347			7,198			11,545
Total other (expense) income		2			(937	)		(935	)		(73	)		(631	)		(704	)
Income (loss) before income taxes	$	(468	)	$	291		$	(177	)	$	(4,372	)	$	(4,712	)	$	(9,084	)
Income tax		—			(1,980	)		(1,980	)		—			(224	)		(224	)
Loss from discontinued operations	$	(468	)	$	(1,689	)	$	(2,157	)	$	(4,372	)	$	(4,936	)	$	(9,308	)

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6. Goodwill

Goodwill represents the excess of the purchase price of a business over the estimated fair value of the assets acquired and liabilities assumed. We have goodwill on acquisitions where we anticipated access to potential exploration and production opportunities. All of our goodwill is attributable to our Turkey operating segment. Goodwill was as follows at March 31, 2012 and December 31, 2011:

	March 31, 2012		December 31, 2011
	(in thousands)
Goodwill at beginning of period,	$	8,514	$	10,341
Foreign exchange change effect		557		(1,827	)
Goodwill at end of period	$	9,071	$	8,514

7. Property and equipment

(a) Oil and natural gas properties. The following table sets forth the capitalized costs under the successful efforts method for oil and gas properties:

	March 31, 2012			December 31, 2011
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	192,332		$	172,886
Bulgaria		2,404			1,691
Total oil and natural gas properties, proved		194,736			174,577
Oil and natural gas properties, unproved:
Turkey		77,370			70,180
Total oil and natural gas properties, unproved		77,370			70,180
Gross oil and natural gas properties		272,106			244,757
Accumulated depletion		(55,406	)		(45,327	)
Net oil and natural gas properties	$	216,700		$	199,430

At March 31, 2012 and December 31, 2011, we excluded $10.4 million and $7.1 million, respectively, from the depletion calculation for proved development wells currently in progress and for fields currently not in production.

At March 31, 2012, our oil and gas properties were comprised of $58.1 million relating to acquisition costs of proved properties which are being amortized by the unit-of-production method using total proved reserves and $70.8 million relating to exploratory well costs and additional development costs which are being amortized by the unit-of-production method using proved developed reserves.

At December 31, 2011, our oil and gas properties were comprised of $61.8 million relating to acquisition costs of proved properties which are being amortized by the unit-of-production method using total proved reserves and $60.4 million relating to exploratory well costs and additional development costs which are being amortized by the unit-of-production method using proved developed reserves.

During the three months ended March 31, 2012, we incurred approximately $6.1 million in exploratory drilling costs, of which $1.3 million was charged to earnings (included in exploration, abandonment and impairment expense) and $4.8 million remained capitalized at March 31, 2012. No exploratory well costs were reclassified to proved properties in the first quarter of 2012. As of March 31, 2012, we had $7.0 million of exploratory well costs capitalized for the Pancarkoy-1 well, which we began drilling in the fourth quarter of 2010. The following table summarizes the costs related to this well:

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					Three Months Ended March 31,
	2010		2011		2012		Total
	(in thousands)
Pancarkoy-1 well initial re-entry and fracture stimulation (Ceylan and Mezardere formations)	$	803	$	4,958	$	1,208	$	6,969
Total capitalized costs	$	803	$	4,958	$	1,208	$	6,969

After the second fracture stimulation, commercial natural gas production could not be sustained due to the high amount of water production when the well was placed on production. A third fracture stimulation was performed in April 2012, but commercial production could not be sustained due to high water production. We have identified at least two more sands within the Mezardere formation that we expect to test initially by conventional means. These sands possess different, more favorable reservoir properties than the previous targets and have strong indicators of natural gas. We expect testing to commence late in the second quarter of 2012, and further fracture stimulation will depend on the outcome of the conventional test results.

Uncertainties affect the recoverability of these costs, as the recovery of the costs are dependent upon us obtaining government approvals, obtaining and maintaining licenses in good standing and achieving commercial production or sale.

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

	March 31, 2012			December 31, 2011
	(in thousands)
Other equipment	$	7,204		$	6,351
Inventory		23,335			20,471
Gas gathering system and facilities		7,268			6,822
Vehicles		1,128			1,001
Office equipment and furniture		6,549			5,758
Gross equipment and other property		45,484			40,403
Accumulated depreciation		(7,028	)		(4,109	)
Net equipment and other property	$	38,456		$	36,294

We classify our materials and supply inventory, including steel tubing and casing, as a long-term assets because such materials will ultimately be classified as long-term assets when the material is used in the drilling of a well.

At March 31, 2012, we excluded $0.5 million of other equipment and $23.3 million of inventory from depreciation, as the equipment and inventory had not been placed into service.

At December 31, 2011, we excluded $0.5 million of other equipment, $20.5 million of inventory and $1.8 million of gas gathering system and facilities from depreciation as the equipment and inventory had not been placed into service.

8. Commodity derivative instruments

We use collar derivative contracts to economically hedge against the variability in cash flows associated with the forecasted sale of our future oil production. We have not designated the derivative financial instruments as hedges for accounting purposes and, accordingly, we record the contracts at fair value and recognize changes in fair value in earnings as they occur.

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

For the three months ended March 31, 2012, we recorded a net loss on commodity derivative contracts of $12.4 million, consisting of a $11.0 million unrealized loss related to changes in fair value and a $1.4 million realized loss for settled contracts. For the three months ended March 31, 2011, we recorded a net loss on commodity derivative contracts of $9.3 million, consisting of a $8.6 million unrealized loss related to changes in fair value and a $0.7 million realized loss for settled contracts.

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At March 31, 2012 and December 31, 2011, we had outstanding contracts with respect to our future crude oil production as set forth in the tables below:

Fair Value of Derivative Instruments as of March 31, 2012

Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of  Liability
									(in thousands)
Collar		April 1, 2012—December 31, 2012		960	$	64.69	$	106.98	$	(4,186	)
Collar		January 1, 2013—December 31, 2013		400	$	75.00	$	125.50		(772	)
Collar		January 1, 2014—December 31, 2014		380	$	75.00	$	124.25		(430	)
									$	(5,388	)

			Collars						Additional Call
Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Liability
											(in thousands)
Three-way collar contract		April 1, 2012—December 31, 2012		240	$	70.00	$	100.00	$	129.50	$	(1,229	)
Three-way collar contract		April 1, 2012— June 30, 2012		350	$	85.00	$	116.25	$	137.38		(226	)
Three-way collar contract		July 1, 2012—December 31, 2012		205	$	85.00	$	97.13	$	162.13		(841	)
Three-way collar contract		January 1, 2013—December 31, 2013		831	$	85.00	$	97.13	$	162.13		(4,997	)
Three-way collar contract		January 1, 2014—December 31, 2014		726	$	85.00	$	97.13	$	162.13		(2,472	)
Three-way collar contract		January 1, 2015—December 31, 2015		1,016	$	85.00	$	91.88	$	151.88		(2,878	)
											$	(12,643	)

Fair Value of Derivative Instruments as of December 31, 2011

Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Asset (Liability)
									(in thousands)
Collar		January 1, 2012—December 31, 2012		960	$	64.69	$	106.98	$	(2,529	)
Collar		January 1, 2013—December 31, 2013		400	$	75.00	$	125.50		(116	)
Collar		January 1, 2014—December 31, 2014		380	$	75.00	$	124.25		12
									$	(2,633	)

			Collars						Additional Call
Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Liability
											(in thousands)
Three-way collar contract		January 1, 2012—December 31, 2012		240	$	70.00	$	100.00	$	129.50	$	(764	)
Three-way collar contract		January 1, 2012— March 31, 2012		350	$	85.00	$	118.88	$	138.13		(7	)
Three-way collar contract		April 1, 2012— June 30, 2012		350	$	85.00	$	116.25	$	137.38		(35	)
Three-way collar contract		July 1, 2012—December 31, 2012		205	$	85.00	$	97.13	$	162.13		(381	)

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			Collars						Additional Call
Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Liability
											(in thousands)
Three-way collar contract		January 1, 2013—December 31, 2013		831	$	85.00	$	97.13	$	162.13		(1,985	)
Three-way collar contract		January 1, 2014—December 31, 2014		726	$	85.00	$	97.13	$	162.13		(626	)
Three-way collar contract		January 1, 2015—December 31, 2015		1,016	$	85.00	$	91.88	$	151.88		(640	)
											$	(4,438	)

9. Asset retirement obligations

The following table summarizes the changes in our asset retirement obligations for the three months ended March 31, 2012 and for the year ended December 31, 2011:

		xxxxxxxx			xxxxxxxx
	Three Months Ended March  31, 2012			Year Ended December 31, 2011
	(in thousands)
Asset retirement obligations at beginning of period	$	13,534		$	6,943
Acquisitions		—			6,480
Change in estimates		(96	)		512
Liabilities settled		—			(195	)
Foreign exchange change effect		873			(2,524	)
Additions		153			1,176
Accretion expense		252			1,142
Asset retirement obligations at end of period		14,716			13,534
Less: current portion		3,605			3,031
Long-term portion	$	11,111		$	10,503

10. Third party loans payable

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

		xxxxxxxx		xxxxxxxx
	March 31,          2012		December 31, 2011
	(in thousands)
Third-Party Floating Rate Debt
Amended and Restated Credit Facility	$	78,000	$	78,000
Third-Party Fixed Rate Debt
TBNG credit agreement		4,542		7,732
Viking International equipment loan		—		—	(1)
Total third-party debt		82,542		85,732
Less: short-term third-party debt		4,542		7,732
Long-term third-party debt	$	78,000	$	78,000
(1)    $2.0 million and $2.1 million outstanding at March 31, 2012 and December 31, 2011, respectively, was classified as “Liabilities held for sale”.

Amended and Restated Senior Secured Credit Facility

On May 18, 2011, DMLP, Ltd. (“DMLP”), TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”), Talon Exploration, Ltd. (“Talon Exploration”), TransAtlantic Turkey, Ltd. (“TAT”) and Petrogas Petrol Gaz ve Petrokimya Ürünleri Inşaat Sanayive Ticaret A.Ş. (“Petrogas”) (collectively, and together with Amity Oil International Pty Ltd (“Amity”), the “Borrowers”) entered into the amended and restated senior secured credit facility with Standard Bank Plc and BNP Paribas

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(Suisse) SA (the “Amended and Restated Credit Facility”). Each of the Borrowers is our wholly owned subsidiary. In July 2011, Amity executed a joinder agreement and became a borrower under the Amended and Restated Credit Facility. The Amended and Restated Credit Facility is guaranteed by us and each of TransAtlantic Petroleum (USA) Corp. and TransAtlantic Worldwide, Ltd. (“TransAtlantic Worldwide”).

The borrowing base is re-determined semi-annually on April 1st and October 1st of each year prior to September 30, 2012 and quarterly on January 1st, April 1st, July 1st and October 1st of each year after September 30, 2012. We expect to complete the semi-annual borrowing base redetermination in the second quarter of 2012. Our borrowing base is currently $81.4 million.

At March 31, 2012, the Borrowers had borrowed $78.0 million and were in compliance with all material covenants under the Amended and Restated Credit Facility.

TBNG credit agreement

At March 31, 2012, we had outstanding borrowings of approximately 8.0 million New Turkish Lira (approximately $4.5 million) under an unsecured credit agreement between TBNG and a Turkish bank. Borrowings under the credit agreement bear interest at a rate of 14% per annum, and interest is payable quarterly. The credit agreement matures on September 13, 2012 and may be renewed for an additional period on the same terms.

Viking International equipment loan

As of March 31, 2012, we had an outstanding balance of $2.0 million under a secured credit agreement between Viking International and a Turkish bank. This secured credit agreement is included in “Liabilities held for sale” in our consolidated balance sheets.

11. Related party loans payable

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

Related Party Floating Rate Debt	March 31, 2012			December 31, 2011
	(in thousands)
Dalea Credit Agreement	$	73,000		$	73,000
Dalea Credit Facility		11,000			—
		84,000			73,000
Viking Drilling note		—	(1)		—	(1)
Total related party debt		84,000			73,000
Less: short-term related party debt		84,000			73,000
Long-term related party debt	$	—		$	—
(1)    $1.7 million and $2.9 million outstanding at March 31, 2012 and December 31, 2011, respectively, was classified as “Liabilities held for sale – related party”.

Dalea Credit Agreement

On June 28, 2010, we entered into the Dalea Credit Agreement. The purpose of the Dalea Credit Agreement was (i) to fund the acquisition of all of the shares of Amity and Petrogas, and (ii) for general corporate purposes. On May 18, 2011, we entered into a first amendment to the Dalea Credit Agreement to extend the maturity date and increase the interest rate to match the interest rate payable under our Amended and Restated Credit Facility. On November 7, 2011, we entered into a second amendment to the Dalea Credit Agreement to extend the maturity date to the earlier of (i) March 31, 2012 or (ii) the sale of Viking International and Viking Geophysical. On March 15, 2012, we entered into a third amendment to the Dalea Credit Agreement to extend the maturity date until the earlier of (i) June 30, 2012 or (ii) the later of (x) the closing of the sale of our oilfield services business or (y) two business days after demand by Dalea.

As of March 31, 2012, we had borrowed $73.0 million under the Dalea Credit Agreement. No further borrowings are permitted under the Dalea Credit Agreement.

Dalea Credit Facility

On March 15, 2012, TransAtlantic Worldwide, TBNG and the Company (collectively, the “Credit Facility Borrowers”) entered into a $15.0 million credit facility with Dalea to provide us with additional liquidity for general corporate purposes until we

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complete the sale of Viking International and Viking Geophysical. Loans under the Dalea Credit Facility accrue interest at a rate of three-month London Interbank Offered Rate (“LIBOR”) plus 5.5% per annum, to be adjusted monthly on the first day of each month. We will be required to pay all accrued interest in arrears on the last day of each month, and we may prepay outstanding amounts at any time before maturity without penalty. Outstanding borrowings must be repaid upon the earlier of (i) July 1, 2012 or (ii) the sale of Viking.

For the initial advance, we were required to pay Dalea an arrangement fee of $250,000. Under the Dalea Credit Facility, we are also required to pay Dalea a commitment fee equal to 2.75% per annum of the difference between the $15.0 million committed amount and the outstanding balance measured and payable on the last day of each fiscal quarter.

Any proceeds received by us or any subsidiary from any debt financings (subject to certain specified exceptions) or from the sale of Viking International and Viking Geophysical, net of reasonable transaction and financing costs, must be used to repay amounts outstanding under the credit facility. In addition, the Dalea Credit Facility is subject to customary covenants, including covenants that limit the ability of the Credit Facility Borrowers to, among other things, (i) make, give, create or permit or attempt to make, give or create any mortgage, charge, lien or encumbrance over any assets of any Credit Facility Borrower or any subsidiary (subject to certain specific exceptions), (ii) change the name of any of the Credit Facility Borrowers or the jurisdictions of organization, (iii) declare or provide for any dividends or other payments or distributions (whether in cash, assets or indebtedness) based on share capital, (iv) redeem or purchase any of their shares, (v) make or permit any sale of or disposition of any substantial or material part of their business, assets or undertaking, or that of any subsidiary, (vi) save and (except for certain specified exceptions) borrow or cause or permit any subsidiary to borrow money from any other person, without first obtaining and delivering a duly signed assignment and postponement of claim by such person in form and terms satisfactory to Dalea, (vii) pay out or permit the payment out of any shareholders loans or other indebtedness to non-arm’s length parties, or (viii) guarantee or permit the guarantee of the obligations of any other person, directly or indirectly, except in the ordinary course of business.

The Dalea Credit Facility is also subject to customary events of default, including payment defaults, defaults in observing or performing any term, covenant or condition of the Dalea Credit Facility or collateral documents, material misrepresentations by a Credit Facility Borrower or any subsidiary, a Credit Facility Borrower or any subsidiary ceases or threatens to cease to carry on business, the prohibition in trading in shares of any of the Credit Facility Borrowers or suspension or delisting from any stock exchange, a material adverse change in the financial condition of any of the Credit Facility Borrowers and any of their subsidiaries taken as a whole, Dalea believes in good faith and on commercially reasonable grounds that the ability of the Credit Facility Borrowers to pay or perform any of the covenants contained in the Dalea Credit Facility is materially impaired, insolvency of any of the Credit Facility Borrowers or any change of control of any of the Credit Facility Borrowers. Control is defined in the Dalea Credit Facility as ownership of or control or direction over, directly or indirectly, 20% or more of the outstanding voting securities of the Credit Facility Borrowers. If an event of default occurs and is continuing, Dalea may demand immediate payment of all monies owing under the Dalea Credit Facility; provided that with respect to certain specified events of default, all monies due under the Dalea Credit Facility shall automatically become due and payable without any demand or any other action by Dalea or any other person.

At March 31, 2012, we had borrowed $11.0 million under the Dalea Credit Facility and had availability of $4.0 million.

Viking Drilling note

As of March 31, 2012, we had an outstanding balance of $1.7 million under a note payable with Viking Drilling, LLC. The note is included in “Liabilities held for sale — related party” in our consolidated balance sheets. Dalea owns 85% of Viking Drilling, LLC.

12. Shareholders’ equity

June 2011 share issuance

On June 7, 2011, we issued 18.5 million common shares at the acquisition date closing price of $2.05 per share in a private placement to an accredited investor in connection with the acquisition of TBNG.

February 2011 share issuance

On February 18, 2011, we issued 8,924,478 common shares at the acquisition date closing price of $3.15 per share in a private placement to an accredited investor in connection with the acquisition of Direct Morocco, Anschutz and Direct Bulgaria.

Restricted stock units

Share-based compensation expense of approximately $0.5 million and $0.6 million with respect to awards of restricted stock units (“RSUs”) was recorded for the three months ended March 31, 2012 and 2011, respectively.

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As of March 31, 2012, we had approximately $2.2 million of unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.79 years.

Stock option plan

Our Amended and Restated Stock Option Plan (2006) (the “Option Plan”) terminated on June 16, 2009. All outstanding awards issued under the Option Plan remained in full force and effect. All options presently outstanding under the Option Plan have a five-year term. We did not grant any stock options during the three months ended March 31, 2011. At March 31, 2012, all stock options have been fully amortized.

Earnings per share

Because we reported a net loss for the three months ended March 31, 2012 and March 31, 2011, we excluded the following share based awards from the computation of earnings per share, as their effect would have been anti-dilutive:

	For the Three Months Ended
	March 31, 2012		March 31,2011
Unvested RSUs		1,524,080		2,083,817
Stock options		430,055		2,065,111
Warrants		7,318,720		17,365,831

Additionally, we had a contingent liability at March 31, 2012 of approximately $10.0 million that is payable in our common shares. At the March 31, 2012 closing price of our common shares, this liability represents 7,692,308 common shares that could be potentially dilutive to future earnings per share calculations.

13. Segment information

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

	Corporate			Romania			Turkey			Bulgaria			Total
	(in thousands)
For the three months ended March 31, 2012
Total revenues	$	—		$	—		$	34,870		$	65		$	34,935
Net income (loss) from continuing operations before income taxes	$	(5,439	)	$	(298	)	$	3,459		$	(200	)	$	(2,478	)
Capital expenditures	$	—		$	—		$	14,011		$	168		$	14,179
For the three months ended March 31, 2011
Total revenues	$	47		$	—		$	28,904		$	128		$	29,079
Net loss from continuing operations before income taxes	$	(7,547	)	$	(313	)	$	(3,304	)	$	(19	)	$	(11,183	)
Capital expenditures	$	21		$	—		$	15,709		$	2,089		$	17,819
Segment assets
March 31, 2012	$	9,694		$	784		$	326,640		$	3,751		$	340,869	(1)
December 31, 2011	$	2,940		$	881		$	309,670		$	4,164		$	317,655	(1)
Goodwill
March 31, 2012	$	—		$	—		$	9,071		$	—		$	9,071
December 31, 2011	$	—		$	—		$	8,514		$	—		$	8,514
(1)    Excludes assets from our discontinued Moroccan operations and oilfield services business of $135.0 million and $128.1 million at March 31, 2012 and at December 31, 2011, respectively.

14. Financial instruments

Cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities were each estimated to have a fair value approximating the carrying amount at March 31, 2012 and December 31, 2011, due to the short maturity of those instruments.

14

Interest rate risk

We are exposed to interest rate risk as a result of our variable rate short-term cash holdings and borrowings under the Amended and Restated Credit Facility, the Dalea Credit Agreement, the Dalea Credit Facility and note payable with Viking Drilling, LLC.

Foreign currency risk

We have underlying foreign currency exchange rate exposure. Our currency exposures relate to transactions denominated in the Canadian Dollar, British Pound, Bulgarian Lev, European Union Euro, Romanian New Leu, Moroccan Dirham and New Turkish Lira. We are also subject to foreign currency exposures resulting from translating the functional currency of our foreign subsidiary financial statements into the U.S. Dollar reporting currency. We have not used foreign currency forward contracts to manage exchange rate fluctuations. At March 31, 2012, we had 12.1 million New Turkish Lira (approximately $6.8 million) in cash and cash equivalents, which exposes us to exchange rate risk based on fluctuations in the value of the New Turkish Lira.

Commodity price risk

We are exposed to fluctuations in commodity prices for crude oil and natural gas. Commodity prices are affected by many factors including but not limited to supply and demand. At March 31, 2012 and December 31, 2011, we were a party to commodity derivative contracts.

Concentration of credit risk

The majority of our receivables are within the oil and gas industry, primarily from our industry partners and from government agencies. Included in receivables are amounts due from Turkiye Petrolleri Anonim Ortakligi, the national oil company of Turkey, Zorlu Dogal Daz Ithalat Ihracat ve Toptan Ticaret A.S., a privately owned natural gas distributor in Turkey, and Turkiye Petrol Refinerileri A.Ş., a privately owned oil refinery in Turkey, which purchase the majority of our oil and natural gas production. The receivables are not collateralized. To date, we have experienced minimal bad debts and have no allowance for doubtful accounts. Other accounts receivable relating to value added taxes are due from various government agencies and are expected to be collected during 2012. The majority of our cash and cash equivalents are held by three financial institutions in the United States and Turkey.

Fair value measurements

The following table summarizes the valuation of our financial assets and liabilities as of March 31, 2012:

	Fair Value Measurement Classification
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Liabilities:
Related party floating rate debt	$	—	$	(84,000	)	$	—	$	(84,000	)
Amended and Restated Credit Facility		—		(78,000	)		—		(78,000	)
TBNG credit agreement		—		(4,542	)		—		(4,542	)
Derivative financial instruments		—		(18,031	)		—		(18,031	)
Total	$	—	$	(184,573	)	$	—	$	(184,573	)

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The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2011:

	Fair Value Measurement Classification
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Liabilities:
Related party floating rate debt	$	—	$	(73,000	)	$	—	$	(73,000	)
Amended and Restated Credit Facility		—		(78,000	)		—		(78,000	)
TBNG credit agreement		—		(7,732	)		—		(7,732	)
Derivative financial instruments		—		(7,071	)		—		(7,071	)
Total	$	—	$	(165,803	)	$	—	$	(165,803	)

15. Related party transactions

The following table summarizes related party accounts receivable and accounts payable as of March 31, 2012 and December 31, 2011:

	March 31, 2012		December 31, 2011
	(in thousands)
Related party accounts payable:
Riata Management service agreement	$	—	$	323
Total related party accounts payable	$	—	$	323

The following table summarizes related party accounts receivable held for sale and related party accounts payable held for sale as of March 31, 2012 and December 31, 2011:

	March 31, 2012		December 31, 2011
	(in thousands)
Related party accounts receivable:
Maritas services agreement	$	1,788	$	251
Viking Oilfield Services services agreement		146		116
Total related party accounts receivable held for sale	$	1,934	$	367
Related party accounts payable:
Viking Drilling services agreement	$	—	$	92
Viking Oilfield Services services agreement		137		617
Gundem lease agreements		36		36
Total related party accounts payable held for sale	$	173	$	745

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

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

Executive Overview

We are an international oil and natural gas company engaged in acquisition, exploration, development and production. We have focused our operations in countries that are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing, royalty and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey, Bulgaria and Romania. As of March 31, 2012, approximately 40% of our outstanding common shares were beneficially owned by N. Malone Mitchell, 3rd, the chairman of our board of directors and chief executive officer.

Financial and Operational Performance Highlights. Highlights of our financial performance and operational performance for the first quarter of 2012 include:

• During the quarter ended March 31, 2012, we derived 69.5% of our revenues from the production of oil and 29.7% of our revenues from the production of natural gas.

• Total oil and natural gas revenues increased 20.9% to $34.7 million for the quarter ended March 31, 2012 from $28.7 million realized in the same period in 2011. The increase was the result of an increase in production volumes, offset by a decline in our average sales price.

• Production increased to approximately 224 net thousand barrels (Mbbls) of oil and approximately 1,367 net million cubic feet (Mmcf) of natural gas for the first quarter of 2012, compared to approximately 219 net Mbbls of oil and 803 net Mmcf of natural gas for the same period in 2011.

• As of March 31, 2012, we produced an aggregate of approximately 2,337 net barrels (Bbls) oil per day and approximately 13.2 net Mmcf of natural gas per day.

• For the quarter ended March 31, 2012, we incurred $14.2 million in capital expenditures, compared to capital expenditures of $17.8 million for the quarter ended March 31, 2011. The decrease in capital expenditures was primarily due to the acquisition of Direct Petroleum Morocco, Inc. (“Direct Morocco”), Anschutz Morocco Corporation (“Anschutz”) and Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”) in the first quarter of 2011.

• As of March 31, 2012, our short-term borrowings were $88.5 million, compared to short-term borrowings of $80.7 million as of December 31, 2011.

Recent Developments

Sale of Viking International and Viking Geophysical. On March 15, 2012, we signed a stock purchase agreement to sell our oilfield services business, which is substantially comprised of our wholly owned subsidiaries Viking International Limited (“Viking International”) and Viking Geophysical Services, Ltd. (“Viking Geophysical” and collectively, “Viking”), to Dalea Partners, LP (“Dalea”, an affiliate of Mr. Mitchell) for an aggregate purchase price of $164.0 million, consisting of $152.5 million in cash, subject to a net working capital adjustment, and a $11.5 million promissory note from Dalea. The promissory note will be payable five years from the date of issuance or earlier upon the occurrence of certain specified events, will bear interest at a rate of 3.0% per annum and will be guaranteed by Mr. Mitchell. Contractually, the effective date of the sale of Viking will be April 1, 2012, regardless of when the actual closing occurs. The closing is anticipated to occur during the second quarter of 2012. The sale of Viking is subject to the approval of regulatory authorities, the receipt of equity financing by Dalea and other customary closing conditions. For additional information concerning the stock purchase agreement, see “Part I, Item 1. Business—Divestiture of Our Oilfield Services Business” in our Annual Report on Form 10-K for the year ended December 31, 2011.

Dalea Credit Facility. On March 15, 2012, we entered into a $15.0 million credit facility with Dalea to provide us with additional liquidity for general corporate purposes until we complete the sale of Viking. Loans under the credit facility accrue interest at a rate of three-month London Interbank Offered Rate (“LIBOR”) plus 5.5% per annum. Any proceeds received by us or any subsidiary from any debt financings (subject to certain specified exceptions) or from the sale of Viking, net of reasonable transaction and financing costs, must be used to repay amounts outstanding under the credit facility. Any outstanding borrowings under the credit facility must be repaid upon the earlier of (i) July 1, 2012 or (ii) the sale of Viking. As of March 31, 2012, we had borrowed $11.0 million under the Dalea credit facility.

Ban on Fracture Stimulation in Bulgaria. On January 18, 2012, the Bulgarian Parliament enacted legislation that was intended to ban fracture stimulation in the Republic of Bulgaria. As long as this legislation remains in effect, our exploration, development and production activities in Bulgaria will be significantly constrained.

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Changes in Executive Management. On January 5, 2012, our board of directors appointed Mustafa Yavuz as our chief operating officer.

First Quarter 2012 Operational Update

During the first quarter of 2012, we continued to develop our Selmo and Arpatepe oil fields in southeastern Turkey and our Thrace Basin natural gas fields in northwestern Turkey, including the natural gas fields acquired in the acquisition of Thrace Basin Natural Gas (Turkiye) Corporation (“TBNG”). In addition, we continued to expand our inventory of exploration opportunities with new prospects identified on recently completed 3D seismic surveys. We achieved positive results on recent fracture stimulation (“frac”) jobs in the Thrace Basin and produced approximately 99 Mmcf of gross incremental production as a result of the frac jobs performed during the first quarter of 2012. As of March 31, 2012, the gross incremental production rate from these frac jobs was approximately 2.2 Mmcf of natural gas per day.

Production. For the quarter ended March 31, 2012, we produced an average of approximately 2,462 net Bbls of oil per day and approximately 15.0 net Mmcf of natural gas per day.

Turkey-Thrace Basin. Following the acquisition of TBNG in June 2011, we accelerated plans for exploration and development of TBNG’s acreage. Our immediate emphasis was on identifying low-cost, high-yield conventional potential in existing wellbores. In the first quarter of 2012, we recompleted six existing wellbores on our TBNG acreage, adding production of approximately 1.4 net Mmcf of natural gas per day. This program has been the primary contributor in offsetting normal field decline rates.

As of March 31, 2012, we had $7.0 million of exploratory well costs capitalized for the Pancarkoy-1 well, which we began drilling in the fourth quarter of 2010. After the second fracture stimulation, commercial natural gas production could not be sustained due to the high amount of water production when the well was placed on production. A third fracture stimulation was performed in April 2012, but commercial production could not be sustained due to high water production. We have identified at least two more sands within the Mezardere formation that we expect to test initially by conventional means. These sands possess different, more favorable reservoir properties than the previous targets and have strong indicators of natural gas. We expect to commence testing late in the second quarter of 2012, and further fracture stimulation will depend on the outcome of the conventional test results.

We continue to identify and prioritize existing TBNG wellbores for fracture stimulation. Furthermore, we have begun evaluating existing wellbores to select our first set of multi-stage fracture stimulation candidates. We will continue our fracture stimulation campaign in the Thrace Basin by stimulating both existing wellbores and newly drilled wells, which target unconventional horizons identified by integrating our geological and engineering studies with our knowledge gained through stimulating existing wellbores in our previous re-entry campaigns.

Southeastern Turkey.

• Selmo. We completed two wells and began drilling four additional wells during the first quarter of 2012.

• Arpatepe. In the first quarter of 2012, we spud one new well and continued drilling a well spud in December 2011. The Arpatepe-6 well was drilled in January 2012, and we expect to complete both the Arpatepe-5 and Arpatepe-6 wells in the second quarter of 2012.

• Molla. We completed the Goksu-2 appraisal well in February 2012 with an initial flow rate of approximately 400 Bbls per day. We commenced drilling the Bahar-1 well in March 2012, with plans to test both the Mardin and Bedinan formations as well as the Dadas shale. Following the drilling of the Bahar-1 well, we plan to drill the Goksu-3H well in the second quarter of 2012. We believe this well will be the first horizontal well to test the fractured Mardin carbonate formations found in this region.

Central Basins. We have substantial exploration acreage in central Turkey. In February 2012, we entered into an agreement with Shell Upstream Turkey BV (“Shell”) pursuant to which Shell agreed to co-fund the acquisition of 1,000 kilometers of 2D seismic data and approximately 8,000 kilometers of airborne gravity gradiometry and magnetic data in Turkey’s Sivas Basin, where we hold exploration licenses covering approximately 1.6 million acres. The agreement provides an option for Shell to farm-in to the exploration licenses after it assesses the data collected. Up to two initial exploration wells may be drilled in 2013 in accordance with the underlying work commitments for the Sivas Basin exploration licenses.

Bulgaria. As a result of the legislation that was intended to ban fracture stimulation in the Republic of Bulgaria, we have temporarily suspended drilling and completion operations for the Deventci-R2 and Peshtene-R11 wells. Although we expect the Bulgarian government to clarify the legislation to allow for conventional drilling and to institute a set of procedures regulating the fracture stimulation of wells, we cannot be certain when or if this will occur. In the meantime, we and our partner, LNG Energy, Ltd. (“LNG”), are evaluating core data gathered while drilling the Peshtene-R11 well and developing a conventional completion program for the well.

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Romania. We and the operator of the Sud Craiova license, Sterling Resources, Ltd. (“Sterling”), have committed to participate in a 200-kilometer 2D seismic survey on the Sud Craiova license, which we plan to complete by the end of 2012.

Planned Operations

We continue to actively explore and develop our existing oil and natural gas properties in Turkey and evaluate opportunities for further activities in Bulgaria and Romania. Our success will depend in part on discovering additional hydrocarbons in commercial quantities and then bringing these discoveries into production. For the remainder of 2012, we are focused on accomplishing the following objectives:

• Expand Fracture Stimulation Program. In the fourth quarter of 2011, our Thrace Basin fracture simulation program brought positive results and provided important lessons regarding fracture stimulation design. We plan to expand our application of fracture stimulation techniques to additional properties in the Thrace Basin. We plan to continue our exploration of the deep, unconventional opportunities in the Thrace Basin, and we plan to drill and test the Dadas shale formation underlying several of our licenses in southeastern Turkey. We anticipate that employing fracture stimulation techniques will result in the development of production and reserves that would have not been commercial otherwise.

• Reduce Exploration Risk Through Partnerships. In an effort to increase the pace of exploration activity, share exploration risk, and reduce our share of the capital commitments necessary to carry forward the exploration of our extensive acreage position, we are currently seeking joint venture partners for our exploration acreage in Bulgaria, Romania and Turkey and plan to continue this effort during the remainder of 2012.

• Complete the Sale of Viking. We expect to complete the sale of Viking in the second quarter of 2012.

Capital expenditures for the remainder of 2012 are expected to range between $100.0 million and $110.0 million. Approximately 55% of these anticipated expenditures will occur in the Thrace Basin in Turkey, devoted to developing conventional and unconventional natural gas production, building infrastructure and acquiring seismic data. Most of the remaining 45% of these anticipated expenditures will occur in southeastern Turkey, devoted to drilling developmental and exploratory oil wells at Selmo, Arpatepe, Molla and Bakuk. If cash on hand, borrowings from our amended and restated senior credit facility (the “Amended and Restated Credit Facility”) with Standard Bank Plc (“Standard Bank”) and BNP Paribas (Suisse) SA (“BNP Paribas”), our credit facility with Dalea and cash flow from operations are not sufficient to fund our capital expenditures, then we will either curtail our discretionary capital expenditures or seek other funding sources. If we successfully complete the sale of our oilfield services business, we may use a portion of the net proceeds to pay down our Amended and Restated Credit Facility, thereby increasing our capacity to fund capital expenditures. Our projected 2012 capital expenditure budget is subject to change and could be reduced if we do not raise additional funds.

We currently plan to execute the following drilling and exploration activities in the remainder of 2012:

Turkey. We plan to drill approximately 65 gross wells during the remainder of 2012, of which 21 will be fracture stimulated. In addition, we plan to fracture stimulate another 16 existing wellbores and perform conventional uphole recompletions in 25 existing wellbores on our Thrace Basin properties. We also plan to construct the infrastructure necessary to produce and sell oil and natural gas from the productive wells we drill.

Bulgaria. We plan to complete our evaluation of the Peshtene-R11 exploration well core data and develop a conventional completion program for the well.

Romania. We plan to complete a 200-kilometer 2D seismic survey on the Sud Craiova license by the end of 2012.

Discontinued Operations in Morocco

On June 27, 2011, we decided to discontinue our Moroccan operations. We are in the process of winding down our operations in Morocco. We have presented the Moroccan segment operating results as discontinued operations for all periods presented, and they are not included in results from continuing operations.

Discontinued Operations of Oilfield Services Business

On March 15, 2012, we signed a stock purchase agreement to sell Viking for an aggregate purchase price of $164.0 million, consisting of $152.5 million in cash, subject to a net working capital adjustment, and a $11.5 million promissory note from Dalea. We intend to use approximately $3.7 million of the cash consideration to repay (i) the outstanding balance on our amended and restated note payable from Viking International to Viking Drilling, LLC (“Viking Drilling”) and (ii) the outstanding balance of a secured credit agreement entered into by Viking International to fund the purchase of vehicles. In addition, we intend to use a portion of the remaining cash proceeds to repay our credit agreement with Dalea and our credit facility with Dalea, and we may use the remaining cash proceeds along with existing cash to repay some or all of the outstanding indebtedness under our Amended and Restated Credit Facility.

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Pursuant to the stock purchase agreement, the Company, Viking International and Viking Geophysical will enter into a five-year master services agreement that would provide us with continued access to Viking’s equipment and services. After the consummation of the sale of these operations, we will no longer own drilling rigs and oilfield services equipment, which will increase our costs and expenses, but will reduce our depreciation and amortization expense and our general and administrative expense. We could also be subject to greater risks related to the availability and cost of drilling rigs and third party oilfield services.

There is no assurance that we will complete the sale of Viking as contemplated or at all. The sale of Viking is subject to the approval of regulatory authorities, the receipt of equity financing by Dalea and other customary closing conditions. The closing is anticipated to occur during the second quarter of 2012. We have presented the oilfield services segment operating results as discontinued operations for all periods presented, and they are not included in results from continuing operations.

Significant Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. Our significant accounting policies are described in “Note 3. Significant Accounting Policies” to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011 and are of particular importance to the portrayal of our financial position and results of operations and require the application of significant judgment by management. These estimates are based on historical experience, information received from third parties, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no changes to the significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 amends Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosures (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the ASC 820 disclosure requirements, particularly for Level 3 fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. We adopted ASU 2011-04 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In June 2011, FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. In December 2011, FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05 (“ASU 2011-12”). ASU 2011-12 deferred the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The amendments will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We adopted ASU 2011-05 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In September 2011, FASB issued ASU 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment (“ASU 2011-08”). ASU 2011-08 allows both public and nonpublic entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity would no longer be required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU 2011-08 allows early adoption and will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted ASU 2011-08 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In December 2011, FASB issued ASU No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 will require entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. Application of ASU 2011-11 is required for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. We are currently evaluating the effects of adopting ASU 2011-11.

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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 our current or future earnings or operations.

Results of Operations—Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011

	Three Months Ended March 31,						Change
	2012			2011			2012-2011
	(in thousands of U.S. dollars, except per unit prices and production  volumes) (as adjusted)
Production:
Oil (Mbbl)		224			219			5
Natural gas (Mmcf)		1,367			803			564
Total production (Mboe)		452			353			99
Average prices:
Oil (per Bbl)	$	108.38		$	108.17		$	0.21
Natural gas (per Mcf)	$	7.60		$	7.29		$	0.31
Oil equivalent (per Boe)	$	76.68		$	81.23		$	(4.55	)
Revenues:
Oil and natural gas sales	$	34,661		$	28,676		$	5,985
Other		274			403			129
Total revenues		34,935			29,079			5,856
Costs and expenses:
Production		3,635			4,102			(467	)
Exploration, abandonment and impairment		2,796			7,232			(4,436	)
Seismic and other exploration		664			2,252			(1,588	)
General and administrative		9,748			9,085			663
Depreciation, depletion and amortization		9,169			4,630			4,539
Interest and other expense		3,259			3,597			(338	)
Loss on commodity derivative contracts:
Cash settlements on commodity derivative contracts		(1,474	)		(704	)		(770	)
Non-cash change in fair value on commodity derivative contracts		(10,961	)		(8,607	)		(2,354	)
Total loss on commodity derivative contracts		(12,435	)		(9,311	)		(3,124	)

Oil and Natural Gas Sales. Total oil and natural gas revenues increased $6.0 million to $34.7 million for the three months ended March 31, 2012 from $28.7 million realized in the same period in 2011. Of this increase, $8.0 million was due to an increase in our total production volumes of 99 Mboe to 452 Mboe for the three months ended March 31, 2012 compared to 353 Mboe in the same period in 2011. Production volumes increased primarily due to the acquisition of TBNG in June 2011, which contributed approximately 111 Mboe. This was partially offset by a decrease in production due to the natural decline of our reserve base. A decrease in our average sales price also partially offset the increase by approximately $2.0 million. For the three months ended March 31, 2012, our average price received was $76.68 per Boe, compared to $81.23 per Boe for the same period in 2011.

Production. Production expenses for the three months ended March 31, 2012 decreased to $3.6 million from $4.1 million for the same period in 2011. The decrease was primarily attributable to an increase in the utilization of our oilfield services business to provide these services.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment costs for the three months ended March 31, 2012 decreased approximately $4.4 million to $2.8 million for the three months ended March 31, 2012, from $7.2 million for the same period in 2011. For the three months ended March 31, 2012, we wrote off two wells, compared to three wells written off for the three months ended March 31, 2011.

Seismic and Other Exploration. Seismic and other exploration costs decreased to $0.7 million for the three months ended March 31, 2012, compared to $2.3 million for the same period in 2011. This decrease was due primarily to a decrease in the utilization of third parties to provide our seismic services.

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General and Administrative. General and administrative expense was $9.7 million for the three months ended March 31, 2012, compared to $9.1 million for the same period in 2011. The increase was primarily due to our acquisition of TBNG in June 2011 and costs related to the proposed sale of our oilfield services business, partially offset by a decrease due to high expenses in the first quarter of 2011 related to acquisition costs for Direct Morocco, Anschutz, Direct Bulgaria and TBNG.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization increased to $9.2 million for the three months ended March 31, 2012, compared to $4.6 million in the same period of 2011. The increase was primarily due to an increase in our depletable asset base at March 31, 2012, which was primarily as a result of our 2011 acquisitions.

Interest and Other Expense. Interest and other expense decreased to $3.3 million for the three months ended March 31, 2012, compared to $3.6 million for the same period in 2011. The decrease was primarily due to warrant expenses for the three months ended March 31, 2011 of approximately $1.2 million associated with our Dalea credit agreement, which were fully amortized in 2011. This decrease was partially offset by an increase of approximately $0.9 million primarily due to an increase in the interest rate under this credit agreement and higher total outstanding debt at March 31, 2012, as compared to March 31, 2011. For the three months ended March 31, 2012, the interest rate on this agreement was LIBOR plus 5.50% per annum, compared to LIBOR plus 2.50% per annum for the same period in 2011. Total outstanding debt at March 31, 2012 was $170.2 million (of which $3.7 million was held for sale), compared to $145.1 million at March 31, 2011.

Loss on Commodity Derivative Contracts. During the three months ended March 31, 2012, we recorded a loss on commodity derivative contracts of approximately $12.4 million, compared to a loss of $9.3 million for the same period in 2011. We recorded a $11.0 million unrealized loss and a $1.5 million realized loss on our derivative contracts for the three months ended March 31, 2012, compared to a $8.6 million unrealized loss and a $0.7 million realized loss for the three months ended March 31, 2011. Unrealized gains and losses are attributable to changes in oil and natural gas prices and volumes hedged from one period end to another. We are required under our Amended and Restated Credit Facility to hedge a portion of our oil production in the Selmo and Arpatepe oil fields in Turkey.

Other Comprehensive Income. We record foreign currency translation adjustments from the process of translating the functional currency of the financial statements of our foreign subsidiaries into the U.S. dollar reporting currency. Foreign currency translation adjustment for the three months ended March 31, 2012 increased to a gain of $14.4 million from a gain of $2.3 million for the same period in 2011 due to the strengthening of the New Turkish Lira (“TRY”) at March 31, 2012.

Discontinued Operations. All revenues and expenses associated with the Moroccan operations and oilfield services business for the three months ended March 31, 2012 and 2011 have been included in discontinued operations.

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The results of operations for our Moroccan operations and oilfield services business were as follows:

	Three Months Ended March 31,
	2012			2011
	(in thousands)
Revenues:
Oil and natural gas sales	$	—		$	48
Oilfield services		10,284			3,117
Total revenues		10,284			3,165
Costs and expenses:
Production		288			5
Exploration, abandonment and impairment		—			2,566
Seismic and other exploration		—			27
Oilfield services costs		7,072			4,738
General and administrative		2,166			1,276
Depreciation, depletion and amortization		—			2,933
Accretion of asset retirement obligations		—			—
Total costs and expenses		9,526			11,545
Operating income (loss)		758			(8,380	)
Other (expense) income:
Interest and other expense		(65	)		(253	)
Interest and other income		18			39
Foreign exchange loss		(888	)		(490	)
Total other (expense) income		(935	)		(704	)
Loss from discontinued operations before income taxes		(177	)		(9,084	)
Current income tax expense		(2,147	)		(173	)
Deferred income tax benefit		167			(51	)
Net loss from discontinued operations	$	(2,157	)	$	(9,308	)

Capital Expenditures

For the quarter ended March 31, 2012, we incurred $14.2 million in capital expenditures compared to capital expenditures from continuing operations of $17.8 million for the quarter ended March 31, 2011. The decrease in capital expenditures was primarily due to the acquisition of Direct Morocco, Anschutz and Direct Bulgaria during the quarter ended March 31, 2011. The remaining decrease was due to less drilling during the first quarter of 2012, as we have been interpreting seismic data shot in late 2011. In the first quarter of 2011, our capital expenditures were for drilling and exploration activities and acquiring long-term drilling inventory.

For the remainder of 2012, we expect our capital expenditures to range between approximately $100.0 million and $110.0 million. Approximately 55% of these anticipated expenditures will occur in the Thrace Basin in Turkey, devoted to developing conventional and unconventional natural gas production, building infrastructure and acquiring seismic data. Most of the remaining 45% of these anticipated expenditures will occur in southeastern Turkey, devoted to drilling developmental and exploratory oil wells at Selmo, Arpatepe, Molla and Bakuk. If cash on hand, borrowings from our Amended and Restated Credit Facility and credit facility with Dalea, and cash flow from operations are not sufficient to fund our capital expenditures, then we will either curtail our discretionary capital expenditures or seek other funding sources. If we successfully complete the sale of our oilfield services business, we may use a portion of the net proceeds to pay down our Amended and Restated Credit Facility, thereby increasing our capacity to fund capital expenditures. Our projected 2012 capital expenditure budget is subject to change and could be reduced if we do not raise additional funds. See “—Liquidity and Capital Resources.”

Liquidity and Capital Resources

Our primary sources of liquidity for the first quarter of 2012 were our cash and cash equivalents, cash flow from operations and borrowings under our various debt agreements. At March 31, 2012, we had cash and cash equivalents of $15.1 million, $88.5 million in short-term debt associated with our continuing operations, $3.7 million in short-term debt associated with our discontinued operations, $78.0 million in long-term debt associated with our continuing operations and, excluding assets held for sale of $135.0 million and liabilities held for sale of $25.9 million, a working capital deficit of $70.2 million, compared to cash and cash equivalents of $15.1 million, $80.7 million in short-term debt associated with our continuing operations, $5.0 million in short-term debt associated with our discontinued operations, $78.0 million in long-term debt associated with our continuing operations, and, excluding assets

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held for sale of $128.1 million and liabilities held for sale of $26.7 million, a working capital deficit of $61.2 million at December 31, 2011. Cash provided by operating activities for the three months ended March 31, 2012 increased to $7.0 million, as compared to cash provided by operating activities of $4.2 million for the quarter ended March 31, 2011, primarily as a result of higher revenues due to increased production.

As of March 31, 2012, the outstanding principal amount of our debt was $170.2 million, of which $3.7 million was classified as held for sale. Of our outstanding debt, $73.0 million under the Dalea credit agreement was due upon the earlier of (i) June 30, 2012 or (ii) the later of (x) the closing of the sale of Viking or (y) two business days after demand by Dalea. We forecast that we will need to consummate the sale of Viking or raise additional debt or equity financing to fund our repayment of the Dalea credit agreement and to fund our operations, including our planned exploration and development activities. On March 15, 2012, we entered into a stock purchase agreement to sell Viking. We also entered into a $15.0 million credit facility with Dalea, of which $11.0 million was outstanding as of March 31, 2012, to provide us with additional liquidity for general corporate purposes. Should we be unable to consummate the sale of Viking, raise additional financing or extend the maturity date of the Dalea credit agreement, we will not have sufficient funds to continue operations beyond June 30, 2012. As a result of the recurring losses from operations and a working capital deficiency, there is substantial doubt regarding our ability to continue as a going concern. The continuing application of the going concern assumption is dependent upon our continuing ability to obtain the necessary financing to discharge our existing obligations, fund ongoing exploration, development and operations and ultimately achieve profitable operations. The inability to secure additional funding when and as needed could have a material adverse effect on our operations and financial condition.

In addition to cash, cash equivalents and cash flow from operations, at March 31, 2012, we had an Amended and Restated Credit Facility, a credit agreement with Dalea, a credit facility with Dalea, a term note with Viking Drilling, an equipment loan with a Turkish bank and a credit agreement with a Turkish bank, each of which is discussed below.

Amended and Restated Credit Facility. DMLP, Ltd., TransAtlantic Exploration Mediterranean International Pty Ltd, Amity Oil International Pty Ltd (“Amity”), Talon Exploration, Ltd., TransAtlantic Turkey, Ltd. and Petrogas Petrol Gaz ve Petrokimya Ürünleri Inşaat Sanayi ve Ticaret A.Ş. (“Petrogas”) (collectively, the “Borrowers”) are parties to the Amended and Restated Credit Facility. Each of the Borrowers is a wholly owned subsidiary. The Amended and Restated Credit Facility is guaranteed by TransAtlantic Petroleum Ltd. and each of TransAtlantic Petroleum (USA) Corp. and TransAtlantic Worldwide, Ltd. (“TransAtlantic Worldwide”) (collectively, the “Guarantors”).

The amount drawn under the Amended and Restated Credit Facility may not exceed the lesser of (i) $250.0 million, (ii) the borrowing base amount at such time, (iii) the aggregate commitments of all lenders at such time, and (iv) any amount borrowed from an individual lender to the extent it exceeds the aggregate amount of such lender’s individual commitment. At March 31, 2012, the lenders had aggregate commitments of $120.0 million, with individual commitments of $60.0 million each. On the last day of each fiscal quarter commencing September 30, 2012 and at the maturity date, the lenders’ commitments are subject to reduction by 6.25% of their commitments existing on such commitment reduction date.

The borrowing base is re-determined semi-annually on April 1st and October 1st of each year prior to September 30, 2012, and quarterly on January 1st, April 1st, July 1st and October 1st of each year after September 30, 2012. We expect to complete the semi-annual borrowing base redetermination in the second quarter of 2012. Our borrowing base is currently $81.4 million.

The borrowing base amount equals, for any calculation date, the lowest of:

• the debt value which results in the field life coverage ratio for such calculation date being 1.50 to 1.00;

• the debt value which results in the loan life coverage ratio for such calculation date being 1.30 to 1.00; and

• the debt value which results in a debt service coverage ratio for any calculation period being 1.25 to 1.00.

The Amended and Restated Credit Facility matures on the earlier of (i) May 18, 2016 or (ii) the last date of the borrowing base calculation period that immediately precedes the date that the semi-annual report of Standard Bank and the Borrowers determines that the aggregate amount of hydrocarbons to be produced from the borrowing base assets in Turkey are less than 25% of the amount of hydrocarbons to be produced from the borrowing base assets shown in the initial report prepared by Standard Bank and the Borrowers. The Amended and Restated Credit Facility bears various letter of credit sub-limits, including among other things, sub-limits of up to (i) $10.0 million, (ii) the aggregate available unused and uncancelled portion of the lenders’ commitments or (iii) any amount borrowed from an individual lender to the extent it exceeds the aggregate amount of such lender’s individual commitment.

Loans under the Amended and Restated Credit Facility accrue interest at a rate of three-month LIBOR plus 5.50% per annum. The Borrowers are also required to pay (i) a commitment fee payable quarterly in arrears at a per annum rate equal to (a) 2.75% per annum of the unused and uncancelled portion of the aggregate commitments that is less than or equal to the maximum available

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amount under the Amended and Restated Credit Facility, and (b) 1.65% per annum of the unused and uncancelled portion of the aggregate commitments that exceed the maximum available amount under the Amended and Restated 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 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 or (b) 5.50% for all other letters of credit.

The Amended and Restated Credit Facility is secured by a pledge of (i) the local collection accounts and offshore collection accounts of each of the Borrowers, (ii) the receivables payable to each of the Borrowers, (iii) the shares of each Borrower, and (iv) substantially all of the present and future assets of the Borrowers.

The Borrowers are required to comply with certain financial and non-financial covenants under the Amended and Restated Credit Facility, including maintaining the following financial ratios:

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

• ratio of EBITDAX (less non-discretionary capital expenditures) to aggregate amounts payable under the Amended and Restated Credit Facility of not less than 1.50 to 1.00;

• ratio of EBITDAX (less non-discretionary capital expenditures) to interest expense of not less than 4.00 to 1.00; and

• ratio of total debt to EBITDAX of less than 2.50 to 1.00.

The non-financial covenants limit the ability of the Borrowers to, among other things, incur indebtedness or create any liens, merge or consolidate, liquidate or dissolve, dispose of any property or business, pay dividends, distributions or similar payments, make certain types of investments, enter into transactions with an affiliate and engage in certain businesses or business activities.

The Amended and Restated Credit Facility is also subject to customary events of default, such as the failure to pay principal or interest when due, the breach of certain covenants and obligations, a cross default to other indebtedness, our bankruptcy or insolvency, the failure to meet the required financial covenant ratios, the occurrence of a material adverse effect and the occurrence of a change in control. If an event of default shall occur and be continuing, all loans under the Amended and Restated Credit Facility will bear an additional interest rate of 2.00% per annum. In the case of an event of default upon bankruptcy or insolvency, all amounts payable under the Amended and Restated Credit Facility become immediately due and payable. In the case of any other event of default, all amounts due under the Amended and Restated 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 fixed charge coverage ratio or the interest coverage ratio by obtaining cash equity or loans from us.

At March 31, 2012, the Borrowers had borrowed $78.0 million under the Amended and Restated Credit Facility, had availability of $3.4 million under the Amended and Restated Credit Facility and were in compliance with all material covenants under the Amended and Restated Credit Facility. For additional information concerning the ratios, financial and non-financial covenants, events of default and other material terms of our Amended and Restated Credit Facility, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our Annual Report on Form 10-K for the year ended December 31, 2011.

Dalea Credit Agreement. We also have a credit agreement with Dalea. The purpose of the Dalea credit agreement was (i) to fund the acquisition of all of the shares of Amity and Petrogas and (ii) for general corporate purposes. On May 18, 2011, we entered into a first amendment to the Dalea credit agreement to extend the maturity date and increase the interest rate. On November 7, 2011, we entered into a second amendment to the Dalea credit agreement to extend the maturity date to the earlier of (i) March 31, 2012 or (ii) the sale of Viking. On March 15, 2012, we entered into a third amendment to the Dalea credit agreement to extend the maturity date until the earlier of (i) June 30, 2012 or (ii) the later of (x) the closing of the sale of Viking or (y) two business days after demand by Dalea.

Pursuant to the Dalea credit agreement, as amended, the aggregate unpaid principal balance, together with all accrued but unpaid interest and other costs, expenses or charges payable under the Dalea credit agreement are due and payable by us upon the earlier of (i) June 30, 2012 or (ii) the later of (x) the closing of the sale of Viking or (y) two business days after demand by Dalea. The Dalea credit agreement is subject to customary events of default, such as payment defaults, defaults in any terms, covenants or conditions of the agreement, the prohibition in trading in our common shares, suspension or delisting of our common shares from any stock exchange, the occurrence of a material adverse change and the occurrence of a change in control. If an event of default occurs and is continuing, Dalea may demand immediate payment of all monies owing under the Dalea credit agreement; provided, that with respect to certain specified events of default, all monies due under the Dalea credit agreement shall automatically become due and payable without any demand or any other action by Dalea or any other person.

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Amounts due under the credit agreement accrue interest at a rate of three-month LIBOR plus 5.50% per annum beginning on May 1, 2011, to be adjusted monthly on the first day of each month. Prior to May 1, 2011, amounts due under the credit agreement accrued interest at a rate of three-month LIBOR plus 2.50% per annum. Interest on the Dalea credit agreement ceased to accrue on April 1, 2012 and will be suspended until the closing date of the sale of Viking. If the closing does not occur, the abated interest will be reinstated. In addition, we are required to pay all accrued interest in arrears on the last day of each month until the date of repayment and at any time that the principal balance is due and payable. We may prepay the amounts due under the credit agreement at any time before maturity without penalty.

The Dalea credit agreement is also subject to customary covenants, such as covenants that limit our ability to incur indebtedness or create any mortgage, charge, lien or encumbrance, declare or provide for any dividends, redeem or repurchase shares, make or permit the sale or disposition of any substantial or material part of our business, assets or undertakings and borrow or allow our subsidiaries to borrow money from any person.

In addition, any proceeds received by us or any subsidiary from any debt financings (subject to certain specified exceptions) must be used to repay amounts outstanding under the credit agreement, net of reasonable transaction and financing costs. We (or any subsidiary) are also required to repay amounts outstanding under the credit agreement from (i) any proceeds of any equity issuance received from Mr. Mitchell, his immediate family or any entities owned or controlled by Mr. Mitchell or his immediate family (collectively, the “Mitchell Family”), and (ii) all proceeds of any equity issuance in excess of $75.0 million (excluding any proceeds received from the Mitchell Family), net of reasonable transaction costs. Amounts repaid under the credit agreement cannot be reborrowed. We were required to pay for Dalea’s reasonable legal fees and other expenses incidental to the completion of the credit agreement.

Under the terms of the Dalea credit agreement, we were required to issue Dalea 100,000 common share purchase warrants for each $1.0 million in principal amount advanced under the credit agreement. We borrowed an aggregate of $73.0 million under the credit agreement, and on September 1, 2010, we issued 7,300,000 common share purchase warrants to Dalea. The common share purchase warrants are exercisable until September 1, 2013 and have an exercise price of $6.00 per share.

At March 31, 2012, we had borrowed $73.0 million under the Dalea credit agreement. No further borrowings are permitted under the Dalea credit agreement. For additional information concerning the covenants, events of default and other material terms of the Dalea credit agreement, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our Annual Report on Form 10-K for the year ended December 31, 2011.

Viking Drilling Note. On July 27, 2009, Viking International purchased the I-13 drilling rig and associated equipment from Viking Drilling. Dalea owns 85% of Viking Drilling. On February 19, 2010, Viking International purchased the I-14 drilling rig and associated equipment from Viking Drilling and entered into an amended and restated note payable to Viking Drilling in the amount of $11.8 million, which was comprised of $5.9 million payable related to the I-14 drilling rig and $5.9 million payable related to the purchase of the I-13 drilling rig. Under the terms of the amended and restated note, interest is payable monthly at a floating rate of LIBOR plus 6.25%, and the amended and restated note is due and payable August 1, 2012. The amended and restated note is secured by the I-13 and I-14 drilling rigs and associated equipment. At March 31, 2012, the outstanding balance under this note was $1.7 million and the note is included in “Liabilities held for sale—related party” in our Consolidated Balance Sheets.

Viking International Equipment Loan. In 2010, Viking International entered into a secured credit agreement with a Turkish bank to fund the purchase of vehicles. The credit agreement matures on July 20, 2014, bears interest at an annual rate of 3.84% and is secured by the vehicles purchased with the proceeds of the loan. There is no further availability under the credit agreement. At March 31, 2012, Viking International had an outstanding balance of $2.0 million under the secured credit agreement and the credit agreement is included in “Liabilities held for sale” in our Consolidated Balance Sheets.

TBNG Credit Agreement. TBNG is a party to an unsecured credit agreement with a Turkish bank. At March 31, 2012, we had outstanding borrowings of approximately 8.0 million New Turkish Lira (approximately $4.5 million) under the credit agreement. Borrowings under the credit agreement bear interest at a rate of 14.0% per annum, and interest is payable quarterly. The credit agreement matures on September 13, 2012 and may be renewed for an additional period on the same terms.

Dalea Credit Facility. On March 15, 2012, TransAtlantic Worldwide, TBNG and TransAtlantic Petroleum Ltd. (collectively, the “Credit Facility Borrowers”) entered into a $15.0 million credit facility with Dalea to provide us with additional liquidity for general corporate purposes until we complete the sale of Viking. Loans under the credit facility accrue interest at a rate of three-month LIBOR plus 5.5% per annum, to be adjusted monthly on the first day of each month. We will be required to pay all accrued interest in arrears on the last day of each month, and we may prepay outstanding amounts at any time before maturity without penalty. Any outstanding borrowings under the credit facility must be repaid upon the earlier of (i) July 1, 2012 or (ii) the sale of Viking.

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For the initial advance, we were required to pay Dalea an arrangement fee of $250,000. Under the credit facility, we are also required to pay Dalea a commitment fee equal to 2.75% per annum of the difference between the $15.0 million committed amount and the outstanding balance measured and payable on the last day of each fiscal quarter.

Any proceeds received by us or any subsidiary from any debt financings (subject to certain specified exceptions) or from the sale of Viking, net of reasonable transaction and financing costs, must be used to repay amounts outstanding under the credit facility. In addition, the Dalea credit facility is subject to customary covenants, including covenants that limit the ability of the Credit Facility Borrowers to, among other things, (i) make, give, create or permit or attempt to make, give or create any mortgage, charge, lien or encumbrance over any assets of any Credit Facility Borrower or any subsidiary (subject to certain specific exceptions), (ii) change the name of any of the Credit Facility Borrowers or the jurisdictions of organization, (iii) declare or provide for any dividends or other payments or distributions (whether in cash, assets or indebtedness) based on share capital, (iv) redeem or purchase any of their shares, (v) make or permit any sale of or disposition of any substantial or material part of their business, assets or undertaking, or that of any subsidiary, (vi) save and (except for certain specified exceptions) borrow or cause or permit any subsidiary to borrow money from any other person, without first obtaining and delivering a duly signed assignment and postponement of claim by such person in form and terms satisfactory to Dalea, (vii) pay out or permit the payment out of any shareholders loans or other indebtedness to non-arm’s length parties, or (viii) guarantee or permit the guarantee of the obligations of any other person, directly or indirectly, except in the ordinary course of business.

The Dalea credit facility is also subject to customary events of default, including payment defaults, defaults in observing or performing any term, covenant or condition of the Dalea credit facility or collateral documents, material misrepresentations by a Credit Facility Borrower or any subsidiary, a Credit Facility Borrower or any subsidiary ceases or threatens to cease to carry on business, the prohibition in trading in shares of any of the Credit Facility Borrowers or suspension or delisting from any stock exchange, a material adverse change in the financial condition of any of the Credit Facility Borrowers and any of their subsidiaries taken as a whole, Dalea believes in good faith and on commercially reasonable grounds that the ability of the Credit Facility Borrowers to pay or perform any of the covenants contained in the Dalea credit facility is materially impaired, insolvency of any of the Credit Facility Borrowers or any change of control of any of the Credit Facility Borrowers. Control is defined in the Dalea credit facility as ownership of or control or direction over, directly or indirectly, 20% or more of the outstanding voting securities of the Credit Facility Borrowers. If an event of default occurs and is continuing, Dalea may demand immediate payment of all monies owing under the Dalea credit facility; provided that with respect to certain specified events of default, all monies due under the Dalea credit facility shall automatically become due and payable without any demand or any other action by Dalea or any other person.

At March 31, 2012, we had borrowed $11.0 million under the Dalea credit facility and had availability of $4.0 million under the Dalea credit facility.

Contractual Obligations

The following table presents our contractual obligations at March 31, 2012:

			Payments Due by Year
	Total		2012		2013		2014		2015		2016		Thereafter
	(in thousands)
Debt (1)	$	170,205	$	90,843	$	850	$	512	$	—	$	78,000	$	—
Leases and other		13,943		3,828		2,517		1,765		1,236		835		3,762
Contracts		8,815		8,815		—		—		—		—		—
Permits		13,000		13,000		—		—		—		—		—
	$	205,963	$	116,486	$	3,367	$	2,277	$	1,236	$	78,835	$	3,762

(1) Includes $2.0 million and $1.7 million outstanding classified as “Liabilities held for sale” and “Liabilities held for sale – related party”, respectively, in our Consolidated Balance Sheets.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements at March 31, 2012.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q are “forward-looking statements” and are prospective. Forward-looking statements are typically identified by words such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “may,” “project,” “forecast,” “estimate,” “continue,” “would,” “could” 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.

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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; economic conditions in the countries and provinces in which we carry on business, especially economic slowdowns; actions by governmental authorities receipt of required approvals, increases in taxes, legislative and regulatory initiatives relating to fracture stimulation activities, 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; the ability to consummate the sale of our oilfield services business as contemplated or at all; the effect of the sale of our oilfield services business to our costs and expenses; and the other factors discussed in other documents that we file with or furnish to the Securities and Exchange Commission (“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 (including the sale of our oilfield services business); cash flows; uses of cash flows; collectability 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 Quarterly Report on Form 10-Q are based on management’s beliefs and opinions at the time the statements are made. The forward-looking statements contained in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q 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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the first quarter of 2012, there were no material changes in market risk exposures that would affect the Quantitative and Qualitative Disclosures About Market Risk disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011. The following tables set forth our outstanding derivatives contracts with respect to future crude oil production as of March 31, 2012:

Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum  Price (per Bbl)		Estimated Fair Value of Liability
									(in thousands)
Collar		April 1, 2012 — December 31, 2012		960	$	64.69	$	106.98	$	(4,186	)
Collar		January 1, 2013 — December 31, 2013		400	$	75.00	$	125.50		(772	)
Collar		January 1, 2014 — December 31, 2014		380	$	75.00	$	124.25		(430	)
									$	(5,388	)

			Collars						Additional Call
Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Liability
											(in thousands)
Three-way collar contract		April 1, 2012 — December 31, 2012		240	$	70.00	$	100.00	$	129.50	$	(1,229	)
Three-way collar contract		April 1, 2012 — June 30, 2012		350	$	85.00	$	116.25	$	137.38		(226	)
Three-way collar contract		July 1, 2012 — December 31, 2012		205	$	85.00	$	97.13	$	162.13		(841	)
Three-way collar contract		January 1, 2013 — December 31, 2013		831	$	85.00	$	97.13	$	162.13		(4,997	)
Three-way collar contract		January 1, 2014 — December 31, 2014		726	$	85.00	$	97.13	$	162.13		(2,472	)
Three-way collar contract		January 1, 2015 — December 31, 2015		1,016	$	85.00	$	91.88	$	151.88		(2,878	)
											$	(12,643	)

Item 4. Controls and Procedures

Acquisition of TBNG

In June 2011, we acquired TBNG. For purposes of determining the effectiveness of our disclosure controls and procedures and internal control over financial reporting, management has excluded the internal control over financial reporting of TBNG from its evaluation of these matters. The acquired business represents approximately 14.7% of our consolidated total assets at March 31, 2012 and 0% of our consolidated net loss for the three months ended March 31, 2012.

Evaluation of Disclosure Controls and Procedures

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

As of March 31, 2012, management carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures. Based upon the evaluation, which excluded the internal control over financial reporting of TBNG, and as a result of the material weaknesses in internal control over financial reporting described in our Annual Report on Form 10-K for the year ended December 31, 2011, our chief executive officer and chief financial officer concluded that, as of March 31, 2012, our disclosure controls and procedures were not effective at the reasonable assurance level.

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

Changes in Internal Control Over Financial Reporting

The following change in our internal control over financial reporting occurred during the first quarter of 2012 and has affected, or is reasonably likely to materially affect, our internal control over financial reporting:

• In January 2012, we integrated TBNG into our accounting system database, effective for all activity on or after January 1, 2012.

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PART II. OTHER INFORMATION

Item 1.         Legal Proceedings

During the first quarter of 2012, there were no material developments to the Legal Proceedings disclosed in “Part I, Item 3. Legal Proceedings” of our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 1A.        Risk Factors

During the first quarter of 2012, there were no material changes to the Risk Factors disclosed in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011, except for the following:

Our Amended and Restated Credit Facility, credit facility with Dalea and credit agreement with Dalea, as amended, contain 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 Amended and Restated Credit Facility, credit facility with Dalea or our credit agreement with Dalea may adversely affect our ability to finance future operations or capital needs or to engage in other business activities. Our Amended and Restated Credit Facility, credit facility with Dalea and credit agreement with Dalea contain 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 natural gas exploration and production company;

• enter into sale and leaseback transactions;

• enter into any merger, consolidation or amalgamation;

• dispose of all or substantially all of our assets;

• use the amounts borrowed for only certain specified purposes;

• declare or provide for any dividends or other payments or distributions;

• redeem or purchase any shares; or

• guarantee or permit the guarantee of the obligations of any other person.

In addition, the Amended and Restated Credit Facility requires us to maintain specified financial ratios and tests. 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 Amended and Restated Credit Facility and could result in a default under the Amended and Restated Credit Facility.

An event of default under the Amended and Restated Credit Facility includes, among other events, failure to pay principal or interest when due, breach of certain covenants and obligations, cross default to other indebtedness, bankruptcy or insolvency, failure to meet the required financial covenant ratios 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 any of TransAtlantic Petroleum (USA) Corp. and TransAtlantic Worldwide or to exercise, directly or indirectly, day-to-day management and operational control of any Borrower or Guarantor; (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 Amended and Restated Credit Facility; 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 or group, excluding Mr. Mitchell and certain of his affiliates, shall become, or obtain rights to become, the beneficial owner, directly or indirectly, 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 an event of default unless we have not appointed a successor reasonably acceptable to the lenders within 60 days of the occurrence of such event.

Events of default under the credit facility with Dalea and credit agreement with Dalea include, among other events, failure to make the payment of principal or interest when due, breach of certain covenants or conditions, the occurrence of an adverse material change in our financial condition, bankruptcy or insolvency, or a change of control. In the event of a default under the credit agreement or the credit facility, the lender can demand all amounts payable under the credit agreement or the credit facility to be immediately due and payable. In the event of bankruptcy or insolvency, all amounts payable under the credit agreement and the credit facility become immediately due and payable.

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In the event of a default and acceleration of indebtedness under the Amended and Restated Credit Facility, credit facility with Dalea or the credit agreement with Dalea, our business, financial condition and results of operations may be materially and adversely affected.

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

None.

Item 3.        Defaults Upon Senior Securities

None.

Item 4.        Mine Safety Disclosures

Not applicable.

Item 5.        Other Information

None.

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Item 6.        Exhibits

2.1*	Stock Purchase Agreement, dated March 15, 2012, by and among TransAtlantic Petroleum Ltd., TransAtlantic Worldwide, Ltd., Longe Energy Limited, TransAtlantic Petroleum (USA) Corp., TransAtlantic Pertroleum Cyprus Limited, Viking International Limited, Viking Geophysical Services, Ltd., Viking Oilfield Services SRL and Dalea Partners, LP.
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 August 20, 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	Registration Rights Agreement, dated February 18, 2011, by and between TransAtlantic Petroleum Ltd. and Direct Petroleum Exploration, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 18, 2011, filed with the SEC on February 24, 2011).
4.3	Common Share Purchase Warrants, dated September 1, 2010, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 21, 2011).
10.1*	Third Amendment to Credit Agreement, dated March 15, 2012, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP.
10.2*	Credit Agreement, dated March 15, 2012, by and among TransAtlantic Petroleum Ltd., TransAtlantic Worldwide, Ltd., Thrace Basin Natural Gas (Turkiye) Corporation and Dalea Partners, LP.
10.3*	Management Services Agreement, dated March 15, 2012, by and between Viking Geophysical Services, Ltd. and Viking Petrol Sahasi Hizmetleri A.S.
10.4	Management Services Agreement, effective February 1, 2012, by and between TransAtlantic Petroleum Ltd. and Viking Petrol Sahasi Hizmetleri A.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 20, 2012, filed with the SEC on April 26, 2012).
31.1*	Certification of the Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Chief Executive Officer and Chief Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101†	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language), (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to the Consolidated Financial Statements.

* Filed herewith. Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.

† Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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Signatures

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

By:	/s/    N. MALONE MITCHELL, 3rd
	N. Malone Mitchell, 3rd Chief Executive Officer
By:	/s/    WIL F. SAQUETON
	Wil F. Saqueton Chief Financial Officer
Date: May 10, 2012

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INDEX TO EXHIBITS

2.1*	Stock Purchase Agreement, dated March 15, 2012, by and among TransAtlantic Petroleum Ltd., TransAtlantic Worldwide, Ltd., Longe Energy Limited, TransAtlantic Petroleum (USA) Corp., TransAtlantic Pertroleum Cyprus Limited, Viking International Limited, Viking Geophysical Services, Ltd., Viking Oilfield Services SRL and Dalea Partners, LP.
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 August 20, 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	Registration Rights Agreement, dated February 18, 2011, by and between TransAtlantic Petroleum Ltd. and Direct Petroleum Exploration, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 18, 2011, filed with the SEC on February 24, 2011).
4.3	Common Share Purchase Warrants, dated September 1, 2010, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 21, 2011).
10.1*	Third Amendment to Credit Agreement, dated March 15, 2012, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP.
10.2*	Credit Agreement, dated March 15, 2012, by and among TransAtlantic Petroleum Ltd., TransAtlantic Worldwide, Ltd., Thrace Basin Natural Gas (Turkiye) Corporation and Dalea Partners, LP.
10.3*	Management Services Agreement, dated March 15, 2012, by and between Viking Geophysical Services, Ltd. and Viking Petrol Sahasi Hizmetleri A.S.
10.4	Management Services Agreement, effective February 1, 2012, by and between TransAtlantic Petroleum Ltd. and Viking Petrol Sahasi Hizmetleri A.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 20, 2012, filed with the SEC on April 26, 2012).
31.1*	Certification of the Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Chief Executive Officer and Chief Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101†	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language), (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to the Consolidated Financial Statements.

* Filed herewith. Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.

† Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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EX-2.1

Exhibit 2.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

BY AND AMONG

TRANSATLANTIC PETROLEUM, LTD.,

TRANSATLANTIC WORLDWIDE, LTD.,

LONGE ENERGY LIMITED,

TRANSATLANTIC PETROLEUM (USA) CORP.,

TRANSATLANTIC PETROLEUM CYPRUS LIMITED,

VIKING INTERNATIONAL LIMITED,

VIKING GEOPHYSICAL SERVICES, LTD.,

VIKING OILFIELD SERVICES SRL

and

DALEA PARTNERS, LP

Dated as of March 15, 2012

TABLE OF CONTENTS

		Page
ARTICLE I	DEFINITIONS		1
ARTICLE II	SALE AND PURCHASE		1
2.1	Purchase and Sale of Shares		1
2.2	Settlement Amounts		2
2.3	Working Capital Adjustment		2
ARTICLE III	CLOSING AND DELIVERIES		5
3.1	Closing		5
3.2	Deliveries by Sellers		5
3.3	Deliveries by the Acquired Companies		6
3.4	Deliveries by Buyer		7
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF TAT, SELLERS AND THE ACQUIRED COMPANIES		8
4.1	Organization and Standing		8
4.2	Capitalization		9
4.3	Subsidiary		9
4.4	Authority, Validity and Effect; No Conflict; Required Filings and Consents		9
4.5	Financial Statements		10
4.6	Taxes		10
4.7	Personal Property		12
4.8	Real Property		12
4.9	Compliance with Laws		12
4.10	Permits		13
4.11	Employee Benefit Plans; Employees		13
4.12	Material Contracts		13
4.13	Legal Proceedings		15
4.14	Intellectual Property		15
4.15	Insurance		15
4.16	Personnel		16
4.17	Environmental Matters		16
4.18	Conduct of Business in Ordinary Course		16

i

TABLE OF CONTENTS

(continued)

		Page
4.19	No Brokers		16
4.20	Customers and Suppliers		16
4.21	Accounts Receivable		17
4.22	Affiliate Transactions		17
4.23	Directors and Officers		17
ARTICLE V	REPRESENTATIONS AND WARRANTIES OF TAT AND SELLERS		17
5.1	Organization and Standing		17
5.2	Authority; Enforceability; Title		18
5.3	Consents		18
5.4	Budget		18
5.5	Selling Expenses		18
ARTICLE VI	REPRESENTATIONS AND WARRANTIES OF BUYER		18
6.1	Investment Intent		18
6.2	Organization and Standing		18
6.3	Authorization, Validity and Effect		19
6.4	No Conflict; Required Filings and Consents		19
6.5	Legal Proceedings		19
6.6	Financing		19
6.7	No Brokers		19
6.8	Disclaimer		19
ARTICLE VII	COVENANTS AND AGREEMENTS		20
7.1	Interim Operations		20
7.2	Reasonable Access; Confidentiality		21
7.3	Publicity		22
7.4	Records		22
7.5	Indemnification of Directors and Officers		23
7.6	Certain Notices; Supplemental Disclosure		23
7.7	Commercially Reasonable Efforts; Cooperation		24
7.8	No Shop		24

ii

TABLE OF CONTENTS

(continued)

		Page
7.9	Restrictive Covenants		24
7.10	Transfer of Assets		29
7.11	Inter-Company Receivables and Payables		29
ARTICLE VIII	CONDITIONS TO CLOSING		29
8.1	Conditions and Obligations of the Parties		29
8.2	Conditions to Obligations of TAT, Sellers and the Acquired Companies		30
8.3	Conditions to Obligations of Buyer		30
8.4	Frustration of Closing Conditions		31
ARTICLE IX	TERMINATION OF AGREEMENT		31
9.1	Termination		31
9.2	Effect of Termination		32
ARTICLE X	REMEDIES		33
10.1	Survival		33
10.2	Indemnification		33
10.3	Exclusive Remedy		34
10.4	Limitations on Indemnification		34
10.5	Procedures		36
ARTICLE XI	TAX MATTERS		39
11.1	Administration of Tax Matters		39
11.2	Liability for Taxes		39
11.3	Cooperation; Audits		40
11.4	Tax Refunds; Amended Tax Returns		41
11.5	Transfer Taxes		41
11.6	Disputes		41
11.7	Time Limits		41
11.8	Conflicts		41
ARTICLE XII	MISCELLANEOUS AND GENERAL		42
12.1	Expenses		42
12.2	Successors and Assigns		42
12.3	Third Party Beneficiaries		42

iii

TABLE OF CONTENTS

(continued)

		Page
12.4	Further Assurances		42
12.5	Notices		42
12.6	Complete Agreement		44
12.7	Captions		44
12.8	Amendment		44
12.9	Waiver		44
12.10	Governing Law; Jurisdiction		44
12.11	Severability		45
12.12	Counterparts		45
12.13	Enforcement of Agreement		45
12.14	Other Definitional and Interpretive Matters		45
12.15	Disclosure Schedules		46
12.16	Independent Legal Counsel; Continuing Representation		47

iv

Exhibits and Schedules

EXHIBITS
Exhibit A	Definitions
Exhibit B	Net Working Capital Principles & Account Composition
Exhibit C	Master Services Agreement
Exhibit D	Transition Services Agreement
Exhibit E	Acquired Company Debt
SCHEDULES
Schedule 1	Shares
Schedule 3.3(h)	Directors’ and Officers’ Resignations
Schedule 4.1	Organization and Standing
Schedule 4.2	Capitalization
Schedule 4.3	Subsidiaries
Schedule 4.4(b)	Conflicts
Schedule 4.4(c)	Consents of the Acquired Companies
Schedule 4.5(a)	Acquired Company Financial Statements
Schedule 4.5(b)	Non-Compliance with GAAP
Schedule 4.5(c)	Undisclosed Liabilities
Schedule 4.6	Taxes
Schedule 4.7(a)	Personal Property
Schedule 4.7(b)	Asset List
Schedule 4.8(a)	Leased Real Property
Schedule 4.8(b)	Owned Real Property
Schedule 4.9	Compliance with Laws
Schedule 4.11(a)	Employee Benefit Plan
Schedule 4.11(b)	Employee List
Schedule 4.12(a)	Material Contracts
Schedule 4.13	Legal Proceedings
Schedule 4.14	Intellectual Property
Schedule 4.15	Insurance
Schedule 4.16	Personnel
Schedule 4.17	Environmental Matters
Schedule 4.18	Conduct of Business in Ordinary Course
Schedule 4.19	Brokers
Schedule 4.20(a)(i)	Customer Notices
Schedule 4.20(a)(ii)	List of Customers
Schedule 4.20(b)(i)	Supplier Notices
Schedule 4.20(b)(ii)	List of Suppliers
Schedule 4.21(a)	Accounts Receivable Outside Ordinary Course
Schedule 4.21(b)	Accounts Receivables
Schedule 4.22	Affiliate Transactions
Schedule 4.23	Directors and Officers

v

Schedule 6.4(b)	Consents of Buyer
Schedule 7.1	Interim Operations
Schedule 7.10	Assets to be Transferred
Schedule 8.2(c)	Governmental Authorities
Schedule 8.3(e)	Closing Consents of Sellers and TAT

vi

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of March 15, 2012, is entered into by and among TransAtlantic Petroleum Ltd., an exempted company incorporated with limited liability under the laws of Bermuda (“TAT”), Viking International Limited, an exempted company incorporated with limited liability under the laws of Bermuda (“VIL”), Viking Geophysical Services, Ltd., an international business company organized under the laws of Bahamas (“VGS”), and Viking Oilfield Services SRL, a limited liability company under the laws of Romania (“VOS SRL” and together with VIL and VGS, the “Acquired Companies”), TransAtlantic Worldwide, Ltd., an international business company organized under the laws of Bahamas (“TAW”), Longe Energy Limited, an exempted company incorporated with limited liability under the laws of Bermuda (“Longe”), TransAtlantic Petroleum (USA) Corp., a corporation incorporated under the laws of the State of Colorado, United States of America (“USA”), and TransAtlantic Petroleum Cyprus Limited, a limited liability company organized under the laws of Cyprus (“Cyprus,” and together with TAW, Longe and USA, “Sellers”), and Dalea Partners, LP, an Oklahoma limited partnership (“Buyer”).

RECITALS

A. Sellers are the record and beneficial owners of all of the issued and outstanding equity securities of each of the Acquired Companies as set forth on Schedule 1 to this Agreement (the “Shares”).

B. Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, all of the Shares.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby confirmed, and subject to the terms and conditions set forth herein, TAT, the Acquired Companies, Sellers and Buyer, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

The terms defined in Exhibit A, whenever used herein, shall have the meanings set forth in Exhibit A for all purposes of this Agreement. The definitions in Exhibit A are incorporated into this Agreement as if fully set forth at length herein and all references to a section in such Exhibit A are references to such section of this Agreement.

ARTICLE II

SALE AND PURCHASE

2.1 Purchase and Sale of Shares. At the Closing, subject to the terms and conditions of this Agreement, Sellers shall sell, transfer, assign and convey the Shares to Buyer, and Buyer shall purchase and accept the Shares from Sellers, and Buyer shall pay to Sellers the Closing Date Cash Consideration and shall deliver the Promissory Note. The “Closing Date Cash Consideration” (and, collectively with the Promissory Note, the “Purchase Price”) shall

be equal to $152,500,000. Sellers acknowledge and agree that, for the convenience of the parties, the Closing Date Cash Consideration, the Promissory Note (and any replacements or substitutions therefor), and all other payments to be made by Buyer to Sellers or TAT under this Agreement shall be paid to TAT, to be further allocated among the Sellers as determined by TAT. The Purchase Price shall be increased or decreased as provided below:

(a) Increases in the Purchase Price. The Purchase Price shall be increased by the Working Capital Overage, if any (as contemplated by Section 2.3(b)).

(b) Decreases in the Purchase Price. The Purchase Price shall be decreased by the Working Capital Underage, if any (as contemplated by Section 2.3(b)).

2.2 Settlement Amounts. At the Closing, Buyer, based upon mutually agreed upon instructions with Sellers and against receipt by Buyer and Sellers of appropriate Lien releases and/or acknowledgments of payment from the relevant creditor entity, shall, out of the Closing Date Cash Consideration, on behalf of the Acquired Companies, cause to be paid in full the Acquired Company Debt (other than the Dalea Party Debt) to the party or parties entitled thereto pursuant to the Payoff Letters (which shall be delivered to Buyer and Sellers no later than three (3) Business Days prior to the Closing Date) (the “Settlement Amounts”).

2.3 Working Capital Adjustment.

(a) Estimated Net Working Capital Statements. Not later than the third Business Day prior to the Closing Date, the Acquired Companies shall prepare and deliver, or cause to be prepared and delivered, to Buyer (i) an unaudited estimated balance sheet for each of the Acquired Companies as of the close of business on the day immediately preceding the Effective Date (the “Estimated Effective Date Balance Sheet”) and (ii) an estimated net working capital statement for each of the Acquired Companies, based on the Estimated Closing Balance Sheet (the “Estimated Net Working Capital Statement”), setting forth each Acquired Company’s calculation of the estimated Net Working Capital of such Acquired Company as of the close of business on the day immediately preceding the Effective Date and the aggregate amount of such calculations (the “Estimated Effective Date Net Working Capital”) calculated, in each case, in good faith and in accordance with GAAP using the same methodologies, procedures and principles set forth on Exhibit B.

(b) Effective Date Adjustment. If the Estimated Effective Date Net Working Capital is less than zero, then the Purchase Price will be reduced (first, through an adjustment to the Promissory Note, and, to the extent the Promissory Note is reduced to zero, by a reduction of the Closing Date Cash Consideration) by an amount equal to the absolute value of such shortfall (a “Working Capital Underage”). If the Estimated Effective Date Net Working Capital is greater than zero, then the Purchase Price will be increased (through an adjustment to the Closing Date Cash Consideration) by an amount equal to such excess (a “Working Capital Overage”). If the Estimated Effective Date Net Working Capital is zero, then the Purchase Price will not be adjusted pursuant to this Section 2.3(b), but may be subject to adjustment as otherwise provided in this Section 2.3. The adjustments made at Closing pursuant to this Section 2.3(b) are subject to subsequent adjustment as provided in Sections 2.3(f)(i) and 2.3(f)(ii).

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(c) Final Net Working Capital Statement. Not later than 90 days after the Closing Date, Buyer shall cause to be prepared and delivered to TAT (i) unaudited balance sheets for each Acquired Company as of the close of business on the day immediately preceding the Effective Date (the “Final Effective Date Balance Sheets”) and (ii) a final net working capital statement, based on the Final Effective Date Balance Sheets (the “Final Net Working Capital Statement”), setting forth Buyer’s calculation of the Net Working Capital of the Acquired Companies, both individually and in the aggregate, as of the close of business on the day immediately preceding the Effective Date (the “Final Net Working Capital”) calculated, in each case, in good faith and in accordance with GAAP using the same methodologies, procedures and principles set forth on Exhibit B.

(d) Dispute. Within 30 days following receipt by TAT of the Final Effective Date Balance Sheets and the Final Net Working Capital Statement, TAT may deliver a written objection notice to Buyer of any disagreement TAT has with respect to the preparation or content of the Final Effective Date Balance Sheets and/or the Final Net Working Capital Statement (such notice, an “Objection Notice”). An Objection Notice must describe in reasonable detail the line item calculations contained in the Final Effective Date Balance Sheets and/or the Final Net Working Capital Statement with which TAT disagrees and must briefly describe the basis for any such disagreement. If TAT does not provide an Objection Notice to Buyer within such 30-day period, such Final Effective Date Balance Sheets and Final Net Working Capital Statement will be final, conclusive and binding on the parties. In the event an Objection Notice is timely provided, Buyer and TAT shall negotiate in good faith to resolve the disputed items identified in the Objection Notice. If Buyer and TAT, notwithstanding such good faith efforts, fail to resolve any such disagreements within 30 days after Buyer’s receipt of an Objection Notice, then Buyer and TAT shall jointly engage the firm of Deloitte LLP, or, if Deloitte LLP is not then independent of Buyer and TAT or is not reasonably available to so act, then such other nationally recognized accounting firm as may be mutually acceptable to Buyer and TAT (or in the event the parties cannot agree, an accounting expert as chosen by the American Arbitration Association) (as applicable, the “Arbitration Firm”) to resolve any remaining disagreements; provided, that the Arbitration Firm shall determine only the disputed items identified in the Objection Notice that remain unresolved following the 30-day period described in this sentence. In addition, in resolving any such disputed items, the Arbitration Firm shall (i) be bound by the terms and conditions set forth in this Section 2.3 and Exhibit B, (ii) render its decision within 30 days after the referral of the dispute(s) to the Arbitration Firm for a decision pursuant hereto, and (iii) not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. Neither TAT and Sellers, on one hand, nor Buyer, on the other hand, (and none of their respective representatives) shall have any ex parte conversations or meetings with the Arbitration Firm without the prior consent of (x) with respect to TAT and Sellers, Buyer and (y) with respect to Buyer, TAT. The fees, costs and expenses of the Arbitration Firm shall be allocated to and borne by Buyer, on the one

3

hand, and TAT, on the other hand, based on the inverse of the percentage that the Arbitration Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Arbitration Firm. For example, should the items in dispute total in amount to $1,000 and the Arbitration Firm awards $600 in favor of Buyer’s position, 60% of the costs of its review would be borne by TAT and 40% of the costs would be borne by Buyer. All determinations made by the Arbitration Firm shall be final, conclusive and binding on the parties. Judgment may be entered upon the determination of the Arbitration Firm in any court having jurisdiction over the party against which such determination is to be enforced.

(e) Access. For purposes of complying with the terms set forth in this Section 2.3, each party shall reasonably cooperate with and make reasonably available to the other parties and their respective representatives all information, records, data and working papers, including reasonable access to its facilities and personnel during normal business hours, as may be reasonably requested in connection with the preparation and analysis of the Final Effective Date Balance Sheets and the Final Net Working Capital Statement and the resolution of any disagreement related thereto; provided, that (i) such activities shall not unreasonably disrupt the operations of the Acquired Companies and (ii) the Acquired Companies shall have no obligation to make available any information if the Acquired Company has been advised by counsel that making such information available may jeopardize any attorney-client or other legal privilege or contravene any applicable Law or Contract in existence as of the Closing Date (including any confidentiality agreement to which the Acquired Company is a party). Buyer may require that TAT enter into a customary confidentiality agreement with respect to such information.

(f) Post-Closing Adjustment. Not later than the third Business Day after the date on which the Final Effective Date Balance Sheets and the Final Net Working Capital are finally determined pursuant to Section 2.3(d), TAT and Buyer shall jointly determine the amount by which the Purchase Price would have been adjusted pursuant to Section 2.3(b) had the Final Net Working Capital been substituted for the Estimated Effective Date Net Working Capital as of the Closing.

(i) If such substitutions would have resulted in a Purchase Price that is greater than the Estimated Closing Date Purchase Price (any such excess, the “Price Increase”), then Buyer shall within 30 days from the date on which the Final Effective Date Balance Sheets and the Final Net Working Capital are finally determined pursuant to Section 2.3(d) cover the Price Increase by payment of immediately available funds to TAT.

(ii) If such substitutions would have resulted in a Purchase Price that is less than the Estimated Closing Date Purchase Price (such deficit, the “Price Decrease”), then TAT shall return the original Promissory Note to Buyer against delivery of a modified Promissory Note the principal of which is reduced by the Price Decrease within five Business Days from the date on which the Final Effective Date Balance Sheets and the Final Net Working Capital are finally determined pursuant to Section 2.3(d). To the extent that the Price Decrease

4

exceeds the balance of the Promissory Note, TAT shall pay the amount of such excess to Buyer in immediately available funds within 30 days after the date on which the Final Effective Date Balance Sheets and the Final Net Working Capital are finally determined pursuant to Section 2.3(d).

(iii) If such substitutions would have resulted in a Purchase Price equal to the Estimated Closing Date Purchase Price, there shall be no adjustment to the consideration payable hereunder pursuant to this Section 2.3(f).

ARTICLE III

CLOSING AND DELIVERIES

3.1 Closing. The closing of the transactions contemplated hereby (the “Closing”) will take place at 10:00 a.m. local time at the offices of Weil, Gotshal & Manges, LLP, 767 Fifth Avenue, New York, New York 10153-0119, on the later of (i) the second Business Day after satisfaction or waiver of each of the conditions set forth in Article VIII (other than conditions to be satisfied at Closing) or (ii) April 2, 2012, or on such other date or at such other time and place as the parties mutually agree in writing. The date on which the Closing occurs is herein referred to as the “Closing Date.” All proceedings to be taken and all documents to be executed and delivered by all parties hereto at the Closing shall be deemed to have been taken and executed simultaneously and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered.

3.2 Deliveries by Sellers. At the Closing, Sellers shall deliver or cause to be delivered to Buyer the following items:

(a) the stock or other certificates representing the Shares with duly executed stock powers or assignments attached in proper form for transfer;

(b) a Master Services Agreement with respect to each of VIL and VGS, each duly executed by TAT;

(c) a Transition Services Agreement for the benefit of each of the Acquired Companies, duly executed by TAT;

(d) an assignment to Buyer of any confidentiality or non-disclosure agreements in favor of TAT or any Seller relating to the potential acquisition of any Acquired Company, including by acquisition of its equity securities or assets, by merger, consolidation, or otherwise;

(e) a closing statement reflecting the flow of funds at the Closing, duly executed by TAT, Sellers, and the Acquired Companies;

(f) a certificate from each Seller dated as of the Closing Date, duly executed by the Secretary of each Seller, given by him or her on behalf of the applicable Seller and not in his or her individual capacity, certifying as to: (i) an attached copy of the resolutions of the Board of Directors of such Seller authorizing and approving the execution, delivery and performance of, and the consummation of the transactions

5

contemplated by, this Agreement, and stating that such resolutions have not been amended, modified, revoked or rescinded; (ii) the incumbency, authority and specimen signature of each officer of such Seller executing this Agreement on behalf of the Acquired Company; and (iii) true and complete copies of the Organizational Documents of such Seller;

(g) a certificate of an executive officer of TAT, given by him or her on behalf of TAT and not in his or her individual capacity, to the effect that the conditions set forth in Section 8.3(a) (solely with respect to the representations and warranties of TAT) and Section 8.3(b) have been satisfied (the “TAT Closing Certificate”); and

(h) a certificate of an executive officer of each Seller, given by him or her on behalf of such Seller and not in his or her individual capacity, to the effect that the conditions set forth in Section 8.3(a) (solely with respect to the representations and warranties of such Seller) and Section 8.3(b) have been satisfied (the “Seller Closing Certificate”).

3.3 Deliveries by the Acquired Companies. At the Closing, the Acquired Companies shall deliver or cause to be delivered to Buyer the following items:

(a) the Payoff Letters reflecting all outstanding Acquired Company Debt and providing a mechanism for obtaining and/or filing any necessary termination statements or other releases, in each case as may be reasonably required to evidence the satisfaction of the Acquired Company Debt;

(b) a true and complete aged receivable and payable listing of each Acquired Company, as of three Business Days prior to Closing, duly certified by the chief financial officer of each Acquired Company;

(c) a certificate from each Acquired Company and each Acquired Company Subsidiary dated as of the Closing Date, duly executed by the Secretary of each Acquired Company or Acquired Company Subsidiary, as applicable, given by him or her on behalf of the applicable Acquired Company or Acquired Company Subsidiary and not in his or her individual capacity, certifying as to: (i) an attached copy of the resolutions of the Board of Directors of the Acquired Company authorizing and approving the execution, delivery and performance of, and the consummation of the transactions contemplated by, this Agreement, and stating that such resolutions have not been amended, modified, revoked or rescinded; and (ii) the incumbency, authority and specimen signature of each officer of the Acquired Company executing this Agreement on behalf of the Acquired Company; and (iii) true and complete copies of the Organizational Documents of the Acquired Company or Acquired Company Subsidiary;

(d) a copy of the certificate of incorporation (or equivalent formation document) of each Acquired Company and Acquired Company Subsidiary certified by the relevant Governmental Authority of the jurisdiction of formation as of a date as close to the Closing Date as is reasonably practicable;

6

(e) a copy of the memorandum of association (or equivalent governing document) of each Acquired Company and Acquired Company Subsidiary certified by the relevant Governmental Authority of the jurisdiction of formation as of a date as close to the Closing Date as is reasonably practicable;

(f) a certificate of the relevant Governmental Authority of the jurisdiction of formation as to the good standing of each Acquired Company and Acquired Company Subsidiary as of a date not more than five Business Days prior to the Closing Date;

(g) a certificate of an executive officer of each Acquired Company, given by him or her on behalf of the Acquired Company and not in his or her individual capacity, to the effect that the conditions set forth in Section 8.3(a) (solely with respect to the representations and warranties of the Acquired Company) and Section 8.3(b) have been satisfied (the “Acquired Company Closing Certificate”);

(h) written resignations signed by the directors and officers of the Acquired Companies and Acquired Company Subsidiaries listed on Schedule 3.3(h); and

(i) the Consents set forth on Schedule 8.3(e).

3.4 Deliveries by Buyer. At the Closing, Buyer shall deliver or cause to be delivered the following items:

(a) to TAT, by wire transfer of immediately available funds to the accounts designated in writing by TAT, the Closing Date Cash Consideration as adjusted pursuant to Sections 2.1, 2.2 and 2.3(b);

(b) to TAT, a promissory note duly executed by Dalea Partners, LP, an Oklahoma limited partnership, in the principal amount of $11,500,000 and in the form agreed to by the parties (the “Promissory Note”);

(c) a guaranty in the form agreed to by the parties, duly executed by N. Malone Mitchell, 3rd.;

(d) to the Persons entitled thereto, by wire transfer of immediately available funds to the account designated in writing by each such recipient, such recipient’s portion of the Settlement Amounts;

(e) to Sellers a certificate dated as of the Closing Date, duly executed by the Secretary or equivalent officer of Buyer, given by him or her on behalf of Buyer and not in his or her individual capacity, certifying as to: (i) an attached copy of the resolutions of the Board of Directors (or similar governing body) of Buyer authorizing and approving the execution, delivery and performance of, and the consummation of the transactions contemplated by, this Agreement, and stating that such resolutions have not been amended, modified, revoked or rescinded; (ii) the incumbency, authority and specimen signature of each officer of Buyer executing this Agreement; and (iii) true and complete copies of the Organizational Documents of Buyer;

7

(f) to Sellers a certificate of the relevant Governmental Authority as to the good standing of Buyer in its jurisdiction of formation as of a date as close to the Closing Date as is reasonably practicable;

(g) to Sellers a certificate of an executive officer of Buyer, given by him or her on behalf of Buyer and not in his or her individual capacity, to the effect that the conditions set forth in Section 8.2(a) and Section 8.2(b) have been satisfied (the “Buyer Closing Certificate”);

(h) the Consents set forth on Schedule 6.4(b);

(i) a Master Services Agreement with respect to each of VIL and VGS, duly executed by the applicable Acquired Company;

(j) a Transition Services Agreement for the benefit of each of the Acquired Companies, duly executed by each applicable Acquired Company; and

(k) a closing statement reflecting the flow of funds at the Closing, duly executed by Buyer.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF TAT, SELLERS AND THE ACQUIRED COMPANIES

Except (a) as set forth in the Schedules referenced in this Article IV (collectively, the “Acquired Company Disclosure Schedules”), which shall qualify the representations and warranties of the Acquired Companies set forth in this Article IV and which shall be organized in parts corresponding to the numbering in this Article IV with disclosures in each part specifically corresponding to or cross-referencing to a particular section (or subsection) of this Article IV (subject to Section 12.15) or (b) as provided by this Agreement, TAT, Sellers, and the Acquired Companies, jointly and severally, represent and warrant to and for the benefit of Buyer that the following statements are true; provided, that the only representations and warranties that apply to VOS SRL are those set forth in Sections 4.1 (first sentence), 4.2, 4.4, 4.5(d), 4.6, and 4.23 and any other reference to Acquired Company in this Article IV shall expressly exclude VOS SRL:

4.1 Organization and Standing. Each Acquired Company is the type of entity as designated on Schedule 4.1, existing and in good standing under the laws of the country in which it was organized, as designated on Schedule 4.1; provided, VOS SRL is dormant. Each Acquired Company has the branches designated on Schedule 4.1. Each Acquired Company, and each branch of such Acquired Company on Schedule 4.1 is duly qualified to do business, and each Acquired Company is in good standing, in each jurisdiction in which the character of the properties owned or leased by it or in which the conduct of its business requires it to be so qualified, except where the failure to be so qualified or to be in good standing would not have a Material Adverse Effect on the Acquired Company.

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4.2 Capitalization. The authorized and outstanding capital stock or other equity securities of each Acquired Company consists of the number of shares of stock or other equity securities set forth on Schedule 1. The Shares are duly authorized, validly issued, fully paid and, with respect to VIL and VGS, nonassessable and, with respect to VOS SRL, no equity holder is obligated to contribute any additional capital to VOS SRL. The Shares represent the only issued and outstanding shares of capital stock or other equity securities of the Acquired Companies. Except as set forth on Schedule 4.2, there are no (a) outstanding securities convertible or exchangeable into shares of capital stock or other equity securities of any Acquired Company; (b) options, warrants, calls, subscriptions or other rights, agreements or commitments obligating any Acquired Company to issue, transfer or sell any shares of its capital stock or other equity securities; or (c) voting trusts or other agreements or understandings to which any Acquired Company is a party or by which any Acquired Company is bound with respect to the voting, transfer or other disposition of its shares of capital stock or other equity securities.

4.3 Subsidiary. Schedule 4.3 lists each Subsidiary of the Acquired Companies (the “Acquired Company Subsidiaries”) and sets forth the issued and outstanding equity interests of each of the Acquired Company Subsidiaries (the “Equity Interests”) and the holders thereof. Such Equity Interests are duly authorized, validly issued, and as of Closing will be fully paid and nonassessable. Other than as set forth on Schedule 4.3, the Acquired Companies own the Equity Interests free and clear of all Liens. Except as set forth on Schedule 4.3, there are no (a) outstanding securities convertible or exchangeable into Equity Interests; (b) options, warrants, calls, subscriptions or other rights, agreements or commitments obligating an Acquired Company Subsidiary to issue, transfer or sell any Equity Interests; or (c) voting trusts or other agreements or understandings to which an Acquired Company Subsidiary is a party or by which an Acquired Company Subsidiary is bound with respect to the voting, transfer or other disposition of any Equity Interests. Except as set forth on Schedule 4.3, no Acquired Company Subsidiary has any operations, employees, assets, or Liabilities.

4.4 Authority, Validity and Effect; No Conflict; Required Filings and Consents.

(a) Each Acquired Company has all requisite power and authority to own or lease the assets owned or leased by it, respectively, to operate its business as currently operated, and to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed and delivered by each Acquired Company pursuant to all necessary authorizations and is the legal, valid and binding obligation of each Acquired Company, enforceable against each Acquired Company in accordance with its terms, except as limited by (a) applicable bankruptcy, reorganization, insolvency, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally from time to time in effect, and (b) the availability of equitable remedies (regardless of whether enforceability is considered in a proceeding at Law or in equity) (collectively (a) and (b) together, the “General Enforceability Exceptions”).

(b) Neither the execution and delivery of this Agreement by the Acquired Companies, nor the consummation by the Acquired Companies of the transactions contemplated hereby, nor compliance by the Acquired Companies with any of the provisions hereof, will (i) conflict with or result in a breach of any provisions of any Organizational Document of any Acquired Company, (ii) except as set forth on Schedule 4.4(b), constitute or result in the material breach of any term, condition or

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provision of, or constitute a material default under, or give rise to any right of termination, cancellation or acceleration with respect to, or result in the creation or imposition of a material Lien upon any property or assets of any Acquired Company, pursuant to any Material Contract, or (iii) subject to receipt of the Consents referred to on Schedule 4.4(c), materially violate any Order or Law applicable to any Acquired Company or any of their respective properties or assets.

(c) Other than as set forth on Schedule 4.4(c), no material Consent is required to be obtained by any Acquired Company, TAT, or any Seller for the consummation by an Acquired Company of the transactions contemplated by this Agreement.

4.5 Financial Statements.

(a) Attached as Schedule 4.5(a) are copies of the following financial statements: (i) the unaudited balance sheets of each of the Acquired Companies as of December 31, 2010 and the related unaudited statements of income and cash flows for the fiscal year then ended (the “2010 Financial Statements”), and (ii) the unaudited balance sheet of the Acquired Companies as of September 30, 2011 (the “Balance Sheet Date”) and the related unaudited statements of income and cash flows for the nine months then ended (the “2011 Financial Statements” and together with the 2010 Financial Statements, the “Acquired Company Financial Statements”).

(b) Other than as set forth on Schedule 4.5(b), the Acquired Company Financial Statements have been prepared in accordance with GAAP (except for the absence of footnotes and the elimination of intercompany transactions and balances among the Acquired Companies) in all material respects and fairly present the financial position and results of operations of each of the Acquired Companies, as of the respective dates thereof and for the periods indicated therein, subject to normal accruals and adjustments in connection with normal audit procedures. The Acquired Company Financial Statements were derived from the books and records of the Acquired Companies.

(c) Except for (i) Liabilities reflected or reserved against in the 2011 Financial Statements, (ii) Liabilities disclosed on Schedule 4.5(c), and (iii) Liabilities incurred in the ordinary course of business since the Balance Sheet Date, the Acquired Companies have no Liabilities of a type required to be reserved on a balance sheet under GAAP.

(d) VOS SRL does not have any operations, employees, assets (other than assets reflected in the Acquired Company Financial Statements), or Liabilities other than assets or Liabilities that are immaterial.

4.6 Taxes. Except as set forth on Schedule 4.6:

(a) Each Acquired Company has timely filed all Tax Returns that it was required to file and has paid all Taxes required to have been paid by it. All such Tax Returns were true, correct and complete in all material respects. With respect to any period for which Tax Returns have not yet been filed or for which Taxes are not yet due or owing, the Acquired Companies have made due and sufficient accruals for such Taxes

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in the Acquired Company Financial Statements. All required estimated Tax payments sufficient to avoid any underpayment penalties or interest have been made by or on behalf of the Acquired Companies and the Acquired Company Subsidiaries.

(b) Each Acquired Company has complied in all material respects with all applicable Laws, rules and regulations relating to the filing of Tax Returns, the payment and withholding of Taxes and has, within the time and in the manner prescribed by Law, withheld and paid over to the proper Governmental Authorities all amounts required to be so withheld and paid over under applicable Laws.

(c) No Acquired Company has agreed to any extension or waiver of the statute of limitations applicable to any Tax Return, or agreed to any extension of time with respect to a Tax assessment or deficiency, which period (after giving effect to such extension or waiver) has not yet expired.

(d) No Acquired Company is a party to any Tax sharing, allocation, indemnity or similar agreement or arrangement (whether or not written) pursuant to which it will have any obligation to make any payments after the Closing.

(e) There are no Liens for unpaid Taxes on the assets of any Acquired Company, except for Permitted Liens.

(f) There are no Actions, examinations or audits currently pending or, to any Sellers’ Knowledge, threatened with respect to any Acquired Company in respect of any Tax. No issue has been raised by a Taxing Authority in any prior Action or examination of any Acquired Company or any Acquired Company Subsidiary which, by application of the same or similar principles, could reasonably be expected to result in a proposed deficiency for any subsequent taxable period.

(g) No claim has been made in writing by any Governmental Authority in a jurisdiction where any Acquired Company does not file Tax Returns that an Acquired Company is, or may be, subject to material taxation by that jurisdiction.

(h) No Acquired Company is subject to United States Taxes or required to file any Tax Returns in the United States and no Acquired Company engages in a trade or business in the United States nor has any income effectively connected to the United States. Each Acquired Company is properly classified for U.S. federal income tax purposes as an association taxable as a corporation.

(i) No Acquired Company has granted in writing any power of attorney which is currently in force with respect to any Taxes or Tax Returns.

Notwithstanding anything to the contrary contained in this Agreement, the representations and warranties in this Section 4.6 are the sole representations and warranties of TAT, the Sellers and the Acquired Companies relating to Tax matters.

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4.7 Personal Property.

(a) Except as set forth on Schedule 4.7(a), each Acquired Company has (in the case of owned personal property) good title to, or (in the case of leased personal property) a valid leasehold interest in all of the tangible assets reflected in the 2011 Company Financial Statements, free and clear of all material Liens except for Permitted Liens, excluding assets sold or disposed of by the Acquired Company in the ordinary course of business since the Balance Sheet Date.

(b) The material equipment and other tangible personal property owned (and to be owned as of the Closing Date) by the Acquired Companies has been maintained in a manner consistent, in all material respects, with the Acquired Companies’ historical maintenance practices and in a manner that is sufficient for the continued operation and use of such equipment and tangible personal property in a manner consistent with their historical use. At Closing, an Acquired Company or an Acquired Company Subsidiary will own good title, free and clear of all material Liens except for Permitted Liens, to each of the assets set forth on Schedule 4.7(b), except with respect to any of such assets that are disposed of in the ordinary course of business between the date hereof and the Closing.

4.8 Real Property. Schedule 4.8(a) contains a complete and accurate description of all leased Real Property and the interests of each Acquired Company therein. The Acquired Companies have valid leasehold interests in each such property. On the Closing Date, an Acquired Company or an Acquired Company Subsidiary will own fee title to that certain portion of the Real Property that is set forth on Schedule 4.8(b) (the “Owned Property”), subject only to Permitted Liens. To Sellers’ Knowledge, each tract of land comprising a portion of the Owned Property has access to a dedicated right-of-way and is serviced by utilities sufficient for the business of the Acquired Company that is currently operated thereon. The Real Property listed on Schedule 4.8(a) and Schedule 4.8(b) comprises all material owned or leased real property interests of the Acquired Companies used in the conduct of the business and operations of the Acquired Companies as now conducted (other than any real property interests to be provided to the Acquired Companies under the Transition Services Agreement).

4.9 Compliance with Laws. Except as set forth on Schedule 4.9, each Acquired Company:

(a) is in material compliance with all Laws and Orders applicable to its business;

(b) has received no written notification or communication from any Governmental Authority within the past two years (i) asserting that the Acquired Company is not in material compliance with any Law, or (ii) threatening to revoke any material Permit owned or held by the Acquired Company; and

(c) to Sellers’ Knowledge, no investigation or review is pending or threatened by any Governmental Authority with respect to any alleged material violation by the Acquired Company of any Law.

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4.10 Permits. No Acquired Company is in default or violation in any material respect of any term, condition or provision of any material Permit. No material Permit will be impaired by the consummation of the transactions contemplated by this Agreement.

4.11 Employee Benefit Plans; Employees. Except as set forth on Section 4.11(a), no Acquired Company has any health, severance pay, salary continuation, bonus, incentive, stock option, restricted stock unit, retirement, workers’ compensation, pension, profit sharing or deferred compensation plans, contracts, programs, funds (“Employee Plans”). Except as set forth on Schedule 4.11(a), no Acquired Company makes or is required to make payments, transfers, or contributions in respect of any Employee Plans. Schedule 4.11(b) includes an accurate count of employees and leased personnel of each Acquired Company by location as of the date hereof.

4.12 Material Contracts.

(a) Set forth on Schedule 4.12(a) is a list of the following Contracts to which each Acquired Company is a party (the “Material Contracts”):

(i) each Contract relating to any partnership, joint venture, strategic alliance or sharing of profits;

(ii) each Contract limiting the right of the Acquired Company to (x) engage in or compete with any Person in any business or in any geographical area or (y) solicit or hire any Person or customers with respect to the business of the Acquired Company;

(iii) each collective bargaining Contract or other Contract with any labor union;

(iv) each material license of Intellectual Property except for licenses implied by the sale of goods and licenses to software generally commercially available;

(v) each Contract relating to the incurrence, assumption or guarantee of any material indebtedness or imposing a material Lien on any of the assets of any Acquired Company, other than TAT’s senior credit facility that imposes Liens on assets of the Acquired Companies that will be released at Closing;

(vi) each Contract providing for severance, retention, change in control or other similar payments or benefits to employees;

(vii) each Contract pertaining to employment arrangements with any officer, director, or key employee of any Acquired Company that provides for annual compensation in excess of $100,000;

(viii) each material Contract between any Acquired Company and TAT, any Seller, or any of their Subsidiaries other than another Acquired Company;

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(ix) each Contract relating to the acquisition (by merger, purchase of equity or assets or otherwise), since January 1, 2011, by any Acquired Company of any operating business or assets or the capital stock of any other Person to the extent that the acquisition is material to the Acquired Companies taken as a whole;

(x) each Contract relating to the sale of any of the assets, since January 1, 2009, of any Acquired Company other than in the ordinary course of business or for the grant to any Person of any preferential rights to purchase or otherwise acquire any of the capital stock or assets of such Acquired Company;

(xi) each loan agreement, note, mortgage, indenture and security agreement relating to Acquired Company Debt and all guarantees of the debt obligations of any third party;

(xii) each Contract pursuant to which any Acquired Company leases or subleases any Real Property or material personal property;

(xiii) each Contract that is a material master services agreement or similar agreement entered into with any third party, other than Dalea Partners, LP and its Affiliates;

(xiv) each letter of credit and each material performance bond or surety agreement;

(xv) each Contract involving a remaining commitment by any Acquired Company in excess of $100,000;

(xvi) any contracts or agreements to sell or otherwise dispose of any capital assets having a fair market value in excess of $100,000; and

(xvii) each material Contract with a Governmental Authority.

(b) Each Acquired Company has heretofore made available to Buyer copies of all Material Contracts. Each Material Contract is in full force and effect in all material respects and constitutes a legal, valid and binding obligation of the applicable Acquired Company, and, to such Sellers’ Knowledge, of the other parties thereto, subject only to the General Enforceability Exceptions. There is (i) no material breach or default by an Acquired Company or, to such Sellers’ Knowledge, by any third party under any Material Contract, and (ii) no event on the part of the Acquired Company, or, to Sellers’ Knowledge, on the part of any other third party under any Material Contract, has occurred which, with notice or lapse of time or both, would constitute a material breach or default by the Acquired Company or, to Sellers’ Knowledge, by any third party, would permit termination, modification or acceleration thereof by any party to such Material Contract.

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4.13 Legal Proceedings. Except as set forth on Schedule 4.13, there are no Actions (a) pending or, to Sellers’ Knowledge, threatened, against an Acquired Company or any of its properties or assets or (b) that challenge, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement. No Acquired Company is subject to any material Order.

4.14 Intellectual Property. Except as set forth on Schedule 4.14:

(a) At Closing, the Acquired Companies will own the rights to the domain names set forth on Schedule 4.14;

(b) No Acquired Company owns any material Acquired Company IP;

(c) No Acquired Company owns any Acquired Company Registered Intellectual Property;

(d) To Sellers’ Knowledge, no Person is infringing on the Acquired Companies’ rights to the domain names set forth on Schedule 4.14;

(e) No Acquired Company has received written notice alleging that it infringes on any Intellectual Property rights of any third party; and

(f) Except as set forth on Schedule 4.14, no Acquired Company has received any written notice of any material claim and, to Sellers’ Knowledge, no material claim has been threatened in writing that alleges that any aspect of the business of an Acquired Company infringes or otherwise violates any third party’s right in or to such third party’s own Intellectual Property.

Notwithstanding anything to the contrary contained in this Agreement, the representations and warranties in this Section 4.14 are the sole representations and warranties of TAT, the Sellers and the Acquired Companies relating to Intellectual Property matters.

4.15 Insurance. Schedule 4.15 sets forth, as of the date of this Agreement, all policies of insurance in effect since January 1, 2010 held by or applicable to each Acquired Company setting forth, in respect of each such policy, the policy name, policy number, carrier, term, type and amount of coverage and annual premium. All unexpired policies are in full force and effect in all material respects, and the applicable Acquired Company has paid all premiums therefor other than any retroactive upward adjustment as to which none of TAT, any Seller or any Acquired Company has received written notification. Excluding insurance policies that have expired and been replaced in the ordinary course of business, no insurance policy has been cancelled by the insurer within the last two years and, to Sellers’ Knowledge, no written threat has been made by an insurer and received by TAT, any Seller or any Acquired Company to cancel any insurance policy held by or applicable to an Acquired Company during such period. None of TAT, any Seller or any Acquired Company has received written notification regarding any retroactive upward adjustment in premiums under any such insurance policies. Since January 1, 2011, there has not been any pending claim that has been denied or rejected by any insurer.

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4.16 Personnel. Except as set forth on Schedule 4.16, no Acquired Company is a party to or subject to any collective bargaining agreements, and, to Sellers’ Knowledge, (a) no labor union or other collective bargaining unit represents or claims to represent any Acquired Company’s employees, and (b) there is no union campaign being conducted to authorize a union with respect to any Acquired Company’s employees. Except as set forth on Schedule 4.16, since January 1, 2011, no Acquired Company has experienced any strike, material grievance or other collective bargaining dispute, and no such action is pending or, to Sellers’ Knowledge, threatened.

4.17 Environmental Matters. Except as set forth on Schedule 4.17:

(a) each Acquired Company is, and has been, in material compliance with all Environmental Laws, which compliance includes obtaining, maintaining and complying with all material Permits required under or pursuant to any Environmental Law;

(b) there has been no material Release of any Hazardous Material by an Acquired Company or at the Real Property that requires cleanup or remediation pursuant to any Environmental Law; and

(c) except as has been resolved prior to the date of this Agreement, no Acquired Company has (i) received written notice of material violation of any Environmental Law; or (ii) received any material written claim under any Environmental Law.

The representations and warranties in this Section 4.17 are the sole representations and warranties of the Acquired Company relating to compliance with and Liabilities arising under Environmental Laws, and the common law, relating to Hazardous Materials or relating to other environmental matters.

4.18 Conduct of Business in Ordinary Course. Except for the transactions contemplated hereby, as set forth on Schedule 4.18 or as permitted by Section 7.1 after the date of this Agreement, since the Balance Sheet Date, (a) each Acquired Company has conducted its business and operations in the ordinary course of business consistent with past practices, and (b) there has not been any change that has had a Material Adverse Effect on an Acquired Company.

4.19 No Brokers. Except as set forth on Schedule 4.19, no broker, finder or similar agent has been employed by or on behalf of TAT, any Seller or any Acquired Company, and no Person with which TAT, any Seller or any Acquired Company has had any dealings or communications of any kind is entitled to any brokerage commission, finder’s fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby.

4.20 Customers and Suppliers.

(a) Except as set forth on Schedule 4.20(a)(i), no Significant Customer of any Acquired Company has given written notice to such Acquired Company of its intent to terminate its business relationship with such Acquired Company or to materially limit its business relationship with such Acquired Company. The term “Significant Customer” means any of the ten largest third party customers, by dollar volume, of each Acquired Company during the period beginning January 1, 2011 and ending on the Balance Sheet

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Date. Schedule 4.20(a)(ii) contains a complete list of the Significant Customers of each Acquired Company and dollar volume of business with each Significant Customer during such period.

(b) Except as set forth on Schedule 4.20(b)(i), no Significant Supplier of any Acquired Company has given written notice to such Acquired Company of its intent to terminate its business relationship with such Acquired Company or to materially limit its business relationship with such Acquired Company. The term “Significant Supplier” means any of the ten largest suppliers, by dollar volume, of each Acquired Company during the period beginning January 1, 2011 and ending on the Balance Sheet Date. Schedule 4.20(b)(ii) contains a complete list of the Significant Suppliers of each Acquired Company and dollar volume of business with each Significant Supplier during such period.

4.21 Accounts Receivable.

(a) Except as set forth on Schedule 4.21(a), the accounts receivable of each Acquired Company reflected on the books and records of the Acquired Company arose in the ordinary course of business and represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business.

(b) Schedule 4.21(b) includes a true and complete aged listing of the accounts receivable of the Acquired Companies.

4.22 Affiliate Transactions. Except as set forth on Schedule 4.22, no Acquired Company is a party to any material agreement or arrangement (whether oral or written) with TAT, any Seller, or any of their Subsidiaries other than another Acquired Company.

4.23 Directors and Officers. Schedule 4.23 sets forth a true and complete list of each director and officer of each of the Acquired Companies and the Acquired Company Subsidiaries.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF TAT AND SELLERS

Except (a) as set forth in the Schedules referenced in this Article V (collectively, the “Seller Disclosure Schedules”), which shall qualify the representations and warranties of TAT and Sellers set forth in this Article V and which shall be organized in parts corresponding to the numbering in this Article V with disclosures in each part specifically corresponding to or cross-referencing to a particular section (or subsection) of this Article V (subject to Section 12.15) or (b) as provided by this Agreement, TAT and Sellers represent and warrant to and for the benefit of Buyer that the following statements are true:

5.1 Organization and Standing. TAT and each Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

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5.2 Authority; Enforceability; Title.

(a) TAT and each Seller has all requisite power and authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated herein, and this Agreement has been duly executed and delivered by TAT and each Seller and is the legal, valid and binding obligation of TAT and each Seller, enforceable against TAT and each Seller in accordance with its terms, except as limited by the General Enforceability Exceptions.

(b) Each Seller is the record and beneficial owner of the Shares set forth on Schedule 1, and has good and valid title to such Shares free and clear of all Liens. Upon the consummation of the transactions contemplated by this Agreement and in accordance with the terms hereof, at the Closing, Buyer will acquire good and valid title to the Shares, free and clear of all Liens, other than Liens created by Buyer.

5.3 Consents. Except as set forth on Schedule 4.4(c), no Consent is required to be obtained by TAT or any Seller for the consummation by TAT and Sellers of the transactions contemplated by this Agreement.

5.4 Budget. TAT has provided Buyer a true and complete copy of the exploration and development budget of TAT and Sellers as of the date of this Agreement for the year ending December 31, 2012. TAT’s board of directors has not authorized, and does not presently anticipate authorizing, any material modifications of such budget, absent a material change in the economic and operational assumptions underlying such budget; provided, that any modification of such budget shall be entirely within the discretion and business judgment of TAT’s board of directors and Buyer shall not be entitled to indemnification for any Losses resulting from (a) failure to expend any funds under such budget or (b) any modifications to such budget that occur after the Closing.

5.5 Selling Expenses. No Acquired Company is liable or responsible for any Selling Expenses incurred by or on behalf of TAT, any Seller, or any Acquired Company.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF BUYER

Except (a) as set forth in the Schedules referenced in this Article VI (collectively, the “Buyer Disclosure Schedules”), which shall qualify the representations and warranties of Buyer set forth in this Article VI and which shall be organized in parts corresponding to the numbering in this Article VI with disclosures in each part specifically corresponding to or cross-referencing to a particular section (or subsection) of this Article VI (subject to Section 12.15) or (b) as provided by this Agreement, Buyer represents and warrants to and for the benefit of the Acquired Companies (prior to the Closing), TAT and Sellers that the following statements are true:

6.1 Investment Intent. The Shares are being acquired by Buyer for investment only and not with a view to distribution in violation of the Securities Act.

6.2 Organization and Standing. Buyer is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Oklahoma. Buyer is duly qualified to do business, and in good standing, in each jurisdiction in which the character of the properties owned or leased by it or in which the conduct of its business requires it to be so qualified, except where the failure to be so qualified or to be in good standing would not have a Material Adverse Effect on Buyer.

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6.3 Authorization, Validity and Effect. Buyer has all the requisite power and authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of Buyer. This Agreement has been duly and validly executed and delivered by Buyer and constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as limited by the General Enforceability Exceptions.

6.4 No Conflict; Required Filings and Consents.

(a) Neither the execution and delivery of this Agreement by Buyer, nor the consummation by Buyer of the transactions contemplated hereby, nor compliance by Buyer with any of the provisions hereof, will (i) conflict with or result in a breach of any provisions of any Organizational Document of Buyer, (ii) constitute or result in the material breach of any term, condition or provision of, or constitute a material default under, or give rise to any right of termination, cancellation or acceleration with respect to, or result in the creation or imposition of any material Lien upon, any property or assets of Buyer or, pursuant to any material note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be subject, or (iii) subject to receipt of the requisite approvals referred to on Schedule 6.4(b), materially violate any Order or Law applicable to Buyer or any of its properties or assets.

(b) Other than as set forth on Schedule 6.4(b), no Consent is necessary for the consummation by Buyer of the transactions contemplated by this Agreement.

6.5 Legal Proceedings. There are no Actions pending or, to Buyer’s knowledge, threatened against Buyer that would adversely affect Buyer’s performance under this Agreement or the consummation of the transactions contemplated hereby.

6.6 Financing. Buyer has provided TAT with a true and complete copy of the Financing Letter, and the Financing Letter has not been modified, withdrawn, or terminated by any party thereto.

6.7 No Brokers. Other than Credit Suisse Securities (Europe) Limited, (a) no broker, finder or similar agent has been employed by or on behalf of Buyer, and (b) neither Buyer nor any Person with which Buyer has had any dealings or communications of any kind is entitled to any brokerage commission, finder’s fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby.

6.8 Disclaimer. Buyer acknowledges and agrees that, except for the representations and warranties made by TAT, Sellers, and the Acquired Companies that are expressly set forth in this Agreement or any Certificate, TAT, Sellers, and the Acquired Companies expressly disclaim all representations and warranties of any kind (whether express or implied), including any implied warranties of merchantability or fitness for a particular purpose.

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ARTICLE VII

COVENANTS AND AGREEMENTS

7.1 Interim Operations. Between the date of this Agreement and the Closing Date or the earlier termination of this Agreement, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Buyer has previously consented in writing or as required by applicable Law, the Acquired Companies will, and TAT and Sellers will cause the Acquired Companies to, (i) conduct their operations in the ordinary course of business consistent with past practice, (ii) use commercially reasonable efforts to preserve (A) present business operations, organization (including employees, but specifically excluding officers and directors) and goodwill and (B) present relationships with suppliers and customers having business dealings with the Acquired Companies and (iii) maintain all assets and properties of, or used by, the Acquired Companies in their current condition (ordinary wear and tear excepted). Without limiting the foregoing, between the date of this Agreement and the Closing Date or the earlier termination of this Agreement, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Buyer has previously consented in writing, N. Malone Mitchell 3^rd or Dustin Guinn has previously directed (within their existing authority) or requested, in each case in writing, or as required by applicable Law, no Acquired Company shall, nor shall TAT or Sellers permit any Acquired Company to, do any of the following:

(a) incur any indebtedness for borrowed money or issue any long-term debt securities or assume, guarantee or endorse such obligations of any other Person, except for indebtedness incurred in the ordinary course of business under lines of credit existing on the date hereof;

(b) except in the ordinary course of business, (i) acquire any material property or assets, (ii) mortgage or encumber any material property or assets other than Permitted Liens, or (iii) cancel any debts owed to or claims held by the Acquired Companies;

(c) other than in the ordinary course of business, enter into, amend, modify or terminate any Material Contract;

(d) (i) enter into, adopt, amend or terminate any agreement relating to the compensation, bonus, benefits provided to or severance of any employee of, or any employee to be transferred at Closing to, any Acquired Company or (ii) terminate without cause the employment of any employee of, or any employee to be transferred at Closing to, any Acquired Company, in each case other than in the ordinary course of business, except to the extent required by Law or any existing agreements;

(e) make any material change to the Acquired Companies’ accounting (including Tax accounting) methods, principles or practices, except as may be required by GAAP or changes in Law;

(f) make any amendment to any Acquired Company’s Organizational Documents;

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(g) issue or sell any capital stock or options, other equity securities, warrants, calls, subscriptions or other rights to purchase any capital stock or other equity securities of any Acquired Company of any of its Subsidiaries or split, combine or subdivide the capital stock or other equity securities of an Acquired Company or any of its Subsidiaries;

(h) (i) make, change or revoke any material Tax election, settle or compromise any material Tax claim or liability or enter into a settlement or compromise, or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for Tax purposes, in each case with respect an Acquired Company, (ii) enter into any material closing agreement, or consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes or (iii) prepare or file any Tax Return related an Acquired Company (or any amendment thereof) unless such Tax Return shall have been prepared in a manner consistent with past practice and Sellers shall have provided Buyer a copy thereof (together with supporting papers) at least ten Business days prior to the due date thereof for Buyer to review and approve (such approval not to be unreasonably withheld or delayed);

(i) take any action which would materially and adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement; or

(j) agree to take any of the actions described in sub-clauses (a) through (i) above.

Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude any Acquired Company, in the Acquired Company’s sole discretion, from making distributions to its equity holder(s) prior to the Effective Date, and from and after the Effective Date, no Acquired Company shall make any distributions of cash or other assets to its equity holder(s) but shall not be prohibited from making cash management transfers related to expenses of the Acquired Companies paid directly by TAT or any Seller in the ordinary course of business consistent with past practices.

7.2 Reasonable Access; Confidentiality.

(a) From the date hereof until the Closing Date or the earlier termination of this Agreement, and subject to applicable Law, the Acquired Companies shall, and TAT and Sellers will cause the Acquired Companies to, (i) give Buyer and its representatives, upon reasonable notice to the Acquired Companies, reasonable access, during normal business hours, to the officers, employees, agents, assets, properties, books, records and agreements of the Acquired Companies, (ii) permit Buyer to make such inspections (but excluding environmental testing and soil or groundwater sampling without the applicable Acquired Company’s prior written consent) as Buyer may reasonably require and (iii) furnish to Buyer during such period all such information relating to the Acquired Companies as Buyer may from time to time reasonably request; provided, that (A) such activities shall not unreasonably disrupt the operations of the Acquired Companies and (B) the Acquired Companies shall have no obligation to make available any information

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if making such information available may jeopardize any attorney-client or other legal privilege or contravene any applicable Law or Contract (including any confidentiality agreement to which the Acquired Companies or any of their respective Affiliates is a party).

(b) Subject to Section 7.3, each Party agrees that it shall not, and each shall cause its Affiliates and representatives not to, without the prior written consent of Buyer, in the case of TAT, any Seller, or any Acquired Company, or TAT, in the case of Buyer, directly or indirectly, reveal, divulge, disclose or communicate (whether orally in writing) to any Person in any manner whatsoever information of any kind, nature or description concerning or relating to the business, assets or Liabilities of any other Party; provided, however, the forgoing shall not apply to any such information which (i) in the case of Buyer after the Closing, relates to any of the Acquired Companies, (ii) at the time of disclosure or thereafter is generally available to the public (other than as a result of its disclosure by a Party hereto or any of its Affiliates or representatives in breach of this Section 7.2(b)) or (iii) was or is required to be disclosed by a Party pursuant to an ongoing contract in effect as of the date hereof, provided that such disclosure is subject to a confidentiality obligation in favor of such Party. If this Agreement is terminated prior to Closing for any reason, this Section 7.2(b) shall remain in effect until December 31, 2012, and after such date this Section 7.2(b) shall no longer have any force or effect.

7.3 Publicity. Except as may be required to comply with the requirements of any applicable Law, no party will issue any press release or other public announcement relating to the subject matter of this Agreement or the transactions contemplated hereby without the prior approval (which approval will not be unreasonably withheld or delayed) of (a) with respect to such releases or announcements by Buyer or an Acquired Company (from and after the Closing Date), TAT or (b) with respect to such releases or announcements by TAT, any Seller or any Acquired Company (prior to the Closing Date), Buyer; provided, however, that, after the Closing, each of Buyer, TAT and any Seller will be entitled to issue a “tombstone” or similar advertisement without obtaining such prior approval so long as such “tombstone” or similar advertisement does not refer to the consideration paid or payable pursuant to this Agreement; provided, further, that notwithstanding the foregoing, TAT shall be permitted to issue any press release or other public announcement in order to comply with its reporting obligations under the rules and regulations of the Securities and Exchange Commission, the NYSE Amex or the Toronto Stock Exchange. The parties shall endeavor to mutually agree upon the wording of such press release or other public announcement, but in the absence of such mutual agreement, TAT shall be entitled to disclose such matters as it shall be advised by legal counsel are necessary and appropriate to comply with applicable Law.

7.4 Records. With respect to the financial books and records and minute books of the Acquired Companies: (a) for a period of five years after the Closing Date, neither Buyer nor any Seller shall cause or permit their destruction or disposal without first offering to surrender them to the other party, and (b) where there is legitimate purpose, including, without limitation, an audit of any party by the United States Internal Revenue Service or any other Taxing Authority or an indemnification claim by a party pursuant to Article X hereof, Buyer and Sellers, as applicable, shall allow the other party and its representatives access to such books and records during` regular business hours. As a condition of granting such access, Buyer or Sellers, as applicable, may require the other party to enter into a customary confidentiality agreement with respect to such matters.

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7.5 Indemnification of Directors and Officers. For a period of five years after the Closing, TAT and Sellers will cause their Organizational Documents to contain the same provisions with respect to the indemnification of directors and officers of the Acquired Companies as those contained in the Organizational Documents of TAT and Sellers as of the date of this Agreement.

7.6 Certain Notices; Supplemental Disclosure.

(a) During the period from the date of this Agreement through the Closing Date or the earlier termination of this Agreement, Buyer shall promptly advise Sellers in writing if it becomes aware of (i) the occurrence, or non-occurrence, of any event of which it has knowledge, which has caused any representation or warranty made by it to be untrue or inaccurate in any material respect at any time after the date of this Agreement and prior to the Closing; and (ii) any material failure on its part to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.

(b) During the period from the date of this Agreement through the Closing Date or the earlier termination of this Agreement, TAT, Sellers, and the Acquired Companies shall advise Buyer in writing if any of them becomes aware of (i) an occurrence, or non-occurrence, of any event, which has caused any representation or warranty made by any of them to be untrue or inaccurate in any material respect at any time after the date of this Agreement and prior to the Closing; and (ii) any material failure on their part to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder. If any such event requires any change to the Acquired Company Disclosure Schedules or the Seller Disclosure Schedules, TAT, Sellers, and the Acquired Companies shall promptly deliver to Buyer a supplement to such Schedules specifying such change, and in any event shall provide such supplement no later than two days prior to Closing. No update of the Seller Disclosure Schedules or the Acquired Company Disclosure Schedules that relates to any matter or circumstance that existed at or prior to the date of this Agreement shall (a) have any effect for the purposes of determining the satisfaction of conditions to Closing set forth in Article VIII hereof or (b) relieve TAT, Sellers or the Acquired Companies of liability or diminish any right or remedies of Buyer with respect to (i) any breach of representation or warranty made to Buyer in this Agreement or (ii) any breach of, or failure to perform, any covenant or obligation contained in this Agreement. With respect to any update of the Seller Disclosure Schedules or the Acquired Company Disclosure Schedules that relates to any material matter or circumstance that first arose after the date of this Agreement, if Buyer elects to close the transactions notwithstanding such update, (a) such update shall be deemed to have modified the representations and warranties of TAT, Sellers, and the Acquired Companies, as applicable, (b) Buyer shall have been deemed to have waived any condition to its obligation to close the transactions contemplated by this Agreement relating solely to such matter or circumstance, and (c) Buyer shall not be entitled to any indemnification with respect to the matter or circumstance described in such update.

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7.7 Commercially Reasonable Efforts; Cooperation. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and to obtain satisfaction or waiver of the conditions precedent to the consummation of the transactions contemplated hereby, including (a) obtaining all of the Consents and the making of all filings and the taking of all steps as may be necessary to obtain a Consent from, or to avoid an Action by, any Governmental Authority, including without limitation all anti-competition filings with or Consents of any Governmental Authorities required with respect to the transactions contemplated by this Agreement, (b) obtaining the necessary consents from third parties, (c) defending any Action challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any Governmental Authority vacated or reversed, and (d) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement.

7.8 No Shop. None of TAT, Sellers or the Acquired Companies shall, and each shall cause their respective officers, directors, subsidiaries, partners, Affiliates and representatives not to, directly or indirectly, (a) solicit, initiate, discuss, entertain, undertake, authorize, recommend, propose, enter into or encourage the submission of any proposal or offer from any Person relating to the direct or indirect acquisition of the Shares or any portion of the assets (other than assets sold in the ordinary course of business) of the Acquired Companies (including any acquisition structured as a merger, consolidation or share exchange) (each, an “Acquisition Proposal”), or (b) participate in any discussions or negotiations regarding, furnish or cause to be furnished to any Person any information with respect to the business, operations, properties or assets of the Acquired Companies or assist or participate in, or facilitate in any other manner any effort or attempt by any Person to pursue any Acquisition Proposal; provided, however, that the Acquired Companies’ representatives may respond to unsolicited inquiries, but solely for the purpose of communicating that TAT, Sellers and the Acquired Companies are not able to entertain the unsolicited offer. Sellers shall notify Buyer orally and in writing promptly after receipt by TAT, any Seller or any Acquired Company or any representatives thereof of any proposal or offer from any Person (other than Buyer) to effect an Acquisition Proposal, including the material terms thereof. TAT, Sellers and the Acquired Companies shall (and each shall cause their respective subsidiaries and representatives to) immediately cease and cause to be terminated any existing discussions or negotiations with any Persons (other than Buyer) conducted heretofore with respect to any Acquisition Proposal.

7.9 Restrictive Covenants.

(a) Non-Competition by Selling Group. As a material and valuable inducement for Buyer to enter into this Agreement and consummate the transactions provided for herein, each member of the Selling Group agrees that during the Restricted Period, such Selling Group member will not, without the prior written consent of Buyer, engage directly or indirectly, for its own benefit or for third parties, in providing any of the following: acid stimulation; cementing; coiled tubing; well-site dirt and construction; drilling fluids and services, drilling rigs; directional drilling (inclusive of down hole

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motors and tools); fracture stimulation; mud logging; nitrogen; rentals and fishing tools; trucking; underbalanced services; roustabout services; collection of geophysical data; and all ancillary or related services (the “Restricted Business”), either as employer, consultant, agent, principal, proprietor, partner (general or limited), shareholder, member, manager, managing member, advisor, joint venturer, investor, lender, independent contractor or in any other individual or representative capacity, in the Restricted Region; provided, that nothing contained herein shall be construed to prevent any member of the Selling Group from investing in the capital stock of any Restricted Business listed on a national securities exchange or traded in the over-the-counter market so long as such member of the Selling Group is not actively involved in the management of such Restricted Business and does not own more than 1% of the stock of such entity. The “Restricted Period” shall mean a period of five years from the Closing Date to the fifth anniversary of the Closing Date.

(b) Acquisitions by Selling Group. If during the Restricted Period any member of the Selling Group (the “Acquirer”) acquires any interest in any Person engaged in a Restricted Business that would otherwise be prohibited by Section 7.9(a), the Acquirer will give Buyer written notice of such acquisition within ten days after the consummation of such acquisition (the “Acquisition Notice”). Following delivery of the Acquisition Notice, the Acquirer shall provide Buyer with access to such information regarding the Offered Business (as defined below) as Buyer may reasonably request and shall promptly respond to Buyer’s questions regarding the Offered Business. Buyer shall have the right to purchase from the Acquirer the portion of such Person’s business constituting the Restricted Business (the “Offered Business”) on the terms set forth in this Section 7.9(b). The Acquisition Notice shall include the Acquirer’s proposed purchase price for the Offered Business, which shall be the Acquirer’s reasonable allocation of the total consideration paid by the Acquirer for the interest acquired by it to the portion of such consideration attributable to the Offered Business. If Buyer desires to purchase the Offered Business, Buyer shall notify the Acquirer of such desire in writing not later than 60 days after the Acquirer has provided Buyer access to the information regarding the Offered Business, as set forth above, which notice shall include the purchase price and terms upon which Buyer offers to purchase the Offered Business (the “Offer Notice”). If Buyer fails to timely deliver an Offer Notice, Buyer’s right to purchase the Offered Business shall terminate, and the Acquirer shall be entitled to operate (but not expand) the Offered Business, for its own benefit but not for the purpose of providing such services to third parties, in substantially the manner operated prior to the acquisition of the Offered Business for the remainder of the Restricted Period. If Buyer timely delivers an Offer Notice, the Offer Notice shall either (i) accept the purchase price proposed in the Acquisition Notice, in which case Buyer shall be obligated to purchase, and the Acquirer shall be obligated to sell, the Offered Business on the terms set forth in the Acquisition Notice within 30 days after such Offer Notice is delivered by Buyer, or (ii) notify the Acquirer that Buyer disputes Acquirer’s allocation of the total consideration paid by the Acquirer for the interest acquired by it to the portion of such consideration attributable to the Offered Business, in which event the parties shall engage Hadco International Appraisal Services (“Hadco”) to appraise the Offered Business. If the price in such appraisal is higher than the purchase price provided in the Offer Notice, Buyer shall pay the fees and expenses of Hadco or, if the price in such appraisal is lower

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than the purchase price provided in the Offer Notice, Acquirer shall pay the fees and expenses of Hadco. Within ten days following receipt of Hadco’s appraisal of the Offered Business, Buyer may revoke its offer to purchase the Offered Business, in which case, Acquirer shall be entitled to operate (but not expand) the Offered Business, for its own benefit but not for the purpose of providing such services to third parties, in substantially the manner operated prior to the acquisition of the Offered Business for the remainder of the Restricted Period. If Buyer does not timely revoke such offer, Acquirer shall be obligated to sell, and Buyer shall be obligated to purchase, the Offered Business at the price set forth in the appraisal within 30 days after the appraisal is delivered to Buyer.

(c) Non-Competition by Buyer. Buyer agrees that during the Restricted Period, Buyer will not, and Buyer will cause its Subsidiaries not to, without the prior written consent of TAT, engage directly or indirectly in oil and gas exploration and production, either as employer, consultant, agent, principal, proprietor, partner (general or limited), shareholder, member, manager, managing member, advisor, joint venturer, investor, lender, independent contractor or in any other individual or representative capacity, in the Restricted Region; provided, that nothing contained herein shall be construed to prevent Buyer or any of its Subsidiaries from investing in the capital stock of any Person engaged in oil and gas exploration and production that is listed on a national securities exchange or traded in the over-the-counter market so long as Buyer or such Subsidiary is not actively involved in the management of such Person and does not own more than 1% of the stock of such entity.

(d) Acquisitions. If during the Restricted Period, Buyer acquires any interest in any Person engaged in oil and gas exploration and production in the Restricted Region (the “E&P Business”), Buyer will give TAT written notice of such acquisition within ten days after the consummation of such acquisition (the “E&P Acquisition Notice”). Following delivery of the E&P Acquisition Notice, Buyer shall provide TAT with access to such information regarding the E&P Business as TAT may reasonably request and shall promptly respond to TAT’s questions regarding the E&P Business. TAT shall have the right to purchase from Buyer the portion of such Person’s business constituting the E&P Business on the terms set forth in this Section 7.9(d). The E&P Acquisition Notice shall include Buyer’s proposed purchase price for the E&P Business, which shall be Buyer’s reasonable allocation of the total consideration paid by Buyer for the interest acquired by it to the portion of such consideration attributable to the E&P Business. If TAT desires to purchase the E&P Business, TAT shall notify Buyer of such desire in writing not later than 60 days after Buyer has provided TAT access to the information regarding the E&P Business, as set forth above, which notice shall include the purchase price and terms upon which TAT offers to purchase the E&P Business (the “E&P Offer Notice”). If TAT fails to timely deliver an Offer Notice, TAT’s right to purchase the E&P Business shall terminate, and Buyer shall be entitled to operate the E&P Business in substantially the manner operated prior to the acquisition of the E&P Business for the remainder of the Restricted Period but shall not be entitled to expand beyond the geographic area in which the E&P Business was permitted to operate prior to Buyer’s acquisition thereof. If TAT timely delivers an E&P Offer Notice, the E&P Offer Notice shall either (i) accept the purchase price proposed in the E&P Acquisition Notice, in

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which case TAT shall be obligated to purchase, and Buyer shall be obligated to sell, the E&P Business on the terms set forth in the E&P Acquisition Notice within 30 days after such E&P Offer Notice is delivered by TAT, or (ii) notify Buyer that TAT disputes Buyer’s allocation of the total consideration paid by Buyer for the interest acquired by it to the portion of such consideration attributable to the E&P Business, in which event that parties shall engage a reputable appraiser to be agreed upon by Buyer and TAT to appraise the E&P Business. If Buyer and TAT are not able to agree on an appraiser, each shall select an appraiser, and such appraisers shall jointly select a third appraiser to appraise the E&P Business (such appraiser, or the appraiser agreed upon by Buyer and TAT, the “Appraiser”). If the price in such appraisal is higher than the purchase price provided in the E&P Offer Notice, TAT shall pay the fees and expenses of the Appraiser or, if the price in such appraisal is lower than the purchase price provided in the E&P Offer Notice, Buyer shall pay the fees and expenses of the Appraiser. Within ten days following receipt of the appraisal of the E&P Business, TAT may revoke its offer to purchase the E&P Business, in which case, Buyer shall be entitled to operate the E&P Business in substantially the manner operated prior to the acquisition of the E&P Business for the remainder of the Restricted Period but shall not be entitled to expand beyond the geographic area in which the E&P Business was permitted to operate prior to Buyer’s acquisition thereof. If TAT does not timely revoke such offer, Buyer shall be obligated to sell, and TAT shall be obligated to purchase, the E&P Business at the price set forth in the appraisal within 30 days after the appraisal is delivered to TAT.

(e) Non-Solicitation of Clients and Customers. During the Restricted Period, each member of the Selling Group agrees that it shall not (i) solicit clients or customers of any Acquired Company for the purpose of engaging in the Restricted Business or (ii) encourage any of such clients or customers to reduce or terminate its business with any of the Acquired Companies. During the Restricted Period, Buyer agrees that it shall not (i) solicit clients or customers of TAT or any Seller for the purpose of engaging in oil and gas exploration and production or (ii) encourage any of such clients or customers to reduce or terminate its business with TAT or any Seller.

(f) Non-Solicitation of Employees, Consultants and Agents. Each member of the Selling Group further agrees that it shall not induce or attempt to induce or encourage others to induce or attempt to induce, any Person who is or during the Restricted Period becomes an employee of, consultant to or agent of Buyer or any Acquired Company to terminate such Person’s employment with Buyer or an Acquired Company, as applicable (in the case of an employee), or cease providing its services to Buyer or an Acquired Company, as applicable (in the case of a consultant or agent); provided, that nothing herein shall restrict general solicitations through advertising or similar means which are not specifically directed at employees of, consultants to or agents of Buyer or any Acquired Company or employing or engaging anyone who responds to such general solicitations. Buyer further agrees that it shall not induce or attempt to induce or encourage others to induce or attempt to induce, any Person who is or during the Restricted Period becomes an employee of, consultant to or agent of TAT or any Seller to terminate such Person’s employment with TAT or any Seller, as applicable (in the case of an employee), or cease providing its services to TAT or any Seller, as applicable (in the case of a consultant or agent); provided, that nothing herein shall restrict general

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solicitations through advertising or similar means which are not specifically directed at employees of, consultants to or agents of TAT or any Seller or employing or engaging anyone who responds to such general solicitations.

(g) Specific Performance. The Parties acknowledge that a breach or violation of any or all of the covenants and agreements contained in this Section 7.9 may cause irreparable harm and the damages in a monetary amount which may be virtually impossible to ascertain. As a result, each Party recognizes and acknowledges that each Party that is intended to benefit from such covenants and agreements shall be entitled, without the posting of any bond, to (i) a decree or order of specific performance to enforce the observance and performance of such covenant, obligation or other provision and (ii) an injunction from any court of competent jurisdiction enjoining and restraining any breach or violation of any or all of the covenants and agreements contained in this Agreement, either directly or indirectly, and that such rights shall be cumulative and in addition to all other rights and remedies available hereunder, at law or in equity.

(h) Review and Enforcement. Each Party has carefully read and considered the provisions of this Section 7.9, and having done so, agrees that the restrictions set forth in this Section 7.9 (including the time period of the restrictions and the geographical areas of restrictions set forth herein) are fair and reasonable and are reasonably required for the protection of the interests of the other Parties. Each member of the Selling Group further agrees that the ongoing business of the Acquired Companies has developed significant goodwill over the years, and they are agreeing to these restrictions in connection with sale of that goodwill and have received fair consideration in exchange for the covenants agreed by each member of the Selling Group under this Agreement. Buyer further agrees that it has received fair consideration in exchange for the covenants agreed by Buyer under this Agreement. In the event that, notwithstanding the foregoing, any part of the covenants set forth in this Section 7.9 are held to be invalid or unenforceable by a court of competent jurisdiction, the Parties agree that such invalid or unenforceable provision(s) may be severed or modified in this Agreement without, in any manner, affecting the remaining portions hereof (all of which shall remain in full force and effect). In the event that any provision of this Section 7.9 related to time period, areas, or activities of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period, area or activities such court deems reasonable and enforceable, said time period, area or activities of restriction shall be deemed modified to the minimum extent necessary to make the geographic or temporal restrictions or activities reasonable and enforceable.

(i) Independence. All covenants in this Section 7.9 shall be construed as an agreement independent of any other provision of this Agreement or any other agreement or other transaction document, and the existence of any claim or cause of action of any member of the Selling Group against Buyer, any Acquired Company or any of their Affiliates, or any claim or cause of action of Buyer against any member of the Selling Group, as applicable, whether predicated on this Agreement or otherwise, shall not constitute a defense to enforcement such covenants.

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7.10 Transfer of Assets. Prior to Closing, and at the sole cost and expense of TAT and Sellers (including the payment of any related Taxes, including transfer Taxes), TAT and Sellers shall cause to be transferred to an Acquired Company or an Acquired Company Subsidiary designated by Buyer good title, free and clear of all Liens except for Permitted Liens, to each of the assets listed on Schedule 7.10, except to the extent any such asset is already owned by an Acquired Company; provided that to the extent any assets set forth on Schedules 4.7(b) or 4.8(b) contemplated to be transferred pursuant to this Section 7.10 are not able to be so transferred due to pending third party consents or regulatory approvals (“Non-Assignable Assets”), TAT and Sellers shall cause such transfers to occur as promptly as practicable after Closing, but in no event more than 120 days after Closing, and such Non-Assignable Assets shall be held, as of and from the Closing Date, by Sellers and TAT in trust for Buyer and the covenants and obligations thereunder shall be performed by Buyer in such Seller’s or TAT’s name and all benefits of and obligations existing thereunder shall be for Buyer’s account. Sellers and TAT shall take or cause to be taken such actions in its name or otherwise as Buyer may reasonably request so as to provide Buyer with the benefits of the Non-Assignable Assets and to effect the collection of money or other consideration that becomes due and payable under the Non-Assignable Assets, and each Sellers and TAT shall promptly pay over to Buyer all money or other consideration received by it in respect of all Non-Assignable Assets. As of and from the Closing Date, Sellers and TAT, on behalf of themselves and their Affiliates, authorize Buyer, to the extent permitted by applicable Law and the terms of the Non-Assignable Assets, to perform all the obligations and receive all the benefits of Sellers, TAT or their Affiliates under the Non-Assignable Assets and each appoint Buyer as its attorney-in-fact to act in its name on its behalf or in the name of any Affiliate of Sellers or TAT that is a party thereto and on such Affiliate’s behalf with respect thereto.

7.11 Inter-Company Receivables and Payables. Prior to Closing, TAT and each of the Sellers will, and will cause their respective Affiliates (other than the Acquired Companies) to, pay in full to the Acquired Companies any accounts payable to the Acquired Companies that are in excess of 30 days old, and TAT and Sellers will cause the Acquired Companies to pay in full to TAT, Sellers or any of their respective Affiliates (other than the Acquired Companies) any accounts payable to TAT, Sellers or any such Affiliates that are in excess of 30 days old.

ARTICLE VIII

CONDITIONS TO CLOSING

8.1 Conditions and Obligations of the Parties. The respective obligations of TAT, Sellers, the Acquired Companies and Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver (if permitted by applicable Law) at or prior to the Closing of each of the following conditions:

(a) Excluding any Action (or Order resulting from any Action) initiated (i) by Buyer against TAT, any Seller or any Acquired Company or (ii) by TAT, any Seller or any Acquired Company against Buyer, no Action shall be pending or threatened seeking to restrain or prohibit, and none of the parties hereto shall be subject to any Order of a court of competent jurisdiction that restrains or prohibits, the consummation of the transactions contemplated by this Agreement or which materially alters such transactions (a “Restraint”). If any such Restraint has been issued, each party shall use its commercially reasonable efforts to have any such Restraint overturned or lifted.

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(b) The waiting period (and any extension thereof) under any relevant antitrust Law applicable to the transactions contemplated by this Agreement shall have expired or been terminated.

8.2 Conditions to Obligations of TAT, Sellers and the Acquired Companies. The obligations of TAT, Sellers and the Acquired Companies to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver (if permitted by applicable Law) at or prior to the Closing of each of the following additional conditions:

(a) The representations and warranties of Buyer in this Agreement must be true and correct in all material respects as of the date hereof and as of the Closing (with materiality being measured individually and on an aggregate basis with respect to all breaches of representations and warranties), except for such representations and warranties that are qualified as to materiality or a “Material Adverse Effect,” each of which must be true and correct in all respects as of the date hereof and as of the Closing, except in each case to the extent any such representation and warranty speaks as of any other specific date, in which case such representation and warranty must have been true and correct as applicable as of such date.

(b) Each of the agreements and covenants of Buyer to be performed and complied with by Buyer pursuant to this Agreement prior to the Closing Date shall have been duly performed and complied with in all material respects (it being understood that failure to pay any amounts payable by or on behalf of Buyer pursuant to, and in accordance with, Articles II and/or III shall be deemed to be material).

(c) Each of the Consents or notices to or from Governmental Authorities or other Persons listed on Schedule 8.2(c) must have been obtained and provided and must be in full force and effect.

(d) TAT shall have received any required Consent of the Toronto Stock Exchange or the NYSE Amex related to the transactions contemplated by this Agreement.

(e) Buyer must have delivered or caused to be delivered each document and payment that Section 3.4 requires it to deliver.

(f) TAT shall have received bring-down certifications through the Closing Date regarding the representations and warranties of TAT, Sellers and the Acquired Companies from N. Malone Mitchell, 3^rd, Dustin Guinn, and Wil Saqueton, each in substantially the form provided to TAT upon execution of this Agreement.

8.3 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver (if permitted by applicable Law) at or prior to the Closing of each of the following additional conditions:

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(a) The representations and warranties of TAT, Sellers and the Acquired Companies in this Agreement must be true and correct in all material respects as of the date hereof and as of the Closing (with materiality being measured individually and on an aggregate basis with respect to all breaches of representations and warranties), except for such representations and warranties that are qualified as to materiality or a “Material Adverse Effect,” each of which must be true and correct in all respects as of the date hereof and as of the Closing, except in each case to the extent any such representation and warranty speaks as of any other specific date, in which case such representation and warranty must have been true and correct as applicable as of such date.

(b) Each of the agreements and covenants of TAT, Sellers, and the Acquired Companies to be performed and complied with by the Company pursuant to this Agreement prior to or as of the Closing Date shall have been duly performed and complied with in all material respects (it being understood that failure to deliver any Shares pursuant to, and in accordance with, Article III shall be deemed to be material).

(c) Since the date hereof, there shall not have been any Material Adverse Effect with respect to TAT, any Seller, or any Acquired Company.

(d) Buyer and Buyer’s Affiliate shall have consummated the equity financing contemplated by the letter agreement dated February 5, 2012 (the “Financing Letter”).

(e) Each of the Consents or notices to or from Governmental Authorities or other Persons listed on Schedule 8.3(e) must have been obtained and provided and must be in full force and effect.

(f) TAT, Sellers and the Acquired Companies must have delivered or caused to be delivered each document that Section 3.2 and Section 3.3 require them to deliver.

(g) TAT, Sellers and the Acquired Companies shall have completed the transfers of assets as required under Section 7.10.

8.4 Frustration of Closing Conditions. None of Buyer, TAT, Sellers or the Acquired Companies may rely on the failure of any condition set forth in Section 8.1, Section 8.2 or Section 8.3, as applicable, to be satisfied if such failure was caused by such party’s breach of its obligations to consummate the transactions contemplated by this Agreement as required by the provisions of this Agreement, including Sections 7.2 and 7.7.

ARTICLE IX

TERMINATION OF AGREEMENT

9.1 Termination. Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any time prior to the Closing Date:

(a) by the mutual written consent of Buyer, TAT, Sellers and the Acquired Companies;

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(b) by Buyer or TAT, upon written notice to the other party, if the transactions contemplated by this Agreement have not been consummated on or prior to June 30, 2012 (the “Outside Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(b) is not available to any party whose breach of its obligations under this Agreement has been the principal cause of, or resulted in, the failure of the transactions contemplated by this Agreement to be consummated by such time;

(c) by Buyer or TAT, upon written notice to the other parties, if any Restraint is in effect and has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(c) shall not be available to any party whose failure to fulfill, in all material respects, any obligation under this Agreement has been the principal cause of, or resulted in, (i) such Restraint or (ii) the failure of such Restraint to be removed;

(d) by Buyer, by giving written notice to TAT in the event TAT, any Seller, or any Acquired Company is in material breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) would cause any of the conditions set forth in Section 8.3(a) or Section 8.3(b) not to be satisfied and (ii) if curable, is not cured within 20 days following delivery by Buyer to TAT of written notice of such breach (it being understood that a failure by TAT, any Seller, or any Acquired Company to consummate Closing on the second Business Day following the satisfaction or waiver of each of the conditions set forth in Article VIII (other than the conditions that are to be satisfied at Closing), or on such other date as the parties mutually agree in writing, shall be deemed an incurable material breach by the Acquired Company of Section 3.1);

(e) by TAT by giving written notice to Buyer in the event Buyer is in material breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) would cause the conditions set forth in Section 8.2(a) or Section 8.2(b) not to be satisfied and (ii) if curable, is not cured within 20 days following delivery by TAT to Buyer of written notice of such breach (it being understood that Buyer’s failure to consummate Closing on the second Business Day following the satisfaction or waiver of each of the conditions set forth in Article VIII (other than the conditions that are to be satisfied at Closing), or on such other date as the parties mutually agree in writing, shall be deemed an incurable material breach by Buyer of Section 3.1); or

(f) by Buyer following a Material Adverse Effect with respect to TAT, any Seller or any Acquired Company that, if curable, is not cured within 20 days after the occurrence of such Material Adverse Effect.

9.2 Effect of Termination. If this Agreement is terminated in accordance with Section 9.1, then (i) this Agreement shall forthwith become void and of no further force or effect (other than Sections 7.2(c) and (d), Section 7.3, this Section 9.2 and Article XII, which shall survive the termination of this Agreement and shall be enforceable by the parties hereto notwithstanding any such termination), and (ii) there shall be no Liability or obligation on the part of any of the parties hereto, except as set forth in this Section 9.2 and except for breaches of this Agreement by such party prior to the time of such termination. Nothing in this Article IX

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shall be deemed to alter the provisions of Section 12.13 or otherwise impair the right of any party to compel specific performance by another party of its obligations under this Agreement. If the transactions contemplated by this Agreement are terminated as provided herein, Buyer shall return all documents and copies and other materials received from or on behalf of the Acquired Companies relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the Acquired Companies.

ARTICLE X

REMEDIES

10.1 Survival. The representations and warranties of the parties, and covenants of the parties which require performance on or prior to the Closing Date, set forth in this Agreement or in any Certificate, shall (except as provided below) survive the Closing solely for purposes of this Article X and shall terminate on the date that is the earlier of (a) 18 months following the Closing Date or (b) the consummation of an IPO; provided, that the Fundamental Representations and any covenant of the parties that by the terms of such covenant requires performance after the Closing Date shall survive until (x) 30 days after the expiration of the applicable statute of limitations with respect to the particular matter that is the subject thereof or, (y) solely with respect to any covenant that specifies an earlier termination date, such earlier date; provided, further, that if any Indemnitee makes a claim for indemnification under this Article X at any time prior to the applicable Limitation Date, then such claim (and only such claim) shall survive the applicable Limitation Date, solely for purposes of resolving such claim, until such time as such claim is fully and finally resolved; provided, further, that (subject to Section 9.2) Buyer’s obligations to pay the Closing Date Cash Consideration and deliver the other consideration contemplated by this Agreement and Seller’s obligation to deliver the Shares to Buyer shall survive the Closing indefinitely. “Limitation Date” shall mean, with respect to any representation, warranty or covenant, the date on which such representation, warranty or covenant expires pursuant to this Section 10.1.

10.2 Indemnification.

(a) Subject to the provisions of this Article X and other than as provided in Article XI, from and after the Closing, Buyer shall (and shall cause the Acquired Companies to) indemnify and hold harmless TAT, Sellers and their successors and permitted assigns, and the officers, employees, directors, shareholders and Affiliates of TAT and Sellers and each of their heirs and personal representatives (collectively, the “Seller Indemnitees”) from and against any and all damages of any kind, awards, losses, liabilities, judgments, obligations, assessments, fines, sanctions, penalties, charges, costs, expenses, payments, all interest thereon (including court costs, costs of defense, and reasonable fees and expenses of attorneys, accountants and other professional advisors) and all amounts paid incident to any compromise or settlement of any claim, lawsuit or arbitration (collectively, “Losses”) actually incurred by any of the Seller Indemnitees following the Closing Date based upon (i) any breach of or inaccuracy in the representations and warranties of Buyer contained in this Agreement or any Closing Certificate delivered by Buyer on the Closing Date pursuant to this Agreement, and (ii) any breach of the covenants or agreements of Buyer contained in this Agreement and any breach of the covenants or agreements of the Acquired Companies contained in this Agreement to be performed following the Closing Date.

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(b) Subject to the provisions of this Article X and other than as provided in Article XI, from and after the Closing, TAT and Sellers shall, jointly and severally, indemnify and hold harmless Buyer and its successors and permitted assigns, and the officers, employees, directors, managers, members, partners, stockholders and Affiliates of Buyer and each of their heirs and personal representatives (collectively, the “Buyer Indemnitees”) from and against any and all Losses actually incurred by any of the Buyer Indemnitees based upon (i) any breach of or inaccuracy in the representations and warranties of the Acquired Companies contained in this Agreement or any Closing Certificate delivered by the Acquired Companies on the Closing Date pursuant to this Agreement, (ii) any breach of the covenants or agreements of the Acquired Companies contained in this Agreement to be performed on or before the Closing Date and (iii) any Actions by or on behalf of employees terminated by TAT, Sellers or the Acquired Companies that are commenced before the Effective Date.

(c) Subject to the provisions of this Article X, TAT and Sellers shall, jointly and severally, indemnify and hold harmless the Buyer Indemnitees from and against any and all Losses actually incurred by any of the Buyer Indemnitees based upon (i) any breach of or inaccuracy in the representations and warranties of TAT and Sellers contained in this Agreement or any Closing Certificate delivered by TAT and Sellers on the Closing Date pursuant to this Agreement and (ii) any breach of the covenants or agreements of TAT and Sellers contained in this Agreement to be performed following the Closing Date.

10.3 Exclusive Remedy. Each party acknowledges and agrees that, from and after the Closing (except for actions seeking specific performance or similar equitable relief pursuant to Section 12.13 and fraud claims), such party’s sole and exclusive remedy with respect to any and all rights, claims and causes of action it may have against TAT, Sellers, the Acquired Companies, Buyer or any Affiliate of any of the foregoing for Losses or otherwise relating to the operation of the Acquired Companies or their businesses, or resulting from or relating to the subject matter of this Agreement (including the Schedules hereto) and the transactions contemplated hereby and thereby, whether arising under or based upon any Law or otherwise (including any right, whether arising at law or in equity, to seek indemnification, contribution, cost recovery, damages, or any other recourse or remedy, including as may arise under common law), shall be pursuant to the indemnification provisions set forth in this Article X. Notwithstanding the foregoing, disputes regarding current assets and current liabilities (including the nature and amount thereof) which are taken into account in computing the Net Working Capital under Section 2.3(d) shall not give rise to an indemnification claim hereunder.

10.4 Limitations on Indemnification. Notwithstanding anything herein to the contrary, the indemnification rights and obligations provided for in Section 10.2 are subject to the following limitations:

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(a) Notwithstanding anything to the contrary in this Agreement, the Buyer Indemnitees’ sole and exclusive remedy and source of recovery for any Losses pursuant to claims under Sections 10.2(b)(i), 10.2(b)(ii) (solely with respect to covenants or agreements to be performed prior to Closing), or 10.2(c)(i) related to breaches of representations and warranties is the portion of the General Indemnity Amount remaining at any given time; provided that breaches of the Fundamental Representations shall not be limited to the portion of the General Indemnity Amount remaining at any given time but shall instead be limited to the full amount of the Purchase Price less any indemnification amounts previously paid by TAT or the Sellers to Buyer pursuant to this Agreement.

(b) No Buyer Indemnitee shall be entitled to indemnification pursuant to Sections 10.2(b)(i), 10.2(b)(ii) (solely with respect to covenants or agreements to be performed prior to Closing), or 10.2(c)(i), (i) with respect to any single breach of representations and warranties or a pre-closing covenant unless the aggregate Losses arising from such breach exceeds $50,000 (the “Claim Threshold”) and (ii) until the aggregate amount of all Losses exceeding the Claim Threshold suffered by Buyer Indemnitees exceeds $2,000,000 (the “Basket”), provided that once the Basket of Losses exceeding the Claims Threshold exceeds $2,000,000, the Buyer Indemnitees shall be entitled to recover the entire amount of all such Losses resulting from all claims exceeding the Claim Threshold, including those included in achieving the Basket (subject to Section 10.4(a)).

(c) The limitations set forth in Section 10.4(a) and Section 10.4(b) shall not apply to (i) claims for fraud, or (ii) claims under Section 10.2(b)(i) (solely with respect to Fundamental Representations which shall be limited to the full amount of the Purchase Price less any indemnification amounts previously paid by TAT or the Sellers to Buyer pursuant to this Agreement), Section 10.2(b)(ii) (solely with respect to covenants or agreements to be performed after Closing), Section 10.2(b)(iii), Section 10.2(c)(i) (solely with respect to Fundamental Representations which shall be limited to the full amount of the Purchase Price less any indemnification amounts previously paid by TAT or the Sellers to Buyer pursuant to this Agreement) or Section 10.2(c)(ii).

(d) If any Losses sustained by an Indemnitee are covered by an insurance policy or an indemnification, contribution or similar obligation of another Person (other than an Affiliate of such Indemnitee), the Indemnitee shall use commercially reasonable efforts to collect such insurance proceeds or indemnity, contribution or similar payments. The amount of any Losses subject to indemnification under Section 10.2 shall be reduced by the amounts recovered by any Indemnitee, as applicable, under applicable insurance policies or an indemnification, contribution or similar obligation of another Person (other than an Affiliate of such Indemnitee) with respect to claims related to such Losses and if any Indemnitee receives such insurance proceeds or indemnity, contribution or similar payments after the settlement of any indemnification claim under Section 10.2, as applicable, such Indemnitee shall refund to the Indemnitor the amount of such insurance proceeds or indemnity, contribution or similar payments, up to the amount received in connection with such indemnification claim. It is the intention of the parties that no insurer or third party shall be entitled to any benefit or right it would not be entitled to receive in the absence of this Section 10.4(d).

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(e) Notwithstanding anything to the contrary contained in this Agreement or provided for under any applicable Law, no party hereto shall be liable under this Article X to any Indemnitee, either in contract or in tort, for any loss of profits or any consequential, incidental, exemplary, special or punitive damages of such Indemnitee, whether or not the possibility of such damages has been disclosed to the other party in advance, other than any such damages with respect to claims brought by a third party.

(f) The Buyer Indemnitees shall not be entitled to indemnification pursuant to Section 10.2(b) for Losses to the extent that any Buyer Indemnitee has been compensated therefor pursuant to Section 2.3 or otherwise.

(g) The Buyer Indemnitees’ right to indemnification pursuant to Section 10.2(b) and Section 10.2(c) shall be reduced by the amount of any reserve reflected in the 2011 Financial Statements specifically established for the specific items giving rise to such Loss or if such Loss is reflected in the Net Working Capital.

(h) Each Indemnitee shall use commercially reasonable efforts to mitigate any Loss for which such Indemnitee seeks indemnification.

(i) No Buyer Indemnitee shall be entitled to duplication of recovery for under this Article X with respect to breaches of representations, warranties, and covenants related to Taxes and employee claims under Section 10.2(b)(iii).

10.5 Procedures.

(a) Notice of Losses by Seller Indemnitee. If a Seller Indemnitee has a claim for indemnification under this Article X that may result in a Loss (including any claim relating to a third party claim) (a “Claim”), such Seller Indemnitee shall, as soon as reasonably practicable after it becomes aware of such claim, give written notice thereof (a “Claims Notice”) to Buyer. A Claims Notice must describe the Claim in reasonable detail, and indicate the amount (estimated, as necessary and to the extent feasible) of the Loss that has been or may be suffered by the applicable Seller Indemnitee and include copies of all written documentation and summaries of all oral information actually known or in good faith believed by Seller to exist sufficient to establish the basis for the Claim. No delay in or failure to give a Claims Notice by Seller to Buyer pursuant to this Section 10.5(a) will adversely affect any of the other rights or remedies that the applicable Seller Indemnitee has under this Agreement, or alter or relieve Buyer of its obligations to indemnify the applicable Seller Indemnitee except to the extent that it is materially prejudiced thereby. Buyer shall respond to Seller (a “Claim Response”) within 30 days (the “Response Period”) after the date that the Claims Notice is sent by Seller. Any Claim Response must specify whether or not Buyer disputes the Claim described in the Claims Notice. If Buyer fails to give a Claim Response within the Response Period, Buyer will be deemed not to dispute the Claim described in the related Claims Notice. If Buyer elects not to dispute a Claim described in a Claims Notice, whether by failing to give a timely Claim Response or otherwise, then the amount of Losses alleged in such Claims Notice will conclusively be deemed an obligation of Buyer, and Buyer shall pay or cause the Acquired Companies to pay, in cash, to Sellers

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on behalf of the applicable Seller Indemnitees, within five days after the last day of the applicable Response Period the amount, if any, specified in the Claims Notice. If Buyer delivers a Claim Response within the Response Period indicating that it disputes one or more of the matters identified in the Claims Notice, Buyer and Sellers shall promptly meet and use their commercially reasonable efforts to settle the dispute. If Buyer and Sellers are unable to reach agreement within 30 days after the conclusion of the Response Period, then the dispute will be resolved in accordance with Section 12.10.

(b) Notice of Losses by Buyer Indemnitee.

(i) Claims with Determinable Losses. Subject to the limitations set forth in this Article X, if any Buyer Indemnitee has a claim for indemnification pursuant to Section 10.2(b) or Section 10.2(c) (a “Buyer Claim”) the amount of which is then known, Buyer shall, as soon as reasonably practicable after it becomes aware of such Buyer Claim, notify Seller of such Buyer Claim by means of a written notice specifying the nature, circumstances and amount of such Buyer Claim, including copies of any written documentation received from third parties and in Buyer’s possession and related to such Buyer Claim (an “Buyer Claim Notice” and, together with a Claims Notice, a “Notice”). The failure by Buyer to promptly deliver a Buyer Claim Notice under this Section 10.5(b)(i) will not adversely affect the applicable Buyer Indemnitee’s right to indemnification except to the extent that Sellers are materially prejudiced thereby. If, within 30 days following receipt by Sellers of a Buyer Claim Notice (the “Dispute Period”), Buyer has not received from Sellers notice in writing that Sellers object to the Buyer Claim (or the amount of Losses set forth therein) asserted in such Buyer Claim Notice (a “Dispute Notice”), Sellers will be conclusively deemed to have agreed to and accepted Liability for the Buyer Claim and the amounts set forth in the Buyer Claim Notice, and Sellers shall pay, first, through a reduction in the then outstanding balance of the Promissory Note in an amount equal to the amount of such Buyer Claim, and second, in cash to the extent that the amount of such Buyer Claim exceeds the outstanding balance of the Promissory Note, to Buyer on behalf of the applicable Buyer Indemnitees, within five days after the last day of the applicable Dispute Period the amount specified in the Buyer Claim Notice, subject to the limitations contained in this Article X.

(ii) Claims Without Determinable Losses. Subject to the limitations set forth in this Article X, if any Buyer Indemnitee determines that it has a Buyer Claim the amount of which cannot reasonably be determined, Buyer shall, as soon as reasonably practicable after it becomes aware of such Buyer Claim, notify Sellers by means of a Buyer Claim Notice that contains the information required by Section 10.5(b)(i) and a good faith estimate, if possible, of Buyer’s calculation of the Losses incurred by the applicable Buyer Indemnitee with respect thereto. The failure by Buyer to promptly deliver an Buyer Claim Notice under this Section 10.5(b)(ii) will not adversely affect the applicable Buyer Indemnitees’ right to indemnification except to the extent Sellers are materially prejudiced thereby. If Buyer has not received a Dispute Notice from Seller within the Dispute Period, Sellers will be conclusively deemed to have agreed to and

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accepted Liability for the Buyer Claim, and Sellers shall pay from time to time as the amount of any such Buyer Claim becomes known, first, through a reduction in the then outstanding balance of the Promissory Note in an amount equal to the amount of such Buyer Claim, and second, in cash to the extent that the amount of such Buyer Claim exceeds the outstanding balance of the Promissory Note, to Buyer on behalf of the applicable Buyer Indemnitees, within five days after Buyer delivers Sellers notice of such amounts, the amount of such Buyer Claims, subject to the limitations contained in this Article X.

(iii) Disputes. If Sellers deliver a Dispute Notice to Buyer within the Dispute Period, Buyer and Sellers shall promptly meet and use their commercially reasonable efforts to settle the dispute as to whether and to what extent the Buyer Indemnitees are entitled to indemnification on account of such Buyer Claim. If Buyer and Sellers are unable to reach agreement within 30 days after Buyer receives such Dispute Notice, then the dispute will be resolved in accordance with Section 12.10. For all purposes of this Article X (including, without limitation, those pertaining to disputes under Section 10.5(a) and this Section 10.5(b)(iii)), Buyer and Sellers shall cooperate with and make available to the other party and its respective representatives all information, records and data, and shall permit reasonable access to its facilities and personnel, as may be reasonably required in connection with the resolution of such disputes.

(c) Opportunity to Defend Third Party Claims. In the event of any claim by a third party against a Buyer Indemnitee or Seller Indemnitee for which indemnification is available hereunder, the Indemnitor has the right, exercisable by written notice to Buyer or Sellers, as applicable, within 30 days of receipt of a Notice from Buyer or Sellers, as applicable, to assume and conduct the defense of such claim with counsel selected by the Indemnitor, subject to the reasonable approval of the Indemnitee; provided, that Sellers shall not be entitled to assume the defense of a claim hereunder if (i) it involves potential criminal Liability of Buyer, any Acquired Company, or any of their employees, (ii) relief other than monetary damages is sought, or (iii) Buyer determines in good faith that the amount necessary to resolve such claims would materially exceed the amount recoverable under this Agreement. If the Indemnitor has assumed such defense as provided in this Section 10.5(c), the Indemnitor will not be liable for any legal expenses subsequently incurred by any Indemnitee in connection with the defense of such Claim. If the Indemnitor does not, or is not permitted to, assume the defense of any third party claim in accordance with this Section 10.5(c), the Indemnitee may continue to defend such Claim (and, subject to the limitations set forth in this Article X, the Indemnitor shall reimburse the Indemnitee for the reasonable expenses of defending such claim upon submission of periodic bills) and the Indemnitor may still participate in, but not control, the defense of such third party claim at the Indemnitor’s sole cost and expense. The Indemnitee shall not consent to a settlement of, or the entry of any judgment arising from, any such Claim, without the prior written consent of the Indemnitor (such consent not to be unreasonably withheld or delayed). Except with the prior written consent of the Indemnitee (such consent not to be unreasonably withheld or delayed), no Indemnitor, in the defense of any such claim, will consent to the entry of any judgment or enter into any settlement that (i) provides for injunctive or other nonmonetary relief affecting the Indemnitee, or

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(ii) does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnitee of a release from all Liability with respect to such claim or litigation. In any such third party claim, the party responsible for the defense of such claim (the “Responsible Party”) shall, to the extent reasonably requested by the other party, keep such other party informed as to the status of such claim, including, without limitation, all settlement negotiations and offers. With respect to a third party claim for which Sellers are the Responsible Parties, Buyer shall use all commercially reasonable efforts to make available to Sellers and their representatives all books and records of Buyer and the Acquired Companies relating to such third party claim and shall cooperate with Sellers, at Sellers’ expense, in the defense of the third party claim.

(d) Settlement. The Responsible Party shall promptly notify the other party of each settlement offer with respect to a third party claim. Such other party shall promptly notify the Responsible Party whether or not such party is willing to accept the proposed settlement offer. If any such settlement offer is made to any claimant and rejected by such claimant, the amount payable to an Indemnitee with respect to such claim will not be limited to the amount of such settlement offer but will remain subject to all other limitations set forth in this Agreement. If the Indemnitor makes any payment hereunder on any third party claim, the Indemnitor shall be subrogated, to the extent of such payment, to all rights and remedies of the Indemnitee to any insurance benefits or other claims of the Indemnitee with respect to such third party claim.

ARTICLE XI

TAX MATTERS

11.1 Administration of Tax Matters. Sellers shall prepare and timely file, or cause to be timely filed, for each Acquired Company with reasonable assistance from each respective Acquired Company, all Tax Returns that are required by Law to be filed on or before the Closing Date and shall pay or cause to be paid all Taxes shown due thereon. Such Tax Returns shall be prepared on a basis consistent with past practice except to the extent otherwise required by Law. Buyer shall prepare and timely file, or cause to be timely filed, all other Tax Returns for the Acquired Companies and shall pay or cause to be paid all Taxes shown due thereon. With respect to all Straddle Periods, such Tax Returns shall be prepared on a basis consistent with past practice except to the extent otherwise required by Law. Buyer shall, at least 30 days prior to filing any such Tax Return that relates to a Pre-Effective Date Tax Period, provide a copy of such Tax Return to Sellers. Sellers shall, within ten days of receiving such Tax Return, advise Buyer regarding any matters in such Tax Return with which it reasonably disagrees based on applicable Laws. In such case, Sellers and Buyer shall reasonably cooperate with each other to reach a timely and mutually satisfactory solution to the disputed matters.

11.2 Liability for Taxes.

(a) Sellers hereby agree, jointly and severally, to be liable for and to indemnify and hold the Buyer Indemnitees harmless from and against, and pay to the Buyer Indemnitees the amount of any and all Losses in respect of (i) all Taxes of any Acquired Company and the Subsidiaries (or any predecessor thereof) for any Pre-Effective Date Tax Period, including the portion of any Straddle Period ending at the close of business on the Effective Date and (ii) any failure by Sellers to timely pay any and all Taxes required to be borne by Sellers pursuant to Section 11.5.

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(b) Buyer hereby agrees to be liable for and to indemnify and hold the Seller Indemnitees harmless from and against, and pay to the Seller Indemnitees the amount of any and all Losses in respect of all Taxes of any Acquired Company and the Subsidiaries for any Post-Effective Date Tax Period, including the portion of any Straddle Period beginning at the close of business on the Effective Date.

(c) The Acquired Companies will, in the discretion of Buyer and where not prohibited by Law, close the taxable periods of some or all the Acquired Companies and the Subsidiaries as of the close of business on the Effective Date. If applicable law does not permit the Acquired Company or a Subsidiary to close its taxable year on the Effective Date or Buyer does not exercise its discretion to do so, in any case in which a Tax is assessed with respect to or is attributable to a Straddle Period, the amount of Taxes attributable to the Pre-Effective Date Tax Period shall be determined on the basis of an interim closing of the books of the Acquired Companies as of the Effective Date, and the determination of the hypothetical Tax for such Pre-Effective Date Tax Period shall be determined on the basis of such interim closing of the books; provided that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the period ending on and including the Effective Date and the period beginning after the Effective Date in proportion to the number of days in each such period relative to the entire taxable period. Taxes attributable to the Pre-Effective Date Tax Period shall be determined under the same method of accounting used by the applicable Acquired Company during that period.

(d) Any and all transactions or events contemplated by this Agreement that occur on or prior to the Effective Date shall be deemed to have occurred in the Pre-Effective Tax Period.

11.3 Cooperation; Audits.

(a) In connection with any audit examinations or Actions relating to the Tax liabilities imposed on any Acquired Company (or any successor thereof), Buyer, on the one hand, and Sellers, on the other hand, shall cooperate fully with each other, including the furnishing or making available during normal business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Tax Returns, the conduct of audit examinations or the defense of Actions by Taxing Authorities as to the imposition of Taxes. Buyer shall and shall cause the Acquired Companies to retain all books and records with respect to Tax matters pertinent to the Acquired Company relating to any taxable period beginning before the Closing Date until the expiration of the applicable statute of limitations (including any extension thereof) for the respective taxable periods, and to abide by all record retention agreements entered into with any Taxing Authority. Notwithstanding the above, the control and conduct of any Action relating to Taxes that is a third-party Claim shall be governed by Section 10.5(c).

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(b) Buyer and Sellers shall, upon request, use commercially reasonable efforts to obtain any certificate or other document from any Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including with respect to the transactions contemplated hereby).

11.4 Tax Refunds; Amended Tax Returns.

(a) Buyer shall promptly pay or cause to be paid to Sellers, or will set-off such amounts against any Tax Liability for the Pre-Effective Date Tax Period owed by Sellers, any Tax refunds attributable to the Acquired Company with respect to any Pre-Effective Date Tax Period that are received by Buyer or any Acquired Company (or any successor thereof) within ten days after the receipt of such refunds. At Sellers’ request, Buyer shall cooperate with Sellers in obtaining such reasonably available refunds, including through the filing of amended Tax Returns or refund claims as prepared by Seller, at Seller’s expense. Notwithstanding the foregoing, Sellers shall not file and Buyer shall not be obligated to file or cause any Acquired Company to file any amended Tax Return or refund claim that would result in additional Tax to Buyer or any Acquired Company or reduction of any Tax item.

(b) Neither Buyer nor any of its Affiliates shall amend, refile, revoke or otherwise modify any Tax Return or Tax election of any Acquired Company (or any successor(s) thereof) with respect to a taxable period (or portion thereof) ending on or prior to the Effective Date unless required to do so by a Taxing Authority or with the prior written consent of Sellers which shall not be unreasonably withheld.

11.5 Transfer Taxes. Sellers shall be liable for and shall pay (and shall indemnify and hold harmless the Buyer Indemnitees against) all sales, use, stamp, documentary, filing, recording, transfer or similar fees or Taxes or governmental charges as levied by any Governmental Authority including any interest and penalties) in connection with the transfer of the Shares, or the transfer of any assets to the Acquired Companies or any Acquired Company Subsidiaries, contemplated by this Agreement.

11.6 Disputes. Any dispute as to any matter covered by this Article XI shall be resolved by an Arbitration Firm. The fees and expenses of such Arbitration Firm shall be borne equally by TAT and Sellers, on the one hand, and Buyer, on the other hand. If any dispute with respect to a Tax Return is not resolved prior to the due date of such Tax Return, such Tax Return shall be filed in the manner which the party responsible for preparing such Tax Return deems correct.

11.7 Time Limits. In accordance with the provisions of Article X, any claim for indemnity under this Article XI may be made at any time prior to 30 days after the expiration of the applicable Tax statute of limitations with respect to the relevant taxable period (including all periods of extension, whether automatic or permissive).

11.8 Conflicts. In the event of a conflict between the provisions of this Article XI, on the one hand, and the provisions of Article X, on the other hand, the provisions of this Article XI shall control.

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ARTICLE XII

MISCELLANEOUS AND GENERAL

12.1 Expenses. Whether or not the transactions contemplated by this Agreement are consummated, all costs and expenses (including all legal, accounting, broker, finder or investment banker fees) incurred in connection with this Agreement and the transactions contemplated hereby are to be paid by the party incurring such expenses, except as expressly provided herein.

12.2 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the parties hereto and their respective successors and permitted assigns, but is not assignable by any party without the prior written consent of the other parties hereto; provided, that Buyer may assign this Agreement and its rights and obligations hereunder other than its obligation to execute and deliver the Promissory Note, without the consent of any other party, to any Affiliate of Buyer, or to any entity formed in connection with and benefiting from the financing contemplated by the Financing Letter, and upon such assignment, (a) the assignee shall be deemed to be “Buyer” for all purposes of this Agreement, (b) Buyer shall be automatically released from any and all obligations and Liabilities under this Agreement, and (c) the parties agree to look solely to such assignee for performance of such obligations and Liabilities, in each case, other than with respect to execution and delivery of the Promissory Note.

12.3 Third Party Beneficiaries. Other than as expressly set forth in this Agreement, each party hereto intends that this Agreement does not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto.

12.4 Further Assurances. The parties hereto shall execute such further instruments and take such further actions as may reasonably be necessary to carry out the intent of this Agreement. Each party hereto shall cooperate affirmatively with the other parties hereto, to the extent reasonably requested by such other parties, to enforce rights and obligations herein provided.

12.5 Notices. Any notice or other communication provided for herein or given hereunder to a party hereto must be in writing, and sent by facsimile transmission (electronically confirmed) or portable document format (.pdf), delivered in person, mailed by first class registered or certified mail, postage prepaid, or sent by Federal Express or other overnight courier of national reputation, addressed as follows:

If to Buyer or after the Closing to an Acquired Company:

Dalea Partners, LP

16803 Dallas Parkway

Addison, Texas 75001

Attention: Christine F. Stroud

Fax:(972) 590-9879

Email: christine.stroud@riatacg.com

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with copies to:

McAfee & Taft A Professional Corporation

Tenth Floor, Two Leadership Square

211 North Robinson

Oklahoma City, Oklahoma 73102

Attention: T. Michael Blake

Fax: (405) 235-0439

Email: mike.blake@mcafeetaft.com

AND

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite 300

Dallas, Texas 75201

Attention: Michael A. Saslaw

Fax: (214) 746-7777

Email: michael.saslaw@weil.com

If to TAT, any Seller or any Acquired Company prior to the Closing:

TransAtlantic Petroleum, Ltd.

16803 Dallas Parkway

Addison, Texas 75001

Attention: Jeffrey S. Mecom

Fax: (214) 265-4795

Email: jeff.mecom@tapcor.com

with a copy to:

Haynes and Boone, LLP

2323 Victory Ave., Suite 700

Dallas, Texas 75219

Attention: Garrett DeVries

Fax: (214) 200-0428

Email: garrett.devries@haynesboone.com

with a copy to:

Baker Botts L.L.P.

2001 Ross Avenue

Suite 1100

Dallas, Texas 75201

Attention: Neel Lemon

Fax: (214) 661-4954

Email: neel.lemon@bakerbotts.com

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or to such other address with respect to a party as such party notifies the other in writing as above provided. Notices delivered personally shall be effective upon delivery. Notices transmitted by facsimile or electronic means, including via pdf, shall be effective when received, provided, that the burden of proving notice when notice is transmitted by facsimile or electronic means shall be the responsibility of the party providing such notice. Notices delivered by overnight mail shall be effective when received. Notices delivered by registered or certified mail shall be effective on the date set forth on the receipt of registered or certified mail, or 72 hours after mailing, whichever is earlier.

12.6 Complete Agreement. This Agreement and the Schedules and Exhibits hereto and the other documents delivered by the parties in connection herewith contains the complete agreement between the parties hereto with respect to the transactions contemplated hereby and thereby and supersede all prior agreements and understandings between the parties hereto with respect to the subject matter hereof and thereof. Notwithstanding any oral agreement or course of action of the parties or their representatives to the contrary, no party to this Agreement shall be under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this Agreement shall have been executed and delivered by each of the parties.

12.7 Captions. The captions contained in this Agreement are for convenience of reference only and do not form a part of this Agreement.

12.8 Amendment. This Agreement may be amended or modified only by an instrument in writing specifically designated as an amendment hereto duly executed by TAT, Sellers, the Acquired Companies and Buyer.

12.9 Waiver. At any time prior to the Closing Date, TAT, Sellers, the Acquired Companies and Buyer may (a) extend the time for the performance of any of the obligations or other acts of the parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, or (c) waive compliance with any of the agreements or conditions contained herein, to the extent permitted by applicable Law. Except as expressly provided in this Agreement to the contrary, any agreement to any such extension or waiver will be valid only if set forth in a writing signed by TAT, Sellers, the Acquired Companies and Buyer. No failure of any party to this Agreement to exercise any power given it under this Agreement, or to insist upon strict compliance with any provision of this Agreement, and no custom or practice at variance with the terms of this Agreement shall constitute a waiver of any such party’s right to demand strict compliance with the terms of this Agreement.

12.10 Governing Law; Jurisdiction. This Agreement is to be governed by, and construed and enforced in accordance with, the laws of the State of Texas, without regard to its rules of conflict of laws. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court sitting in Dallas County in the State of Texas. Consistent with the preceding sentence, each of the parties hereto hereby (a) submits to the exclusive jurisdiction of any federal or state court sitting in the State of Texas for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and

44

(b) irrevocably waives, and agrees not to assert by way of motion, defense, or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts.

12.11 Severability. So long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party, any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable, TAT, Sellers, the Acquired Companies, and Buyer shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

12.12 Counterparts. This Agreement may be executed in one or more counterparts (and by facsimile or portable document format (.pdf)), each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

12.13 Enforcement of Agreement. The parties hereto agree that irreparable damage would occur if any of the provisions of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to (a) any other remedy to which they are entitled hereunder, at law or in equity, prior to the Closing Date, or (b) any other remedy to which they are entitled hereunder after the Closing Date.

12.14 Other Definitional and Interpretive Matters.

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

(i) Calculation of Time Period. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

(ii) Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.

(iii) Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are

45

hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.

(iv) Gender and Number. Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

(v) Headings. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.

(vi) Herein. The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

(vii) Including. The word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

12.15 Disclosure Schedules. Disclosure in any section of the Acquired Company Disclosure Schedules or the Seller Disclosure Schedules of any information (a) shall not be construed as or constitute an admission, evidence or agreement that a violation, right of termination, default, non-compliance, Liability or other obligation of any kind exists with respect to any item; (b) with respect to the enforceability of Contracts with third-parties, the existence or non-existence of third-party rights, the absence of breaches or defaults by third-parties, or similar matters or statements, is intended only to allocate rights and risks among the parties to this Agreement and is not intended to be admissions against interests, give rise to any inference or proof of accuracy, be admissible against any party by any Person who is not a party, or give rise to any claim or benefit to any entity or person who is not a party; and (c) shall not be deemed or interpreted to broaden the representations and warranties, obligations, covenants, conditions or agreements of the Acquired Company or Seller contained in this Agreement. The specifications of any dollar amount in any representation, warranty or covenant contained in this Agreement is not intended to imply that such amount, or higher or lower amounts, are or are not material, and no Person shall use the fact of the setting forth of any such amount in any dispute or controversy between the parties as to whether any obligation, item or matter not described herein or included in the Seller Disclosure Schedules or the Acquired Company Disclosure Schedules is or is not material for purposes of this Agreement.

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12.16 Independent Legal Counsel; Continuing Representation. Each party hereto has had the benefit of independent legal counsel with respect to the preparation of this Agreement. This Agreement expresses the mutual intent of the parties and each party has participated equally in its preparation. Accordingly, the rule on construction against the drafting party shall have no application to this Agreement. The parties hereto (collectively, the “Consenting Parties”) acknowledge and agree that at all times relevant hereto up to the Closing, Haynes and Boone LLP and Baker Botts LLP (on behalf of TAT’s Special Committee of Independent Directors (individually or collectively, “Sellers’ Counsel”) has represented TAT, Sellers and the Acquired Companies. If subsequent to the Closing any dispute were to arise relating in any manner to this Agreement or any other agreement between Seller on the one hand and Buyer or its Affiliates (including the Acquired Company), on the other hand, relating in any manner to this Agreement or any of the transactions contemplated herein (a “Dispute”), Buyer hereby consents to Sellers’ Counsel’s representation of Sellers in such Dispute.

[Signatures on Following Pages.]

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IN WITNESS WHEREOF, Buyer, TAT, the Acquired Companies and Sellers have executed this Agreement to be effective as of the day and year first above written.

BUYER: DALEA PARTNERS, LP By: Dalea Management, LLC, an Oklahoma limited liability company, its General Partner
By:	/s/ N. Malone Mitchell, 3rd
Name:	N. Malone Mitchell, 3rd
Title:	Manager

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

TAT: TRANSATLANTIC PETROLEUM, LTD.
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Vice President

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

ACQUIRED COMPANIES: VIKING INTERNATIONAL LIMITED
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Vice President

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

VIKING GEOPHYSICAL SERVICES, LTD.
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Vice President

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

VIKING OILFIELD SERVICES SRL
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Authorized Representative

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

SELLERS: TRANSATLANTIC WORLDWIDE, LTD.
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Vice President

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

LONGE ENERGY LIMITED
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Vice President

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

TRANSATLANTIC PETROLEUM (USA) CORP.
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Vice President

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

TRANSATLANTIC PETROLEUM CYPRUS LIMITED
By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Director

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

EXHIBIT A

DEFINED TERMS

The definitions of terms capitalized and used throughout this Agreement are as follows:

“2010 Financial Statements” has the meaning set forth in Section 4.5(a).

“2011 Financial Statements” has the meaning set forth in Section 4.5(a).

“Acquired Companies” has the meaning set forth in the preamble.

“Acquired Company Closing Certificate” has the meaning set forth in Section 3.3(g).

“Acquired Company Debt” means the Liabilities of TAT, Sellers and the Acquired Companies or any of their Subsidiaries set forth on Exhibit E hereto.

“Acquired Company Disclosure Schedules” has the meaning set forth in the preamble of Article IV.

“Acquired Company Financial Statements” has the meaning set forth in Section 4.5(a).

“Acquired Company IP” means Intellectual Property used in the conduct of the business of the Acquired Companies as currently conducted.

“Acquired Company-Owned IP” means Acquired Company IP that is owned by the Acquired Companies.

“Acquired Company Registered Intellectual Property” means all United States, international and foreign (a) patents and patent applications (including provisional applications), (b) registered service marks and trademarks and applications to register service marks and trademarks, and (c) registered copyrights and applications for copyright registration, in each case of (a) through (c) that is owned by the Acquired Companies and which have not expired.

“Acquired Company Subsidiary” has the meaning set forth in Section 4.3.

“Acquirer” has the meaning set forth in Section 7.9(b).

“Acquisition Notice” has the meaning set forth in Section 7.9(b).

“Acquisition Proposal” has the meaning set forth in Section 7.8.

“Action” or “Actions” means any lawsuit, legal proceeding, administrative enforcement proceeding, arbitration proceeding or similar matter before any Governmental Authority.

“Affiliate” means with respect to any Person, any Person that directly or indirectly controls, is controlled by or is under common control with such Person.

“Agreement” has the meaning set forth in the preamble.

EXHIBIT A-1

“Appraiser” has the meaning set forth in Section 7.9(c).

“Arbitration Firm” has the meaning set forth in Section 2.3(d).

“Balance Sheet Date” has the meaning set forth in Section 4.5(a).

“Basket” has the meaning set forth in Section 10.4(b).

“Business Day” means any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank located in Dallas, Texas, is closed. References to “days” other than Business Days shall be to calendar days.

“Buyer” has the meaning set forth in the preamble.

“Buyer Claim” has the meaning set forth in Section 10.5(b).

“Buyer Claim Notice” has the meaning set forth in Section 10.5(b).

“Buyer Closing Certificate” has the meaning set forth in Section 3.4(g).

“Buyer Disclosure Schedules” has the meaning set forth in the preamble of Article VI.

“Buyer Indemnitees” has the meaning set forth in Section 10.2(b).

“Certificate” means the Acquired Company Closing Certificate, the Buyer Closing Certificate, Seller Closing Certificate and the TAT Closing Certificate.

“Claim” has the meaning set forth in Section 10.5(a).

“Claims Notice” has the meaning set forth in Section 10.5(a).

“Claim Response” has the meaning set forth in Section 10.5(a).

“Claim Threshold” has the meaning set forth in Section 10.4(b).

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Date Cash Consideration” has the meaning set forth in Section 2.1.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Consent” means any consent, approval, authorization, qualification, waiver, registration or notification required to be obtained from, filed with or delivered to a Governmental Authority in connection with the consummation of the transactions provided for in this Agreement.

“Consenting Parties” has the meaning set forth in Section 12.16.

EXHIBIT A-2

“Contracts” means all written or oral contracts, leases, licenses, and other agreements (including any amendments and other modifications thereto) (other than purchase orders and sale orders entered into in the ordinary course of business), to which the Acquired Companies is a party.

“Cyprus” has the meaning set forth in the preamble.

“Dalea Party Debt” means the aggregate amount of outstanding indebtedness of any member of the Selling Group that is payable to Dalea Partners, LP or any Affiliate of Dalea Partners, LP.

“Dispute” has the meaning set forth in Section 12.16.

“Dispute Notice” has the meaning set forth in Section 10.5(b).

“Dispute Period” has the meaning set forth in Section 10.5(b).

“E&P Acquisition Notice” has the meaning set forth in Section 7.9(d).

“E&P Business” has the meaning set forth in Section 7.9(d).

“E&P Offer Notice” has the meaning set forth in Section 7.9(d).

“Effective Date” means April 1, 2012.

“Employee Plans” has the meaning set forth in Section 4.11.

“Environment” means soil, surface waters, groundwater, land, stream sediments and ambient air.

“Environmental Law” means all Laws with respect to protection of the Environment.

“Equity Interests” has the meaning set forth in Section 4.3.

“Estimated Closing Date Purchase Price” means for purposes of Section 2.3, the Purchase Price actually paid at Closing, as determined after the adjustments made in Sections 2.1(a), 2.1(b) and 2.3(b) (without regard to Sections 2.3(f)(i) or (f)(ii)).

“Estimated Effective Date Balance Sheet” has the meaning set forth in Section 2.3(a).

“Estimated Effective Date Net Working Capital” has the meaning set forth in Section 2.3(a).

“Estimated Net Working Capital Statement” has the meaning set forth in Section 2.3(a).

“Final Effective Date Balance Sheet” has the meaning set forth in Section 2.3(c).

“Final Net Working Capital” has the meaning set forth in Section 2.3(c).

EXHIBIT A-3

“Final Net Working Capital Statement” has the meaning set forth in Section 2.3(c).

“Financing Letter” has the meaning set forth in Section 8.3(d).

“Fundamental Representations” means the representations and warranties contained in the first sentence of Section 4.1 and the representations and warranties contained in Sections 4.2, 4.3, 4.4(a), 4.6, 4.19, 5.2 and 5.5.

“GAAP” means United States generally accepted accounting principles applied on a basis consistent with the Acquired Company Financial Statements.

“General Enforceability Exceptions” has the meaning set forth in Section 4.4(a).

“General Indemnity Amount” means an amount equal to $16,400,000.

“Governmental Authority” means any government or political subdivision, whether federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision, or any federal, state, local or foreign court or arbitrator.

“Hadco” has the meaning set forth in Section 7.9(b).

“Hazardous Material” means any material regulated because of its effect or potential effect on human health or the environment, including (i) any substance, waste or material that is regulated as a hazardous substance, toxic substance, hazardous waste, extremely hazardous waste, restricted hazardous waste, radioactive contaminant, hazardous constituent, solid waste, special waste or pollutant pursuant to any Environmental Law, or (ii) petroleum or any fraction or by-product thereof, asbestos, polychlorinated biphenols or naturally occurring radioactive material.

“Indemnitee” means any Person entitled to indemnification pursuant to Section 10.2.

“Indemnitor” means any Person required to provide indemnification pursuant to Section 10.2.

“Intellectual Property” means (i) patents and patent applications, (ii) Internet domain names, trademarks, service marks, trade dress, trade names, logos and corporate names, and any registrations and applications for registration therefore, and all of the goodwill associated therewith, (iii) copyrights (registered or unregistered) and copyrightable works, and registrations and applications for registration thereof, (iv) trade secrets, and (v) customized or proprietary computer software, data and databases and all documentation related thereto.

“IPO” means the initial public offering of any equity securities of Buyer pursuant to which such equity securities are thereafter listed for sale on the London Stock Exchange (or any similar stock exchange).

“Law” means any law, statute, code, ordinance, regulation or rule of any Governmental Authority.

EXHIBIT A-4

“Liabilities” means all liabilities or obligations, whether known or unknowns, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether due or to become due.

“Liens” means any security interest, mortgage, lien, option, pledge or other similar encumbrance.

“Limitation Date” has the meaning set forth in Section 10.1.

“Longe” has the meaning set forth in the preamble.

“Losses” has the meaning set forth in Section 10.2(a).

“Master Services Agreement” means a Master Services Agreement in substantially the form of Exhibit C.

“Material Adverse Effect” means any change, occurrence or development that has or could reasonably be expected to have a material adverse effect on the business, results of operations, or financial condition of such party and its subsidiaries taken as a whole, but excluding any effect resulting from (a) general economic conditions (whether as a result of acts of terrorism, war, armed conflicts or otherwise) to the extent such party is not disproportionately affected thereby, (b) affecting companies in the industry in which it conducts its business generally to the extent such party is not disproportionately affected thereby or (c) the announcement or performance of this Agreement.

“Material Contracts” has the meaning set forth in Section 4.12(a).

“Net Working Capital” means the amount by which (a) accounts receivable, prepaid expenses, cash and cash equivalents exceeds (b) accounts payable, outstanding checks net of deposits in transit, accrued expenses and salaries, and other current liabilities (excluding (i) Selling Expenses (including any employee incentive, deferred compensation or bonus expenses), (ii) Acquired Company Debt and any accrued interest or fees thereon, and (iii) any current or other Liability not assumed by Buyer), all as calculated in accordance with Exhibit B.

“Non-Acquired Company Affiliates” has the meaning set forth in Section 4.23.

“Non-Assignable Assets” has the meaning set forth in Section 7.10.

“Notice” has the meaning set forth in Section 10.5(b).

“Objection Notice” has the meaning set forth in Section 2.3(d).

“Offered Business” has the meaning set forth in Section 7.9(b).

“Offer Notice” has the meaning set forth in Section 7.9(b).

“Order” means any order, judgment, ruling, injunction, assessment, award, decree or writ of any Governmental Authority.

EXHIBIT A-5

“Organizational Documents” means (a) the certificate or articles of incorporation, organization or formation and the by-laws, the partnership agreement or operating or limited liability company agreement (as applicable), and (b) any documents comparable to those described in clause (a) as may be applicable pursuant to any applicable Law.

“Outside Date” has the meaning set forth in Section 9.1(b).

“Owned Property” has the meaning set forth in Section 4.8.

“Payoff Letters” means the letters provided by the holders of Acquired Company Debt to the Acquired Companies in connection with the repayment of the Acquired Company Debt as contemplated hereby.

“Permits” means any license, permit, authorization, certificate of authority, qualification or similar document or authority that has been issued or granted by any Governmental Authority.

“Permitted Liens” means (a) Liens for Taxes not yet due and payable or being contested in good faith by appropriate proceedings and reserved against in the 2011 Financial Statements or otherwise reserved against in the Acquired Companies accounting books and records to the extent required under GAAP, (b) mechanics’, workmens’, repairmen’s, warehousemen’s, carriers’ or other like Liens arising or incurred in the ordinary course of business or by operation of Law if the underlying obligations are not delinquent, and (c) with respect to the Real Property, (i) easements, encroachments, restrictions, rights of way and any other non-monetary title defects and (ii) zoning, building and other similar restrictions.

“Person” means any individual, sole proprietorship, partnership, corporation, limited liability company, joint venture, unincorporated society or association, trust or other legal entity or any Governmental Authority.

“Post-Effective Date Tax Period” means any Tax period beginning after the Closing Date.

“Pre-Effective Date Tax Period” means any Tax period (or the portion of a Straddle Period) ending on or before the Effective Date.

“Price Decrease” has the meaning set forth in Section 2.3(f)(ii).

“Price Increase” has the meaning set forth in Section 2.3(f)(i).

“Promissory Note” has the meaning set forth in Section 3.4(b).

“Purchase Price” has the meaning set forth in Section 2.1.

“Real Property” means all of the Acquired Companies’ and their Subsidiary’s real property and interest in real property, leaseholds and subleaseholds, purchase options, easements, licenses, rights to access, rights of way, all buildings and other improvements thereon, and other real property interests currently used in the business or operations of the Acquired Companies.

EXHIBIT A-6

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping into the Environment.

“Response Period” has the meaning set forth in Section 10.5(a).

“Responsible Party” has the meaning set forth in Section 10.5(c).

“Restraint” has the meaning set forth in Section 8.1(a).

“Restricted Business” has the meaning set forth in Section 7.9(a).

“Restricted Region” means the following countries (or any countries successor thereto): India, Pakistan, Turkmenistan, United Arab Emirates, Yemen, Oman, Qatar, Bahrain, Kuwait, Iraq, Saudi Arabia, Turkey, Syria, Lebanon, Palestine, Jordan, Somalia, Ethiopia, Sudan, Egypt, Libya, Algeria, Tunisia, Morocco, Lithuania, Latvia, Estonia, Russia, Poland, Romania, Ukraine, Hungary, Bulgaria, Albania and Moldova.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller” and “Sellers” have the meaning set forth in the preamble.

“Seller Closing Certificate” has the meaning set forth in Section 3.2(h).

“Seller Disclosure Schedules” has the meaning set forth in the preamble of Article V.

“Seller Indemnitees” has the meaning set forth in Section 10.2(a).

“Sellers’ Counsel” has the meaning set forth in Section 12.16.

“Sellers’ Knowledge” means the actual knowledge of N. Malone Mitchell, 3^rd, Dustin Guinn, Jeff Mecom, Aramis Guerra or Wil Saqueton.

“Selling Expenses” means all of the unpaid fees and expenses of outside legal counsel, accountants, advisors, brokers and investment bankers incurred by or on behalf of TAT, any Seller or any of the Acquired Companies in connection with the consummation of the transactions contemplated hereby and not paid for in full as of the Closing or reflected in the calculation of the Working Capital Overage or Working Capital Underage, as applicable, including any employee incentive, defined compensation or bonus expenses and any payroll or other employer Tax Liability that arise out of amounts payable as a result of the Closing.

“Selling Group” means, collectively, TAT and each Seller, and any Subsidiary or other investment of the foregoing, but does not include the Acquired Companies.

“Settlement Amounts” has the meaning set forth in Section 2.2.

“Shares” has the meaning set forth in the recitals.

“Significant Customer” has the meaning set forth in Section 4.20(a).

EXHIBIT A-7

“Significant Supplier” has the meaning set forth in Section 4.20(b).

“Straddle Period” means any Tax period beginning on or before and ending after the Effective Date.

“Subsidiary,” when used with respect to any Person, means any entity of which 50% or more of the effective voting power or equity interests of such entity is directly or indirectly owned by such Person.

“TAT” has the meaning set forth in the preamble.

“TAT Closing Certificate” has the meaning set forth in Section 3.2(g).

“TAW” has the meaning set forth in the preamble.

“Tax” means (i) any federal, provincial, state, local or foreign net income, assessments, charges, duties, fees, alternative or add-on minimum or other similar taxes, including, gross income, gross receipts, sales, use, ad valorem, value-added, transfer, franchise, profits, license, withholding, payroll, employment, disability, unemployment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax of any kind whatsoever imposed by any Taxing Authority, (ii) all interest, penalties, fines, additions to tax or additional amounts imposed by any Taxing Authority in connection with any item described in clause (i) and (iii) any Liability in respect of any items described in clauses (i) or (ii) payable by reason of Contract, assumption, successor or transferee Liability, operation of Law or otherwise.

“Tax Returns” means all returns, statements and reports filed or required to be filed in respect of Taxes (including any elections, declarations, schedules or attachments thereto, and any amendment thereof) including any information return, claim for refund, amended return or declaration of estimated Tax, and including, where permitted or required, combined, consolidated or unitary returns for any group of entities that includes the Acquired Companies, any of their Subsidiaries or any of their Affiliates.

“Taxing Authority” means any Governmental Authority responsible for the administration or imposition of any Tax.

“Transition Services Agreement” means a Transition Services Agreement in substantially the form of Exhibit D.

“USA” has the meaning set forth in the preamble.

“VGS” has the meaning set forth in the preamble.

“VIL” has the meaning set forth in the preamble.

“VOS SRL” has the meaning set forth in the preamble.

“Working Capital Overage” has the meaning set forth in Section 2.3(b).

“Working Capital Underage” has the meaning set forth in Section 2.3(b).

EXHIBIT A-8

EXHIBIT E-1

EX-10.1

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) is made and dated for reference March 15, 2012.

BETWEEN:

DALEA PARTNERS, LP,

as Lender

AND:

TRANSATLANTIC PETROLEUM LTD.,

as Borrower

WHEREAS:

A. The parties hereto entered into that certain credit agreement made as of June 28, 2010 (the “Credit Agreement”) wherein the Lender agreed to establish the Loan in favor of the Borrower;

B. The parties hereto have agreed to amend the Credit Agreement, as herein set out.

NOW THEREFORE, in consideration of the premises and of other good and valuable consideration (the receipt whereof is hereby acknowledged), the parties hereto agree as follows:

Unless otherwise defined herein or unless the context otherwise requires, defined words and terms used in the Credit Agreement shall have the same meanings when used herein.

The Credit Agreement shall be and is hereby amended and modified as follows:

Paragraph 4(a) shall be deleted and replaced with the following:

(a) The aggregate unpaid principal amount of the Loan, together with all accrued but unpaid interest and other costs, expenses or charges payable hereunder from time to time (collectively the “Outstanding Balance”), will be immediately due and payable by the Borrower to the Lender on the earliest of:

(i) June 30, 2012;

(ii) The later of:

a. The day of the close of the sale of the Borrower’s wholly owned subsidiaries, Viking Geophysical Services, Ltd. and Viking International Limited, in whole or in part (the “Closing Date”); or

b. Two (2) Business Days after demand by Lender; and

- 2 -

(iii) The occurrence of an Event of Default and a demand for payment by the Lender pursuant to paragraph 12 below.

Notwithstanding anything to the contrary in the Credit Agreement, no interest shall accrue on the Outstanding Balance for the period from April 1, 2012 until the Closing Date; provided, that if the Closing Date has not occurred on or before June 30, 2012, interest shall be deemed to have accrued on the Outstanding Balance during such period as set forth in the Credit Agreement. Interest will accrue on the Outstanding Balance in the amount and the manner provided in the Credit Agreement after the Closing Date.

The Credit Agreement, together with all terms, covenants and conditions thereof as hereby amended, will be and continue to be in full force and effect.

This Amendment and everything herein contained will enure to the benefit of and be binding on the Borrower and the Lender and their respective successors and assigns.

This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or by e-mail in pdf format shall be effective as delivery of a manually executed counterpart hereof.

This Amendment shall be effective as of and from March 15, 2012.

IN WITNESS WHEREOF the parties hereto have executed this Amendment as of the date first above written.

The Borrower:		The Lender:
TRANSATLANTIC PETROLEUM LTD.		DALEA PARTNERS, LP
By:	/s/ Jeffrey S. Mecom	By:	/s/ N. Malone Mitchell, 3rd
Name:	Jeff Mecom	Name:	N. Malone Mitchell, 3rd
Title:	Vice President, Legal	Title:	Manager

EX-10.2

Exhibit 10.2

Final Execution

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”) dated as of March 15, 2012 (“Effective Date”) is between:

DALEA PARTNERS, LP, an Oklahoma limited partnership, having an office at 16803 North Dallas Parkway, Addison, Texas 75001

(the “Lender”)

AND:

TRANSATLANTIC PETROLEUM LTD., a limited exempted company incorporated under the laws of Bermuda, having its corporate seat and registered office at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda, and office at TransAtlantic Petroleum (USA) Corp., 16803 North Dallas Parkway, Addison, Texas 75001;

TRANSATLANTIC WORLDWIDE, LTD., a company incorporated in the Commonwealth of the Bahamas having its corporate seat and registered office at Trident Corporate Services (Bahamas) Limited, 1^st Floor, Kings Court, Bay Street, P.O. Box N-3944, Nassau, Bahamas, and an office at TransAtlantic Petroleum (USA) Corp., 16803 North Dallas Parkway, Addison, Texas 75001; and

THRACE BASIN NATURAL GAS (TURKIYE) CORPORATION, a company incorporated in the British Virgin Islands having its corporate seat and registered office at Jayla Place, Wickhams Cay I, P.O. Box 3190 Road Town, Tortola, British Virgin Islands VG1110, and an office at TransAtlantic Petroleum (USA) Corp., 16803 North Dallas Parkway, Addison, Texas 75001.

(the “Borrowers”)

RECITALS

A. The Borrowers have identified certain needs for funds for business operations.

B. Lender has agreed to lend funds to the Borrowers so that the Borrowers can fund the costs and expenses associated with the sale of Viking International Limited, Viking Geophysical Services, Ltd., and other related entities and assets, or any part thereof (the “Viking Sale”) and to further the general corporate purposes of the Borrowers, the Lender has agreed to lend to the Borrowers and the Borrowers have agreed to borrow from the Lender in multiple advances the aggregate principal amount of up to the Committed Amount (as defined below), on the terms and subject to the conditions of this Agreement.

AGREEMENTS

For good and valuable consideration, the receipt and sufficiency of which each party acknowledges, the parties agree as follows:

1. Definitions. In this Agreement:

(a) Adjustment Date has the meaning set forth in paragraph 5.

(b) Arrangement Fee means USD$250,000, payable upon the Initial Advance;

(c) Business Day means a day which is not a Saturday, Sunday or a day on which commercial banks in the State of Texas are authorized or required to be closed;

(d) Committed Amount means USD $15,000,000;

(e) Commitment Fee means a fee equal to 2.75% per annum of the difference between the Committed Amount and the Outstanding Balance measured and payable on the last day of each fiscal quarter.

(f) Commitment Termination Date means June 1, 2012.

(g) Contract Rate has the meaning set forth in paragraph 5.

(h) Disclosure Record has the meaning set forth in clause (g) of paragraph 7;

(i) Effective Date has the meaning set forth in the first paragraph above.

(j) Event of Default has the meaning set forth in paragraph 10;

(k) Exchanges means the Toronto Stock Exchange and the NYSE Amex exchange.

(l) Indemnitee has the meaning set forth in paragraph 13;

(m) Initial Advance has the meaning set forth in paragraph 2;

(n) LIBOR Rate means a rate of interest equal to the three month London interbank offered rate as published in the “Money Rates” section of The Wall Street Journal on the Business Day immediately preceding (i) the date of the Initial Advance, and (ii) each Adjustment Date (or, if such source is not available, such alternate third party reporting source as reasonably determined by the Lender).

CREDIT AGREEMENT - PAGE | 2

(o) Loan means the loan to be made by the Lender to the Borrowers pursuant to paragraph 2;

(p) Maturity Date has the meaning set forth in paragraph 4;

(q) Maximum Rate has the meaning set forth in paragraph 22;

(r) Note has the meaning set forth in paragraph 2;

(s) Outstanding Balance has the meaning set forth in paragraph 4(a);

(t) Subsequent Advance has the meaning set forth in paragraph 2;

(u) Subsidiaries means, with respect to each of the Borrowers, any corporation of which at least a majority of the outstanding shares to which there is attached voting power under ordinary circumstances to elect a majority of the board of directors of such corporation, shall at the relevant time be owned directly or indirectly by one or more of the Borrowers, one or more Subsidiaries of the Borrowers, or any combination thereof, and “Subsidiary” shall mean any one of them; and

(v) Viking Sale has the meaning set forth in recital B.

2. The Loan. Subject to and upon the fulfilment of the conditions precedent contained in paragraph 6 of this Agreement, the Lender will advance to the Borrowers in one or more advances the aggregate principal amount of up to the Committed Amount (the “Loan”). Notwithstanding anything to the contrary, the Loan shall be denominated (and deemed made) in U.S. Dollars and the Outstanding Balance shall be denominated, calculated and determined in U.S. Dollars, and shall be prepaid or paid when due in U.S. Dollars. The initial advance under the Loan (the “Initial Advance”) shall be no less than $5,000,000.00. Further advances under the Loan (each, a “Subsequent Advance”) shall be in multiples of $1,000,000.00. For any such advance, the Borrower shall provide written notice to the Lender and the Lender shall, if satisfied that all conditions hereunder have been met, provide the Borrower with such advance within three (3) Business Days. The Lender’s commitment to make the Loan shall expire at 5:00 pm Dallas, Texas time on the Commitment Termination Date. The Initial Advance and each Subsequent Advance will be evidenced by the promissory note in the form attached hereto as Exhibit A (the “Note”).

3. Use of Proceeds. The Borrowers covenant and agree with the Lender that the proceeds of the Loan will be used by the Borrowers for to fund the costs and expenses associated with the Viking Sale, and for general corporate purposes of the Borrowers and their Subsidiaries.

4. Term, Prepayment and Payments Generally

(a) The aggregate unpaid principal amount of the Loan, together with all accrued but unpaid interest and other costs, expenses or charges payable hereunder from time to time (collectively the “Outstanding Balance”), will be immediately due and payable by the Borrowers to the Lender on the earliest of:

CREDIT AGREEMENT - PAGE | 3

(i)  July 1, 2012 (the “Maturity Date”); and

(ii)  the occurrence of an Event of Default and a demand for payment by the Lender pursuant to paragraph 10 below.

(b) If after the making of the Loan, or any portion thereof, the Borrowers or any of their Subsidiaries close one or more debt financings (other than any loans obtained in the ordinary course of business and secured by a purchase money security interest, or any equipment leases entered into in the ordinary course of business), the Borrowers will promptly pay or cause to be paid to the Lender all proceeds from such financings, net of reasonable transaction and financing costs, up to the full amount of the Outstanding Balance, to be applied to the repayment of the Loan.

(c) If after the making of the Loan, or any portion thereof, the Borrowers consummate the Viking Sale, the Borrowers will promptly pay or cause to be paid to the Lender all proceeds from sale, net of reasonable transaction and financing costs, up to the full amount of the Outstanding Balance, to be applied to the repayment of the Loan.

(d) The Borrowers may prepay the Loan in whole at any time before maturity, without penalty.

(e) All payments to be made by the Borrowers will be made without deduction for any counterclaim, defence, recoupment or setoff and free and clear, and without deduction for, or withholding of any and all taxes (other than taxes upon net income of the Lender imposed by the United States of America and the State of Texas). If the Borrowers are required by law to deduct or withhold any taxes (other than taxes upon the net income of the Lender imposed by the United States of America or the State of Texas) from payments due hereunder, the amount payable by the Borrowers to the Lender shall be increased as necessary so that after making all required deductions and withholdings, the Lender receive the amount it would have received had there been no deduction or withholding, and the Borrowers shall pay the full amount required to be deducted or withheld to the appropriate taxing authority.

(f) Amounts prepaid or repaid under this Agreement may not be re-borrowed.

5. Interest. Interest will accrue on the Outstanding Balance from time-to-time outstanding during the period from the date the Initial Advance is made to the date the entire Outstanding Balance is repaid, at the LIBOR Rate plus 5.50% per annum (the “Contract Rate”). The Contract Rate will be adjusted on the first day of each month (the “Adjustment Date”) and remain fixed until the next Adjustment Date. The Borrowers will pay all accrued interest monthly in arrears on the last day of each month, and at any time principal is due and payable as provided in paragraph 4.

CREDIT AGREEMENT - PAGE | 4

6. Conditions Precedent.

(a) Conditions Precedent to Making of the Initial Advance. As conditions precedent to the making of the Initial Advance by the Lender:

(i) the Borrowers shall have delivered a certified copy of any applicable directors’ resolutions authorizing the borrowing contemplated by this Agreement and the execution and delivery of this Agreement, and all agreements, documents and instruments referred to herein, together with an officer’s certificate, certifying certain factual matters, in form and terms satisfactory to the Lender;

(ii) the Borrowers shall have executed and delivered or caused to be executed and delivered the Note;

(iii) the Borrowers shall have paid to the Lender the Arrangement Fee;

(iv) the Borrowers shall have executed and delivered to the Lender an officer’s certificate and other supporting documents satisfactory to Lender that the proceeds of the Initial Advance shall be used by the Borrower for the purpose of (a) funding costs and expenses associated with the Viking Sale, or (b) general corporate purposes;

(v) the representations and warranties of the Borrowers contained in paragraph 7 will be true and correct in all material respects and the Borrowers will have complied with all covenants required to be complied with by them under this Agreement and all other documents delivered hereunder, prior to the making of the Loan by the Lender;

(vi) the Lender will have completed and, in their sole and absolute discretion, be satisfied with their due diligence review of the Borrowers and their respective properties and assets and will have received all necessary approvals; and

(vii) the Lender will, in their sole and absolute discretion, be satisfied as to the creditworthiness of the Borrowers and each of their Subsidiaries.

(b) Conditions Precedent to the Making of any Subsequent Advance. As conditions precedent to the making of any Subsequent Advance by the Lender:

(i) the representations and warranties of the Borrowers contained in paragraph 7 will be true and correct in all material respects and the Borrowers will have complied with all covenants required to be complied with by them under this Agreement and all other documents delivered hereunder, prior to the making of the Subsequent Advance by the Lender;

(ii) the Borrowers shall have executed and delivered to the Lender an officer’s certificate and other supporting documents satisfactory to the Lender that the proceeds of the Subsequent Advance shall be used by the Borrowers for the purpose of (a) funding costs and expenses associated with the Viking Sale, or (b) general corporate purposes;

CREDIT AGREEMENT - PAGE | 5

(iii) the Borrowers shall have paid to the Lender all Commitment Fees due and payable at the time of such Subsequent Advance; and

(iv) there shall have been no adverse material change in the business, operations, assets or ownership of the Borrowers since the Initial Advance or any Subsequent Advance.

The Lenders’ commitment to make the Initial Advance or any Subsequent Advance shall automatically terminate on an Event of Default or the Commitment Termination Date regardless of whether the above conditions precedent have been satisfied or waived, and no further amounts may be advanced by the Lender in respect of the Loan after such Event of Default or the Commitment Termination Date.

7. Representations and Warranties of the Borrowers. The Borrowers represent and warrant jointly and severally to the Lender as follows:

(a) the Borrowers each exist under the laws of the jurisdiction in which they are created, and each has not discontinued or been dissolved under any applicable laws and is in good standing with respect to the filing of annual reports and all other such requirements pursuant to the laws thereof;

(b) the Borrowers each have the power and authority to (i) carry on their businesses as now being conducted and are each licensed or registered or otherwise qualified in all jurisdictions wherein the nature of each of their assets or the business transacted by them makes such licensing, registration or qualification necessary, (ii) acquire, own, hold, lease and mortgage or grant security in their assets including real property and personal property and (iii) enter into and perform their obligations under this Agreement and all other documents or instruments delivered hereunder;

(c) this Agreement and all ancillary instruments or documents issued, executed and delivered hereunder by the Borrowers have been duly authorized by all necessary action of the Borrowers and each constitutes or will constitute a legal, valid and binding obligation of the Borrowers, enforceable against the Borrowers, in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights and remedies of creditors and to the general principles of equity;

(d) neither the Borrowers nor any Subsidiary is in breach of or in default under any obligation in respect of borrowed money, and the execution and delivery of this Agreement and all ancillary instruments or documents issued and delivered hereunder or thereunder, and the performance of the terms hereof and thereof will not be, or result in, a violation or breach of, or default under, the Borrowers’ or any Subsidiary’s charter documents, any law, judgment, agreement or instrument to which they are a party or may be bound;

CREDIT AGREEMENT - PAGE | 6

(e) execution, delivery and performance of this Agreement and all other documents and instruments contemplated hereby will not constitute a breach or default under or in respect of any agreement to which the any of the Borrowers is bound, and no consent, filing, authorization, approval or other action is prudent or necessary under the terms of any such agreement to proceed with the transactions contemplated herein;

(f) no litigation or administrative proceedings before any court or governmental authority are presently ongoing, or have been threatened in writing, or to the best of each of the Borrowers” knowledge are pending, against the any of the Borrowers, any Subsidiary or any of their respective properties or assets or affecting any of their respective properties or assets which could have a material adverse effect on their respective business, properties or assets;

(g) the Borrowers or each Subsidiary, as the case may be, are the legal and beneficial owner of the interests in the properties, business and assets referred to in the information circulars, prospectuses, annual information forms, offering memoranda, financial statements, material change reports and news releases filed with the Exchanges and the securities regulatory authority or commission in each of the jurisdictions in which TransAtlantic Petroleum Ltd. is a reporting issuer on or during the twelve (12) months preceding the date hereof, and any other disclosure materials provided to the Lender and their advisers in conjunction with this transaction (collectively, the “Disclosure Record”), as being owned by any of the Borrowers or such Subsidiary and has a valid right to acquire all interests in properties, business and assets referred to in the Disclosure Record as being subject to options or other rights to acquire the same, and any and all agreements pursuant to which the Borrowers and each Subsidiary, as the case may be, holds or will hold any such interests, options or rights in property, business or assets are in good standing in all material respects under the applicable statutes and regulations of the jurisdictions in which they are situated;

(h) except as disclosed to the Lender in writing prior to the Effective Date, there has been no material adverse change (actual, contemplated or threatened) in the property, assets, business or operations of the any of the Borrowers or any Subsidiary within the past twelve (12) months, except as disclosed in the Disclosure Record and there has been no such material adverse change since December 31, 2011;

(i) the Disclosure Record is complete and accurate in all material respects and omits no facts, the omission of which makes the Disclosure Record, or any particulars therein, misleading, misrepresentative or incorrect in any material respect;

(j) the Borrowers and to the best of each of the Borrowers’ knowledge each Subsidiary, has conducted and is conducting each of their businesses in material compliance with all applicable laws, bylaws, rules and regulations of each jurisdiction in which each of their businesses are now carried on and hold all licenses, registrations, permits, consents or qualifications (whether governmental, regulatory or otherwise) required in order to enable each of their businesses to be carried on as now conducted or as proposed to be conducted, and all such licenses, registrations, permits, consents and

CREDIT AGREEMENT - PAGE | 7

qualifications are valid and subsisting and in good standing and neither the Borrowers nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any such licenses, registrations, permits, consents or qualifications which, if the subject of an unfavourable decision, ruling or finding, would materially adversely affect the condition of such businesses, operations, condition (financial or otherwise) or income of the Borrowers or any such Subsidiary, as the case may be;

(k) no order ceasing or suspending trading in securities of the Borrowers or prohibiting the sale or trading of securities by the Borrowers has been issued and no proceedings for this purpose have been instituted, are pending, contemplated or threatened;

(l) no taxation authority has asserted or, to the best of the Borrowers’ knowledge, has threatened to assert any assessment, claim or liability for taxes due or to become due in connection with any review or examination of the tax returns of the Borrower or any Subsidiary filed for any year which would have material adverse effect on the assets, properties, business, results of operations, prospects or condition (financial or otherwise) of the Borrowers or any Subsidiary;

(m) neither the Borrowers nor any Subsidiary is a party to any material contract other than as disclosed in the Disclosure Record;

(n) except as disclosed to the Lender in writing prior to the Effective Date of this Agreement, the Borrowers and each Subsidiary owns each of their business, operations and assets, as more particularly described in the Disclosure Record;

(o) all factual information previously or contemporaneously furnished to the Lender by or on behalf of the Borrowers for purposes of or in connection with this Agreement or any transaction contemplated hereby, is true and accurate in every material respect and such information is not incomplete by the omission of any material fact necessary to make such information not misleading; and

(p) after giving effect to the consummation of the Viking Sale and the Loan contemplated in this Agreement, the Borrowers and each Subsidiary are generally able to pay their debts as they come due.

8. Affirmative Covenants of the Borrowers. The Borrowers covenant and agree jointly and severally that so long as any monies will be outstanding under this Agreement, they and each of them shall:

(a) except for the Viking Sale, at all times maintain each of their existence and the existence of all of each of their Subsidiaries, provided that Subsidiaries of the Borrowers may enter into intercompany mergers with other Subsidiaries of the Borrowers;

(b) duly perform each of their obligations under this Agreement, and all other agreements and instruments executed and delivered hereunder or thereunder;

CREDIT AGREEMENT - PAGE | 8

(c) carry on and conduct each of their businesses in a proper business-like manner in accordance with good business practice and will keep or cause to be kept proper books of account in accordance with generally accepted accounting principles;

(d) at all times comply with all applicable laws, except such voluntary non-compliance as shall, in each of their good faith business judgment, not have a material adverse effect on the business of the Borrowers or any Subsidiary, taken as a whole;

(e) at all times maintain any material contracts in good standing and fulfill all obligations thereunder, and immediately notify the Lender of any facts or circumstances which may arise which could constitute a default thereunder and give rise to a right of termination under either such agreement, and take all steps as may be prudent or necessary to rectify or cure any such default;

(f) pay and discharge promptly when due, all taxes, assessments and other governmental charges or levies imposed upon it or upon its properties or assets or upon any part thereof, as well as all claims of any kind (including claims for labour, materials and supplies) which, if unpaid, would by law become a lien, charge, trust or other claims upon any such properties or assets; provided, however, that the Borrowers shall not be required to pay any such tax, assessment, charge or levy or claim if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings and if the Borrowers shall have set aside on each of their books the reserve the extent required by generally accepted accounting principles in an amount which is reasonably adequate with respect thereto;

(g) promptly furnish and give to the Lender such reports, certificates, financial statements, and such other information with respect to the Borrowers as the Lender may reasonably request from time to time during the term of this Agreement;

(h) provide the Lender with written notice of any proposed financing made by or to the Borrowers concurrently with, but not prior to, public disclosure of such financing; and

(i) furnish and give to the Lender (if such is the case) notice that an Event of Default has occurred and, if applicable, is continuing or notice in respect of any event which would constitute an Event of Default hereunder and specifying the nature of same.

9. Negative Covenants of the Borrowers. The Borrowers covenant and agree jointly and severally with the Lender that the Borrowers will not, and each of them will not permit any Subsidiary to, without first obtaining the written consent of the Lender (which consent the Lender will be free to withhold in their sole and absolute discretion):

(a) make, give, create or permit or attempt to make, give or create any mortgage, charge, lien or encumbrance over any assets of the Borrowers or any Subsidiary other than in connection debt or financing existing on the Effective Date, or purchase money security interests and equipment leases entered into in the ordinary course of business;

CREDIT AGREEMENT - PAGE | 9

(b) change the name of any of the Borrowers or the jurisdictions of organization;

(c) in respect of each of them, declare or provide for any dividends or other payments or distributions (whether in cash, assets or indebtedness) based on share capital;

(d) redeem or purchase any of their shares;

(e) except for the Viking Sale, make or permit any sale of or disposition of any substantial or material part of their business, assets or undertaking, or that of any Subsidiary, including their interest in the shares or assets of any Subsidiary outside of the ordinary course of business;

(f) save and except for purchase money security interests and equipment leases entered into in the ordinary course of business, borrow or cause or permit any Subsidiary to borrow money from any person other than in a financing with the Lender, without first obtaining and delivering to the Lender a duly signed assignment and postponement of claim by such person in favour of the Lender, in form and terms satisfactory to the Lender;

(g) in respect of each of the Borrowers or any Subsidiary, pay out or permit the payment out of any shareholders loans or other indebtedness to non-arm’s length parties; or

(h) in respect of each of the Borrowers or any Subsidiary, guarantee or permit the guarantee of the obligations of any other person, directly or indirectly, except in the ordinary course of business.

10. Events of Default. Each and every one of the events set forth in this paragraph will be an event of default (“Event of Default”):

(a) if the Borrowers fail to make any payment of principal or interest when due hereunder, and such failure continues for two (2) Business Days;

(b) if the Borrowers or any Subsidiary defaults in observing or performing any term, covenant or condition of this Agreement or any other loan document delivered hereunder or in connection herewith, other than the payment of monies as provided for in subparagraph (a) hereof, on their part to be observed or performed and such failure continues for ten (10) Business Days;

(c) if any of the Borrowers’ or any Subsidiary’s representations, warranties or other statements in this Agreement or any other document delivered hereunder or in connection with the Loan were at the time given false or misleading in any material respect;

CREDIT AGREEMENT - PAGE | 10

(d) if the any of the Borrowers or any Subsidiary, either directly or indirectly through any Subsidiary, ceases or threatens to cease to carry on business;

(e) if any order is made or issued by a competent regulatory authority prohibiting the trading in shares of any of the Borrowers or any successor thereof, or if the Borrowers’ common shares are suspended or de-listed from trading on any stock exchange;

(f) if, in the reasonable opinion of the Lender, an adverse material change occurs in the financial condition of any of the Borrowers and any of their Subsidiaries, taken as a whole;

(g) if the Lender in good faith and on commercially reasonable grounds believe that the ability of the Borrowers to pay any of the Outstanding Balance to the Lender or to perform any of the covenants contained in this Agreement is impaired in any material respect;

(h) if the any of the Borrowers or any Subsidiary petitions or applies to any tribunal for the appointment of a trustee, receiver or liquidator or commences any proceedings under any bankruptcy, insolvency, readjustment of debt or liquidation law of any jurisdiction, whether now or hereafter in effect;

(i) if any petition or application for appointment of a trustee, receiver or liquidator is filed, or any proceedings under any bankruptcy, insolvency, readjustment of debt or liquidation law are commenced, against the any of the Borrowers or any Subsidiary which is not opposed by such Borrower or any such Subsidiary in good faith, or an order, judgment or decree is entered appointing any such trustee, receiver, or liquidator, or approving the petition in any such proceeding; or

(j) if there is any change of control of any of the Borrowers (“control” being defined as ownership of or control or direction over, directly or indirectly, 20% or more of the outstanding voting securities of the Borrowers).

11. Effect of Event of Default. If any one or more of the Events of Default occur or occurs and is or are continuing, the Lender may, without limitation in respect of any other rights they may have in law or pursuant to this Agreement or any other document or instrument delivered hereunder, demand immediate payment of all monies owing hereunder; provided, however, that in the event an Event of Default of the type referred to in clause (h) or clause (i) occurs, all monies due hereunder shall automatically, without any demand or any other action by the Lender or any other person or entity, become due and payable.

12. Legal Fees. The Borrowers shall pay the legal fees and other costs, charges and expenses (including due diligence expenses) of and incidental to the preparation, execution and completion of this Agreement executed hereto.

13. Indemnity. The Borrowers agree to indemnify and save harmless the Lender and each of their directors, officers, employees, attorneys and agents (each being referred to as an “Indemnitee”) from and against all liabilities, claims, losses, damages and expenses

CREDIT AGREEMENT - PAGE | 11

including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the any of the Borrowers arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement and any other agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) the Loan or the use of proposed use of the proceeds thereof, (iii) any actual or alleged presence or release of hazardous materials on or from any property owned or operated by any of the Borrowers or any Subsidiaries, or any environmental liability related in any way to the Borrowers or any Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any of the Borrowers or any of the Borrowers’ Subsidiaries, directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) results from a claim brought by the Borrowers against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other document executed pursuant hereto, if the Borrowers have obtained a final and nonappealable judgment in their favor on such claim as determined by a court of competent jurisdiction. All amounts due pursuant to this paragraph 13 shall be payable upon demand.

14. Further Assurances. The Borrowers will do, whether before or after the occurrence of an Event of Default, all such acts and things and execute and deliver all such documents, deeds, transfers, assignments and instruments as the Lender may require (a) to correct any material defect or error that may be discovered in this Agreement or any other document or instrument executed or to be executed pursuant hereto or in the execution, acknowledgement, filing or recordation thereof, and (b) to do, execute, acknowledge, deliver, record, file, and register or to take any and all such further acts, deeds, certificates, assurances and other instruments as the Lender may reasonably require from time to time in order to carry out more effectively the purposes of this Agreement.

15. Notices. In this Agreement:

(a) any notice or communication required or permitted to be given under this Agreement will be in writing and will be considered to have been given if delivered by hand, transmitted by facsimile transmission or mailed by prepaid registered post to the address or facsimile transmission number of each party set out below:

CREDIT AGREEMENT - PAGE | 12

(i) if to the Lender:

Dalea Partners, LP

16803 North Dallas Parkway

Addison, Texas 75001

Attention: Mike Burnett

Fax No: (972) 590-9908

Mike.burnett@riatacg.com

With a copy to Christine Stroud at the same address.

(ii) if to the Borrowers:

TransAtlantic Petroleum Ltd.

TransAtlantic Worldwide Ltd.

Thrace Basin Natural Gas (Turkiye) Corporation

c/o TransAtlantic Petroleum (USA) Corp.

16803 North Dallas Parkway

Addison, Texas 75001

Attention: Jeffrey S. Mecom Fax No: (214) 265-4755

Jeff.mecom@tapcor.com

or to such other address or facsimile transmission number as any party may designate in the manner set out above; and

(b)     notice or communication will be considered to have been received:

(i) if delivered by hand during business hours on a Business Day, upon receipt by a responsible representative of the receiver, and if not delivered during business hours, upon the commencement of business on the next Business Day;

(ii) if sent by facsimile transmission during business hours on a Business Day, upon the sender receiving confirmation of the transmission, and if not transmitted during business hours, upon the commencement of business on the next Business Day; and

(iii) if mailed by prepaid registered post upon the fifth (5^th) Business Day following posting; except that, in the case of a disruption or an impending or threatened disruption in postal services every notice or communication will be delivered by hand or sent by facsimile transmission.

16. Assignment. The Borrowers acknowledge and agree that the Lender may assign all or part of the Loan, this Agreement and all agreements, documents or instruments delivered hereunder to one or more assignees, free from any right of set-off or counterclaim or equity, subject only to the Lender’s notification of such assignment or assignments being given in writing to the Borrowers.

CREDIT AGREEMENT - PAGE | 13

17. Agreement to Pay. Upon receipt of written notice and direction from the Lender, the Borrowers covenant and agree to make all payments of interest, principal and structuring fees due under this Agreement to the Lender or any assignee, pro rata in accordance with their respective proportionate interests in the Loan as set out in such written notice and direction, absent which all such payments may be made to the Lender.

18. Enurement. This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

19. Waivers. No failure or delay on the Lender’s part in exercising any power or right hereunder will operate as a waiver thereof.

20. Remedies are Cumulative. The Lender’s rights and remedies hereunder are cumulative and not exclusive of any rights or remedies at law or in equity.

21. Time. Time is of the essence of this Agreement and all documents or instruments delivered hereunder.

22. Interest Rate Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Note or any other documents as instrument executed pursuant to this Agreement, the interest paid or agreed to be paid hereunder or thereunder shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If the Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loan or, if it exceeds such unpaid principal, refunded to the Borrowers. In determining whether the interest contracted for, charged, or received by the Lender exceeds the Maximum Rate, the Lender may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the obligations thereunder.

23. Invalidity. If at any time any one or more of the provisions hereof is or becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions hereof will not in any way be affected or impaired thereby to the fullest extent possible by law.

24. Governing Laws. This Agreement will be governed by and interpreted in accordance with the laws of the State of Texas. The Borrowers submit to the non-exclusive jurisdiction of the Courts of the State of Texas and agree to be bound by any suit, action or proceeding commenced in such Courts and by any order or judgment resulting from such suit, action or proceeding, but the foregoing will in no way limit the right of the Lender to commence suits, actions or proceedings based on this Agreement in any jurisdiction it may deem appropriate.

CREDIT AGREEMENT - PAGE | 14

25. Amendment. This Agreement supersedes all prior agreements and discussions between the parties with respect to the subject matter set forth herein. This Agreement may be varied or amended only by or pursuant to an agreement in writing signed by the parties hereto.

26. Exhibits. All Exhibits attached hereto will be deemed fully a part of this Agreement.

27. Counterparts. This Agreement may be signed in one or more counterparts, originally or by facsimile, each such counterpart taken together will form one and the same agreement.

[Signatures on following page.]

CREDIT AGREEMENT - PAGE | 15

Final Execution

TO EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement as of the date first above written.

DALEA PARTNERS, LP
By:	/s/ N. Malone Mitchell, 3rd
	Authorized Signatory

TRANSATLANTIC PETROLEUM LTD.
By:	/s/ Jeffrey S. Mecom
	Authorized Signatory

TRANSATLANTIC WORLDWIDE, LTD.
By:	/s/ Jeffrey S. Mecom
	Authorized Signatory

THRACE BASIN NATURAL GAS (TURKIYE) CORPORATION

By:	/s/ Jeffrey S. Mecom
	Authorized Signatory

[SIGNATURE PAGE TO THE CREDIT AGREEMENT]

Final Execution

EXHIBIT A

PROMISSORY NOTE

Principal Amount: US$15,000,000

For value received, TRANSATLANTIC PETROLEUM LTD., TRANSATLANTIC WORLDWIDE LTD., AND THRACE BASIN NATURAL GAS (TURKIYE) CORPORATION, (the “Borrowers”) hereby promise to pay, jointly and serverally, to DALEA PARTNERS, LP, (the “Lender”) up to the principal sum of FIFTEEN MILLION UNITED STATES DOLLARS (US$15,000,000) on the earliest of:

(i) the occurrence of an Event of Default as such term is defined in the Credit Agreement between the Borrower and the Lender dated as of March 15, 2012, as may be amended from time to time (the “Credit Agreement”), and

(ii) the Maturity Date (as defined in the Credit Agreement);

together with interest accruing on the outstanding principal amount from the date hereof at the “Contract Rate” defined in the Credit Agreement, before and after each of maturity, default and judgment, payable as provided in the Credit Agreement. All payments under this promissory note will be made by in U.S. Dollars by certified cheque, bank draft or wire transfer (pursuant to wire transfer instructions provided by the Lender from time to time) and delivered to the Lender at 16803 North Dallas Parkway, Addison, Texas 75001.

The undersigned is entitled to prepay this promissory note, in whole or in part, without notice or penalty. The undersigned waives demand and presentment for payment, notice of non-payment, protest, notice of protest and notice of dishonour. This promissory note will be governed by and construed in accordance with the laws of the State of Texas.

Dated: March             , 2012

TRANSATLANTIC PETROLEUM LTD.

By:
	Authorized Signatory

TRANSATLANTIC WORLDWIDE, LTD.

By:
	Authorized Signatory

THRACE BASIN NATURAL GAS (TURKIYE) CORPORATION

By:
	Authorized Signatory

CREDIT AGREEMENT - EXHIBIT A - PROMISSORY NOTE

EX-10.3

Exhibit 10.3

MANAGEMENT SERVICES AGREEMENT

THIS MANAGEMENT SERVICES AGREEMENT (“Agreement”) dated as of March 15, 2012, between VIKING PETROL SAHASI HIZMETLERI A.S., a Turkish joint stock company (“VOS”), whose registered address is Nispetiye Caddesi Akmerkez B Blok Kat: 5, 34337 Etiler-Besiktas- ISTANBUL, and VIKING GEOPHYSICAL SERVICES, LTD., a Bahamian international business company (“VGS”), whose registered address is1^st Floor, Kings Court, Bay Street, PO Box N-3944, Nassau, Bahamas.

WHEREAS, VOS is the owner of certain seismic equipment, and related inventory and supplies, all of which is described on the attached Exhibit A which is made a part hereof (such equipment and any additional seismic equipment owned by VOS is collectively referred to herein as the “Equipment”);

WHEREAS, VGS and VOS have entered into that certain Master Service Agreement and Supplement 1 thereto (collectively, the “Master Service Agreement”) with GX Technology Corporation and its affiliates (collectively, “GXT”), whereby VOS and VGS will each provide seismic data acquisition services to GXT and its affiliates in Poland (the “PolandSPAN Project”);

WHEREAS, VGS has the knowledge and expertise to provide management and personnel services to VOS regarding its Equipment;

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Services to be Provided. During the term of this Agreement, VGS agrees to provide VOS with the management and personnel services (the “Services”) necessary to enable the Equipment to be used in Poland in accordance with the Master Service Agreement.

2. Standard of Care. VGS’s standard of care with respect to the provision of Services pursuant to this Agreement shall be limited to providing services of the same general quality as VGS provides for its own internal operations, and VOS’s sole and exclusive remedy for the failure by VGS to meet such standard of care in providing Services hereunder shall be to terminate such services as provided in this Agreement. Notwithstanding anything herein to the contrary, VGS shall be liable for losses sustained or liabilities arising out of VGS’s gross negligence or willful misconduct. VGS makes no representations or warranties of any kind, whether express or implied (i) as to the quality or timeliness or fitness for a particular purpose of services it provides hereunder, or (ii) with respect to any supplies or other material purchased on behalf of VOS pursuant to this Agreement, the merchantability or fitness for any purpose of any such supplies or other materials. UNDER NO CIRCUMSTANCES SHALL VGS HAVE ANY LIABILITY HEREUNDER FOR DAMAGES IN EXCESS OF AMOUNTS PAID BY VOS UNDER THIS AGREEMENT OR FOR CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST PROFITS.

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3. Payment. In consideration of the provision of Services under this Agreement, VGS shall be entitled to payment from VOS for all actual costs and expenses associated with the provision of Services. In addition, VGS shall be entitled to a monthly management fee equal to eight percent (8.0%) of the total amount invoiced for direct labor costs for employees of VGS providing Services pursuant to this Agreement. VOS shall pay all invoices within thirty (30) days of receipt unless VOS has disputed an invoice in writing. In the event of a dispute, the parties shall work in good faith to resolve such dispute.

4. Master Service Agreement Participation. It is contemplated that one of either VOS’ or VGS’ seismic acquisition crews will operate in Poland prior to the arrival of the other seismic acquisition crew in Poland. Accordingly, during the term of the Master Service Agreement:

(a) all revenues and expenses generated from providing seismic data acquisition services in connection with the PolandSPAN Project:

(i) will be shared fifty percent (50%) by VOS and fifty percent (50%) by VGS during the period that VOS and VGS both have a seismic acquisition crew operating in Poland; and

(ii) will be for the sole account of either VOS or VGS during the period that VOS or VGS, as applicable, has the sole seismic acquisition crew operating in Poland.

(b) all revenues and royalties generated for the account of VOS and VGS by the sale of PolandSPAN Project seismic data will be shared fifty percent (50%) by VOS and fifty percent (50%) by VGS.

5. Term. This Agreement shall terminate upon the termination of the Master Service Agreement. Upon termination of this Agreement, VGS shall be paid for Services rendered pursuant to this Agreement through the effective date of the termination and shall be entitled to receive the monthly management fee through the last month of the term. Thereafter, the parties shall have no further liability to each other as to unperformed services not yet due hereunder (except for those obligations expressly surviving such termination).

6. Insurance. If requested by VGS, VOS shall secure and maintain insurance of the types and in the amounts necessary to protect itself and the interests of VGS against hazards or risks of loss with regard to the Equipment. VOS shall cause VGS to be listed as an additional insured and/or loss payee on such insurance policies. VOS shall invoice VGS for the actual cost of such insurance, and VGS shall pay such invoices within thirty (30) days of receipt of such invoice.

7. Representations and Warranties. VOS represents and warrants that the Equipment is in good operating condition and repair, and is suitable for immediate use for their intended purpose.

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8. Indemnification. VGS shall fully defend, indemnify and hold VOS, its shareholders, partners, officers, directors, employees and agents, harmless from and against any and all losses, claims, demands, damages, suits, expenses, causes of action, and any sanctions of every kind and character (including reasonable attorneys’ fees, court costs, and costs of investigation) which may be made or asserted by VGS, VGS’s assigns, VGS’s employees, agents, contractors, and subcontractors and employees thereof, or by any third parties (including governmental agencies) for personal injury, death, property damage, property confiscation, breach of contract, taxes, duties, tariffs, pollution, environmental damage, and regulatory compliance, any fines or penalties asserted on account of such damage, and causes of action alleging liability caused by, arising out of the provision of Services by VGS from and after the date of this Agreement. This indemnity shall not apply to losses sustained or liabilities arising out of (a) VOS’s gross negligence or willful misconduct, or (b) defects in the design or construction of the Equipment.

9. No Waiver or Amendment. No waiver of any of the terms, provisions or conditions hereof, or any modification of such terms, provisions or conditions, shall be effective unless in writing and signed by a duly authorized officer of each party.

10. Assignment. This Agreement and the duties, rights and obligations of the parties hereunder shallbe assignable by either party with the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assignees.

11. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Texas without regard to its principles regarding conflicts of laws. Venue for any action tried hereunder will be in Dallas, Texas, whether in federal or state court.

12. Independent Contractor. VGS shall perform the Services hereunder solely in the capacity of an independent contractor. VGS and VOS agree that nothing herein shall in any manner constitute either party as the agent or representative of the other party for any purpose whatsoever. Without limiting the foregoing, neither party shall have the right or authority to enter into any contract, warranty, guarantee or other undertaking or obligation in the name of or for the account of the other party, or to assume or create any obligation or liability of any kind, express or implied, on behalf of the other party, or to bind the other party in any manner whatsoever, or to hold itself out as having any right, power or authority to do any of the foregoing, except, in each case, as to actions taken by a party at the express written request and direction of the other party. Nothing in this Agreement, express or implied, shall create a partnership relationship between the parties (including any of their respective successors and assigns).

13. Entire Agreement. This Agreement represents the entire agreement between the parties, and supercedes and nullifies all prior representations, negotiations, proposals and statements.

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14. Notices. Any notice, request, demand, statement, routine communications, or invoices will be in writing and delivered to the parties at the addresses or facsimile numbers identified below. Notice will be deemed given when physically delivered to the other party in person, when transmitted to the other party by confirmed facsimile transmission, or when deposited in the U.S. Mail or with a delivery service, postage pre-paid. Either party may change its address or facsimile number by providing notice of same in accordance with this provision.

VIKING PETROL SAHASI HIZMETLERI A.S.	VIKING GEOPHYSICAL SERVICES LTD.
Nispetiye Caddesi Akmerkez B Blok Kat: 5, 34337 Etiler- Besiktas - ISTANBUL Facsimile: 90 212.317 25 97	Sehit Erhan Caddesi 24/7, 06680 Cancaya - ANKARA Facsimile: 90 312.426 02 04

15. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed in its corporate name by its corporate officers, as of the day and year first above written.

VIKING PETROL SAHASI HIZMETLERI A.S.

By:	/s/ N. Malone Mitchell, 3rd
Name:	N. Malone Mitchell, 3rd
Title:	Authorized Signatory

VIKING GEOPHYSICAL SERVICES, LTD.

By:	/s/ Jeffrey S. Mecom
Name:	Jeffrey S. Mecom
Title:	Vice President

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EXHIBIT “A”

DESCRIPTION OF EQUIPMENT

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

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

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

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

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

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

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

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

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

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

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

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

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

Date: May 10, 2012	/s/ N. Malone Mitchell, 3rd
	N. Malone Mitchell, 3rd
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Wil F. Saqueton, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 10, 2012	/s/ Wil F. Saqueton
	Wil F. Saqueton
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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

The quarterly report on Form 10-Q for the quarter ended March 31, 2012 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

Date: May 10, 2012

/s/ N. Malone Mitchell, 3rd

N. Malone Mitchell, 3rd

Chief Executive Officer

/s/ Wil F. Saqueton

Wil F. Saqueton

Chief Financial Officer

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

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Recent Accounting Policies

3 Months Ended

Mar. 31, 2012

Recent Accounting Policies [Abstract]

Recent Accounting Policies

3. Recent accounting policies

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs ("ASU 2011-04"). ASU 2011-04 amends Accounting Standards Codification ("ASC") 820 Fair Value Measurements and Disclosures ("ASC 820"), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the ASC 820 disclosure requirements, particularly for Level 3 fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. We adopted ASU 2011-04 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In June 2011, FASB issued ASU 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"). ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. In December 2011, FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05 ("ASU 2011-12"). ASU 2011-12 deferred the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The amendments will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We adopted ASU 2011-05 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In September 2011, FASB issued ASU 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment ("ASU 2011-08"). ASU 2011-08 allows both public and nonpublic entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity would no longer be required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU 2011-08 allows early adoption and will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted ASU 2011-08 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In December 2011, FASB issued ASU No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities ("ASU 2011-11"). ASU 2011-11 will require entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. Application of ASU 2011-11 is required for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. We are currently evaluating the effects of adopting ASU 2011-11.

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

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Going Concern

3 Months Ended

Mar. 31, 2012

Going Concern [Abstract]

Going Concern

2. Going concern

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern. These principles assume that we will be able to realize our assets and discharge our obligations in the normal course of operations for the foreseeable future.

We incurred a net loss of $4.8 million for the three months ended March 31, 2012, which includes a net loss from discontinued operations of $2.2 million. At March 31, 2012, the outstanding principal amount of our debt was $170.2 million, of which $3.7 million was classified as held for sale. Excluding assets held for sale of $135.0 million and total liabilities held for sale of $25.9 million, we had a working capital deficit from continuing operations of $70.2 million. Of our outstanding debt, $73.0 million under our credit agreement (the "Dalea Credit Agreement") with Dalea Partners, LP ("Dalea") is due upon the earlier of (i) June 30, 2012 or (ii) the later of (x) two business days after demand by Dalea or (y) the closing of the sale of our oilfield services business, which is substantially comprised of our wholly owned subsidiaries Viking International Limited ("Viking International") and Viking Geophysical Services, Ltd. ("Viking Geophysical"). Dalea is 100% owned by Mr. Mitchell and his wife. On March 15, 2012, we entered into a stock purchase agreement to sell Viking International and Viking Geophysical. We also entered into a $15.0 million credit facility with Dalea (the "Dalea Credit Facility"), of which $11.0 million was outstanding at March 31, 2012, to provide us with additional liquidity for general corporate purposes. Should we be unable to consummate the sale, raise additional financing or extend the maturity date of the Dalea Credit Agreement, we will not have sufficient funds to continue operations beyond June 30, 2012. As a result of the recurring losses from operations and a working capital deficiency, there is substantial doubt regarding our ability to continue as a going concern. The continuing application of the going concern assumption is dependent upon our continuing ability to obtain the necessary financing to discharge our existing obligations, fund ongoing exploration, development and operations and ultimately achieve profitable operations.

Management believes the going concern assumption to be appropriate for these financial statements. If the going concern assumption was not appropriate, adjustments would be necessary to the carrying values of assets and liabilities, reported revenues and expenses and in the balance sheet classifications used in these consolidated financial statements.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 15,087	$ 15,116
Accounts receivable
Oil and natural gas sales, net	37,507	35,702
Other	6,233	6,992
Prepaid and other current assets	10,750	8,810
Deferred income taxes	3,179	2,124
Assets held for sale	134,972	128,117
Total current assets	207,728	196,861
Property and equipment:
Oil and natural gas properties, proved	194,736	174,577
Oil and natural gas properties, unproved	77,370	70,180
Equipment and other property	45,484	40,403
Property and equipment, gross	317,590	285,160
Less accumulated depreciation, depletion and amortization	(62,434)	(49,436)
Property and equipment, net	255,156	235,724
Other long-term assets:
Other assets	3,886	4,673
Goodwill	9,071	8,514
Total other assets	12,957	13,187
Total assets	475,841	445,772
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	23,985	25,733
Accounts payable - related party		323
Accrued liabilities	18,560	16,450
Loans payable	4,542	7,732
Loan payable - related party	84,000	73,000
Derivative liabilities	8,256	3,716
Asset retirement obligations	3,605	3,031
Liabilities held for sale - related party	1,863	3,677
Liabilities held for sale	24,076	23,037
Total current liabilities	168,887	156,699
Long-term liabilities:
Asset retirement obligations	11,111	10,503
Accrued liabilities	5,631	5,503
Deferred income taxes	15,562	15,508
Loan payable	78,000	78,000
Derivative liabilities	9,775	3,355
Total long-term liabilities	120,079	112,869
Total liabilities	288,966	269,568
Commitments and contingencies
Shareholders' equity:
Common shares, $0.01 par value, 1,000,000,000 shares authorized; issued and outstanding 366,534,449 as of March 31, 2012 and 365,790,492 as of December 31, 2011	3,665	3,658
Additional paid-in capital	535,203	534,117
Accumulated other comprehensive loss	(36,241)	(50,615)
Accumulated deficit	(315,752)	(310,956)
Total shareholders' equity	186,875	176,204
Total liabilities and shareholders' equity	$ 475,841	$ 445,772

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Operating activities:
Net loss	$ (4,796)	$ (21,155)
Adjustment for net loss from discontinued operations	2,157	9,308
Net loss from continuing operations	(2,639)	(11,847)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation	493	557
Foreign currency gain	(6,653)	(1,425)
Unrealized loss on commodity derivative contracts	10,960	8,607
Amortization of loan financing costs	225	730
Deferred income tax benefit	(1,859)	(1,874)
Amortization of warrants - related party		1,224
Exploration, abandonment and impairment	1,493	6,437
Depreciation, depletion and amortization	9,169	4,630
Accretion of asset retirement obligations	252	214
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(1,658)	(2,945)
Prepaid expenses and other assets	1,290	2,842
Accounts payable and accrued liabilities	223	(3,466)
Net cash provided by operating activities from continuing operations	11,296	3,684
Net cash (used in) provided by operating activities from discontinued operations	(4,322)	527
Net cash provided by operating activities	6,974	4,211
Investing activities:
Acquisitions, net of cash		(2,088)
Additions to oil and natural gas properties	(13,355)	(14,485)
Additions to equipment and other properties	(824)	(1,457)
Restricted cash	1,062
Net cash used in investing activities from continuing operations	(13,117)	(18,030)
Net cash used in investing activities from discontinued operations	(1,208)	(8,056)
Net cash used in investing activities	(14,325)	(26,086)
Financing activities:
Exercise of stock options and warrants	600	173
Loan proceeds	4,284	8,110
Loan proceeds - related party	11,000
Loan repayment	(7,497)	(2)
Loan financing costs	(250)
Net cash provided by financing activities from continuing operations	8,137	8,281
Net cash used in financing activities from discontinued operations	(1,519)	(1,044)
Net cash provided by financing activities	6,618	7,237
Effect of exchange rate changes on cash	704	162
Net decrease in cash and cash equivalents	(29)	(14,476)
Cash and cash equivalents, beginning of year	15,116	34,676
Cash and cash equivalents, end of period	15,087	20,200
Supplemental disclosures:
Cash paid for interest	2,747	1,272
Cash paid for income taxes	$ 2,007	$ 881

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General

3 Months Ended

Mar. 31, 2012

General [Abstract]

General

1. General

Nature of operations

TransAtlantic Petroleum Ltd. (together with its subsidiaries, "we," "us," "our," the "Company" or "TransAtlantic") is an international oil and natural gas company engaged in acquisition, exploration, development and production. We have focused our operations in countries that are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing, royalty and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey, Bulgaria and Romania. As of March 31, 2012, approximately 40% of our outstanding common shares were beneficially owned by N. Malone Mitchell, 3rd, the chairman of our board of directors and chief executive officer.

Basis of presentation

Our consolidated financial statements are expressed in U.S. Dollars and have been prepared by management in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). All amounts in these notes to the consolidated financial statements are in U.S. Dollars unless otherwise indicated. We have prepared the accompanying unaudited interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, and in the opinion of management, such financial statements reflect all adjustments necessary to present fairly the consolidated financial position of TransAtlantic at March 31, 2012 and its results of operations and cash flows for the periods presented. We have omitted certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP pursuant to those rules and regulations, although we believe that the disclosures we have made are adequate to make the information presented not misleading. These unaudited interim financial statements should be read in conjunction with our audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2011. Certain prior year amounts have been reclassified to conform to current year presentation.

In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures. The results of operations for the interim periods are not necessarily indicative of the results we expect for the full year.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	1,000,000,000	1,000,000,000
Common shares, issued	366,534,449	365,790,492
Common shares, outstanding	366,534,449	365,790,492

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Related Party Loans Payable

3 Months Ended

Mar. 31, 2012

Related Party Loans Payable [Abstract]

Related Party Loans Payable

11. Related party loans payable

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

Related Party Floating Rate Debt	March 31, 2012			December 31, 2011
	(in thousands)
Dalea Credit Agreement	$	73,000		$	73,000
Dalea Credit Facility		11,000			—
		84,000			73,000
Viking Drilling note		—	(1)		—	(1)
Total related party debt		84,000			73,000
Less: short-term related party debt		84,000			73,000
Long-term related party debt	$	—		$	—
(1)    $1.7 million and $2.9 million outstanding at March 31, 2012 and December 31, 2011, respectively, was classified as "Liabilities held for sale – related party".

Dalea Credit Agreement

On June 28, 2010, we entered into the Dalea Credit Agreement. The purpose of the Dalea Credit Agreement was (i) to fund the acquisition of all of the shares of Amity and Petrogas, and (ii) for general corporate purposes. On May 18, 2011, we entered into a first amendment to the Dalea Credit Agreement to extend the maturity date and increase the interest rate to match the interest rate payable under our Amended and Restated Credit Facility. On November 7, 2011, we entered into a second amendment to the Dalea Credit Agreement to extend the maturity date to the earlier of (i) March 31, 2012 or (ii) the sale of Viking International and Viking Geophysical. On March 15, 2012, we entered into a third amendment to the Dalea Credit Agreement to extend the maturity date until the earlier of (i) June 30, 2012 or (ii) the later of (x) the closing of the sale of our oilfield services business or (y) two business days after demand by Dalea.

As of March 31, 2012, we had borrowed $73.0 million under the Dalea Credit Agreement. No further borrowings are permitted under the Dalea Credit Agreement.

Dalea Credit Facility

On March 15, 2012, TransAtlantic Worldwide, TBNG and the Company (collectively, the "Credit Facility Borrowers") entered into a $15.0 million credit facility with Dalea to provide us with additional liquidity for general corporate purposes until we complete the sale of Viking International and Viking Geophysical. Loans under the Dalea Credit Facility accrue interest at a rate of three-month London Interbank Offered Rate ("LIBOR") plus 5.5% per annum, to be adjusted monthly on the first day of each month. We will be required to pay all accrued interest in arrears on the last day of each month, and we may prepay outstanding amounts at any time before maturity without penalty. Outstanding borrowings must be repaid upon the earlier of (i) July 1, 2012 or (ii) the sale of Viking.

For the initial advance, we were required to pay Dalea an arrangement fee of $250,000. Under the Dalea Credit Facility, we are also required to pay Dalea a commitment fee equal to 2.75% per annum of the difference between the $15.0 million committed amount and the outstanding balance measured and payable on the last day of each fiscal quarter.

Any proceeds received by us or any subsidiary from any debt financings (subject to certain specified exceptions) or from the sale of Viking International and Viking Geophysical, net of reasonable transaction and financing costs, must be used to repay amounts outstanding under the credit facility. In addition, the Dalea Credit Facility is subject to customary covenants, including covenants that limit the ability of the Credit Facility Borrowers to, among other things, (i) make, give, create or permit or attempt to make, give or create any mortgage, charge, lien or encumbrance over any assets of any Credit Facility Borrower or any subsidiary (subject to certain specific exceptions), (ii) change the name of any of the Credit Facility Borrowers or the jurisdictions of organization, (iii) declare or provide for any dividends or other payments or distributions (whether in cash, assets or indebtedness) based on share capital, (iv) redeem or purchase any of their shares, (v) make or permit any sale of or disposition of any substantial or material part of their business, assets or undertaking, or that of any subsidiary, (vi) save and (except for certain specified exceptions) borrow or cause or permit any subsidiary to borrow money from any other person, without first obtaining and delivering a duly signed assignment and postponement of claim by such person in form and terms satisfactory to Dalea, (vii) pay out or permit the payment out of any shareholders loans or other indebtedness to non-arm's length parties, or (viii) guarantee or permit the guarantee of the obligations of any other person, directly or indirectly, except in the ordinary course of business.

The Dalea Credit Facility is also subject to customary events of default, including payment defaults, defaults in observing or performing any term, covenant or condition of the Dalea Credit Facility or collateral documents, material misrepresentations by a Credit Facility Borrower or any subsidiary, a Credit Facility Borrower or any subsidiary ceases or threatens to cease to carry on business, the prohibition in trading in shares of any of the Credit Facility Borrowers or suspension or delisting from any stock exchange, a material adverse change in the financial condition of any of the Credit Facility Borrowers and any of their subsidiaries taken as a whole, Dalea believes in good faith and on commercially reasonable grounds that the ability of the Credit Facility Borrowers to pay or perform any of the covenants contained in the Dalea Credit Facility is materially impaired, insolvency of any of the Credit Facility Borrowers or any change of control of any of the Credit Facility Borrowers. Control is defined in the Dalea Credit Facility as ownership of or control or direction over, directly or indirectly, 20% or more of the outstanding voting securities of the Credit Facility Borrowers. If an event of default occurs and is continuing, Dalea may demand immediate payment of all monies owing under the Dalea Credit Facility; provided that with respect to certain specified events of default, all monies due under the Dalea Credit Facility shall automatically become due and payable without any demand or any other action by Dalea or any other person.

At March 31, 2012, we had borrowed $11.0 million under the Dalea Credit Facility and had availability of $4.0 million.

Viking Drilling note

As of March 31, 2012, we had an outstanding balance of $1.7 million under a note payable with Viking Drilling, LLC. The note is included in "Liabilities held for sale — related party" in our consolidated balance sheets. Dalea owns 85% of Viking Drilling, LLC.

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Document And Entity Information	3 Months Ended
	Mar. 31, 2012	May 08, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Entity Registrant Name	TRANSATLANTIC PETROLEUM LTD.
Entity Central Index Key	0001092289
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		366,534,449

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Shareholders' Equity

3 Months Ended

Mar. 31, 2012

Shareholders' Equity [Abstract]

Shareholders' Equity

12. Shareholders' equity

June 2011 share issuance

On June 7, 2011, we issued 18.5 million common shares at the acquisition date closing price of $2.05 per share in a private placement to an accredited investor in connection with the acquisition of TBNG.

February 2011 share issuance

On February 18, 2011, we issued 8,924,478 common shares at the acquisition date closing price of $3.15 per share in a private placement to an accredited investor in connection with the acquisition of Direct Morocco, Anschutz and Direct Bulgaria.

Restricted stock units

Share-based compensation expense of approximately $0.5 million and $0.6 million with respect to awards of restricted stock units ("RSUs") was recorded for the three months ended March 31, 2012 and 2011, respectively.

As of March 31, 2012, we had approximately $2.2 million of unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.79 years.

Stock option plan

Our Amended and Restated Stock Option Plan (2006) (the "Option Plan") terminated on June 16, 2009. All outstanding awards issued under the Option Plan remained in full force and effect. All options presently outstanding under the Option Plan have a five-year term. We did not grant any stock options during the three months ended March 31, 2011. At March 31, 2012, all stock options have been fully amortized.

Earnings per share

Because we reported a net loss for the three months ended March 31, 2012 and March 31, 2011, we excluded the following share based awards from the computation of earnings per share, as their effect would have been anti-dilutive:

	For the Three Months Ended
	March 31, 2012		March 31,2011
Unvested RSUs		1,524,080		2,083,817
Stock options		430,055		2,065,111
Warrants		7,318,720		17,365,831

Additionally, we had a contingent liability at March 31, 2012 of approximately $10.0 million that is payable in our common shares. At the March 31, 2012 closing price of our common shares, this liability represents 7,692,308 common shares that could be potentially dilutive to future earnings per share calculations.

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Consolidated Statements Of Operations And Comprehensive Income (Loss) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenues:
Oil and natural gas sales	$ 34,661	$ 28,676
Other	274	403
Total revenues	34,935	29,079
Costs and expenses:
Production	3,635	4,102
Exploration, abandonment and impairment	2,796	7,232
Seismic and other exploration	664	2,252
General and administrative	9,748	9,085
Depreciation, depletion and amortization	9,169	4,630
Accretion of asset retirement obligations	252	214
Total costs and expenses	26,264	27,515
Operating income	8,671	1,564
Other (expense) income:
Interest and other expense	(3,259)	(3,597)
Interest and other income	273	157
Loss on commodity derivative contracts	(12,435)	(9,311)
Foreign exchange gain	4,272	4
Total other (expense) income	(11,149)	(12,747)
Loss from continuing operations before income taxes	(2,478)	(11,183)
Current income tax expense	(2,020)	(2,538)
Deferred income tax benefit	1,859	1,874
Loss from continuing operations	(2,639)	(11,847)
Loss from discontinued operations, net of taxes	(2,157)	(9,308)
Net loss	(4,796)	(21,155)
Other comprehensive income:
Foreign currency translation adjustment	14,374	2,299
Comprehensive income (loss)	$ 9,578	$ (18,856)
Net loss per common share:
From continuing operations	$ (0.01)	$ (0.03)
From discontinued operations	$ (0.01)	$ (0.03)
Basic and diluted weighted average number of shares outstanding	366,436	341,142

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Goodwill

3 Months Ended

Mar. 31, 2012

Goodwill [Abstract]

Goodwill

6. Goodwill

Goodwill represents the excess of the purchase price of a business over the estimated fair value of the assets acquired and liabilities assumed. We have goodwill on acquisitions where we anticipated access to potential exploration and production opportunities. All of our goodwill is attributable to our Turkey operating segment. Goodwill was as follows at March 31, 2012 and December 31, 2011:

	March 31, 2012		December 31, 2011
	(in thousands)
Goodwill at beginning of period,	$	8,514	$	10,341
Foreign exchange change effect		557		(1,827	)
Goodwill at end of period	$	9,071	$	8,514

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Discontinued Operations

3 Months Ended

Mar. 31, 2012

Discontinued Operations [Abstract]

Discontinued Operations

5. Discontinued operations

Discontinued operations in Morocco

On June 27, 2011, we decided to discontinue our operations in Morocco. We have transferred our oilfield services equipment from Morocco to Turkey and are in the process of winding down our operations in Morocco. We have presented the Moroccan segment operating results as discontinued operations for all periods presented.

Discontinued operations of oilfield services business

On September 30, 2011, we engaged a financial advisor to assist with the sale, transfer or other disposition of our oilfield services business. On March 15, 2012, we entered into a stock purchase agreement with Dalea to sell Viking International and Viking Geophysical for an aggregate purchase price of $164.0 million, subject to adjustments in certain circumstances. The sale of Viking International and Viking Geophysical is subject to the approval of regulatory authorities, the receipt of equity financing by Dalea and other customary closing conditions. We have presented the oilfield services segment operating results as discontinued operations for all periods presented.

The assets and liabilities held for sale of the Moroccan and oilfield services segments at March 31, 2012 were as follows (in thousands):

	Morocco		Oilfield Services		Total Held for Sale
Cash	$	196	$	2,335	$	2,531
Receivables, net		—		7,575		7,575
Property and equipment, net		1,029		116,200		117,229
Other assets		1,526		6,111		7,637
Total assets held for sale	$	2,751	$	132,221	$	134,972
Accrued expenses and other liabilities	$	5,569	$	18,507	$	24,076
Liabilities held for sale related party		—		1,863		1,863
Total liabilities held for sale	$	5,569	$	20,370	$	25,939

The assets and liabilities held for sale of the Moroccan and oilfield services segments at December 31, 2011 are as follows (in thousands):

	Morocco		Oilfield Services		Total Held for Sale
Cash	$	95	$	1,090	$	1,185
Receivables, net		—		8,098		8,098
Property and equipment, net		1,026		113,497		114,523
Other assets		1,652		2,659		4,311
Total assets held for sale	$	2,773	$	125,344	$	128,117
Accrued expenses and other liabilities	$	6,154	$	16,883	$	23,037
Liabilities held for sale related party		—		3,677		3,677
Total liabilities held for sale	$	6,154	$	20,560	$	26,714

Operating results of discontinued operations are summarized as follows for the three months ended (in thousands):

	Morocco			Oilfield Services			Total			Morocco			Oilfield Services			Total
	March 31, 2012									March 31, 2011
Total revenues	$	—		$	10,284		$	10,284		$	48		$	3,117		$	3,165
Total costs and expenses		470			9,056			9,526			4,347			7,198			11,545
Total other (expense) income		2			(937	)		(935	)		(73	)		(631	)		(704	)
Income (loss) before income taxes	$	(468	)	$	291		$	(177	)	$	(4,372	)	$	(4,712	)	$	(9,084	)
Income tax		—			(1,980	)		(1,980	)		—			(224	)		(224	)
Loss from discontinued operations	$	(468	)	$	(1,689	)	$	(2,157	)	$	(4,372	)	$	(4,936	)	$	(9,308	)

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Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information [Abstract]

Segment Information

13. Segment information

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

	Corporate			Romania			Turkey			Bulgaria			Total
	(in thousands)
For the three months ended March 31, 2012
Total revenues	$	—		$	—		$	34,870		$	65		$	34,935
Net income (loss) from continuing operations before income taxes	$	(5,439	)	$	(298	)	$	3,459		$	(200	)	$	(2,478	)
Capital expenditures	$	—		$	—		$	14,011		$	168		$	14,179
For the three months ended March 31, 2011
Total revenues	$	47		$	—		$	28,904		$	128		$	29,079
Net loss from continuing operations before income taxes	$	(7,547	)	$	(313	)	$	(3,304	)	$	(19	)	$	(11,183	)
Capital expenditures	$	21		$	—		$	15,709		$	2,089		$	17,819
Segment assets
March 31, 2012	$	9,694		$	784		$	326,640		$	3,751		$	340,869	(1)
December 31, 2011	$	2,940		$	881		$	309,670		$	4,164		$	317,655	(1)
Goodwill
March 31, 2012	$	—		$	—		$	9,071		$	—		$	9,071
December 31, 2011	$	—		$	—		$	8,514		$	—		$	8,514
(1)    Excludes assets from our discontinued Moroccan operations and oilfield services business of $135.0 million and $128.1 million at March 31, 2012 and at December 31, 2011, respectively.

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Asset Retirement Obligations

3 Months Ended

Mar. 31, 2012

Asset Retirement Obligations [Abstract]

Asset Retirement Obligations

9. Asset retirement obligations

The following table summarizes the changes in our asset retirement obligations for the three months ended March 31, 2012 and for the year ended December 31, 2011:

		xxxxxxxx			xxxxxxxx
	Three Months Ended March  31, 2012			Year Ended December 31, 2011
	(in thousands)
Asset retirement obligations at beginning of period	$	13,534		$	6,943
Acquisitions		—			6,480
Change in estimates		(96	)		512
Liabilities settled		—			(195	)
Foreign exchange change effect		873			(2,524	)
Additions		153			1,176
Accretion expense		252			1,142
Asset retirement obligations at end of period		14,716			13,534
Less: current portion		3,605			3,031
Long-term portion	$	11,111		$	10,503

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Property And Equipment

3 Months Ended

Mar. 31, 2012

Property And Equipment [Abstract]

Property And Equipment

7. Property and equipment

(a) Oil and natural gas properties. The following table sets forth the capitalized costs under the successful efforts method for oil and gas properties:

	March 31, 2012			December 31, 2011
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	192,332		$	172,886
Bulgaria		2,404			1,691
Total oil and natural gas properties, proved		194,736			174,577
Oil and natural gas properties, unproved:
Turkey		77,370			70,180
Total oil and natural gas properties, unproved		77,370			70,180
Gross oil and natural gas properties		272,106			244,757
Accumulated depletion		(55,406	)		(45,327	)
Net oil and natural gas properties	$	216,700		$	199,430

At March 31, 2012 and December 31, 2011, we excluded $10.4 million and $7.1 million, respectively, from the depletion calculation for proved development wells currently in progress and for fields currently not in production.

At March 31, 2012, our oil and gas properties were comprised of $58.1 million relating to acquisition costs of proved properties which are being amortized by the unit-of-production method using total proved reserves and $70.8 million relating to exploratory well costs and additional development costs which are being amortized by the unit-of-production method using proved developed reserves.

At December 31, 2011, our oil and gas properties were comprised of $61.8 million relating to acquisition costs of proved properties which are being amortized by the unit-of-production method using total proved reserves and $60.4 million relating to exploratory well costs and additional development costs which are being amortized by the unit-of-production method using proved developed reserves.

During the three months ended March 31, 2012, we incurred approximately $6.1 million in exploratory drilling costs, of which $1.3 million was charged to earnings (included in exploration, abandonment and impairment expense) and $4.8 million remained capitalized at March 31, 2012. No exploratory well costs were reclassified to proved properties in the first quarter of 2012. As of March 31, 2012, we had $7.0 million of exploratory well costs capitalized for the Pancarkoy-1 well, which we began drilling in the fourth quarter of 2010. The following table summarizes the costs related to this well:

					Three Months Ended March 31,
	2010		2011		2012		Total
	(in thousands)
Pancarkoy-1 well initial re-entry and fracture stimulation (Ceylan and Mezardere formations)	$	803	$	4,958	$	1,208	$	6,969
Total capitalized costs	$	803	$	4,958	$	1,208	$	6,969

After the second fracture stimulation, commercial natural gas production could not be sustained due to the high amount of water production when the well was placed on production. A third fracture stimulation was performed in April 2012, but commercial production could not be sustained due to high water production. We have identified at least two more sands within the Mezardere formation that we expect to test initially by conventional means. These sands possess different, more favorable reservoir properties than the previous targets and have strong indicators of natural gas. We expect testing to commence late in the second quarter of 2012, and further fracture stimulation will depend on the outcome of the conventional test results.

Uncertainties affect the recoverability of these costs, as the recovery of the costs are dependent upon us obtaining government approvals, obtaining and maintaining licenses in good standing and achieving commercial production or sale.

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

	March 31, 2012			December 31, 2011
	(in thousands)
Other equipment	$	7,204		$	6,351
Inventory		23,335			20,471
Gas gathering system and facilities		7,268			6,822
Vehicles		1,128			1,001
Office equipment and furniture		6,549			5,758
Gross equipment and other property		45,484			40,403
Accumulated depreciation		(7,028	)		(4,109	)
Net equipment and other property	$	38,456		$	36,294

We classify our materials and supply inventory, including steel tubing and casing, as a long-term assets because such materials will ultimately be classified as long-term assets when the material is used in the drilling of a well.

At March 31, 2012, we excluded $0.5 million of other equipment and $23.3 million of inventory from depreciation, as the equipment and inventory had not been placed into service.

At December 31, 2011, we excluded $0.5 million of other equipment, $20.5 million of inventory and $1.8 million of gas gathering system and facilities from depreciation as the equipment and inventory had not been placed into service.

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Commodity Derivative Instruments

3 Months Ended

Mar. 31, 2012

Commodity Derivative Instruments [Abstract]

Commodity Derivative Instruments

8. Commodity derivative instruments

We use collar derivative contracts to economically hedge against the variability in cash flows associated with the forecasted sale of our future oil production. We have not designated the derivative financial instruments as hedges for accounting purposes and, accordingly, we record the contracts at fair value and recognize changes in fair value in earnings as they occur.

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

For the three months ended March 31, 2012, we recorded a net loss on commodity derivative contracts of $12.4 million, consisting of a $11.0 million unrealized loss related to changes in fair value and a $1.4 million realized loss for settled contracts. For the three months ended March 31, 2011, we recorded a net loss on commodity derivative contracts of $9.3 million, consisting of a $8.6 million unrealized loss related to changes in fair value and a $0.7 million realized loss for settled contracts.

At March 31, 2012 and December 31, 2011, we had outstanding contracts with respect to our future crude oil production as set forth in the tables below:

Fair Value of Derivative Instruments as of March 31, 2012

Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of  Liability
									(in thousands)
Collar		April 1, 2012—December 31, 2012		960	$	64.69	$	106.98	$	(4,186	)
Collar		January 1, 2013—December 31, 2013		400	$	75.00	$	125.50		(772	)
Collar		January 1, 2014—December 31, 2014		380	$	75.00	$	124.25		(430	)
									$	(5,388	)

			Collars						Additional Call
Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Liability
											(in thousands)
Three-way collar contract		April 1, 2012—December 31, 2012		240	$	70.00	$	100.00	$	129.50	$	(1,229	)
Three-way collar contract		April 1, 2012— June 30, 2012		350	$	85.00	$	116.25	$	137.38		(226	)
Three-way collar contract		July 1, 2012—December 31, 2012		205	$	85.00	$	97.13	$	162.13		(841	)
Three-way collar contract		January 1, 2013—December 31, 2013		831	$	85.00	$	97.13	$	162.13		(4,997	)
Three-way collar contract		January 1, 2014—December 31, 2014		726	$	85.00	$	97.13	$	162.13		(2,472	)
Three-way collar contract		January 1, 2015—December 31, 2015		1,016	$	85.00	$	91.88	$	151.88		(2,878	)
											$	(12,643	)

Fair Value of Derivative Instruments as of December 31, 2011

Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Asset (Liability)
									(in thousands)
Collar		January 1, 2012—December 31, 2012		960	$	64.69	$	106.98	$	(2,529	)
Collar		January 1, 2013—December 31, 2013		400	$	75.00	$	125.50		(116	)
Collar		January 1, 2014—December 31, 2014		380	$	75.00	$	124.25		12
									$	(2,633	)

			Collars						Additional Call
Type	Period		Quantity (Bbl/day)		Weighted Average Minimum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Weighted Average Maximum Price (per Bbl)		Estimated Fair Value of Liability
											(in thousands)
Three-way collar contract		January 1, 2012—December 31, 2012		240	$	70.00	$	100.00	$	129.50	$	(764	)
Three-way collar contract		January 1, 2012— March 31, 2012		350	$	85.00	$	118.88	$	138.13		(7	)
Three-way collar contract		April 1, 2012— June 30, 2012		350	$	85.00	$	116.25	$	137.38		(35	)
Three-way collar contract		July 1, 2012—December 31, 2012		205	$	85.00	$	97.13	$	162.13		(381	)
Three-way collar contract		January 1, 2013—December 31, 2013		831	$	85.00	$	97.13	$	162.13		(1,985	)
Three-way collar contract		January 1, 2014—December 31, 2014		726	$	85.00	$	97.13	$	162.13		(626	)
Three-way collar contract		January 1, 2015—December 31, 2015		1,016	$	85.00	$	91.88	$	151.88		(640	)
											$	(4,438	)

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Third Party Loans Payable

3 Months Ended

Mar. 31, 2012

Third Party Loans Payable [Abstract]

Third Party Loans Payable

10. Third party loans payable

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

		xxxxxxxx		xxxxxxxx
	March 31,          2012		December 31, 2011
	(in thousands)
Third-Party Floating Rate Debt
Amended and Restated Credit Facility	$	78,000	$	78,000
Third-Party Fixed Rate Debt
TBNG credit agreement		4,542		7,732
Viking International equipment loan		—		—	(1)
Total third-party debt		82,542		85,732
Less: short-term third-party debt		4,542		7,732
Long-term third-party debt	$	78,000	$	78,000
(1)    $2.0 million and $2.1 million outstanding at March 31, 2012 and December 31, 2011, respectively, was classified as "Liabilities held for sale".

Amended and Restated Senior Secured Credit Facility

On May 18, 2011, DMLP, Ltd. ("DMLP"), TransAtlantic Exploration Mediterranean International Pty Ltd ("TEMI"), Talon Exploration, Ltd. ("Talon Exploration"), TransAtlantic Turkey, Ltd. ("TAT") and Petrogas Petrol Gaz ve Petrokimya Ürünleri Inaat Sanayive Ticaret A.. ("Petrogas") (collectively, and together with Amity Oil International Pty Ltd ("Amity"), the "Borrowers") entered into the amended and restated senior secured credit facility with Standard Bank Plc and BNP Paribas

(Suisse) SA (the "Amended and Restated Credit Facility"). Each of the Borrowers is our wholly owned subsidiary. In July 2011, Amity executed a joinder agreement and became a borrower under the Amended and Restated Credit Facility. The Amended and Restated Credit Facility is guaranteed by us and each of TransAtlantic Petroleum (USA) Corp. and TransAtlantic Worldwide, Ltd. ("TransAtlantic Worldwide").

The borrowing base is re-determined semi-annually on April 1st and October 1st of each year prior to September 30, 2012 and quarterly on January 1st, April 1st, July 1st and October 1st of each year after September 30, 2012. We expect to complete the semi-annual borrowing base redetermination in the second quarter of 2012. Our borrowing base is currently $81.4 million.

At March 31, 2012, the Borrowers had borrowed $78.0 million and were in compliance with all material covenants under the Amended and Restated Credit Facility.

TBNG credit agreement

At March 31, 2012, we had outstanding borrowings of approximately 8.0 million New Turkish Lira (approximately $4.5 million) under an unsecured credit agreement between TBNG and a Turkish bank. Borrowings under the credit agreement bear interest at a rate of 14% per annum, and interest is payable quarterly. The credit agreement matures on September 13, 2012 and may be renewed for an additional period on the same terms.

Viking International equipment loan

As of March 31, 2012, we had an outstanding balance of $2.0 million under a secured credit agreement between Viking International and a Turkish bank. This secured credit agreement is included in "Liabilities held for sale" in our consolidated balance sheets.

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Related Party Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

15. Related party transactions

The following table summarizes related party accounts receivable and accounts payable as of March 31, 2012 and December 31, 2011:

	March 31, 2012		December 31, 2011
	(in thousands)
Related party accounts payable:
Riata Management service agreement	$	—	$	323
Total related party accounts payable	$	—	$	323

The following table summarizes related party accounts receivable held for sale and related party accounts payable held for sale as of March 31, 2012 and December 31, 2011:

	March 31, 2012		December 31, 2011
	(in thousands)
Related party accounts receivable:
Maritas services agreement	$	1,788	$	251
Viking Oilfield Services services agreement		146		116
Total related party accounts receivable held for sale	$	1,934	$	367
Related party accounts payable:
Viking Drilling services agreement	$	—	$	92
Viking Oilfield Services services agreement		137		617
Gundem lease agreements		36		36
Total related party accounts payable held for sale	$	173	$	745

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Consolidated Statements Of Equity (USD $) In Thousands	Common Shares [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2011	$ 3,658	$ 534,117	$ (50,615)	$ (310,956)	$ 176,204
Balance, shares at Dec. 31, 2011	365,790
Exercise of stock options	6	594			600
Exercise of stock options, shares	600
Issuance of restricted stock units	1	(1)
Issuance of restricted stock units, shares	144
Share-based compensation		493			493
Foreign currency translation adjustments			14,374		14,374
Net loss attributable to common shareholders				(4,796)	(4,796)
Balance at Mar. 31, 2012	$ 3,665	$ 535,203	$ (36,241)	$ (315,752)	$ 186,875
Balance, shares at Mar. 31, 2012	366,534

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Pro Forma Results Of Operations

3 Months Ended

Mar. 31, 2012

Pro Forma Results Of Operations [Abstract]

Pro Forma Results Of Operations

4. Pro forma results of operations

The following table presents the unaudited pro forma results of operations as though the acquisitions of Direct Petroleum Morocco, Inc. ("Direct Morocco"), Anschutz Morocco Corporation ("Anschutz"), Direct Petroleum Bulgaria EOOD ("Direct Bulgaria") and Thrace Basin Natural Gas (Turkiye) Corporation ("TBNG") had occurred as of January 1, 2011 (see our Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of these acquisitions):

	For the Three Months Ended March 31, 2011
	(in thousands, except per share data)
Total revenues	$	36,415
Loss from continuing operations before income taxes		(9,249	)
Loss from continuing operations		(10,300	)
Loss from discontinued operations		(9,926	)
Net loss		(20,226	)
Net loss per common share from continuing operations
Basic	$	(0.03	)
Diluted	$	(0.03	)
Net loss per common share from discontinued operations
Basic	$	(0.03	)
Diluted	$	(0.03	)

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Financial Instruments

3 Months Ended

Mar. 31, 2012

Financial Instruments [Abstract]

Financial Instruments

14. Financial instruments

Cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities were each estimated to have a fair value approximating the carrying amount at March 31, 2012 and December 31, 2011, due to the short maturity of those instruments.

Interest rate risk

We are exposed to interest rate risk as a result of our variable rate short-term cash holdings and borrowings under the Amended and Restated Credit Facility, the Dalea Credit Agreement, the Dalea Credit Facility and note payable with Viking Drilling, LLC.

Foreign currency risk

We have underlying foreign currency exchange rate exposure. Our currency exposures relate to transactions denominated in the Canadian Dollar, British Pound, Bulgarian Lev, European Union Euro, Romanian New Leu, Moroccan Dirham and New Turkish Lira. We are also subject to foreign currency exposures resulting from translating the functional currency of our foreign subsidiary financial statements into the U.S. Dollar reporting currency. We have not used foreign currency forward contracts to manage exchange rate fluctuations. At March 31, 2012, we had 12.1 million New Turkish Lira (approximately $6.8 million) in cash and cash equivalents, which exposes us to exchange rate risk based on fluctuations in the value of the New Turkish Lira.

Commodity price risk

We are exposed to fluctuations in commodity prices for crude oil and natural gas. Commodity prices are affected by many factors including but not limited to supply and demand. At March 31, 2012 and December 31, 2011, we were a party to commodity derivative contracts.

Concentration of credit risk

The majority of our receivables are within the oil and gas industry, primarily from our industry partners and from government agencies. Included in receivables are amounts due from Turkiye Petrolleri Anonim Ortakligi, the national oil company of Turkey, Zorlu Dogal Daz Ithalat Ihracat ve Toptan Ticaret A.S., a privately owned natural gas distributor in Turkey, and Turkiye Petrol Refinerileri A.., a privately owned oil refinery in Turkey, which purchase the majority of our oil and natural gas production. The receivables are not collateralized. To date, we have experienced minimal bad debts and have no allowance for doubtful accounts. Other accounts receivable relating to value added taxes are due from various government agencies and are expected to be collected during 2012. The majority of our cash and cash equivalents are held by three financial institutions in the United States and Turkey.

Fair value measurements

The following table summarizes the valuation of our financial assets and liabilities as of March 31, 2012:

	Fair Value Measurement Classification
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Liabilities:
Related party floating rate debt	$	—	$	(84,000	)	$	—	$	(84,000	)
Amended and Restated Credit Facility		—		(78,000	)		—		(78,000	)
TBNG credit agreement		—		(4,542	)		—		(4,542	)
Derivative financial instruments		—		(18,031	)		—		(18,031	)
Total	$	—	$	(184,573	)	$	—	$	(184,573	)

The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2011:

	Fair Value Measurement Classification
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Liabilities:
Related party floating rate debt	$	—	$	(73,000	)	$	—	$	(73,000	)
Amended and Restated Credit Facility		—		(78,000	)		—		(78,000	)
TBNG credit agreement		—		(7,732	)		—		(7,732	)
Derivative financial instruments		—		(7,071	)		—		(7,071	)
Total	$	—	$	(165,803	)	$	—	$	(165,803	)