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: June 30, 2016

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.)
16803 Dallas Parkway Addison, Texas	75001
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (214) 220-4323

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

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 August 8, 2016, the registrant had 47,160,617 common shares outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	2
Consolidated Statements of Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2016 and 2015	3
Consolidated Statement of Equity for the Six Months Ended June 30, 2016	4
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	31
Item 4. Controls and Procedures	32
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	33
Item 1A. Risk Factors	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	35

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TRANSATLANTIC PETROLEUM LTD.

Consolidated Balance Sheets

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

	June 30,			December 31,
	2016			2015
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	1,600		$	7,480
Restricted cash		7,168			3,758
Accounts receivable, net
Oil and natural gas sales		18,864			14,169
Joint interest and other		5,905			5,885
Related party		479			414
Prepaid and other current assets		3,569			2,807
Derivative asset		913			3,235
Assets held for sale		1,579			51,511
Total current assets		40,077			89,259
Property and equipment:
Oil and natural gas properties (successful efforts methods)
Proved		274,115			271,080
Unproved		31,346			31,135
Equipment and other property		36,426			36,708
		341,887			338,923
Less accumulated depreciation, depletion and amortization		(164,723	)		(148,218	)
Property and equipment, net		177,164			190,705
Other long-term assets:
Other assets		3,145			3,355
Note receivable - related party		7,964			11,500
Derivative asset		2,001			3,370
Total other assets		13,110			18,225
Total assets	$	230,351		$	298,189
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	12,811		$	12,675
Accounts payable - related party		2,122			2,684
Accrued liabilities		14,524			10,583
Loans payable		25,223			37,006
Loans payable - related party		3,593			3,593
Liabilities held for sale - related party		-			3,540
Liabilities held for sale		16,017			65,649
Total current liabilities		74,290			135,730
Long-term liabilities:
Asset retirement obligations		9,484			9,237
Accrued liabilities		12,101			11,940
Deferred income taxes		27,775			27,360
Loans payable		34,350			34,400
Loans payable - related party		20,650			20,600
Total long-term liabilities		104,360			103,537
Total liabilities		178,650			239,267
Commitments and contingencies
Shareholders' equity:
Common shares, $0.10 par value, 100,000,000 shares authorized; 47,160,617 shares and 41,017,777    shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively		4,716			4,102
Treasury stock		(970	)		(970	)
Additional paid-in-capital		573,034			569,365
Accumulated other comprehensive loss		(120,881	)		(121,590	)
Accumulated deficit		(404,198	)		(391,985	)
Total shareholders' equity		51,701			58,922
Total liabilities and shareholders' equity	$	230,351		$	298,189

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

2

TRANSATLANTIC PETROLEUM LTD.

Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

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

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenues:
Oil and natural gas sales	$	16,162		$	24,513		$	30,688		$	49,921
Sales of purchased natural gas		1,520			490			2,546			788
Other		16			50			30			101
Total revenues		17,698			25,053			33,264			50,810
Costs and expenses:
Production		3,069			3,334			5,955			6,955
Exploration, abandonment and impairment		128			4,093			1,433			4,440
Cost of purchased natural gas		1,341			469			2,237			735
Seismic and other exploration		15			93			81			151
General and administrative		3,899			6,692			8,742			13,815
Depreciation, depletion and amortization		7,807			8,956			15,773			20,010
Accretion of asset retirement obligations		96			93			188			189
Total costs and expenses		16,355			23,730			34,409			46,295
Operating income (loss)		1,343			1,323			(1,145	)		4,515
Other income (expense):
Interest and other expense		(2,614	)		(3,343	)		(5,270	)		(6,451	)
Interest and other income		190			188			402			351
(Loss) gain on commodity derivative contracts		(3,003	)		(3,274	)		(2,232	)		538
Foreign exchange (loss) gain		(611	)		805			(269	)		(5,646	)
Total other expense		(6,038	)		(5,624	)		(7,369	)		(11,208	)
Loss from continuing operations before income taxes		(4,695	)		(4,301	)		(8,514	)		(6,693	)
Income tax expense		(1,849	)		(1,388	)		(3,596	)		(3,019	)
Net loss from continuing operations		(6,544	)		(5,689	)		(12,110	)		(9,712	)
Loss from discontinued operations before income taxes		(118	)		(2,135	)		(1,056	)		(3,715	)
Gain on disposal of discontinued operations		-			-			749			-
Income tax benefit		-			574			204			683
Net loss from discontinued operations		(118	)		(1,561	)		(103	)		(3,032	)
Net loss	$	(6,662	)	$	(7,250	)	$	(12,213	)	$	(12,744	)
Other comprehensive (loss) income:
Foreign currency translation adjustment		(2,265	)		(4,917	)		709			(28,536	)
Comprehensive loss	$	(8,927	)	$	(12,167	)	$	(11,504	)	$	(41,280	)
Net loss per common share
Basic net loss per common share
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)
Weighted average common shares outstanding		41,001			40,973			40,870			40,870
Diluted net loss per common share
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)
Weighted average common and common equivalent shares    outstanding		41,001			40,973			40,870			40,870

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

3

TRANSATLANTIC PETROLEUM LTD.

Consolidated Statement of Equity

(Unaudited)

(U.S. Dollars and shares in thousands)

															Accumulated
												Additional			Other						Total
	Common		Treasury				Common		Treasury			Paid-in			Comprehensive			Accumulated			Shareholders'
	Shares		Shares		Warrants		Shares		Stock			Capital			Loss			Deficit			Equity
Balance at December 31, 2015		41,018		333		699	$	4,102	$	(970	)	$	569,365		$	(121,590	)	$	(391,985	)	$	58,922
Issuance of common shares		5,998		-		-		600		-			3,370			-			-			3,970
Issuance of restricted stock units		145		-		-		14		-			(14	)		-			-			-
Tax withholding on restricted stock units		-		-		-		-		-			(41	)		-			-			(41	)
Share-based compensation		-		-		-		-		-			354			-			-			354
Foreign currency translation adjustment		-		-		-		-		-			-			709			-			709
Net loss		-		-		-		-		-			-			-			(12,213	)		(12,213	)
Balance at June 30, 2016		47,161		333		699	$	4,716	$	(970	)	$	573,034		$	(120,881	)	$	(404,198	)	$	51,701

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

4

TRANSATLANTIC PETROLEUM LTD.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands of U.S. Dollars)

	For the Six Months Ended
	June 30,
	2016			2015
Operating activities:
Net loss	$	(12,213	)	$	(12,744	)
Adjustment for net (gain) loss from discontinued operations		103			3,032
Net loss from continuing operations		(12,110	)		(9,712	)
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation		354			814
Foreign currency loss		357			6,760
Loss (gain) on commodity derivative contracts		2,232			(538	)
Cash settlement on commodity derivative contracts		1,459			7,248
Amortization on loan financing costs		331			445
Deferred income tax expense		684			560
Exploration, abandonment and impairment		1,433			4,440
Depreciation, depletion and amortization		15,773			20,010
Accretion of asset retirement obligations		188			189
Vendor settlements		-			(236	)
Changes in operating assets and liabilities:
Accounts receivable		(4,514	)		12,256
Prepaid expenses and other assets		(283	)		443
Accounts payable and accrued liabilities		5,692			(14,479	)
Net cash provided by operating activities from continuing operations		11,596			28,200
Net cash used in operating activities from discontinued operations		(202	)		(6,392	)
Net cash provided by operating activities		11,394			21,808
Investing activities:
Additions to oil and natural gas properties		(3,182	)		(10,433	)
Restricted cash		(3,399	)		-
Additions to equipment and other properties		(139	)		(2,903	)
Net cash used in investing activities from continuing operations		(6,720	)		(13,336	)
Net cash used in investing activities from discontinued operations		-			(7,083	)
Net cash used in investing activities		(6,720	)		(20,419	)
Financing activities:
Issuance of common shares		1,658			-
Tax withholding on restricted share units		(41	)		(391	)
Loan proceeds		-			7,600
Loan repayment		(12,152	)		(8,330	)
Net cash used in financing activities from continuing operations		(10,535	)		(1,121	)
Net cash used in financing activities from discontinued operations		-			(14,819	)
Net cash used in financing activities		(10,535	)		(15,940	)
Effect of exchange rate on cash flows and cash equivalents		(19	)		(1,258	)
Net decrease in cash and cash equivalents		(5,880	)		(15,809	)
Cash and cash equivalents, beginning of period		7,480			35,132
Cash and cash equivalents, end of period	$	1,600		$	19,323
Supplemental disclosures:
Cash paid for interest	$	3,216		$	3,551
Cash paid for taxes	$	263		$	1,390
Supplemental non-cash financing activities:
Issuance of common shares	$	2,312		$	-
Repayment of the prepayment agreement	$	-		$	2,130

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

5

Transatlantic Petroleum Ltd.

Notes to Consolidated Financial Statements

(Unaudited)

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 have established, yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing, royalty rates and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey and Bulgaria. As of August 8, 2016, approximately 36% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

TransAtlantic is a holding company with two operating segments – Turkey and Bulgaria.  Its assets consist of its ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

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 United States (“U.S. GAAP”). All amounts in the notes to the consolidated financial statements are in U.S. Dollars unless otherwise indicated. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews estimates, including those related to fair value measurements associated with acquisitions and financial derivatives, the recoverability and impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.  During the six months ended June 30, 2016, we reclassified certain balance sheet amounts previously reported on our consolidated balance sheet at December 31, 2015 to conform to current year presentation.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2015.

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 $12.2 million for the six months ended June 30, 2016, which included net loss from discontinued operations of $0.1 million.  At June 30, 2016, the outstanding principal amount of our debt was $84.7 million (excluding unamortized deferred financing costs), and we had a working capital deficit (excluding assets and liabilities held for sale) of $19.8 million.

Due to the significant decline in Brent crude oil prices during 2015, the borrowing base under our senior credit facility (the “Senior Credit Facility”) with BNP Paribas (Suisse) SA (“BNP Paribas”) and the International Finance Corporation (“IFC”, and together with BNP Paribas, the “Lenders”) was decreased to $5.4 million effective April 1, 2016. The decline in the borrowing base resulted in a $18.8 million borrowing base deficiency under the Senior Credit Facility as of June 30, 2016.

On April 19, 2016, we entered into a second waiver and consent to credit agreement (the “Second Waiver and Consent”) with BNP Paribas and IFC, which granted us a conditional waiver of defaults under the Senior Credit Facility and the current ratio financial covenant non-compliance at December 31, 2015, and March 31, June 30, and September 30, 2016.  The Second Waiver and Consent also permitted the borrowers to make certain limited transfers and withdrawals from the collection accounts pledged to the Lenders under the Senior Credit Facility.

6

The Second Waiver and Consent included certain conditions, including the following:

(i) The borrowing base deficiency must be repaid by September 30, 2016 (provided that the Lenders may, in their sole and absolute discretion, agree in writing to extend such date to December 31, 2016) (the “Waiver Period”);

(ii) All monthly hedge settlement proceeds shall be used to pay down debt outstanding under the Senior Credit Facility;

(iii) Net proceeds from certain asset sales shall be used to prepay loans outstanding under the Senior Credit Facility;

(iv) On or before May 15, 2016, the Company shall have entered into a binding purchase and sale agreement for the sale of all of the equity interests in, or all or substantially all of the assets of, Thrace Basin Natural Gas (Turkiye) Corporation (“TBNG”);

(v) By June 30, 2016, the Lenders shall be granted a security interest over all of the equity interests in, and assets and property of, TBNG; and

(vi) On or before September 30, 2016, all holders of our 13.0% convertible notes due 2017 (the “2017 Notes”) shall either (a) convert their debt interest under the 2017 Notes into equity interest, or (b) agree to extend the maturity of the 2017 Notes to April 1, 2019 or later on substantially identical terms.

As of June 30, 2016, we had $24.2 million of outstanding borrowings under the Senior Credit Facility, a borrowing base deficiency of $18.8 million and no availability.  In addition, we were not in compliance with certain covenants in the Second Waiver and Consent, including the requirement to enter into a binding purchase and sale agreement for TBNG by May 15, 2016.  We continue to work with the Lenders to satisfy these conditions and restructure our Senior Credit Facility obligations.  Subsequent to June 30, 2016, we repaid $0.9 million of principal under the Senior Credit Facility, reducing the outstanding balance to $23.3 million and the borrowing base deficiency to $17.9million as of August 8, 2016.  In addition, as of June 30, 2016 and August 8, 2016, the Lenders held $7.2 million and $12.0 million, respectively, of restricted cash in our collection accounts in Turkey.      

Even if we obtain the funds to repay our borrowing base deficiency, we will need some form of debt restructuring, capital raising effort or asset sale in order to fund our operations and meet our substantial debt service obligations of approximately $29.7 million in 2016 and $55.0 million in 2017.  We have engaged Seaport Global Inc. as an independent advisor, and our management is actively pursuing improving our working capital position and/or restructuring our future debt service obligations in order to remain a going concern for the foreseeable future.

As a result there is substantial doubt regarding our ability to continue as a going concern.

Management believes the going concern assumption to be appropriate for these consolidated 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 pronouncements

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), an amendment to Accounting Standards Codification (“ASC”) Subtopic 330-10.  The amendment states that entities should measure inventory at the lower of cost and net realizable value.  The amendment does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method.  The amendment applies to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost.  ASU 2015-11 is effective for fiscal years beginning after December 31, 2016, including interim periods within those fiscal years.  We are currently assessing the potential impact of ASU 2015-11 on our consolidated financial statements and results of operations.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”).  ASU 2016-08 does not change the core principle of Topic 606 but clarifies the implementation guidance on principal versus agent considerations.  ASU 2016-08 is effective for the annual and interim periods beginning after December 15, 2017.  We are currently assessing the potential impact of ASU 2016-08 on our consolidated financial statements and results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”).  ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted.  We are currently assessing the potential impact of ASU 2016-09 on our consolidated financial statements and results of operations.

7

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”).  ASU 2016-10 does not change the core principle of Topic 606 but clarifies the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.  ASU 2016-10 is effective for annual and interim periods beginning after December 15, 2017.  We are currently assessing the potential impact of ASU 2016-10 on our consolidated financial statements and results of operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”).  ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently assessing the potential impact of ASU 2016-13 on our consolidated financial statements and results of operations.

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. Property and equipment

Oil and natural gas properties

The following table sets forth the capitalized costs under the successful efforts method for our oil and natural gas properties as of:

	June 30, 2016			December 31, 2015
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	273,619		$	270,591
Bulgaria		496			489
Total oil and natural gas properties, proved		274,115			271,080
Oil and natural gas properties, unproved:
Turkey		31,346			31,135
Total oil and natural gas properties, unproved		31,346			31,135
Gross oil and natural gas properties		305,461			302,215
Accumulated depletion		(154,645	)		(139,002	)
Net oil and natural gas properties	$	150,816		$	163,213

At June 30, 2016 and December 31, 2015, we excluded $0.1 million and $0.7 million, respectively, from the depletion calculation for proved development wells currently in progress and for costs associated with fields currently not in production.

At June 30, 2016, the capitalized costs of our oil and natural gas properties, net of accumulated depletion, included $18.8 million relating to acquisition costs of proved properties, which are being depleted by the unit-of-production method using total proved reserves, and $100.6 million relating to well costs and additional development costs, which are being depleted by the unit-of-production method using proved developed reserves.

At December 31, 2015, the capitalized costs of our oil and natural gas properties included $20.0 million relating to acquisition costs of proved properties, which are being amortized by the unit-of-production method using total proved reserves, and $111.4 million relating to well costs and additional development costs, which are being amortized by the unit-of-production method using proved developed reserves

8

Impairments of proved properties and impairment of exploratory well costs

Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate the carrying value of such properties may not be recoverable. We primarily use Level 3 inputs to determine fair value, including but are not limited to, estimates of proved reserves, future commodity prices, the timing and amount of future production and capital expenditures and discount rates commensurate with the risk reflective of the lives remaining for the respective oil and natural gas properties.

During the three and six months ended June 30, 2016, we recorded $0.1 million and $1.4 million, respectively, of impairment of proved properties and exploratory well costs, which are primarily measured using Level 3 inputs.  

Capitalized cost greater than one year

As of June 30, 2016, we had $1.3 million and $2.2 million of exploratory well costs capitalized for the Hayrabolu-10 and Pinar-1 wells, respectively, in Turkey, which we spud in February 2013 and March 2014, respectively. The Hayrabolu-10 and Pinar-1 wells continue to be held for completion.

Equipment and other property

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

	June 30, 2016			December 31, 2015
	(in thousands)
Inventory	$	20,978		$	21,338
Leasehold improvements, office equipment and software		7,836			7,794
Gas gathering system and facilities		4,821			4,798
Other equipment		2,390			2,378
Vehicles		401			400
Gross equipment and other property		36,426			36,708
Accumulated depreciation		(10,078	)		(9,216	)
Net equipment and other property	$	26,348		$	27,492

We classify our materials and supply inventory, including steel tubing and casing, as 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 June 30, 2016 and December 31, 2015, we excluded $21.0 million and $21.3 million of inventory, respectively, from depreciation as the inventory had not been placed into service.

5. Asset retirement obligations

The following table summarizes the changes in our asset retirement obligations (“ARO”) for the six months ended June 30, 2016 and for the year ended December 31, 2015:

	June 30, 2016		December 31, 2015
	(in thousands)
Asset retirement obligations at beginning of period	$	9,237	$	10,543
Change in estimates		-		385
Foreign exchange change effect		59		(2,137	)
Additions		-		78
Accretion expense		188		368
Asset retirement obligations at end of period		9,484		9,237
Less: current portion		-		-
Long-term portion	$	9,484	$	9,237

Our ARO is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging costs, remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs.

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6. Commodity derivative instruments

We use derivative contracts to hedge against the variability in cash flows associated with the forecasted sale of a portion of our future oil production. We have not designated the derivative contracts as hedges for accounting purposes, and accordingly, we record the derivative 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 contracts with the same counterparty in our consolidated balance sheets. All of our oil derivative contracts are settled based upon Brent crude oil pricing. We recognize gains and losses related to these contracts on a fair value basis in our consolidated statements of comprehensive (loss) income under the caption “(Loss) gain on commodity derivative contracts.” Settlements of derivative contracts are included in operating activities on our consolidated statements of cash flows under the caption “Cash settlement on commodity derivative contracts.”  

During the three months ended June 30, 2016 and 2015, we recorded a net loss on commodity derivative contracts of $3.0 million and $3.3 million, respectively.  During the six months ended June 30, 2016 and 2015, we recorded a net loss on commodity derivative contracts of $2.2 million and a net gain of $0.5 million, respectively.

At June 30, 2016 and December 31, 2015, 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 June 30, 2016

		Puts
				Weighted
				Average		Estimated Fair
		Quantity		Price		Value of
Type	Period	(Bbl/day)		(per Bbl)		Asset
						(in thousands)
Put	July 1, 2016— December 31, 2016		738	$	50.00	$	336
Put	January 1, 2017— December 31, 2017		610	$	50.00		1,190
Put	January 1, 2018— December 31, 2018		494	$	50.00		1,135
Put	January 1, 2019— March 31, 2019		443	$	50.00		253
Total estimated fair value of asset						$	2,914

Fair Value of Derivative Instruments as of December 31, 2015

		Puts
				Weighted
				Average		Estimated Fair
		Quantity		Price		Value of
Type	Period	(Bbl/day)		(per Bbl)		Asset
						(in thousands)
Put	January 1, 2016— December 31, 2016		808	$	50.00	$	3,235
Put	January 1, 2017— December 31, 2017		610	$	50.00		1,798
Put	January 1, 2018— December 31, 2018		494	$	50.00		1,292
Put	January 1, 2019— March 31, 2019		443	$	50.00		280
Total estimated fair value of asset						$	6,605

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Balance sheet presentation

The following table summarizes both: (i) the gross fair value of our commodity derivative instruments by the appropriate balance sheet classification even when the commodity derivative instruments are subject to netting arrangements and qualify for net presentation in our consolidated balance sheets at June 30, 2016 and December 31, 2015, and (ii) the net recorded fair value as reflected on our consolidated balance sheets at June 30, 2016 and December 31, 2015.

		As of June 30, 2016
				Gross
				Amount		Net Amount of
		Gross		Offset in the		Assets
		Amount of		Consolidated		Presented in the
		Recognized		Balance		Consolidated
Underlying Commodity	Location on Balance Sheet	Assets		Sheet		Balance Sheet
		(in thousands)
Crude oil	Current assets	$	913	$	-	$	913
Crude oil	Long-term assets	$	2,001	$	-	$	2,001

		As of December 31, 2015
				Gross
				Amount		Net Amount of
		Gross		Offset in the		Assets
		Amount of		Consolidated		Presented in the
		Recognized		Balance		Consolidated
Underlying Commodity	Location on Balance Sheet	Assets		Sheet		Balance Sheet
		(in thousands)
Crude oil	Current assets	$	3,235	$	-	$	3,235
Crude oil	Long-term assets	$	3,370	$	-	$	3,370

7. Loans payable

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

	June 30,			December 31,
	2016			2015
Fixed and floating rate loans	(in thousands)
2017 Notes	$	34,350		$	34,400
2017 Notes - Related Party		20,650			20,600
Senior Credit Facility		24,243			32,075
Unamortized deferred financing cost - Senior Credit Facility and    2017 Notes		(892	)		(1,260	)
TBNG credit facility		872			5,192
ANBE Note		3,593			3,592
West Promissory Notes		1,000			1,000
Loans payable		83,816			95,599
Less: current portion		28,816			40,599
Long-term portion	$	55,000		$	55,000

Senior Credit Facility

On May 6, 2014, certain of our wholly owned subsidiaries entered into the Senior Credit Facility with BNP Paribas and IFC. The Senior Credit Facility is guaranteed by us and each of TransAtlantic Petroleum (USA) Corp. (“TransAtlantic USA”) and TransAtlantic Worldwide, Ltd. (each, a “Guarantor”).

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The borrowing base amount is re-determined semi-annually on April 1st and October 1st of each year.  The April 1, 2016 redetermination resulted in a $5.4 million borrowing base and a $18.8 million borrowing base deficiency under the Senior Credit Facility as of June 30, 2016. Loans under the Senior Credit Facility accrue interest at a rate of three-month LIBOR plus 5.00% per annum (5.63% at June 30, 2016), except as described below.  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; and

· the debt value which results in the loan life coverage ratio for such calculation date being 1.30 to 1.00.

On April 19, 2016, we entered into the Second Waiver and Consent with BNP Paribas and IFC, which granted us a conditional waiver of defaults under the Senior Credit Facility and permitted the borrowers to make certain limited transfers and withdrawals from the collection accounts pledged to the Lenders under the Senior Credit Facility.  The Second Waiver and Consent also waived non-compliance with the current ratio financial covenant in the Senior Credit Facility on each of December 31, 2015, and March 31, June 30, and September 30, 2016.

The Second Waiver and Consent included certain conditions, including the following:

(i) The borrowing base deficiency must be repaid by September 30, 2016 (provided that the Lenders may, in their sole and absolute discretion, agree in writing to extend such date to December 31, 2016);

(ii) All monthly hedge settlement proceeds shall be used to pay down debt outstanding under the Senior Credit Facility;

(iii) Net proceeds from certain asset sales shall be used to prepay loans outstanding under the Senior Credit Facility;

(iv) On or before May 15, 2016, the Company shall have entered into a binding purchase and sale agreement for the sale of all of the equity interests in, or all or substantially all of the assets of, TBNG;

(v) By June 30, 2016, the Lenders shall be granted a security interest over all of the equity interest in, and assets and property of, TBNG; and

(vi) On or before September 30, 2016, all holders of the 2017 Notes shall either (a) convert their debt interest under the 2017 Notes into equity interest, or (b) agree to extend the maturity of the 2017 Notes to April 1, 2019 or later on substantially identical terms.

Pursuant to the Second Waiver and Consent, as of April 19, 2016, the Lenders’ aggregate commitments were reduced to $30.5 million, with individual commitments of $15.2 million each, and shall be further reduced by the amount of any payments under the Senior Credit Facility.  During the Waiver Period, interest on the borrowing base deficiency will accrue at a rate of three-month LIBOR plus 7.00% per annum (7.63% at June 30, 2016).  

As of June 30, 2016, we had $24.2 million of outstanding borrowings under the Senior Credit Facility, a borrowing base deficiency of $18.8 million and no availability. In addition, we were not in compliance with certain covenants in the Second Waiver and Consent, including the requirement to enter into a binding purchase and sale agreement for TBNG by May 15, 2016.  We continue to work with the Lenders to satisfy these conditions and restructure our Senior Credit Facility obligations.  Subsequent to June 30, 2016, we repaid $0.9 million of principal under the Senior Credit Facility, reducing the outstanding balance to $23.3 million and the borrowing base deficiency to $17.9 million, as of August 8, 2016.  In addition, as of June 30, 2016 and August 8, 2016, the Lenders held $7.2 million and $12.0 million, respectively, of restricted cash in our collection accounts in Turkey.    

As of August 8, 2016, we had granted a security interest in favor of the Lenders over all of the equity interests in, and moveable assets of, TBNG, and were in the process of granting a security interest in favor of the Lenders over all present and future receivables of TBNG. We are also in active negotiations with third party purchasers for the sale of TBNG. We have engaged Seaport Global Inc. as an independent advisor, and our management is actively pursuing alternate structures for the 2017 Notes.

We have classified all borrowings under the Senior Credit Facility as short-term debt as of June 30, 2016 due to the uncertainty regarding our ability to comply with the covenants in the Senior Credit Facility for the next twelve months.

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2017 Notes

As of June 30, 2016, we had $55.0million aggregate principal amount of outstanding 2017 Notes. The 2017 Notes bear interest at a rate of 13.0% per annum and mature on July 1, 2017. The 2017 Notes are convertible at any time, at the election of a holder, into our common shares at a conversion price of $6.80 per share.

On June 30, 2016, we issued 2,905,737 common shares in a private placement to certain holders of the 2017 Notes, at the election of such holders to receive common shares in lieu of cash interest on the 2017 Notes (see Note 9, “Shareholders’ equity”).

TBNG credit facility

TBNG has a fully-drawn credit facility with a Turkish bank.  During the second quarter of 2016, the facility was amended and the monthly principal installments were deferred until August 29, 2016.  The facility may be prepaid without penalty. The facility is secured by a lien on a Turkish real estate property owned by Gundem Turizm Yatirim ve Isletmeleri Anonim Sirketi (“Gundem”), which is 97.5% beneficially owned by Mr. Mitchell and his children. At June 30, 2016, TBNG owed $0.9 million under the credit facility and had no availability.

West Promissory Notes

In August 2015, TransAtlantic USA entered into promissory notes (the “Promissory Notes”) with each of Mary West CRT 2 LLC and Gary West CRT 2 LLC, shareholders of the Company (collectively, the “Holders”), whereby TransAtlantic USA could borrow up to $1.5 million under each Promissory Note to fund our share repurchase program. The Holders are managed by Randy Rochman, an observer of our board of directors.

On August 21, 2015, TransAtlantic USA borrowed $500,000 under each Promissory Note. Pursuant to the terms of the Promissory Notes, the Holders are granted a first priority lien and security interest in all of our common shares purchased under our share repurchase program. Loans under the Promissory Notes accrue interest at a rate of 9.00% per annum and mature on October 1, 2016. The Promissory Notes are guaranteed by us. As of June 30, 2016, we had borrowed $1.0 million under the Promissory Notes and had no availability. The funds were used to purchase our common shares pursuant to our share repurchase program.

ANBE Note

On December 30, 2015, TransAtlantic USA entered into a $5.0 million draw down convertible promissory note (the “Note”) with ANBE Holdings, L.P. (“ANBE”), an entity owned by the children of the Company’s chairman and chief executive officer, N. Malone Mitchell 3rd, and controlled by an entity managed by Mr. Mitchell and his wife. The Note bears interest at a rate of 13.0% per annum.  On December 30, 2015, the Company borrowed $3.6 million under the Note (the “Initial Advance”) for general corporate purposes.

On June 30, 2016, TransAtlantic USA entered into an extension of the Note (the “Extension”) with ANBE.  The Extension extended the date on which the Company could request advances under the Note from June 15, 2016 to August 15, 2016 and extended the maturity date of the Note from June 30, 2016 to August 31, 2016.  As of June 30, 2016, the Company had borrowed $3.6 million under the Note and had availability of $1.4 million.

Advances under the Note may be converted, at the election of ANBE, any time after the NYSE MKT approves the Company’s application to list the additional common shares issuable pursuant to the conversion feature of the Note and prior to the maturity of the Note.  The conversion price per common share for each advance is equal to 105% of the closing price of the Company’s common shares on the NYSE MKT on the trading date immediately prior to such advance.  The conversion price of the Initial Advance is $1.3755 per share.

On June 30, 2016, we issued 355,826 common shares in a private placement to ANBE in lieu of cash interest on the Note (see Note 9, “Shareholders’ equity”).

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8. Contingencies relating to production leases and exploration permits

Selmo

We are involved in litigation with persons who claim ownership of a portion of the surface at the Selmo oil field in Turkey. These cases are being vigorously defended by TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”) and Turkish governmental authorities. We do not have enough information to estimate the potential additional operating costs we would incur in the event the purported surface owners’ claims are ultimately successful. Any adjustment arising out of the claims will be recorded when it becomes probable and measurable.

Morocco

During 2012, we were notified that the Moroccan government may seek to recover approximately $5.5 million in contractual obligations under our Tselfat exploration permit work program. In February 2013, the Moroccan government drew down our $1.0 million bank guarantee that was put in place to ensure our performance of the Tselfat exploration permit work program. Although we believe that the bank guarantee satisfies our contractual obligations, during 2012, we recorded $5.0 million in accrued liabilities relating to our Tselfat exploration permit for this contingency.

Bulgaria

During 2012, we were notified that the Bulgarian government may seek to recover approximately $2.0 million in contractual obligations under our Aglen exploration permit work program. Due to the Bulgarian government’s January 2012 ban on fracture stimulation and related activities, a force majeure event under the terms of the exploration permit was recognized by the government. Although we invoked force majeure, we recorded $2.0 million in general and administrative expense relating to our Aglen exploration permit during 2012 for this contractual obligation.

In October 2015, the Bulgarian Ministry of Energy and Economy filed a suit against our subsidiary, Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”), claiming a $200,000 penalty for Direct Bulgaria’s alleged failure to fulfill the Aglen work program.  We believe that Direct Bulgaria is not under any obligation to fulfill the work program until the 2012 force majeure event is rectified and intend to vigorously defend this claim.

Direct Petroleum

In July 2013, we entered into a second amendment (the “Amendment”) to the purchase agreement (the “Purchase Agreement”) with Direct Petroleum Exploration, LLC (“Direct”). The Amendment set forth a new obligation to drill and test the Deventci-R2 well by May 1, 2014. We completed the drilling and testing requirements pursuant to the Amendment during April 2014, which resulted in the reversal of a $2.5 million contingent liability recorded in 2011. The reversal was recognized in our consolidated statements of comprehensive income (loss) under the caption “Revaluation of contingent consideration” during the nine months ended September 30, 2014.

In December 2014, Direct filed suit against the Company alleging that it was due liquidated damages of $5.0 million worth of common shares of the Company pursuant to the Amendment. On March 15, 2016, the Company entered into a settlement agreement pursuant to which we agreed to issue 225,000 common shares to Direct in exchange for a mutual release of all current and future claims against the other party in connection with the Purchase Agreement. On April 17, 2016, the Company issued 225,000 common shares to Direct pursuant to a settlement agreement, and the court dismissed the lawsuit on April 28, 2016.

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9. Shareholders’ equity

June 2016 share issuance

On June 30, 2016, we issued an aggregate of 5,773,305 common shares in private placements under the Securities Act of 1933, as amended (the “Securities Act”). Of the 5,773,305 common shares, (i) 2,905,737 common shares were issued to holders of the 2017 Notes at the election of such holders to receive common shares in lieu of cash interest on the 2017 Notes; (ii) 355,826 common shares were issued to ANBE in lieu of cash interest on the Note; and (iii) 2,511,742 common shares were issued for cash, which was used to pay cash interest to certain holders of the 2017 Notes. All of the shares were issued at a value of $0.6599 per share, which was equal to 75% of the 10-day volume weighted average price through the close of trading of the common shares on the NYSE MKT on June 29, 2016.

Direct settlement

On April 17, 2016, we issued 225,000 common shares to Direct pursuant to a settlement agreement.

Restricted stock units

We recorded share-based compensation expense of $0.2 million for awards of restricted stock units (“RSUs”) for each of the three months ended June 30, 2016 and 2015. We recorded share-based compensation expense of $0.4  million and $0.5 million for awards of RSUs for the six months ended June 30, 2016 and 2015, respectively.

As of June 30, 2016, we had approximately $0.6 million of unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.5 years.

Earnings per share

We account for earnings per share in accordance with ASC Subtopic 260-10, Earnings Per Share (“ASC 260-10”). ASC 260-10 requires companies to present two calculations of earnings per share: basic and diluted. Basic earnings per common share for the three and six months ended June 30, 2016 and 2015 equals net loss divided by the weighted average shares outstanding during the periods. Weighted average shares outstanding are equal to the weighted average of all shares outstanding for the period, excluding unvested RSUs. Diluted earnings per common share for the three and six months ended June 30, 2016 and 2015 are computed in the same manner as basic earnings per common share after assuming the issuance of common shares for all potentially dilutive common share equivalents, which includes RSUs.  For the three and six months ended June 30, 2016, there were no dilutive securities included in the calculation of diluted earnings per share.  

The following table presents the basic and diluted earnings per common share computations:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands, except per share amounts)	2016			2015			2016			2015
Net loss from continuing operations	$	(6,544	)	$	(5,689	)	$	(12,110	)	$	(9,712	)
Net loss from discontinued operations	$	(118	)	$	(1,561	)	$	(103	)	$	(3,032	)
Basic net loss per common share:
Shares:
Weighted average common shares outstanding		41,001			40,973			40,870			40,870
Basic net loss per common share:
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)
Diluted net loss per common share:
Shares:
Weighted average common shares outstanding		41,001			40,973			40,870			40,870
Diluted net loss per common share:
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)

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10. Segment information

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

	Corporate			Turkey			Bulgaria			Total
	(in thousands)
For the three months ended June 30, 2016
Total revenues	$	-		$	17,698		$	-		$	17,698
Loss from continuing operations before income    taxes		(3,990	)		(567	)		(138	)		(4,695	)
Capital expenditures	$	-		$	911		$	-		$	911
For the three months ended June 30, 2015
Total revenues	$	-		$	25,053					$	25,053
(Loss) income from continuing operations before income    taxes		(5,405	)		4,970			(3,866	)		(4,301	)
Capital expenditures	$	108		$	4,418		$	-		$	4,526
For the six months ended June 30, 2016
Total revenues				$	33,264					$	33,264
(Loss) income from continuing operations before income    taxes		(8,990	)		679			(203	)		(8,514	)
Capital expenditures	$	-		$	3,191		$	-		$	3,191
For the six months ended June 30, 2015
Total revenues	$	-		$	50,810		$	-		$	50,810
(Loss) income from continuing operations before income    taxes		(11,903	)		9,177			(3,967	)		(6,693	)
Capital expenditures	$	163		$	10,776		$	41		$	10,980
Segment assets(1)
June 30, 2016	$	10,477		$	217,677		$	618		$	228,772
December 31, 2015	$	14,689		$	231,388		$	601		$	246,678

(1) Excludes assets from our discontinued Albanian and Moroccan operations of $1.6 million and $51.5 million at June 30, 2016 and December 31, 2015, respectively.

11. Financial instruments

Cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and our loans payable were each estimated to have a fair value approximating the carrying amount at June 30, 2016 and December 31, 2015, 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 Senior Credit Facility.

Foreign currency risk

We have underlying foreign currency exchange rate exposure. Our currency exposures relate to transactions denominated in the Canadian Dollar, Bulgarian Lev, European Union Euro, Romanian New Leu and Turkish Lira (“TRY”). 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 June 30, 2016, we had 28.6 million TRY (approximately $9.9 million) in cash and cash equivalents and restricted cash, which exposes us to exchange rate risk based on fluctuations in the value of the TRY.

Commodity price risk

We are exposed to fluctuations in commodity prices for oil and natural gas. Commodity prices are affected by many factors, including, but not limited to, supply and demand. At June 30, 2016 and December 31, 2015, we were a party to commodity derivative contracts (see Note 6, “Commodity derivative instruments”).

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Concentration of credit risk

The majority of our receivables are within the oil and natural 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, and Turkiye Petrol Rafinerileri A.Ş., a privately owned oil refinery in Turkey, which purchases all of our oil production. The receivables are not collateralized. To date, we have experienced minimal bad debts from customers in Turkey. 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 June 30, 2016:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	2,914	$	-		$	2,914
Disclosed but not carried at fair value
Liabilities:
Senior Credit Facility		-		-		(22,082	)		(22,082	)
2017 Notes		-		-		(47,826	)		(47,826	)
Total	$	-	$	2,914	$	(69,908	)	$	(66,994	)

The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2015:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	6,605	$	-		$	6,605
Disclosed but not carried at fair value
Liabilities:
Senior Credit Facility		-		-		(30,050	)		(30,050	)
2017 Notes		-		-		(44,489	)		(44,489	)
Total	$	-	$	6,605	$	(74,539	)	$	(67,934	)

We remeasure our derivative contracts on a recurring basis, with changes flowing through earnings.  At June 30, 2016 and December 31, 2015, the fair values of the Senior Credit Facility and 2017 Notes were estimated using a discounted cash flow analysis based on unobservable Level 3 inputs, including our own credit risk associated with the loans payable.

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12. Related party transactions

The following table summarizes related party accounts receivable and accounts payable as of the dates indicated:

	June 30,		December 31,
	2016		2015
	(in thousands)
Related party accounts receivable:
Riata Management service agreement	$	230	$	194
PSIL MSA		249		-
Viking International master services agreement		-		220
Total related party accounts receivable	$	479	$	414
Related party accounts payable:
PSIL MSA	$	1,818	$	-
Riata Management service agreement		304		384
Viking International master services agreement		-		2,300
Total related party accounts payable	$	2,122	$	2,684

Services transactions

On March 3, 2016, Mr. Mitchell closed a transaction whereby he sold his interests in Viking Services B.V. (“Viking Services”), the beneficial owner of Viking International Limited (“Viking International”), Viking Petrol Sahasi Hizmetleri A.S. (“VOS”) and Viking Geophysical Services Ltd. (“Viking Geophysical”), to a third party.  As part of the transaction, Mr. Mitchell acquired certain equipment used in the performance of stimulation, wireline, workover and similar services, which equipment is owned and operated by a new entity, Production Solutions International Petrol Arama Hizmetleri Anonim Sirketi (“PSIL”).  PSIL is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. Consequently, on March 3, 2016, TEMI entered into a master services agreement (the “PSIL MSA”) with PSIL on substantially similar terms to the current master services agreements with Viking International, VOS and Viking Geophysical.  Pursuant to the PSIL MSA, PSIL performs the services on behalf of TEMI and its affiliates.  The master service agreements with each of Viking International, VOS and Viking Geophysical will remain in effect through the remainder of the five-year term of the agreements ending on June 13, 2017.

Dalea Amended Note and Pledge Agreement

On April 19, 2016, we entered into a note amendment agreement (the “Note Amendment Agreement”) with Mr. Mitchell, and Dalea Partners, LP (“Dalea”), pursuant to which Dalea agreed to deliver an amended and restated promissory note (the “Amended Note”) in favor of us, in the principal sum of $7,964,053, which Amended Note would amend and restate that certain promissory note, dated June 13, 2012, made by Dalea in favor of us in the principal amount of $11.5 million (the “Original Note”). The Note Amendment Agreement reduced the principal amount of the Original Note to $8.0 million in exchange for the cancellation of an account payable of approximately $3.5 million (the “Account Payable”) owed by TransAtlantic Albania Ltd. (“TransAtlantic Albania”), a former subsidiary of the Company, to Viking International.  We have indemnified a third party for any liability relating to the payment of the Account Payable.

Pursuant to the Note Amendment Agreement, on April 19, 2016, we entered into the Amended Note, which amended and restated the Original Note that was issued in connection with our sale of our subsidiaries, Viking International and Viking Geophysical Services, to a joint venture owned by Dalea and Abraaj Investment Management Limited in June 2012. In the Amended Note, we and Dalea acknowledged that (i) while the sale of Dalea’s interest in Viking Services enabled us to take the position that the Original Note was accelerated in accordance with its terms, the principal purpose of including the acceleration events in the Original Note was to ensure that certain oilfield services provided by Viking Services to us would continue to be available to us, and (ii) such services will now be provided pursuant to the PSIL MSA.  PSIL is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. As a result, the Amended Note revised the events triggering acceleration of the repayment of the Original Note to the following: (i) a reduction of ownership by Dalea (and other controlled affiliates of Mr. Mitchell) of equity interest in PSIL to less than 50%; (ii) the sale or transfer by Dalea or PSIL of all or substantially all of its assets to any person (a “Transferee”) that does not own a controlling interest in Dalea or PSIL and is not controlled by Mr. Mitchell (an “Unrelated Person”), or the subsequent transfer by any Transferee that is not an Unrelated Person of all or substantially all of its assets to an Unrelated Person; (iii) the acquisition by an Unrelated Person of more than 50% of the voting interests of Dalea or PSIL; (iv) termination of the PSIL MSA other than as a result of an uncured default thereunder by TEMI; (v) default by PSIL under the PSIL MSA, which default is not remedied within a period of 30 days after notice thereof to PSIL; and (vi) insolvency or bankruptcy of PSIL. The maturity date of the Amended Note was extended to June 13, 2019. The interest rate on the Amended Note remains at 3.0% per annum and continues to be guaranteed by Mr. Mitchell.  The Amended Note contains customary events of default.

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In addition, pursuant to the Note Amendment Agreement, on April 19, 2016, we entered into a pledge agreement (the “Pledge Agreement”) with Dalea, whereby Dalea pledged the $2.0 million principal amount of the 2017 Notes owned by Dalea (the “Dalea Convertible Notes”), including any future securities for which the Dalea Convertible Notes are converted or exchanged, as security for the performance of Dalea’s obligations under the Amended Note. The Pledge Agreement provides that interest payable to Dalea under the Dalea Convertible Notes (or any future securities for which the Dalea Convertible Notes are converted or exchanged) will be credited first against the outstanding principal balance of the Amended Note and, upon full repayment of the outstanding principal balance of the Amended Note, any accrued and unpaid interest on the Amended Note. The Pledge Agreement contains customary events of default.

On June 30, 2016, we entered into a waiver with Dalea, whereby we waived our right under the Pledge Agreement to receive the interest payment due July 1, 2016 under the Dalea Convertible Notes in connection with the payment of 201,459 common shares to Dalea with respect to the 2017 Note interest payment paid on June 30, 2016.

Private placements

On June 30, 2016, we issued an aggregate of 5,773,305 common shares in private placements under the Securities Act. Of the 5,773,305 common shares, (i) 1,974,452 common shares were issued to Dalea, the trusts of Mr. Mitchell’s four children and Pinon Foundation, a nonprofit entity controlled by Mrs. Mitchell, at their election to receive common shares in lieu of cash interest on the 2017 Notes; (ii) 355,826 common shares were issued to ANBE in lieu of cash interest on the Note and (iii) 814,627 common shares were issued to Dalea and the trusts of Mr. Mitchell’s four children for cash, which was used to pay cash interest to certain holders of the 2017 Notes (see Note 9, “Shareholders’ equity”).

Indemnity agreement

On May 9, 2016, Mr. Mitchell guaranteed the payment of director and officer liability premiums in the amount of $0.4 million(the “Guaranteed Payments”) payable to US Premium Finance solely in the event of a change of control of the Company.  On May 9, 2016, we entered into an Indemnity Agreement with Mr. Mitchell pursuant to which we agreed to indemnify him for any damages he incurs related to the Guaranteed Payments.

13. Discontinued operations

Discontinued operations in Albania

As of December 31, 2015 and June 30, 2016, we classified our Albania segment as assets and liabilities held for sale and presented the operating results within discontinued operations for all periods presented.  

In February 2016, we sold all of the outstanding equity in Stream Oil & Gas Ltd. (“Stream”) to GBC Oil Company Ltd. (“GBC Oil”) in exchange for (i) the future payment of $2.3 million to Raiffeisen Bank Sh.A. (“Raiffeisen”) to pay down the term loan facility dated as of September 17, 2014 (the “Term Loan Facility”) between Stream’s wholly-owned subsidiary, TransAtlantic Albania and Raiffeisen, and (ii) the assumption of $29.2 million of liabilities owed by Stream, consisting of $23.1 million of accounts payable and accrued liabilities and $6.1 million of debt.  TransAtlantic Albania owns all of our former Albanian assets and operations.  In addition, GBC Oil issued us a warrant pursuant to which we have the option to acquire up to 25% of the fully diluted equity interests in TransAtlantic Albania for nominal consideration at any time on or before March 1, 2019.  Prior to the sale of Stream to GBC Oil, TransAtlantic Albania entered into an assignment and assumption agreement pursuant to which TransAtlantic Albania will assign its Delvina natural gas assets and $12.9 million of associated liabilities to Delvina Gas Company Ltd. (“Delvina Gas”), our newly formed, wholly owned subsidiary, to be effective immediately upon receipt of required contractual consents. There is no assurance that we will be able to obtain the required contractual consents.  In addition, we agreed to indemnify GBC Oil and Stream for the $12.9 million of liabilities related to the Delvina gas operations.  We are currently negotiating a joint venture with a third party for the purchase of a portion of Delvina Gas.  There is no assurance that we will be able to complete a joint venture for the purchase of a portion of Delvina Gas.  If the Delvina natural gas assets are not transferred to Delvina Gas due to a breach of the purchase agreement by GBC Oil or its affiliates, we believe we have contractual damages claims that would offset any such indemnification obligations, including the Account Payable.  Subsequent to the divestiture, we reduced the $12.9 million of indemnification liabilities to $9.5 million due to the cancellation of the Account Payable discussed in Note 12, “Related party transactions”.

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Discontinued operations in Morocco

On June 27, 2011, we decided to discontinue our operations in Morocco. We have substantially completed the process of winding down our operations in Morocco. We have presented the Moroccan segment operating results as discontinued operations for all periods presented.

The assets and liabilities held for sale at June 30, 2016 and December 31, 2015 were as follows:

	Albania		Morocco		TotalHeld for Sale
	(in thousands)
As of June 30, 2016
Assets
Cash	$	-	$	16	$	16
Other current assets		1,551		12		1,563
Total current assets held for sale	$	1,551	$	28	$	1,579
Liabilities
Accounts payable and other accrued liabilities	$	9,421	$	6,596	$	16,017
Total current liabilities held for sale	$	9,421	$	6,596	$	16,017
As of December 31, 2015
Assets
Cash	$	1,201	$	16	$	1,217
Other current assets		1,853		11		1,864
Property and equipment, net		48,430		-		48,430
Total current assets held for sale	$	51,484	$	27	$	51,511
Liabilities
Accounts payable and other accrued liabilities	$	37,888	$	6,352	$	44,240
Accounts payable - related party		3,540		-		3,540
Loans payable		6,123		-		6,123
Deferred tax liability		15,286		-		15,286
Total current liabilities held for sale	$	62,837	$	6,352	$	69,189

Loans payable

As of the dates indicated, TransAtlantic Albania’s third-party debt consisted of the following:

	June 30,		December 31,
	2016		2015
Fixed and floating rate loans	(in thousands)
Term Loan Facility	$	-	$	6,123
Loans payable	$	-	$	6,123

Term Loan Facility

TransAtlantic Albania was a party to the Term Loan Facility with Raiffeisen.  The loan was scheduled to mature on December 31, 2016 and bore interest at the rate of LIBOR plus 5.5%, with a minimum interest rate of 7.0%. TransAtlantic Albania was required to pay 1/16th of the total commitment each quarter on the last business day of each of March, June, September and December each year. The loan was guaranteed by TransAtlantic Albania’s parent company, Stream. TransAtlantic Albania could prepay the loan at its option in whole or in part, subject to a 3.0% penalty plus breakage costs.  The Term Loan Facility was secured by substantially all of the assets of TransAtlantic Albania.

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As of December 31, 2015, TransAtlantic Albania had $6.1 million outstanding under the Term Loan Facility and no availability.  As of December 31, 2015, TransAtlantic Albania was in default under the Term Loan Facility for failure to repay $1.1 million due on December 31, 2015.  On February 29, 2016, we sold all the equity interest in Stream, the parent company of TransAtlantic Albania, to GBC Oil, who assumed the Term Loan Facility.

Our operating results from discontinued operations for the three and six months ended June 30, 2016 and 2015 are summarized as follows:

	Albania			Morocco		Total
	(in thousands)
For the three months ended June, 2016
Total revenues	$	-		$	-	$	-
Production and transportation expense		-			-		-
Total other costs and expenses		118			-		118
Loss before income taxes	$	(118	)	$	-	$	(118	)
Gain on disposal of discontinued operations		-			-		-
Income tax benefit		-			-		-
Loss from discontinued operations	$	(118	)	$	-	$	(118	)
For the three months ended June, 2015
Total revenues	$	3,437		$	-	$	3,437
Production and transportation expense		3,763			-		3,763
Total other costs and expenses		1,801			-		1,801
Total other income		(8	)		-		(8	)
Loss before income taxes	$	(2,135	)	$	-	$	(2,135	)
Income tax benefit		574			-		574
Loss from discontinued operations	$	(1,561	)	$	-	$	(1,561	)
For the six months ended June, 2016
Total revenues	$	626		$	-	$	626
Production and transportation expense		1,155			-		1,155
Total other costs and expenses		527			-		527
Loss before income taxes	$	(1,056	)	$	-	$	(1,056	)
Gain on disposal of discontinued operations		749			-		749
Income tax benefit		204			-		204
Loss from discontinued operations	$	(103	)	$	-	$	(103	)
For the six months ended June, 2015
Total revenues	$	4,676		$	-	$	4,676
Production and transportation expense		6,138			-		6,138
Total other costs and expenses		3,836			-		3,836
Total other income		1,583			-		1,583
Loss before income taxes	$	(3,715	)	$	-	$	(3,715	)
Income tax benefit		683			-		683
Loss from discontinued operations	$	(3,032	)	$	-	$	(3,032	)

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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 have established yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing, royalty rates and tax rates to exploration and production companies. As of June 30, 2016, we held interests in approximately 1.4 million net acres of developed and undeveloped oil and natural gas properties in Turkey and Bulgaria. As of August 8, 2016, approximately 36% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

TransAtlantic is a holding company with two operating segments – Turkey and Bulgaria.  Its assets consist of its ownership interest in subsidiaries that primarily own assets in Turkey and Bulgaria.

Decline in Oil Prices, Effect on Liquidity and Going Concern

Due to the significant decline in Brent crude oil prices during 2015, the borrowing base under the Company’s senior credit facility (the “Senior Credit Facility”) with BNP Paribas (Suisse) SA (“BNP Paribas”) and the International Finance Corporation (“IFC”, and together with BNP Paribas, the “Lenders”) was decreased to $5.4 million effective April 1, 2016. The decline in the borrowing base resulted in a $18.8 million borrowing base deficiency under the Senior Credit Facility as of June 30, 2016.

On April 19, 2016, we entered into a second waiver and consent to credit agreement (the “Second Waiver and Consent”) with BNP Paribas and IFC, which granted us a conditional waiver of defaults under the Senior Credit Facility and the current ratio financial covenant non-compliance at December 31, 2015, and March 31, June 30, and September 30, 2016.  The Second Waiver and Consent also permitted the borrowers to make certain limited transfers and withdrawals from the collection accounts pledged to the Lenders under the Senior Credit Facility.  The Second Waiver and Consent includes certain conditions, including that no borrowing base deficiency exist as of September 30, 2016.

As of June 30, 2016, we had $24.2 million of outstanding borrowings under the Senior Credit Facility, a borrowing base deficiency of $18.8 million and no availability.  In addition, we were not in compliance with certain covenants in the Second Waiver and Consent, including the requirement to enter into a binding purchase and sale agreement for Thrace Basin Natural Gas (Turkiye) Corporation (“TBNG”) by May 15, 2016.  We continue to work with the Lenders to satisfy these conditions and restructure our Senior Credit Facility obligations.  Subsequent to June 30, 2016, we repaid $0.9 million of principal under the Senior Credit Facility, reducing the outstanding balance to $23.3 million and the borrowing base deficiency to $17.9million as of August 8, 2016.  In addition, as of June 30, 2016 and August 8, 2016, the Lenders held $7.2 million and $12.0 million, respectively, of restricted cash in our collection accounts in Turkey.  

Given the unfavorable market conditions and our limited access to capital, we are focused on the following near-term business strategies: (i) the sale of assets to raise cash, (ii) a significantly reduced development plan focused on maintaining our acreage position by drilling obligation wells and performing low cost, high return well optimizations, (iii) continued cost reduction measures to reduce our operating costs and general and administrative expenses, and (iv) restructuring, repaying or refinancing our debt obligations, including the Senior Credit Facility and our convertible notes.  During the second quarter of 2016, we engaged Seaport Global Inc. as an independent advisor, and our management is actively pursuing improving our working capital position and/or restructuring our future debt service. Notwithstanding these measures, there can be no assurance that we will be able to successfully sell assets or cure, waive or extend the deadline to repay the borrowing base deficiency repayment obligation.

These factors raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements included in this report do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty.

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Financial and Operational Performance Summary

The following is a summary of our financial and operational performance for the second quarter of 2016:

· We reported a $6.5 million net loss from continuing operations for the three months ended June 30, 2016.

· We derived 82.9% of our oil and natural gas revenues from the production of oil and 17.1% from the production of natural gas during the three months ended June 30, 2016.

· Total oil and natural gas sales revenues decreased 34.1% to $16.2 million for the quarter ended June 30, 2016, from $24.5 million in the same period in 2015. The decrease was primarily the result of a $12.84 decrease in the average price received per barrel of oil equivalent (“Boe”) and a decrease in sales volumes of 61 Mboe.

· For the quarter ended June 30, 2016, we incurred $0.9 million in capital expenditures, including seismic and corporate expenditures, as compared to $4.5 million for the quarter ended June 30, 2015.

· As of June 30, 2016, not including unamortized deferred financing costs and liabilities held for sale, we had $55.0 million in long-term debt and $29.7 million in short-term debt, as compared to $55.0 million in long-term debt and $41.9 million in short-term debt as of December 31, 2015.  During the quarter ended June 30, 2016, we repaid $9.6 million in debt as we continue to focus on deleveraging our balance sheet.

Second Quarter 2016 Operational Update

During the second quarter of 2016, we completed one well and continued workover and production optimizations in Southeastern Turkey.  The following summarizes our operations by location during the second quarter of 2016:

Turkey-Southeast

In the second quarter of 2016, we re-tested the Catak-1 well and, subsequently, completed it as a Bedinan producer.  This discovery well has allowed us to apply for, and be granted, a two-year extension on our West Molla license.  We are still in the process of our electrification and gas utilization project in the Bahar field.  We expect to complete this project, which will allow for further well optimization, this summer.

In Selmo, we continued facility modifications and upgrading the western pipeline extension.  We also performed minor optimization and maintenance work.  Following the completion of the pipeline upgrades, we will be able to perform additional production optimization work.

Turkey-Northwest

We did not engage in any new drilling activities during the second quarter of 2016, but spud the Guney Reisdere-1 obligation well (50% working interest) on August 2, 2016, and plan to resume workover activity in the third quarter of 2016.

Bulgaria

We continue to evaluate our position in Bulgaria with updated geologic models and continue to market a joint venture exploration program for our assets in Bulgaria.

Planned Operations

We currently plan to execute the following activities under our reduced development plan during the remainder of 2016:

Turkey. We will continue our well optimizations in the Bahar and Selmo fields.  Upon spudding the Guney Reisdere-1 obligation well in August in the Thrace Basin, we have fulfilled all drilling obligations in Turkey to maintain our acreage through the end of 2016.  We also continue to evaluate and perform secondary recovery and workover operations that we expect to be cash flow positive at current oil prices.

Bulgaria.  We plan to continue working on our geologic model for additional prospects and continue to market a joint venture exploration program for our assets in Bulgaria.

Discontinued Operations in Albania

In February 2016, we sold all of the outstanding equity in our wholly-owned subsidiary, Stream Oil & Gas Ltd. (“Stream”), to GBC Oil Company Ltd. (“GBC Oil”) in exchange for (i) the future payment of $2.3 million to Raiffeisen Bank Sh.A. (“Raiffeisen”) to pay down a term loan facility, and (ii) the assumption of $29.2 million of liabilities owed by Stream, consisting of $23.1 million of accounts payable and accrued liabilities and $6.1 million of debt.  TransAtlantic Albania Ltd. (“TransAtlantic Albania”), Stream’s

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wholly owned subsidiary, owns all of our former Albanian assets and operations.  In addition, GBC Oil issued us a warrant pursuant to which we have the option to acquire up to 25% of the fully diluted equity interests in TransAtlantic Albania for nominal consideration at any time on or before March 1, 2019.  Prior to the sale of Stream to GBC Oil, TransAtlantic Albania entered into an assignment and assumption agreement pursuant to which TransAtlantic Albania will assign its Delvina natural gas assets and $12.9 million of associated liabilities (the “Delvina Gas Liabilities”) to Delvina Gas Company, Ltd. (“Delvina Gas”), our newly formed, wholly owned subsidiary, to be effective immediately upon receipt of required contractual consents. There is no assurance that we will be able to obtain the required contractual consents.  In addition, we agreed to indemnify GBC Oil and Stream for the Delvina Gas Liabilities.  We are currently negotiating a joint venture with a third party for the purchase of a portion of Delvina Gas.  There is no assurance that we will be able to complete a joint venture for the purchase of a portion of Delvina Gas.  If the Delvina natural gas assets are not transferred to Delvina Gas due to a breach of the purchase agreement by GBC Oil or its affiliates, we believe we have contractual damages claims that would offset any such indemnification obligations, including the account payable of approximately $3.5 million (the “Account Payable”) owed by TransAtlantic Albania to Viking International Limited.  Subsequent to the divestiture, we reduced the $12.9 million of indemnification liabilities to $9.5 million due to the cancellation of the Account Payable.  We have presented the Albanian segment operating results as discontinued operations for the three and six months ended June 30, 2016 and June 30, 2015.

Discontinued Operations in Morocco

In June 2011, we decided to discontinue our Moroccan operations. We have substantially completed the process of winding down our operations in Morocco. We have presented the Moroccan segment operating results as discontinued operations for the three and six months ended June 30, 2016 and June 30, 2015.

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, 2015 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, 2015.

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Results of Continuing Operations—Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

Our results of continuing operations for the three months ended June 30, 2016 and 2015 were as follows:

	Three Months Ended June 30,						Change
	2016			2015			2016-2015
	(in thousands of U.S. Dollars, except per unit amounts and production volumes)
Sales volumes:
Oil (Mbbl)		329			343			(14	)
Natural gas (Mmcf)		391			676			(285	)
Total production (Mboe)		395			456			(61	)
Average daily sales volumes (Boepd)		4,335			5,006			(671	)
Average prices:
Oil (per Bbl)	$	40.67		$	56.03		$	(15.36	)
Natural gas (per Mcf)	$	7.08		$	7.84		$	(0.76	)
Oil equivalent (per Boe)	$	40.97		$	53.81		$	(12.84	)
Revenues:
Oil and natural gas sales	$	16,162		$	24,513		$	(8,351	)
Sales of purchased natural gas		1,520			490			1,030
Other		16			50			(34	)
Total revenues		17,698			25,053			(7,355	)
Costs and expenses (income):
Production		3,069			3,334			(265	)
Exploration, abandonment and impairment		128			4,093			(3,965	)
Cost of purchased natural gas		1,341			469			872
General and administrative		3,899			6,692			(2,793	)
Depletion		7,233			8,272			(1,039	)
Depreciation and amortization		574			684			(110	)
Interest and other expense		2,614			3,343			(729	)
Interest and other income		(190	)		(188	)		(2	)
Foreign exchange loss (gain)		611			(805	)		1,416
Loss on commodity derivative contracts:
Cash settlements on commodity derivative contracts		231			2,864			(2,633	)
Change in fair value on commodity derivative contracts		(3,234	)		(6,138	)		2,904
Total loss on commodity derivative contracts		(3,003	)		(3,274	)		271
Oil and natural gas costs per Boe:
Production	$	6.81		$	6.40		$	0.41
Depletion	$	16.04		$	12.04		$	4.00

Oil and Natural Gas Sales. Total oil and natural gas sales revenues decreased $8.4 million to $16.2 million for the three months ended June 30, 2016, from $24.5 million realized in the same period in 2015.  The decrease was primarily due to a decrease in the average realized price per Boe and reduced production.  Our average price received decreased $12.84 per Boe to $40.97 per Boe for the three months ended June 30, 2016, from $53.81 per Boe for the same period in 2015.  Additionally, our average daily sales volumes decreased 671 Boepd for the three months ended June 30, 2016, as compared to the same period in 2015.

Production. Production expenses for the three months ended June 30, 2016 decreased to $3.1 million, or $6.81 per Boe, from $3.3 million, or $6.40 per Boe, for the same period in 2015.  The decrease was primarily due to fewer workovers, reduced headcount and successful cost-cutting measures in our field operations during the three months ended June 30, 2016, as compared to the same period in 2015.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment costs for the three months ended June 30, 2016 decreased $4.0 million to $0.1 million, from $4.1 million for the same period in 2015.

General and Administrative. General and administrative expense was $3.9 million for the three months ended June 30, 2016, compared to $6.7 million for the same period in 2015.  Our general and administrative expenses decreased $2.8 million due to a $2.3 million decrease in personnel expenses, a $0.3 million decrease in office expenses, a $0.1 million decrease in travel expenses and a $0.1 million decrease in legal, accounting and other services.

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Depletion. Depletion decreased to $7.2 million, or $16.04 per Boe, for the three months ended June 30, 2016, compared to $8.3 million, or $12.04 per Boe, for the same period of 2015. The decrease was primarily due to a reduction in the net book value of our Goksu field to zero during 2015, which resulted in lower depletion expense during the three months ended June 30, 2016.

Interest and Other Expense. Interest and other expense decreased to $2.6 million for the three months ended June 30, 2016, compared to $3.3 million for the same period in 2015. The decrease was primarily due to our lower average debt balances during the three months ended June 30, 2016 versus the same period in 2015.

Interest and Other Income. Interest and other income remained unchanged at $0.2 million for the three months ended June 30, 2016, as compared to $0.2 million for the same period in 2015.

Foreign Exchange Loss (Gain). We recorded a foreign exchange loss of $0.6 million during the three months ended June 30, 2016, as compared to a gain of $0.8 million in the same period in 2015. The foreign exchange loss is primarily unrealized (non-cash) in nature and results from the re-measuring of specific transactions and monetary accounts in a currency other than the functional currency. For example, a U.S. Dollar transaction which occurs in Turkey is re-measured at the period-end to the New Turkish Lira (“TRY”) amount if it has not been settled previously. The foreign exchange loss for the three months ended June 30, 2016 was due to a 2.1% decrease in the value of the TRY compared to the U.S. Dollar, versus a 2.9% decrease in the value of the TRY for the three months ended June 30, 2015.

Loss on Commodity Derivative Contracts. During the three months ended June 30, 2016, we recorded a net loss on commodity derivative contracts of $3.0 million, as compared to a net loss of $3.3 million for the same period in 2015. During the three months ended June 30, 2016, we recorded a $3.2 million loss to mark our commodity derivative contracts to their fair value and a $0.2 million gain on settled contracts. During the same period in 2015, we recorded a $6.1 million loss to mark our derivative contracts to their fair value and a $2.9 million gain on settled contracts.

Other Comprehensive Income (Loss). 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 June 30, 2016 decreased to a loss of $2.3 million from a loss of $4.9 million for the same period in 2015.  The decrease in foreign currency translation loss in the three months ended June 30, 2016 was due to a 2.1% decrease in the value of the TRY as compared to the U.S. Dollar, versus a 2.9% decrease in the value of the TRY for the three months ended June 30, 2015.

Discontinued Operations. All revenues and expenses associated with our Albanian and Moroccan operations have been classified as discontinued operations.  Our operating results from discontinued operations in Albania and Morocco are summarized as follows:

	Albania			Morocco		Total
	(in thousands)
For the three months ended June, 2016
Total revenues	$	-		$	-	$	-
Production and transportation expense		-			-		-
Total other costs and expenses		118			-		118
Loss before income taxes	$	(118	)	$	-	$	(118	)
Gain on disposal of discontinued operations		-			-		-
Income tax benefit		-			-		-
Loss from discontinued operations	$	(118	)	$	-	$	(118	)
For the three months ended June, 2015
Total revenues	$	3,437		$	-	$	3,437
Production and transportation expense		3,763			-		3,763
Total other costs and expenses		1,801			-		1,801
Total other income		(8	)		-		(8	)
Loss before income taxes	$	(2,135	)	$	-	$	(2,135	)
Income tax benefit		574			-		574
Loss from discontinued operations	$	(1,561	)	$	-	$	(1,561	)

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Results of Continuing Operations—Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

Our results of continuing operations for the six months ended June 30, 2016 and 2015 were as follows:

	Six Months Ended June 30,						Change
	2016			2015			2016-2015
	(in thousands of U.S. Dollars, except per unit amounts and volumes)
Sales volumes:
Oil (Mbbl)		685			724			(39	)
Natural gas (Mmcf)		869			1,410			(541	)
Total production (Mboe)		830			958			(128	)
Average daily sales volumes (Boepd)		4,561			5,295			(734	)
Average prices:
Oil (per Bbl)	$	35.82		$	53.25		$	(17.43	)
Natural gas (per Mcf)	$	7.07		$	8.08		$	(1.01	)
Oil equivalent (per Boe)	$	36.97		$	52.09		$	(15.12	)
Revenues:
Oil and natural gas sales	$	30,688		$	49,921		$	(19,233	)
Sales of purchased natural gas		2,546			788			1,758
Other		30			101			(71	)
Total revenues		33,264			50,810			(17,546	)
Costs and expenses (income):
Production		5,955			6,955			(1,000	)
Exploration, abandonment and impairment		1,433			4,440			(3,007	)
Cost of purchased natural gas		2,237			735			1,502
General and administrative		8,742			13,815			(5,073	)
Depletion		14,827			18,687			(3,860	)
Depreciation and amortization		946			1,323			(377	)
Interest and other expense		5,270			6,451			(1,181	)
Interest and other income		(402	)		(351	)		(51	)
Foreign exchange loss		269			5,646			(5,377	)
(Loss) gain on commodity derivative contracts:
Cash settlements on commodity derivative contracts		1,459			7,248			(5,789	)
Change in fair value on commodity derivative contracts		(3,691	)		(6,710	)		3,019
Total (loss) gain on commodity derivative contracts		(2,232	)		538			(2,770	)
Oil and natural gas costs per Boe:
Production	$	6.28		$	6.35		$	(0.07	)
Depletion	$	15.63		$	17.05		$	(1.42	)

Oil and Natural Gas Sales. Total oil and natural gas sales revenues decreased $19.2 million to $30.7 million for the six months ended June 30, 2016, from $49.9 million realized in the same period in 2015.  The decrease was primarily due to a decrease in the average realized price per Boe and reduced production.  Our average price received decreased $15.12 per Boe to $36.97 per Boe for the six months ended June 30, 2016, from $52.09 per Boe for the same period in 2015.  Additionally, our average daily sales volumes decreased 734 Boepd for the six months ended June 30, 2016, as compared to the same period in 2015.

Production. Production expenses for the six months ended June 30, 2016 decreased to $6.0 million, or $6.28 per Boe, from $7.0 million, or $6.35 per Boe, for the same period in 2015.  The decrease in Turkey was primarily due to fewer workovers, reduced headcount and successful cost-cutting measures in our field operations during the six months ended June 30, 2016, as compared to the same period in 2015.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment costs for the six months ended June 30, 2016 decreased $3.0 million to $1.4 million, from $4.4 million for the same period in 2015. During the six months ended June 30, 2016, we incurred proved property impairment of $1.4 million.

27

General and Administrative. General and administrative expense was $8.7 million for the six months ended June 30, 2016, compared to $13.8 million for the same period in 2015.  Our general and administrative expenses decreased $5.1 million due to a $4.5 million decrease in personnel expenses, a $0.6 million decrease in office expenses and a $0.3 million decrease in travel expenses, which was partially offset by an increase in legal, accounting and other services of $0.4 million.

Depletion. Depletion decreased to $14.8 million, or $15.63 per Boe, for the six months ended June 30, 2016, compared to $18.7 million, or $17.05 per Boe, for the same period of 2015. The decrease was primarily due to a reduction in the net book value of our Goksu field to zero during 2015, which resulted in lower depletion expense during the six months ended June 30, 2016.

Interest and Other Expense. Interest and other expense decreased to $5.3 million for the six months ended June 30, 2016, compared to $6.5 million for the same period in 2015. The decrease was primarily due to our lower average debt balances during the six months ended June 30, 2016 versus the same period in 2015.

Interest and Other Income. Interest and other income remained unchanged at $0.4 million for the six months ended June 30, 2016, as compared to $0.4 million for the same period in 2015.

Foreign Exchange Loss. We recorded a foreign exchange loss of $0.3 million during the six months ended June 30, 2016, as compared to a loss of $5.6 million in the same period in 2015. The foreign exchange loss is primarily unrealized (non-cash) in nature and results from the re-measuring of specific transactions and monetary accounts in a currency other than the functional currency. For example, a U.S. Dollar transaction which occurs in Turkey is re-measured at the period-end to the TRY amount if it has not been settled previously. The foreign exchange loss for the six months ended June 30, 2016 was due to a 1.0% decrease in the value of the TRY compared to the U.S. Dollar, versus a 15.8% decrease in the value of the TRY for the six months ended June 30, 2015.

(Loss) Gain on Commodity Derivative Contracts. During the six months ended June 30, 2016, we recorded a net loss on commodity derivative contracts of $2.2 million, as compared to a net gain of $0.5 million for the same period in 2015. During the six months ended June 30, 2016, we recorded a $3.7 million loss to mark our commodity derivative contracts to their fair value and a $1.5 million gain on settled contracts. During the same period in 2015, we recorded a $6.7 million loss to mark our derivative contracts to their fair value and a $7.2 million gain on settled contracts.

Other Comprehensive Income (Loss). 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 six months ended June 30, 2016 increased to a gain of $0.7 million from a loss of $28.5 million for the same period in 2015.  The increase in foreign currency translation adjustments in the six months ended June 30, 2016 was due to a 1.0% decrease in the value of the TRY as compared to the U.S. Dollar, versus a 15.8% decrease in the value of the TRY for the six months ended June 30, 2015.

28

Discontinued Operations. All revenues and expenses associated with our Albanian and Moroccan operations have been classified as discontinued operations.  Our operating results from discontinued operations in Albania and Morocco are summarized as follows:

	Albania			Morocco		Total
	(in thousands)
For the six months ended June, 2016
Total revenues	$	626		$	-	$	626
Production and transportation expense		1,155			-		1,155
Total other costs and expenses		527			-		527
Loss before income taxes	$	(1,056	)	$	-	$	(1,056	)
Gain on disposal of discontinued operations		749			-		749
Income tax benefit		204			-		204
Loss from discontinued operations	$	(103	)	$	-	$	(103	)
For the six months ended June, 2015
Total revenues	$	4,676		$	-	$	4,676
Production and transportation expense		6,138			-		6,138
Total other costs and expenses		3,836			-		3,836
Total other income		1,583			-		1,583
Loss before income taxes	$	(3,715	)	$	-	$	(3,715	)
Income tax benefit		683			-		683
Loss from discontinued operations	$	(3,032	)	$	-	$	(3,032	)

Capital Expenditures

For the quarter ended June 30, 2016, we incurred $0.9 million in capital expenditures, including seismic and corporate expenditures, as compared to $4.5 million for the quarter ended June 30, 2015.  The decrease was due to our planned reduction in our capital expenditures during the quarter ended June 30, 2016.

We expect our net field capital expenditures for the remainder of 2016 to range between $2.0 million and $10.0 million in Turkey for obligation wells and low cost, high return well optimizations. We do not anticipate material capital expenditures in Bulgaria during the remainder of 2016. We expect cash on hand and cash flow from operations will be sufficient to fund our remaining 2016 net field capital expenditures. If not, we will either curtail our discretionary capital expenditures or seek other funding sources. Our projected 2016 capital expenditure budget is subject to change.

Cash Flows

Net cash provided by operating activities from continuing operations during the six months ended June 30, 2016 was $11.6 million, a decrease from net cash provided by operating activities from continuing operations of $28.2 million during the same period in 2015, due primarily to a decrease in our oil and natural gas sales and a decrease in cash settlements on our commodity derivative contracts.  Net cash used in investing activities from continuing operations for the six months ended June 30, 2016 decreased to $6.7 million, compared to net cash used in investing activities from continuing operations of $13.3 million for the same period in 2015, due primarily to a decrease in drilling operations in light of the low oil price environment.  Additionally, net cash used in financing activities from continuing operations for the six months ended June 30, 2016 was $10.5 million, an increase from net cash used in financing activities from continuing operations of $1.1 million for the same period in 2015, due primarily to a decrease in our borrowings and higher loan repayments in 2016.  

Liquidity and Capital Resources

On a consolidated basis, as of June 30, 2016, TransAtlantic had $84.7 million of indebtedness, not including $14.9 million of trade payables, as further described below.  TransAtlantic believes that its cash flow from operations will be sufficient to meet its normal operating requirements and to fund planned capital expenditures during the next 12 months.  

Outstanding Debt

At June 30, 2016, we had a Senior Credit Facility, a credit facility with a Turkish bank, convertible notes, and promissory notes, all of which are discussed below.

29

Senior Credit Facility.On May 6, 2014, DMLP, Ltd. (“DMLP”), TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”), Talon Exploration, Ltd. (“Talon Exploration”), TransAtlantic Turkey, Ltd. (“TransAtlantic Turkey”), Amity Oil International Pty Ltd, (“Amity”) and Petrogas Petrol Gaz ve Petrokimya Urunleri Insaat Sanayi ve Ticaret A.S. (“Petrogas”) (collectively the “Borrowers”) entered into the Senior Credit Facility with BNP Paribas and the IFC. Each of the Borrowers is our wholly owned subsidiary. The Senior Credit Facility is guaranteed by us and each of TransAtlantic Petroleum (USA) Corp. (“TransAtlantic USA”) and TransAtlantic Worldwide, Ltd. (each, a “Guarantor”).  As of June 30, 2016, we had borrowings of $24.2 million, bearing interest at a rate of three-month LIBOR plus 5.00% per annum (5.63% at June 30, 2016), except as described below.  Pursuant to the terms of the Senior Credit Facility, the borrowing base resets on the first day of each fiscal quarter. The April 2016 redetermination resulted in a $18.8 million borrowing base deficiency under the Senior Credit Facility as of June 30, 2016.  The borrowing base was $5.4 million as of June 30, 2016.

On April 19, 2016, the Company entered into the Second Waiver and Consent with BNP Paribas and IFC. Pursuant to the Second Waiver and Consent, the Lenders provided a conditional waiver of the defaults under the Credit Agreement and permitted the Borrowers to make certain limited transfers and withdrawals from the collection accounts pledged to the Lenders under the Senior Credit Facility.  The Second Waiver and Consent also waived non-compliance with the current ratio financial covenant in the Senior Credit Facility on each of December 31, 2015 and March 31, June 30, and September 30, 2016.

The Second Waiver and Consent included certain conditions, including the following:

(i) The borrowing base deficiency must be repaid by September 30, 2016 (provided thatthe Lenders may, in their sole and absolute discretion, agree in writing to extend such date to December 31, 2016) (the “Waiver Period”);

(ii) All monthly hedge settlement proceeds shall be used to pay down debt outstanding under the Senior Credit Facility;

(iii) Net proceeds from certain asset sales shall be used to prepay loans outstanding under the Senior Credit Facility;

(iv) On or before May 15, 2016, the Company shall have entered into a binding purchase and sale agreement for the sale of all of the equity interests in, or all or substantially all of the assets of, TBNG;

(v) By June 30, 2016, the Lenders shall be granted a security interest over all of the equity interests in, and assets and property of, TBNG; and

(vi) On or before September 30, 2016, all holders of the 13% Convertible Notes Due 2017 issued by the Company (the “2017 Notes”) shall either (a) convert their debt interests under the 2017 Notes into equity interests, or (b) agree to extend the maturity of the 2017 Notes to April 1, 2019 or later on substantially identical terms.

Pursuant to the Second Waiver and Consent, as of April 19, 2016, the Lenders’ aggregate commitments were reduced to $30.5 million, with individual commitments of $15.2 million each, and shall be further reduced by the amount of any payments under the Senior Credit Facility.  During the Waiver Period, interest on the borrowing base deficiency will accrue at a rate of three-month LIBOR plus 7.00% per annum (7.63% at May 6, 2016).  

As of June 30, 2016, we had $24.2 million of outstanding borrowings under the Senior Credit Facility, a borrowing base deficiency of $18.8 million and no availability.  In addition, we were not in compliance with certain covenants in the Second Waiver and Consent, including the requirement to enter into a binding purchase and sale agreement for TBNG by May 15, 2016.  We continue to work with the Lenders to satisfy these conditions and restructure our Senior Credit Facility obligations.  Subsequent to June 30, 2016, we repaid $0.9 million of principal under the Senior Credit Facility, reducing the outstanding balance to $23.3 million and the borrowing base deficiency to $17.9million, as of August 8, 2016.  In addition, as of June 30, 2016 and August 8, 2016, the Lenders held $7.2 million and $12.0 million, respectively, of restricted cash in our collection accounts in Turkey.  

As of August 8, 2016, we had granted a security interest in favor of the Lenders over all of the equity interests in, and moveable assets of, TBNG, and were in the process of granting a security interest in favor of the Lenders over all present and future receivables of TBNG. We are also in active negotiations with third party purchasers for the sale of TBNG. We have engaged Seaport Global Inc. as an independent advisor, and our management is actively pursuing alternate structures for the 2017 Notes.

TBNG Credit Facility. TBNG has a fully-drawn credit facility with a Turkish bank.  During the second quarter of 2016, the facility was amended and the monthly principal installments were deferred until August 29, 2016.  The facility may be prepaid without penalty. The facility is secured by a lien on a Turkish real estate property owned by Gundem Turizm Yatirim ve Isletmeleri Anonim Sirketi (“Gundem”), which is 97.5% beneficially owned by Mr. Mitchell and his children. At June 30, 2016, TBNG owed $0.9 million under the credit facility and had no availability.

30

2017 Notes.  At June 30, 2016, we had $55.0million aggregate principal amount of 2017 Notes.The 2017 Notes bear interest at an annual rate of 13.0% per annum.  Interest is payable semi-annually, in arrears, on January 1 and July 1 of each year.  The 2017 Notes mature on July 1, 2017.  The 2017 Notes are convertible at any time, at the election of a holder, into our common shares at a conversion price of $6.80 per share.

On June 30, 2016, we issued 2,905,737 common shares in a private placement to certain holders of the 2017 Notes, at the election of such holders to receive common shares in lieu of cash interest on the 2017 Notes.

West Promissory Notes. In August 2015, TransAtlantic USA entered into promissory notes (the “Promissory Notes”) with each of Mary West CRT 2 LLC and Gary West CRT 2 LLC, shareholders of the Company (collectively, the “Holders”), whereby TransAtlantic USA could borrow up to $1.5 million under each Promissory Note to fund our share repurchase program. The Holders are managed by Randy Rochman, an observer of our board of directors.  Loans under the Promissory Notes accrue interest at a rate of 9.00% per annum and mature on October 1, 2016.  As of June 30, 2016, we had borrowed $1.0 million under the Promissory Notes and had no availability. The funds were used to purchase our common shares pursuant to our share repurchase program.

ANBE Note. On December 30, 2015, TransAtlantic USA entered into a $5.0 million draw down convertible promissory note (the “Note”) with ANBE Holdings, L.P. (“ANBE”), an entity owned by the children of the Company’s chairman and chief executive officer, N. Malone Mitchell 3rd, and controlled by an entity managed by Mr. Mitchell and his wife. The Note bears interest at a rate of 13.0% per annum.  On December 30, 2015, the Company borrowed $3.6 million under the Note (the “Initial Advance”) for general corporate purposes.

On June 30, 2016, TransAtlantic USA entered into an extension of the Note (the “Extension”) with ANBE.  The Extension extended the date on which the Company could request advances under the Note from June 15, 2016 to August 15, 2016 and extended the maturity date of the Note from June 30, 2016 to August 31, 2016.  As of June 30, 2016, we had borrowed $3.6 million under the Note and had availability of $1.4 million.

Advances under the Note may be converted, at the election of ANBE, any time after the NYSE MKT approves the Company’s application to list the additional common shares issuable pursuant to the conversion feature of the Note and prior to the maturity of the Note.  The conversion price per common share for each advance is equal to 105% of the closing price of the Company’s common shares on the NYSE MKT on the trading date immediately prior to such advance.  The conversion price of the Initial Advance is $1.3755 per share.

On June 30, 2016, we issued 355,826 common shares in a private placement to ANBE in lieu of cash interest on the Note.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our derivative contracts may expose us to credit risk in the event of nonperformance by our counterparty. One of the Lenders is a counterparty to our derivative contracts. While collateral is generally not required to be posted by counterparties, credit risk associated with derivative instruments is minimized by entering into derivative instruments only with creditworthy counterparties that are generally large financial institutions. Additionally, master netting agreements are used to mitigate risk of loss due to default with counterparties on derivative instruments. These agreements allow us to offset our asset position with our liability position in the event of default by the counterparty.

During the second quarter of 2016, there were no material changes in market risk exposures or their management that would affect the Quantitative or Qualitative Disclosures About Market Risk disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.  The following tables set forth our outstanding derivatives contracts, which are settled based on Brent crude oil pricing, with respect to future crude oil production as of June 30, 2016:

31

Fair Value of Derivative Instruments as of June 30, 2016

		Puts
				Weighted
				Average		Estimated Fair
		Quantity		Price		Value of
Type	Period	(Bbl/day)		(per Bbl)		Asset
						(in thousands)
Put	July 1, 2016— December 31, 2016		738	$	50.00	$	336
Put	January 1, 2017— December 31, 2017		610	$	50.00		1,190
Put	January 1, 2018— December 31, 2018		494	$	50.00		1,135
Put	January 1, 2019— March 31, 2019		443	$	50.00		253
Total estimated fair value of asset						$	2,914

Item 4. Controls and Procedures

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 June 30, 2016, 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 (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon the evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2016, our disclosure controls and procedures were effective at the reasonable assurance level.

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

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

32

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

During the second quarter of 2016, there were no material developments to the Legal Proceedings disclosed in “Part I, Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2015.

Item 1A. Risk Factors

During the second quarter of 2016, there were no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

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

On April 27, 2016, the Company issued 225,000 common shares of the Company pursuant to a settlement agreement with Direct Petroleum Exploration LLC (“Direct”).  The issuance of the shares was made pursuant to the exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(2) and Rule 506 of Regulation D under the Securities Act of 1933, as amended (“Regulation D”), for sales to “accredited investors” (as such term is defined in Rule 501 of Regulation D).  Direct represented to the Company that it is an “accredited investor”.

On June 30, 2016, the Company issued an aggregate of 5,773,305 common shares in private placements under the Securities Act.  Of the 5,773,305 common shares, (i) 2,905,737 shares were issued to holders of the Company’s outstanding 2017 Notes, at the election of such holders to receive common shares in lieu of cash interest on the 2017 Notes; (ii) 355,826 shares were issued to ANBE in lieu of cash interest on the Note and (iii) 2,511,742 shares were issued for cash, which was used to pay cash interest to certain holders of the 2017 Notes. All of the shares were issued at a value of $0.6599 per share, which was equal to 75% of the 10-day volume weighted average price through the close of trading of the common shares on the NYSE MKT on June 29, 2016.  The issuance of the shares was made pursuant to the exemptions from the registration requirements of the Securities Act provided by Section 4(2) and Rule 506 of Regulation D for sales to “accredited investors” (as such term is defined in Rule 501 of Regulation D).  Each recipient of shares represented to the Company that it is an “accredited investor”.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our ratio of earnings to fixed charges for the six months ended June 30, 2016. You should read this ratio in connection with our consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q.  Because we did not have preferred stock outstanding during this period, our ratio of earnings to combined fixed charges and preferred dividends for any given period is equivalent to our ratio of earnings to fixed charges.

	Six
	Months
	Ended
	June 30,
	2016
Ratio of earnings to fixed charges	$	-
Deficiency of earnings to fixed charges (in thousands)		(13,784	)

33

For purposes of calculating the ratio of earnings to fixed charges, “earnings” represents income (loss) from continuing operations before income taxes plus fixed charges. “Fixed charges” includes interest expense, capitalized interest, amortization of discount and capitalized expenses related to indebtedness and the portion of rental expense that management believes is representative of the interest component of rental expense. The ratio of earnings to fixed charges presented in this Form 10-Q may not be comparable to similarly titled measures presented by other companies, and may not be comparable to corresponding measures used in our various agreements, including the Senior Credit Facility.

PRICE RANGE OF OUR COMMON SHARES

Canada

Our common shares are traded in Canada on the Toronto Stock Exchange (the “TSX”) under the trading symbol “TNP”. The following table sets forth the quarterly high and low sales prices per common share in Canadian dollars on the TSX for the period indicated.

	High		Low
2016:	$	1.49	$	0.86
Second Quarter

United States

Our common shares are traded in the United States on the NYSE MKT under the trading symbol “TAT”. The following table sets forth the high and low sales price per common share in U.S. Dollars on the NYSE MKT for the period indicated.

	High		Low
2016:	$	1.21	$	0.63
Second Quarter

34

Item 6. Exhibits  

2.1	Share Purchase Agreement, dated February 29, 2016, among TransAtlantic Holdings B.C. Ltd. and Continental Oil & Gas (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated February 29, 2016, filed with the SEC on March  4, 2016).
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	Altered Memorandum of Continuance of TransAtlantic Petroleum Ltd., dated March 4, 2014 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated March 6, 2014, filed with the SEC on March 6, 2014).
3.3	Amended Bye-Laws of TransAtlantic Petroleum Ltd., dated March 4, 2014 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated March 6, 2014, filed with the SEC on March 6, 2014).
10.1*	Second Waiver and Consent Agreement, dated April 19, 2016, among Amity Oil International Pty Ltd, DMLP, Ltd., Petrogas Petrol Gaz ve Petrokimya Urunleri Insaat Sanayi ve Ticaret A.S., TransAtlantic Exploration Mediterranean International Pty Ltd, Talon Exploration, Ltd., and TransAtlantic Turkey, Ltd., as borrowers; TransAtlantic Petroleum Ltd., TransAtlantic Worldwide, Ltd. and TransAtlantic Petroleum (USA) Corp., as guarantors; BNP Paribas (Suisse) SA and International Finance Corporation, as lenders; and BNPA Paribas (Suisse) SA, as administrative agent.
10.2	Note Amendment Agreement, dated April 19, 2016, by and among TransAtlantic Petroleum Ltd., Dalea Partners, LP., and N. Malone Mitchell, 3rd (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 19, 2016, filed with the SEC on April 22, 2016).
10.3	Amended and Restated Promissory Note, dated April 19, 2016, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 19, 2016, filed with the SEC on April 22, 2016).
10.4	Pledge Agreement, dated April 19, 2016, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 19, 2016, filed with the SEC on April 22, 2016).
10.5	Extension of Convertible Promissory Note, dated June 30, 2016, by and between ANBE Holdings, L.P. and TransAtlantic Petroleum Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 30, 2016, filed with the SEC on July 5, 2016).
12.1*	Ratio of Earnings to Fixed Charges
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.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

** Furnished herewith.

35

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: August 10, 2016

36

INDEX TO EXHIBITS

2.1	Share Purchase Agreement, dated February 29, 2016, among TransAtlantic Holdings B.C. Ltd. and Continental Oil & Gas (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated February 29, 2016, filed with the SEC on March  4, 2016).
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	Altered Memorandum of Continuance of TransAtlantic Petroleum Ltd., dated March 4, 2014 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated March 6, 2014, filed with the SEC on March 6, 2014).
3.3	Amended Bye-Laws of TransAtlantic Petroleum Ltd., dated March 4, 2014 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated March 6, 2014, filed with the SEC on March 6, 2014).
10.1*	Second Waiver and Consent Agreement, dated April 19, 2016, among Amity Oil International Pty Ltd, DMLP, Ltd., Petrogas Petrol Gaz ve Petrokimya Urunleri Insaat Sanayi ve Ticaret A.S., TransAtlantic Exploration Mediterranean International Pty Ltd, Talon Exploration, Ltd., and TransAtlantic Turkey, Ltd., as borrowers; TransAtlantic Petroleum Ltd., TransAtlantic Worldwide, Ltd. and TransAtlantic Petroleum (USA) Corp., as guarantors; BNP Paribas (Suisse) SA and International Finance Corporation, as lenders; and BNPA Paribas (Suisse) SA, as administrative agent.
10.2	Note Amendment Agreement, dated April 19, 2016, by and among TransAtlantic Petroleum Ltd., Dalea Partners, LP., and N. Malone Mitchell, 3rd (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 19, 2016, filed with the SEC on April 22, 2016).
10.3	Amended and Restated Promissory Note, dated April 19, 2016, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 19, 2016, filed with the SEC on April 22, 2016).
10.4	Pledge Agreement, dated April 19, 2016, by and between TransAtlantic Petroleum Ltd. and Dalea Partners, LP (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 19, 2016, filed with the SEC on April 22, 2016).
10.5	Extension of Convertible Promissory Note, dated June 30, 2016, by and between ANBE Holdings, L.P. and TransAtlantic Petroleum Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 30, 2016, filed with the SEC on July 5, 2016).
12.1*	Ratio of Earnings to Fixed Charges
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.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

** Furnished herewith.

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EX-10.1

Exhibit 10.1

SECOND WAIVER AND CONSENT TO CREDIT AGREEMENT

This SECOND WAIVER AND CONSENT TO CREDIT AGREEMENT (this “Agreement”) is entered into as of April 19, 2016, by and among (1) AMITY OIL INTERNATIONAL PTY LTD, a company organized and existing under the laws of Australia (“Amity”), (2) DMLP, LTD., a Bahamas international business company (“DMLP”), (3) PETROGAS PETROL GAZ VE PETROKIMYA ÜRÜNLERI İNŞAAT SANAYI VE TICARET A.Ş., a Turkish joint stock company (“Petrogas”), (4) TRANSATLANTIC EXPLORATION MEDITERRANEAN INTERNATIONAL PTY. LTD., a company organized and existing under the laws of Australia (“TEMI”), (5) TALON EXPLORATION, LTD., a corporation duly organized and validly existing under the laws of Bahamas (“Talon”), (6) TRANSATLANTIC TURKEY, LTD., a corporation duly organized and validly existing under the laws of Bahamas (“TAT”, and together with Amity, DMLP, Petrogas, TEMI and Talon, each a “Borrower” and, collectively, the “Borrowers”), (7) the Guarantors (as defined in the Credit Agreement defined herein), (8) the Lenders (as defined in the Credit Agreement defined herein) and (9) BNP PARIBAS (SUISSE) SA as administrative agent (the “Agent”).

W I T N E S S E T H:

WHEREAS, the Borrowers, the Guarantors, the Lenders and the Agent are parties to that certain Credit Agreement, dated as of May 6, 2014 (as may from time to time be amended, supplemented, restated or otherwise modified, the “Credit Agreement”).

WHEREAS, the Borrowers, the Guarantors, the Lenders and the Agent are parties to that certain Waiver and Consent to Credit Agreement, dated as of December 30, 2015 (the “First Waiver”) pursuant to which the Lenders have agreed to (i) waive certain Defaults under the Credit Agreement and (ii) consent to the Borrowers making certain transfers to the Parent and cash withdrawals from the Collection Accounts, in each case subject to the terms and conditions set forth in the First Waiver.

WHEREAS, the Borrowers have failed to satisfy one or more of the conditions under the First Waiver and as such have requested that the Lenders grant a further waiver subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereto agree as follows:

SECTION 1.  DEFINITIONS AND INTERPRETATION

1.1Definitions.  Unless the context otherwise requires, capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement. In addition:

“Albanian Facility” means the agreement for a $20,000,000 term loan facility dated December 15, 2011 (and amended and restated on September 17, 2014) between Raiffeisen Bank Sh. A as lender and TransAtlantic Albania Ltd. (a subsidiary of Stream Oil & Gas Ltd.) as borrower.

“Albanian Transaction” means the formation of a joint venture company with respect to the Delvina gas assets in Albania, whether by way of a single transaction or series of related transactions.

“Convertible Notes” means the 13.0% Convertible Notes issued by the Parent and maturing on July 1, 2017 in an aggregate principal amount of $55,000,000 and shall include all debt instruments issued directly or indirectly to replace such Convertible Notes (whether by way of a conversion, exchange, swap or other mechanism).

“Disposal Proceeds” means, in connection withan Albanian Transaction, a Selmo Farm-Out, a TBNG Disposal or any other Disposal made by any Obligor (or any of its Subsidiaries), the gross proceeds received therefrom, less (a) amounts required to repay outstanding senior secured Indebtedness owed to unaffiliated third parties (including, where applicable, Yapi ve Kredi Bankasi) whose consent may have been required in connection with such Disposal, (b) amounts required to pay government obligations or third party contractual obligations and any required escrows or bonding arrangements for indemnification obligations or purchase price adjustments in connection with such Disposal, (c) attorneys’ fees reasonably incurred in connection with such Disposal, and (d) transaction fees and other customary out-of-pocket fees and expenses (but excluding any general and administrative costs) actually incurred by the Parent or its Subsidiaries in connection with such Disposal.

“Funding Proceeds” means, in connection with any funding (whether through debt or equity) obtained by any Obligor (or any of its Subsidiaries), the gross proceeds received therefrom, less (a) attorneys’ fees reasonably incurred in connection with obtaining such funding, and (b) transaction fees and other customary out-of-pocket fees and expenses (but excluding any general and administrative costs) actually incurred by such Obligor (or its Subsidiary) in connection with obtaining such funding; provided that “Funding Proceeds” shall not include the proceeds from the issuance of debt instruments to replace the Convertible Notes (whether by way of a conversion, exchange, swap or other mechanism), if such replacement debt instruments are (x) unsecured, (y) subordinated in priority of payment to the Lenders at all times, and (z) contain terms no more favorable to the holders thereof and no more onerous to the Parent and its Subsidiaries than those contained in the Convertible Notes, as determined by the Lenders in their sole and absolute discretion.

“Monthly Withdrawal Limit” means $4,250,000; provided that if TBNG’s share of payments due under each offtake contract are being paid into a Local Collection Account designated by the Collateral Agent, the Lenders shall, subject to receipt of satisfactory information concerning TBNG’s operating expenditures, discuss with the Borrowers in good faith the possibility of allowing withdrawals above the Monthly Withdrawal Limit in each calendar month to enable TBNG to fund such expenditures.

“Selmo Farm-Out” means a farm-out, joint venture or other Disposal by TEMI of an economic interest in the Selmo Field.

“TBNG” means Thrace Basin Natural Gas (Türkiye) Corporation, a British Virgin Islands company, and a subsidiary of the Parent.

“TBNG Disposal” means a Disposal of all or substantially all of the Equity Interests of TBNG, or all or substantially all of TBNG’s assets or property (whether by way of a single transaction or series of related transactions), and yielding Disposal Proceeds of at least $15,000,000.

“TBNG Disposal Agreement” means a definitive and binding sale and purchase agreement in respect of a TBNG Disposal, entered into with an independent buyer reasonably satisfactory to the Lenders.

“TBNG Facility” means the agreement for an approximately $27,000,000 term loan facility maturing on September 30, 2015 (as amended and restated from time to time) between Yapi ve Kredi Bankasi as lender and TBNG as borrower.

“TBNG Receivables Assignment” means an assignment of receivables granting a Security Interest over all of the present and future receivables of TBNG, in form and substance satisfactory to the Lenders.

“TBNG Security Documents” means (a) a share pledge granting a Security Interest over all present and future Equity Interests of TBNG, and (b) a commercial enterprise pledge agreement granting a Security Interest over substantially all of the present and future movable assets of TBNG, each in form and substance satisfactory to the Lenders.

“Waiver Date” is defined in Section 4.1 (Conditions Precedent).

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“Waiver Period” means the period starting from the Waiver Date and ending on the Waiver Termination Date (both dates inclusive).

“Waiver Termination Date” means September 30, 2016; provided that the Lenders may, in their sole and absolute discretion, agree in writing to extend such date to December 31, 2016.

1.2Interpretation.  This Agreement shall be construed and interpreted in accordance with the rules of construction set forth in Section 1.2 (Terms Generally) and Section 1.3 (Headings; Cross-References) of the Credit Agreement.

SECTION 2.  CONDITIONAL WAIVER AND CONSENT  

2.1Conditional Waiver.  Subject to Section 2.3 (Conditions) and Section 4.1 (Conditions Precedent), the Lenders party hereto agree to waive any Default or Event of Default existing on the date of this Agreement arising from:

(a) the failure to maintain a Designated Hedge Agreement to provide commodity price support in respect of at least 30% of the anticipated oil production volumes attributable to Proved Developed Producing Reserves, in breach of Section 7.14(a) (Hydrocarbon Hedge Agreement) of the Credit Agreement;

(b) payments by the Borrowers to the Parent and its Affiliates for certain field technical services and general and administrative services in breach of Section 8.6 (Restricted Payments) of the Credit Agreement;

(c) the Current Ratio falling below 1.10 to 1.00 on each of December 31, 2015, March 31, 2016, June 30, 2016 and September 30, 2016, in breach of Section 8.16(a) (Financial Covenants) of the Credit Agreement;

(d) the existence of a Borrowing Base Deficiency in an amount of $25,132,527.40 as of the date of this Agreement; and

(e) a default under the Albanian Facility due to deferred payment of the term loan installment due on December 31, 2015 and failure to execute an agreement with Albpetrol Sh. A to postpone certain capital expenditures, and consequent cross-default under Section 9.1(e) (Cross-Default) of the Credit Agreement.

It is hereby acknowledged and agreed by the parties hereto that each of the foregoing conditional waivers shall not be deemed to be, nor construed as, a waiver of any other Default or Event of Default that may now be in existence or that may hereafter occur, nor a waiver of any Default or Event of Default which may result from any  of the conditions in Section 2.3 (Conditions) and Section 4.1 (Conditions Precedent) not being satisfied.

2.2Conditional Consent.  Subject to Section 2.3 (Conditions) and Section 4.1 (Conditions Precedent), the Lenders party hereto consent to the following transfers and withdrawals from the Collection Accounts:

(a) on or before December 31, 2015, the Borrowers may transfer to the Parent an aggregate amount of up to $1,680,000 to pay for general and administrative costs relating to the Borrowers;

(b) before December 31, 2015, the Borrowers may withdraw an aggregate amount of up to $3,500,000 to pay for certain projected expenditure items under the most recently delivered Banking Case as of the date of the First Waiver;

(c) for each of January, February and March 2016, the Borrowers may withdraw an aggregate amount of up to $3,500,000 per calendar month to pay for certain projected expenditure items under the most recently delivered Banking Case as of the date of the First Waiver;

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(d) for each calendar month during theWaiver Period, theBorrowers may withdraw an aggregate amount not exceeding the Monthly Withdrawal Limit in any calendar month to pay for certain projected expenditure items specified in the most recently delivered Banking Case as of the date of this Agreement; 

(e) for each calendar month during the Waiver Period, the Borrowers may transfer to the Parent an aggregate amount of up to $540,000 per calendar month to pay for the Parent’s general and administrative costs relating to the Borrowers for such month (but without duplicating any general and administrative costs in Section 2.2(f) below); provided that (x) any such general and administrative costs exceeding $540,000 for any month shall not be carried over to the next month but shall be funded entirely by the shareholders of the Parent by way of capital contributions or shareholder loans, and no Obligor or any of its Subsidiaries shall facilitate the payment of any such excess (whether by Restricted Payments or otherwise), and (y) such transfer would not cause the Monthly Withdrawal Limit to be exceeded in any calendar month;

(f) during the Waiver Period, the Borrowers may transfer to the Parent an aggregate amount of up to $1,000,000 to pay for the Parent’s general and administrative costs directly related to transactions to raise Disposal Proceeds or Funding Proceeds; provided that at the time such transfer is to be made (x) all expenses then due and payable in connection with maintaining the Borrowing Base Assets have first been paid in full, and (y) such transfer would not cause the Monthly Withdrawal Limit to be exceeded in any calendar month, and

it being understood that the amount of such withdrawals will be calculated based on the then current daily foreign exchange rate of Dollars to Turkish Lira as published by the Central Bank of Turkey.  Save as set forth in this Agreement, the Borrowers may not make any other withdrawals from the Collection Accounts.

2.3Conditions.  The waivers and consents granted by the Lenders under Section 2.1 (Conditional Waiver) and Section 2.2 (Conditional Consent) shall take effect during the Waiver Period and are conditioned upon the following:

(a) each Borrower shall not (and shall procure that its Subsidiaries do not) make, or permit  to be made, any similar or equivalent payments to the Parent or its Affiliates for field technical services and administrative services;

(b) by the Waiver Termination Date, the Obligors shall ensure that the Borrowing Base Deficiency is cured;

(c) during the Waiver Period, interest on the amount of the Borrowing Base Deficiency shall be calculated using an Applicable Margin of 7.00% per annum and, for the avoidance of doubt, shall be due and payable in cash only (and may not be paid in kind through accretion to principal);

(d) by May 15, 2016, the Petrogas directors whose terms have currently expired shall be replaced with new directors and the new Petrogas directors shall pass a resolution approving the Turkish Share Pledge;

(e) within two (2) Business Days after receipt of any Disposal Proceeds by any Obligor (or any of its Subsidiaries), such Obligor shall (or shall cause its Subsidiary to) apply all such Disposal Proceeds to prepay the Loans then outstanding, and no Disposal Proceeds shall be used for any purpose other than to prepay the Loans then outstanding; provided that no such prepayment shall be required if the Borrowing Base Deficiency has been cured and all Lenders are satisfied in their sole and absolute discretion that, after using such Disposal Proceeds for other purposes, the Borrowers will still have sufficient funds to pay in full the Obligations when due in accordance with their terms;

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(f) within two (2) Business Days after receipt of any Funding Proceeds by any Obligor (or any of its Subsidiaries), such Obligor shall (or shall cause its Subsidiary to) apply all such Funding Proceeds to prepay the Loans then outstanding, and no Funding Proceeds shall be used for any purpose other than to prepay the Loans then outstanding; provided thatno such prepayment shall be required if theBorrowing Base Deficiency has been cured and all Lenders are satisfied in their sole and absolute discretion that, after using such Funding Proceeds for other purposes, the Borrowers will still have sufficient funds to pay in full the Obligations when due in accordance with their terms, in which case such Funding Proceeds may be used by such Obligor (or any of its Subsidiaries) to pay interestand/or repay principal in respect of any of its other third-party debt facilities (but not shareholder loans); 

(g) by May 15, 2016, the relevant Obligor(s) shall (or shall cause its Subsidiaries to) enter into a TBNG Disposal Agreement; provided that if an independent buyer has not been identified by May 15, 2016, the Parent shall, within five (5) Business Days thereafter (or such longer period as the Lenders may agree to in writing), at its own expense appoint an M&A advisor reasonably satisfactory to the Lenders to expedite a TBNG Disposal and to advise on the feasibility of other strategies and Disposals to raise sufficient funds to prepay the Loans then outstanding;

(h) the relevant Obligor(s) shall (or shall cause its Subsidiaries to):

(i) on the Waiver Date, commence drafting negotiations in respect of the TBNG Security Documents with the Collateral Agent and its legal counsel;

(ii) by May 31, 2016, execute the TBNG Security Documents;

(iii) by June 30, 2016, ensure that the Security Interests created pursuant to the TBNG Security Documents are duly perfected in accordance with Applicable Law (including obtaining all approvals required by EMRA, GDPA and all other Governmental Authorities); and

(iv) promptly pay all documented costs and expenses (including legal fees) incurred by the Agent and the Lenders in connection with the drafting, negotiation and execution of the TBNG Security Documents and the perfection of the Security Interests created pursuant thereto;

provided that if a TBNG Disposal Agreement is entered into during the Waiver Period, the Collateral Agent shall release the Security Interests created pursuant to the TBNG Security Documents over the relevant assets in order to permit closing to occur thereunder;

(i) upon the earlier of (a) the TBNG Facility being repaid in full and (b) June 30, 2016, the relevant Obligor(s) shall (or shall cause its Subsidiaries to) cause TBNG to execute the TBNG Receivables Assignment and deliver a receivables payment instruction letter instructing each offtaker to make TBNG’s share of payments due under each offtake contract (but for the avoidance of doubt, excluding any share of payments belonging to any of TBNG’s joint venture partners) into a Local Collection Account designated by the Collateral Agent; provided that if a TBNG Disposal Agreement is entered into during the Waiver Period, the Collateral Agent shall release the Security Interests created pursuant to the TBNG Receivables Assignment in order to permit closing to occur thereunder;

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(j) within fourteen (14) days of the Waiver Date, the hedge counterparty under each Hedge Agreement to which a Borrower (or any of its Subsidiaries) is a party shall be instructed to pay all amounts due to the Borrower (or such Subsidiary) to the Agent (such instruction not to be revoked without the prior written consent of all Lenders), and the Agent may apply all amounts so received to pay interest (including any stepped-up interest and default interest) on the Loans then outstanding, then to prepay the Loans then outstanding or to cure any Borrowing Base Deficiency then in effect; provided that no such Hedge Agreement shall be closed out, netted, replaced or terminated (whether directly or indirectly) at any time before the aggregate outstanding principal amount of the Loans plus the LC Outstandings (if any) after such transaction is less than $10,000,000; 

(k) by the last day of each calendar month during the Waiver Period, the Borrowers shall apply an amount of not less than $850,000 to pay interest (including any stepped-up interest and default interest) on the Loans then outstanding, then to prepay the Loans then outstanding to cure any Borrowing Base Deficiency then in effect (it being acknowledged that such $850,000 shall include all amounts applied by the Agent pursuant to Section 2.3‎(j)) above); provided that if such prepayment would fall on a day that is not a Business Day, such prepayment shall instead occur on the next Business Day;

(l) except as stated in Section 2.2 (Conditional Consent) above and Section 4.1(b) (Conditions Precedent) below and, no other transfers or withdrawals shall be permitted from any Collection Account without the prior written consent of all Lenders;  

(m) by December 31, 2016, the Parent shall ensure that it has a cash reserve in an amount of not less than $8,000,0000, which amount shall be used solely to fund its general and administrative costs relating to the Borrowers for 2017;

(n) on a weekly basis, the Borrowers shall deliver to the Agent (with sufficient copies for the Lenders) each of the following in form and substance satisfactory to the Lenders:

(i) a report containing sufficient details on the status and progress made with respect to an Albanian Transaction, a Selmo Farm-out, a TBNG Disposal, each other Disposal and all transactions directly related to raising Funding Proceeds involving any Obligor or any of such Obligor’s Subsidiaries; and

(ii) a 3-month forward looking weekly liquidity analysis of the Parent and its Subsidiaries in substantially the form required by the Lenders from time to time, and the Parent shall ensure that there are sufficient cash reserves to meet the funding needs of the Parent and its Subsidiaries as shown in such liquidity analysis;

(o) all payments required to be made by the Parent in respect of the Convertible Notes prior to the holders thereof converting their debt interests into Equity Interests in the Parent and relinquishing their debt claims shall be funded entirely by the shareholders of the Parent by way of capital contributions or shareholder loans, and no Obligor or any of its Subsidiaries shall facilitate such payments (whether by Restricted Payments or otherwise); and

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(p) by September 30, 2016, all holders of the Convertible Notes shall have either (i) converted their debt interests under the Convertible Notes into Equity Interests in the Parent and shall have relinquished their debt claims as holders of the Convertible Notes, or (ii) agreed to extend the maturity of the Convertible Notes to April 1, 2019 (or later) on terms substantially identical to those applicable to the Convertible Notes on the date of this Agreement, and provided that all payments required to be made by the Parent in respect of the Convertible Notes (as extended) prior to the holders thereof converting their debt interests into Equity Interests in the Parent and relinquishing their debt claims shall be funded entirely by the shareholders of the Parent by way of capital contributions or shareholder loans, and no Obligor or any of its Subsidiaries shall facilitate such payments (whether by Restricted Payments or otherwise). 

SECTION 3.  AMENDMENTS

3.1Commitments.  Notwithstanding anything to the contrary in the Credit Agreement (including Section 2.2(c) (Nature of Loans) of the Credit Agreement), the Credit Agreement shall be modified as follows with immediate effect and such modifications shall continue in force unless all Lenders otherwise agree in writing:

(a) the Tranche A Commitment of BNP Paribas shall be permanently reduced from $18,462,000 to $15,243,652.08;

(b) the Tranche B Commitment of IFC shall be permanently reduced from $18,462,000 to $15,243,652.08;

(c) if a Borrower repays or prepays any portion of the Loans then outstanding, each Lender’s Commitment shall further be automatically and permanently reduced by the amount of such repayment or prepayment it receives; and

(d) any portion of the Loans repaid or prepaid by a Borrower may not subsequently be re-borrowed, and no Borrower may submit a new Notice of Borrowing or new LC Application.

3.2Information on Hydrocarbon Interests.  Subject to Section 4.1 (Conditions Precedent), the Obligors agree that each production forecast and production report to be delivered pursuant to Section 7.2(b) (Hydrocarbon Production Forecast) and Section 7.2(c) (Hydrocarbon Production Report) of the Credit Agreement shall include corresponding information relating to TBNG and its hydrocarbon interests; provided that such information need not be included if a TBNG Disposal Agreement has been entered into and closing has occurred thereunder.

SECTION 4.  CONDITIONS PRECEDENT

4.1Conditions Precedent.  The waivers and consent referred to in Section 2 (Conditional Waiver and Consent) and the amendments in Section 3 (Amendments) shall become effective on the date (the “Waiver Date”) on which all of the following conditions precedent are first satisfied:

(a) this Agreement shall have been executed by all Obligors and the Lenders and counterparts hereof as so executed shall have been delivered to the Agent;

(b) an amount of $4,000,000 shall have been withdrawn from the Collection Accounts and applied to prepay the Loans then outstanding; and

(c) the Borrowers shall have paid all outstanding documented costs and expenses (including invoiced legal fees and a waiver fee in the amount of $50,000 payable to each Lender) of the Agent and the Lenders; and

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(d) the Borrowers shall deposit with Herguner Bilgen & Ozeke, Turkish legal counsel to the Lenders, an amount of $13,500 to partially cover the Lenders’ legal fees and expenses in connection with the drafting, negotiation and execution of the TBNG Security Documents, the TBNG Receivables Assignment and the perfection of the Security Interests created pursuant thereto.  

SECTION 5.  MISCELLANEOUS

5.1Representations and Warranties.  Each Obligor, by signing below, hereby represents,  warrants and undertakes to the Agent and the Lenders as follows:

(a) it is duly organized, validly existing and in good standing (if such concept exists under the laws of its jurisdiction of organization) under the laws of its jurisdiction of organization;  

(b) the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby (i) are within its corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene its constitutional documents or any Applicable Law or any of its Contractual Obligations, and (iv) will not result in the creation or imposition of any Lien prohibited by the Credit Agreement;

(c) no consent, order, authorization, or approval or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required for its due execution and delivery of this Agreement, the performance of its obligations hereunder or the consummation of the transactions contemplated hereby;

(d) it has duly executed and delivered this Agreement, and upon satisfaction of the conditions set forth in Section 3.1 above, this Agreement constitutes its legal, valid, and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally and by general principles of equity;

(e) no Obligor has guaranteed or granted any collateral to secure the obligations of Stream Oil & Gas Ltd. as borrower under the Albanian Facility, nor will any Obligor do so without the prior written consent of all Lenders;

(f) if any payment in respect of the Convertible Notes is funded by way of a shareholder loan, the Parent shall ensure that no payment (whether of principal, interest or otherwise) in the form of cash or cash equivalents is made in respect of such shareholder loan until all Commitments have been terminated and all Obligations have been paid in full when due in accordance with their terms; provided that the Parent shall be entitled to make payment in kind by issuing additional equity in the Parent to the shareholder who advanced such shareholder loan;

(g) after giving effect to this Agreement, no Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement; and

(h) to the extent not already made above, each of the other representations and warranties set forth in Article 6 of the Credit Agreement is true and correct in all material respects as of the date hereof, (unless stated to relate solely to an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date).

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5.2Waiver of Claims.  Each Obligor hereby waives and releases each of the Secured Parties and their respective directors, officers, employees, attorneys, affiliates and subsidiaries from any and all claims, offsets, defenses and counterclaims of which it is aware that currently exist and can now be asserted to reduce or eliminate all or any part of the obligation of such Obligor to make any payments to the Secured Parties as provided in the Loan Documents, such waiver and release being made with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto. 

5.3Expenses.  As provided in the Credit Agreement, but without limiting any terms or provisions thereof, each Obligor agrees to pay on demand, upon presentation of a statement of account, all reasonable costs and expenses incurred by the Agent in connection with the preparation, negotiation, and execution of this Agreement, including without limitation the reasonable costs and fees of the Agent’s legal counsel, regardless of whether the Waiver Date occurs in accordance with the terms hereof.

5.4Credit Agreement Unaffected.  Each reference to the Credit Agreement herein or in any other Loan Document shall hereafter be construed as a reference to the Credit Agreement as amended hereby.  Except as herein otherwise specifically provided, all provisions of the Credit Agreement shall remain in full force and effect and be unaffected hereby and, in particular but without prejudice to the foregoing, each Guarantor acknowledges and agrees that its guarantee obligations under Article 10 of the Credit Agreement shall remain in full force and effect and be unaffected hereby.  This Agreement is a Loan Document.

5.5Entire Agreement.  This Agreement, together with the Credit Agreement and the other Loan Documents, integrates all the terms and conditions mentioned herein and supersedes all oral representations and negotiations and prior writings with respect to the subject matter hereof.

5.6Counterparts.  This Agreement may be executed in any number of counterparts, by different parties hereto in separate counterparts and by facsimile signature, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

5.7Governing Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

5.8Submission to Jurisdiction.  EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, AND APPELLATE COURTS FROM ANY THEREOF, IN ANY LITIGATION OR OTHER PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF A SECURED PARTY OR AN OBLIGOR IN CONNECTION HEREWITH OR THEREWITH; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE SECURED PARTY’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND; PROVIDED FURTHER THAT NOTHING HEREIN SHALL LIMIT THE RIGHT OF A SECURED PARTY TO BRING PROCEEDINGS AGAINST AN OBLIGOR IN THE COURTS OF ANY OTHER JURISDICTION.

5.9Jury Trial Waiver.  THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH.  EACH PARTY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

[Remainder of page left blank intentionally.]

9

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as of the date first written above.

AMITY OIL INTERNATIONAL PTY LTD, as Borrower
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Director

DMLP, LTD., as Borrower
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Director

PETROGAS PETROL GAZ VE PETROKIMYA ÜRÜNLERI İNŞAAT SANAYI VE TICARET A.Ş., as Borrower
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Directory on behalf of TransAtlantic Turkey Ltd. – Bahamas (BOD member)

TRANSATLANTIC EXPLORATION MEDITERRANEAN INTERNATIONAL PTY. LTD., as Borrower
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Director

TALON EXPLORATION, LTD., as Borrower
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Director

TRANSATLANTIC TURKEY, LTD., as Borrower
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Director

TRANSATLANTIC WORLDWIDE, LTD., as Guarantor
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Director

10

TRANSATLANTIC PETROLEUM (USA) CORP., as Guarantor
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Vice President

TRANSATLANTIC PETROLEUM LTD., as Guarantor
By:	/s/ Wil F. Saqueton
Name:	Wil F. Saqueton
Title:	Vice President & CFO

BNP PARIBAS (SUISSE) SA, as Administrative Agent
By:	/s/ Johnny Akiki
Name:	Johnny AKIKI
Title:	Authorised signatory
By:	/s/ Philippe Riboni
Name:	Philippe RIBONI
Title:	Member of Management

BNP PARIBAS (SUISSE) SA, as a Lender
By:	/s/ Philippe Guibert
Name:	Philippe Guibert
Title:	Managing Director
By:	/s/ Adrien Bouchet
Name:	Adrien BOUCHET
Title:	Director – Oil & Gas EMEA

INTERNATIONAL FINANCE CORPORATION, as a Lender
By:	/s/ DeLanson D. Crist
Name:	DeLanson D. Crist
Title:	Global Head, Natural Resources
By:
Name:
Title:

11

EX-12.1

Exhibit 12.1

TRANSATLANTIC PETROLEUM LTD.

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

(in thousands, except ratios)

	Six Months EndedJune 30, 2016
Earnings available for fixed charges:
Loss from continuing operations before income taxes	$	(8,514	)
Interest expense		5,270
Portion of rent expense representing interest		-
Earnings available for fixed charges		(3,244	)
Fixed charges:
Interest expense		5,270
Portion of rent expense representing interest		-
Fixed charges		5,270
Ratio of earnings to fixed charges		-
Coverage deficiency		13,784

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.

August 10, 2016	/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.

August 10, 2016	/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:

This Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (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 represents, in all material respects, the financial condition and results of operation of the Company as of, and for, the periods presented in the Form 10-Q.

Date: August 10, 2016

        /s/ N. Malone Mitchell 3rd 

N. Malone Mitchell 3^rd

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.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 08, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	TAT
Entity Registrant Name	TRANSATLANTIC PETROLEUM LTD.
Entity Central Index Key	0001092289
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		47,160,617

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 1,600	$ 7,480
Restricted cash	7,168	3,758
Accounts receivable, net
Oil and natural gas sales	18,864	14,169
Joint interest and other	5,905	5,885
Related party	479	414
Prepaid and other current assets	3,569	2,807
Derivative asset	913	3,235
Assets held for sale	1,579	51,511
Total current assets	40,077	89,259
Oil and natural gas properties (successful efforts methods)
Proved	274,115	271,080
Unproved	31,346	31,135
Equipment and other property	36,426	36,708
Property and equipment, gross	341,887	338,923
Less accumulated depreciation, depletion and amortization	(164,723)	(148,218)
Property and equipment, net	177,164	190,705
Other long-term assets:
Other assets	3,145	3,355
Note receivable - related party	7,964	11,500
Derivative asset	2,001	3,370
Total other assets	13,110	18,225
Total assets	230,351	298,189
Current liabilities:
Accounts payable	12,811	12,675
Accounts payable - related party	2,122	2,684
Accrued liabilities	14,524	10,583
Loans payable	25,223	37,006
Loans payable - related party	3,593	3,593
Liabilities held for sale - related party		3,540
Liabilities held for sale	16,017	65,649
Total current liabilities	74,290	135,730
Long-term liabilities:
Asset retirement obligations	9,484	9,237
Accrued liabilities	12,101	11,940
Deferred income taxes	27,775	27,360
Loans payable	34,350	34,400
Loans payable - related party	20,650	20,600
Total long-term liabilities	104,360	103,537
Total liabilities	178,650	239,267
Commitments and contingencies
Shareholders' equity:
Common shares, $0.10 par value, 100,000,000 shares authorized; 47,160,617 shares and 41,017,777 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	4,716	4,102
Treasury stock	(970)	(970)
Additional paid-in-capital	573,034	569,365
Accumulated other comprehensive loss	(120,881)	(121,590)
Accumulated deficit	(404,198)	(391,985)
Total shareholders' equity	51,701	58,922
Total liabilities and shareholders' equity	$ 230,351	$ 298,189

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Common shares, par value	$ 0.10	$ 0.10
Common shares, authorized	100,000,000	100,000,000
Common shares, issued	47,160,617	41,017,777
Common shares, outstanding	47,160,617	41,017,777

XML

Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Oil and natural gas sales	$ 16,162	$ 24,513	$ 30,688	$ 49,921
Sales of purchased natural gas	1,520	490	2,546	788
Other	16	50	30	101
Total revenues	17,698	25,053	33,264	50,810
Costs and expenses:
Production	3,069	3,334	5,955	6,955
Exploration, abandonment and impairment	128	4,093	1,433	4,440
Cost of purchased natural gas	1,341	469	2,237	735
Seismic and other exploration	15	93	81	151
General and administrative	3,899	6,692	8,742	13,815
Depreciation, depletion and amortization	7,807	8,956	15,773	20,010
Accretion of asset retirement obligations	96	93	188	189
Total costs and expenses	16,355	23,730	34,409	46,295
Operating income (loss)	1,343	1,323	(1,145)	4,515
Other income (expense):
Interest and other expense	(2,614)	(3,343)	(5,270)	(6,451)
Interest and other income	190	188	402	351
(Loss) gain on commodity derivative contracts	(3,003)	(3,274)	(2,232)	538
Foreign exchange (loss) gain	(611)	805	(269)	(5,646)
Total other expense	(6,038)	(5,624)	(7,369)	(11,208)
Loss from continuing operations before income taxes	(4,695)	(4,301)	(8,514)	(6,693)
Income tax expense	(1,849)	(1,388)	(3,596)	(3,019)
Net loss from continuing operations	(6,544)	(5,689)	(12,110)	(9,712)
Loss from discontinued operations before income taxes	(118)	(2,135)	(1,056)	(3,715)
Gain on disposal of discontinued operations			749
Income tax benefit		574	204	683
Net loss from discontinued operations	(118)	(1,561)	(103)	(3,032)
Net loss	(6,662)	(7,250)	(12,213)	(12,744)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(2,265)	(4,917)	709	(28,536)
Comprehensive loss	$ (8,927)	$ (12,167)	$ (11,504)	$ (41,280)
Basic net loss per common share
Continuing operations	$ (0.16)	$ (0.14)	$ (0.30)	$ (0.24)
Discontinued operations	$ 0.00	$ (0.04)	$ 0.00	$ (0.07)
Weighted average common shares outstanding	41,001	40,973	40,870	40,870
Diluted net loss per common share
Continuing operations	$ (0.16)	$ (0.14)	$ (0.30)	$ (0.24)
Discontinued operations	$ 0.00	$ (0.04)	$ 0.00	$ (0.07)
Weighted average common and common equivalent shares outstanding	41,001	40,973	40,870	40,870

XML

Consolidated Statement of Equity (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands	Total	Common Shares [Member]	Treasury Stock [Member]	Warrants [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2015	$ 58,922	$ 4,102	$ (970)	$ 699	$ 569,365	$ (121,590)	$ (391,985)
Beginning balance, shares at Dec. 31, 2015	41,017,777	41,018,000	333,000
Issuance of common shares	$ 3,970	$ 600			3,370
Issuance of common shares (in shares)		5,998,000
Issuance of restricted stock units		$ 14			(14)
Issuance of restricted stock units, shares		145,000
Tax withholding on restricted stock units	(41)				(41)
Share-based compensation	354				354
Foreign currency translation adjustment	709					709
Net loss	(12,213)						(12,213)
Ending balance at Jun. 30, 2016	$ 51,701	$ 4,716	$ (970)	$ 699	$ 573,034	$ (120,881)	$ (404,198)
Ending balance, shares at Jun. 30, 2016	47,160,617	47,161,000	333,000

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating activities:
Net loss	$ (12,213)	$ (12,744)
Adjustment for net (gain) loss from discontinued operations	103	3,032
Net loss from continuing operations	(12,110)	(9,712)
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	354	814
Foreign currency loss	357	6,760
Loss (gain) on commodity derivative contracts	2,232	(538)
Cash settlement on commodity derivative contracts	1,459	7,248
Amortization on loan financing costs	331	445
Deferred income tax expense	684	560
Exploration, abandonment and impairment	1,433	4,440
Depreciation, depletion and amortization	15,773	20,010
Accretion of asset retirement obligations	188	189
Vendor settlements		(236)
Changes in operating assets and liabilities:
Accounts receivable	(4,514)	12,256
Prepaid expenses and other assets	(283)	443
Accounts payable and accrued liabilities	5,692	(14,479)
Net cash provided by operating activities from continuing operations	11,596	28,200
Net cash used in operating activities from discontinued operations	(202)	(6,392)
Net cash provided by operating activities	11,394	21,808
Investing activities:
Additions to oil and natural gas properties	(3,182)	(10,433)
Restricted cash	(3,399)
Additions to equipment and other properties	(139)	(2,903)
Net cash used in investing activities from continuing operations	(6,720)	(13,336)
Net cash used in investing activities from discontinued operations		(7,083)
Net cash used in investing activities	(6,720)	(20,419)
Financing activities:
Issuance of common shares	1,658
Tax withholding on restricted share units	(41)	(391)
Loan proceeds		7,600
Loan repayment	(12,152)	(8,330)
Net cash used in financing activities from continuing operations	(10,535)	(1,121)
Net cash used in financing activities from discontinued operations		(14,819)
Net cash used in financing activities	(10,535)	(15,940)
Effect of exchange rate on cash flows and cash equivalents	(19)	(1,258)
Net decrease in cash and cash equivalents	(5,880)	(15,809)
Cash and cash equivalents, beginning of period	7,480	35,132
Cash and cash equivalents, end of period	1,600	19,323
Supplemental disclosures:
Cash paid for interest	3,216	3,551
Cash paid for taxes	263	1,390
Supplemental non-cash financing activities:
Issuance of common shares	$ 2,312
Repayment of the prepayment agreement		$ 2,130

XML

General

6 Months Ended

Jun. 30, 2016

Organization Consolidation And Presentation Of Financial Statements [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 have established, yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing, royalty rates and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey and Bulgaria. As of August 8, 2016, approximately 36% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

TransAtlantic is a holding company with two operating segments – Turkey and Bulgaria.  Its assets consist of its ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

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 United States (“U.S. GAAP”). All amounts in the notes to the consolidated financial statements are in U.S. Dollars unless otherwise indicated. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews estimates, including those related to fair value measurements associated with acquisitions and financial derivatives, the recoverability and impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.  During the six months ended June 30, 2016, we reclassified certain balance sheet amounts previously reported on our consolidated balance sheet at December 31, 2015 to conform to current year presentation.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2015.

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Going Concern

6 Months Ended

Jun. 30, 2016

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 $12.2 million for the six months ended June 30, 2016, which included net loss from discontinued operations of $0.1 million.  At June 30, 2016, the outstanding principal amount of our debt was $84.7 million (excluding unamortized deferred financing costs), and we had a working capital deficit (excluding assets and liabilities held for sale) of $19.8 million.

Due to the significant decline in Brent crude oil prices during 2015, the borrowing base under our senior credit facility (the “Senior Credit Facility”) with BNP Paribas (Suisse) SA (“BNP Paribas”) and the International Finance Corporation (“IFC”, and together with BNP Paribas, the “Lenders”) was decreased to $5.4 million effective April 1, 2016. The decline in the borrowing base resulted in a $18.8 million borrowing base deficiency under the Senior Credit Facility as of June 30, 2016.

On April 19, 2016, we entered into a second waiver and consent to credit agreement (the “Second Waiver and Consent”) with BNP Paribas and IFC, which granted us a conditional waiver of defaults under the Senior Credit Facility and the current ratio financial covenant non-compliance at December 31, 2015, and March 31, June 30, and September 30, 2016.  The Second Waiver and Consent also permitted the borrowers to make certain limited transfers and withdrawals from the collection accounts pledged to the Lenders under the Senior Credit Facility.

The Second Waiver and Consent included certain conditions, including the following:

(i) The borrowing base deficiency must be repaid by September 30, 2016 (provided that the Lenders may, in their sole and absolute discretion, agree in writing to extend such date to December 31, 2016) (the “Waiver Period”);

(ii) All monthly hedge settlement proceeds shall be used to pay down debt outstanding under the Senior Credit Facility;

(iii) Net proceeds from certain asset sales shall be used to prepay loans outstanding under the Senior Credit Facility;

(iv) On or before May 15, 2016, the Company shall have entered into a binding purchase and sale agreement for the sale of all of the equity interests in, or all or substantially all of the assets of, Thrace Basin Natural Gas (Turkiye) Corporation (“TBNG”);

(v) By June 30, 2016, the Lenders shall be granted a security interest over all of the equity interests in, and assets and property of, TBNG; and

(vi) On or before September 30, 2016, all holders of our 13.0% convertible notes due 2017 (the “2017 Notes”) shall either (a) convert their debt interest under the 2017 Notes into equity interest, or (b) agree to extend the maturity of the 2017 Notes to April 1, 2019 or later on substantially identical terms.

As of June 30, 2016, we had $24.2 million of outstanding borrowings under the Senior Credit Facility, a borrowing base deficiency of $18.8 million and no availability.  In addition, we were not in compliance with certain covenants in the Second Waiver and Consent, including the requirement to enter into a binding purchase and sale agreement for TBNG by May 15, 2016.  We continue to work with the Lenders to satisfy these conditions and restructure our Senior Credit Facility obligations.  Subsequent to June 30, 2016, we repaid $0.9 million of principal under the Senior Credit Facility, reducing the outstanding balance to $23.3 million and the borrowing base deficiency to $17.9million as of August 8, 2016.  In addition, as of June 30, 2016 and August 8, 2016, the Lenders held $7.2 million and $12.0 million, respectively, of restricted cash in our collection accounts in Turkey.       

Even if we obtain the funds to repay our borrowing base deficiency, we will need some form of debt restructuring, capital raising effort or asset sale in order to fund our operations and meet our substantial debt service obligations of approximately $29.7 million in 2016 and $55.0 million in 2017.  We have engaged Seaport Global Inc. as an independent advisor, and our management is actively pursuing improving our working capital position and/or restructuring our future debt service obligations in order to remain a going concern for the foreseeable future.

As a result there is substantial doubt regarding our ability to continue as a going concern.

Management believes the going concern assumption to be appropriate for these consolidated 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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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2016

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

3. Recent accounting pronouncements

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), an amendment to Accounting Standards Codification (“ASC”) Subtopic 330-10.  The amendment states that entities should measure inventory at the lower of cost and net realizable value.  The amendment does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method.  The amendment applies to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost.  ASU 2015-11 is effective for fiscal years beginning after December 31, 2016, including interim periods within those fiscal years.  We are currently assessing the potential impact of ASU 2015-11 on our consolidated financial statements and results of operations.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”).  ASU 2016-08 does not change the core principle of Topic 606 but clarifies the implementation guidance on principal versus agent considerations.  ASU 2016-08 is effective for the annual and interim periods beginning after December 15, 2017.  We are currently assessing the potential impact of ASU 2016-08 on our consolidated financial statements and results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”).  ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted.  We are currently assessing the potential impact of ASU 2016-09 on our consolidated financial statements and results of operations.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”).  ASU 2016-10 does not change the core principle of Topic 606 but clarifies the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.  ASU 2016-10 is effective for annual and interim periods beginning after December 15, 2017.  We are currently assessing the potential impact of ASU 2016-10 on our consolidated financial statements and results of operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”).  ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently assessing the potential impact of ASU 2016-13 on our consolidated financial statements and results of operations.

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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Property and equipment

6 Months Ended

Jun. 30, 2016

Property Plant And Equipment [Abstract]

Property and equipment

4. Property and equipment

Oil and natural gas properties

The following table sets forth the capitalized costs under the successful efforts method for our oil and natural gas properties as of:

	June 30, 2016			December 31, 2015
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	273,619		$	270,591
Bulgaria		496			489
Total oil and natural gas properties, proved		274,115			271,080
Oil and natural gas properties, unproved:
Turkey		31,346			31,135
Total oil and natural gas properties, unproved		31,346			31,135
Gross oil and natural gas properties		305,461			302,215
Accumulated depletion		(154,645	)		(139,002	)
Net oil and natural gas properties	$	150,816		$	163,213

At June 30, 2016 and December 31, 2015, we excluded $0.1 million and $0.7 million, respectively, from the depletion calculation for proved development wells currently in progress and for costs associated with fields currently not in production.

At June 30, 2016, the capitalized costs of our oil and natural gas properties, net of accumulated depletion, included $18.8 million relating to acquisition costs of proved properties, which are being depleted by the unit-of-production method using total proved reserves, and $100.6 million relating to well costs and additional development costs, which are being depleted by the unit-of-production method using proved developed reserves.

At December 31, 2015, the capitalized costs of our oil and natural gas properties included $20.0 million relating to acquisition costs of proved properties, which are being amortized by the unit-of-production method using total proved reserves, and $111.4 million relating to well costs and additional development costs, which are being amortized by the unit-of-production method using proved developed reserves

Impairments of proved properties and impairment of exploratory well costs

Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate the carrying value of such properties may not be recoverable. We primarily use Level 3 inputs to determine fair value, including but are not limited to, estimates of proved reserves, future commodity prices, the timing and amount of future production and capital expenditures and discount rates commensurate with the risk reflective of the lives remaining for the respective oil and natural gas properties.

During the three and six months ended June 30, 2016, we recorded $0.1 million and $1.4 million, respectively, of impairment of proved properties and exploratory well costs, which are primarily measured using Level 3 inputs.  

Capitalized cost greater than one year

As of June 30, 2016, we had $1.3 million and $2.2 million of exploratory well costs capitalized for the Hayrabolu-10 and Pinar-1 wells, respectively, in Turkey, which we spud in February 2013 and March 2014, respectively. The Hayrabolu-10 and Pinar-1 wells continue to be held for completion.

Equipment and other property

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

	June 30, 2016			December 31, 2015
	(in thousands)
Inventory	$	20,978		$	21,338
Leasehold improvements, office equipment and software		7,836			7,794
Gas gathering system and facilities		4,821			4,798
Other equipment		2,390			2,378
Vehicles		401			400
Gross equipment and other property		36,426			36,708
Accumulated depreciation		(10,078	)		(9,216	)
Net equipment and other property	$	26,348		$	27,492

We classify our materials and supply inventory, including steel tubing and casing, as 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 June 30, 2016 and December 31, 2015, we excluded $21.0 million and $21.3 million of inventory, respectively, from depreciation as the inventory had not been placed into service.

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Asset Retirement obligations

6 Months Ended

Jun. 30, 2016

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement obligations

5. Asset retirement obligations

The following table summarizes the changes in our asset retirement obligations (“ARO”) for the six months ended June 30, 2016 and for the year ended December 31, 2015:

	June 30, 2016		December 31, 2015
	(in thousands)
Asset retirement obligations at beginning of period	$	9,237	$	10,543
Change in estimates		-		385
Foreign exchange change effect		59		(2,137	)
Additions		-		78
Accretion expense		188		368
Asset retirement obligations at end of period		9,484		9,237
Less: current portion		-		-
Long-term portion	$	9,484	$	9,237

Our ARO is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging costs, remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs.

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Commodity derivative instruments

6 Months Ended

Jun. 30, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Commodity derivative instruments

6. Commodity derivative instruments

We use derivative contracts to hedge against the variability in cash flows associated with the forecasted sale of a portion of our future oil production. We have not designated the derivative contracts as hedges for accounting purposes, and accordingly, we record the derivative 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 contracts with the same counterparty in our consolidated balance sheets. All of our oil derivative contracts are settled based upon Brent crude oil pricing. We recognize gains and losses related to these contracts on a fair value basis in our consolidated statements of comprehensive (loss) income under the caption “(Loss) gain on commodity derivative contracts.” Settlements of derivative contracts are included in operating activities on our consolidated statements of cash flows under the caption “Cash settlement on commodity derivative contracts.”

During the three months ended June 30, 2016 and 2015, we recorded a net loss on commodity derivative contracts of $3.0 million and $3.3 million, respectively.  During the six months ended June 30, 2016 and 2015, we recorded a net loss on commodity derivative contracts of $2.2 million and a net gain of $0.5 million, respectively.

At June 30, 2016 and December 31, 2015, 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 June 30, 2016

		Puts
				Weighted
				Average		Estimated Fair
		Quantity		Price		Value of
Type	Period	(Bbl/day)		(per Bbl)		Asset
						(in thousands)
Put	July 1, 2016— December 31, 2016		738	$	50.00	$	336
Put	January 1, 2017— December 31, 2017		610	$	50.00		1,190
Put	January 1, 2018— December 31, 2018		494	$	50.00		1,135
Put	January 1, 2019— March 31, 2019		443	$	50.00		253
Total estimated fair value of asset						$	2,914

Fair Value of Derivative Instruments as of December 31, 2015

		Puts
				Weighted
				Average		Estimated Fair
		Quantity		Price		Value of
Type	Period	(Bbl/day)		(per Bbl)		Asset
						(in thousands)
Put	January 1, 2016— December 31, 2016		808	$	50.00	$	3,235
Put	January 1, 2017— December 31, 2017		610	$	50.00		1,798
Put	January 1, 2018— December 31, 2018		494	$	50.00		1,292
Put	January 1, 2019— March 31, 2019		443	$	50.00		280
Total estimated fair value of asset						$	6,605

Balance sheet presentation

The following table summarizes both: (i) the gross fair value of our commodity derivative instruments by the appropriate balance sheet classification even when the commodity derivative instruments are subject to netting arrangements and qualify for net presentation in our consolidated balance sheets at June 30, 2016 and December 31, 2015, and (ii) the net recorded fair value as reflected on our consolidated balance sheets at June 30, 2016 and December 31, 2015.

		As of June 30, 2016
				Gross
				Amount		Net Amount of
		Gross		Offset in the		Assets
		Amount of		Consolidated		Presented in the
		Recognized		Balance		Consolidated
Underlying Commodity	Location on Balance Sheet	Assets		Sheet		Balance Sheet
		(in thousands)
Crude oil	Current assets	$	913	$	-	$	913
Crude oil	Long-term assets	$	2,001	$	-	$	2,001

		As of December 31, 2015
				Gross
				Amount		Net Amount of
		Gross		Offset in the		Assets
		Amount of		Consolidated		Presented in the
		Recognized		Balance		Consolidated
Underlying Commodity	Location on Balance Sheet	Assets		Sheet		Balance Sheet
		(in thousands)
Crude oil	Current assets	$	3,235	$	-	$	3,235
Crude oil	Long-term assets	$	3,370	$	-	$	3,370

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Loans payable

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Loans payable

7. Loans payable

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

	June 30,			December 31,
	2016			2015
Fixed and floating rate loans	(in thousands)
2017 Notes	$	34,350		$	34,400
2017 Notes - Related Party		20,650			20,600
Senior Credit Facility		24,243			32,075
Unamortized deferred financing cost - Senior Credit Facility and    2017 Notes		(892	)		(1,260	)
TBNG credit facility		872			5,192
ANBE Note		3,593			3,592
West Promissory Notes		1,000			1,000
Loans payable		83,816			95,599
Less: current portion		28,816			40,599
Long-term portion	$	55,000		$	55,000

Senior Credit Facility

On May 6, 2014, certain of our wholly owned subsidiaries entered into the Senior Credit Facility with BNP Paribas and IFC. The Senior Credit Facility is guaranteed by us and each of TransAtlantic Petroleum (USA) Corp. (“TransAtlantic USA”) and TransAtlantic Worldwide, Ltd. (each, a “Guarantor”).

The borrowing base amount is re-determined semi-annually on April 1st and October 1st of each year.  The April 1, 2016 redetermination resulted in a $5.4 million borrowing base and a $18.8 million borrowing base deficiency under the Senior Credit Facility as of June 30, 2016. Loans under the Senior Credit Facility accrue interest at a rate of three-month LIBOR plus 5.00% per annum (5.63% at June 30, 2016), except as described below.  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; and

· the debt value which results in the loan life coverage ratio for such calculation date being 1.30 to 1.00.

On April 19, 2016, we entered into the Second Waiver and Consent with BNP Paribas and IFC, which granted us a conditional waiver of defaults under the Senior Credit Facility and permitted the borrowers to make certain limited transfers and withdrawals from the collection accounts pledged to the Lenders under the Senior Credit Facility.  The Second Waiver and Consent also waived non-compliance with the current ratio financial covenant in the Senior Credit Facility on each of December 31, 2015, and March 31, June 30, and September 30, 2016.

The Second Waiver and Consent included certain conditions, including the following:

(i) The borrowing base deficiency must be repaid by September 30, 2016 (provided that the Lenders may, in their sole and absolute discretion, agree in writing to extend such date to December 31, 2016);

(ii) All monthly hedge settlement proceeds shall be used to pay down debt outstanding under the Senior Credit Facility;

(iii) Net proceeds from certain asset sales shall be used to prepay loans outstanding under the Senior Credit Facility;

(iv) On or before May 15, 2016, the Company shall have entered into a binding purchase and sale agreement for the sale of all of the equity interests in, or all or substantially all of the assets of, TBNG;

(v) By June 30, 2016, the Lenders shall be granted a security interest over all of the equity interest in, and assets and property of, TBNG; and

(vi) On or before September 30, 2016, all holders of the 2017 Notes shall either (a) convert their debt interest under the 2017 Notes into equity interest, or (b) agree to extend the maturity of the 2017 Notes to April 1, 2019 or later on substantially identical terms.

Pursuant to the Second Waiver and Consent, as of April 19, 2016, the Lenders’ aggregate commitments were reduced to $30.5 million, with individual commitments of $15.2 million each, and shall be further reduced by the amount of any payments under the Senior Credit Facility.  During the Waiver Period, interest on the borrowing base deficiency will accrue at a rate of three-month LIBOR plus 7.00% per annum (7.63% at June 30, 2016).  

As of June 30, 2016, we had $24.2 million of outstanding borrowings under the Senior Credit Facility, a borrowing base deficiency of $18.8 million and no availability. In addition, we were not in compliance with certain covenants in the Second Waiver and Consent, including the requirement to enter into a binding purchase and sale agreement for TBNG by May 15, 2016.  We continue to work with the Lenders to satisfy these conditions and restructure our Senior Credit Facility obligations.  Subsequent to June 30, 2016, we repaid $0.9 million of principal under the Senior Credit Facility, reducing the outstanding balance to $23.3 million and the borrowing base deficiency to $17.9 million, as of August 8, 2016.  In addition, as of June 30, 2016 and August 8, 2016, the Lenders held $7.2 million and $12.0 million, respectively, of restricted cash in our collection accounts in Turkey.    

As of August 8, 2016, we had granted a security interest in favor of the Lenders over all of the equity interests in, and moveable assets of, TBNG, and were in the process of granting a security interest in favor of the Lenders over all present and future receivables of TBNG. We are also in active negotiations with third party purchasers for the sale of TBNG. We have engaged Seaport Global Inc. as an independent advisor, and our management is actively pursuing alternate structures for the 2017 Notes.

We have classified all borrowings under the Senior Credit Facility as short-term debt as of June 30, 2016 due to the uncertainty regarding our ability to comply with the covenants in the Senior Credit Facility for the next twelve months.

2017 Notes

As of June 30, 2016, we had $55.0million aggregate principal amount of outstanding 2017 Notes. The 2017 Notes bear interest at a rate of 13.0% per annum and mature on July 1, 2017. The 2017 Notes are convertible at any time, at the election of a holder, into our common shares at a conversion price of $6.80 per share.

On June 30, 2016, we issued 2,905,737 common shares in a private placement to certain holders of the 2017 Notes, at the election of such holders to receive common shares in lieu of cash interest on the 2017 Notes (see Note 9, “Shareholders’ equity”).

TBNG credit facility

TBNG has a fully-drawn credit facility with a Turkish bank.  During the second quarter of 2016, the facility was amended and the monthly principal installments were deferred until August 29, 2016.  The facility may be prepaid without penalty. The facility is secured by a lien on a Turkish real estate property owned by Gundem Turizm Yatirim ve Isletmeleri Anonim Sirketi (“Gundem”), which is 97.5% beneficially owned by Mr. Mitchell and his children. At June 30, 2016, TBNG owed $0.9 million under the credit facility and had no availability.

West Promissory Notes

In August 2015, TransAtlantic USA entered into promissory notes (the “Promissory Notes”) with each of Mary West CRT 2 LLC and Gary West CRT 2 LLC, shareholders of the Company (collectively, the “Holders”), whereby TransAtlantic USA could borrow up to $1.5 million under each Promissory Note to fund our share repurchase program. The Holders are managed by Randy Rochman, an observer of our board of directors.

On August 21, 2015, TransAtlantic USA borrowed $500,000 under each Promissory Note. Pursuant to the terms of the Promissory Notes, the Holders are granted a first priority lien and security interest in all of our common shares purchased under our share repurchase program. Loans under the Promissory Notes accrue interest at a rate of 9.00% per annum and mature on October 1, 2016. The Promissory Notes are guaranteed by us. As of June 30, 2016, we had borrowed $1.0 million under the Promissory Notes and had no availability. The funds were used to purchase our common shares pursuant to our share repurchase program.

ANBE Note

On December 30, 2015, TransAtlantic USA entered into a $5.0 million draw down convertible promissory note (the “Note”) with ANBE Holdings, L.P. (“ANBE”), an entity owned by the children of the Company’s chairman and chief executive officer, N. Malone Mitchell 3rd, and controlled by an entity managed by Mr. Mitchell and his wife. The Note bears interest at a rate of 13.0% per annum.  On December 30, 2015, the Company borrowed $3.6 million under the Note (the “Initial Advance”) for general corporate purposes.

On June 30, 2016, TransAtlantic USA entered into an extension of the Note (the “Extension”) with ANBE.  The Extension extended the date on which the Company could request advances under the Note from June 15, 2016 to August 15, 2016 and extended the maturity date of the Note from June 30, 2016 to August 31, 2016.  As of June 30, 2016, the Company had borrowed $3.6 million under the Note and had availability of $1.4 million.

Advances under the Note may be converted, at the election of ANBE, any time after the NYSE MKT approves the Company’s application to list the additional common shares issuable pursuant to the conversion feature of the Note and prior to the maturity of the Note.  The conversion price per common share for each advance is equal to 105% of the closing price of the Company’s common shares on the NYSE MKT on the trading date immediately prior to such advance.  The conversion price of the Initial Advance is $1.3755 per share.

On June 30, 2016, we issued 355,826 common shares in a private placement to ANBE in lieu of cash interest on the Note (see Note 9, “Shareholders’ equity”).

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Contingencies relating to production leases and exploration permits

6 Months Ended

Jun. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Contingencies relating to production leases and exploration permits

8. Contingencies relating to production leases and exploration permits

Selmo

We are involved in litigation with persons who claim ownership of a portion of the surface at the Selmo oil field in Turkey. These cases are being vigorously defended by TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”) and Turkish governmental authorities. We do not have enough information to estimate the potential additional operating costs we would incur in the event the purported surface owners’ claims are ultimately successful. Any adjustment arising out of the claims will be recorded when it becomes probable and measurable.

Morocco

During 2012, we were notified that the Moroccan government may seek to recover approximately $5.5 million in contractual obligations under our Tselfat exploration permit work program. In February 2013, the Moroccan government drew down our $1.0 million bank guarantee that was put in place to ensure our performance of the Tselfat exploration permit work program. Although we believe that the bank guarantee satisfies our contractual obligations, during 2012, we recorded $5.0 million in accrued liabilities relating to our Tselfat exploration permit for this contingency.

Bulgaria

During 2012, we were notified that the Bulgarian government may seek to recover approximately $2.0 million in contractual obligations under our Aglen exploration permit work program. Due to the Bulgarian government’s January 2012 ban on fracture stimulation and related activities, a force majeure event under the terms of the exploration permit was recognized by the government. Although we invoked force majeure, we recorded $2.0 million in general and administrative expense relating to our Aglen exploration permit during 2012 for this contractual obligation.

In October 2015, the Bulgarian Ministry of Energy and Economy filed a suit against our subsidiary, Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”), claiming a $200,000 penalty for Direct Bulgaria’s alleged failure to fulfill the Aglen work program.  We believe that Direct Bulgaria is not under any obligation to fulfill the work program until the 2012 force majeure event is rectified and intend to vigorously defend this claim.

Direct Petroleum

In July 2013, we entered into a second amendment (the “Amendment”) to the purchase agreement (the “Purchase Agreement”) with Direct Petroleum Exploration, LLC (“Direct”). The Amendment set forth a new obligation to drill and test the Deventci-R2 well by May 1, 2014. We completed the drilling and testing requirements pursuant to the Amendment during April 2014, which resulted in the reversal of a $2.5 million contingent liability recorded in 2011. The reversal was recognized in our consolidated statements of comprehensive income (loss) under the caption “Revaluation of contingent consideration” during the nine months ended September 30, 2014.

In December 2014, Direct filed suit against the Company alleging that it was due liquidated damages of $5.0 million worth of common shares of the Company pursuant to the Amendment. On March 15, 2016, the Company entered into a settlement agreement pursuant to which we agreed to issue 225,000 common shares to Direct in exchange for a mutual release of all current and future claims against the other party in connection with the Purchase Agreement. On April 17, 2016, the Company issued 225,000 common shares to Direct pursuant to a settlement agreement, and the court dismissed the lawsuit on April 28, 2016.

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Shareholders' equity

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Shareholders' equity

9. Shareholders’ equity

June 2016 share issuance

On June 30, 2016, we issued an aggregate of 5,773,305 common shares in private placements under the Securities Act of 1933, as amended (the “Securities Act”). Of the 5,773,305 common shares, (i) 2,905,737 common shares were issued to holders of the 2017 Notes at the election of such holders to receive common shares in lieu of cash interest on the 2017 Notes; (ii) 355,826 common shares were issued to ANBE in lieu of cash interest on the Note; and (iii) 2,511,742 common shares were issued for cash, which was used to pay cash interest to certain holders of the 2017 Notes. All of the shares were issued at a value of $0.6599 per share, which was equal to 75% of the 10-day volume weighted average price through the close of trading of the common shares on the NYSE MKT on June 29, 2016.

Direct settlement

On April 17, 2016, we issued 225,000 common shares to Direct pursuant to a settlement agreement.

Restricted stock units

We recorded share-based compensation expense of $0.2 million for awards of restricted stock units (“RSUs”) for each of the three months ended June 30, 2016 and 2015.  We recorded share-based compensation expense of $0.4  million and $0.5 million for awards of RSUs for the six months ended June 30, 2016 and 2015, respectively.

As of June 30, 2016, we had approximately $0.6 million of unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.5 years.

Earnings per share

We account for earnings per share in accordance with ASC Subtopic 260-10, Earnings Per Share (“ASC 260-10”). ASC 260-10 requires companies to present two calculations of earnings per share: basic and diluted. Basic earnings per common share for the three and six months ended June 30, 2016 and 2015 equals net loss divided by the weighted average shares outstanding during the periods. Weighted average shares outstanding are equal to the weighted average of all shares outstanding for the period, excluding unvested RSUs. Diluted earnings per common share for the three and six months ended June 30, 2016 and 2015 are computed in the same manner as basic earnings per common share after assuming the issuance of common shares for all potentially dilutive common share equivalents, which includes RSUs.  For the three and six months ended June 30, 2016, there were no dilutive securities included in the calculation of diluted earnings per share.  

The following table presents the basic and diluted earnings per common share computations:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands, except per share amounts)	2016			2015			2016			2015
Net loss from continuing operations	$	(6,544	)	$	(5,689	)	$	(12,110	)	$	(9,712	)
Net loss from discontinued operations	$	(118	)	$	(1,561	)	$	(103	)	$	(3,032	)
Basic net loss per common share:
Shares:
Weighted average common shares outstanding		41,001			40,973			40,870			40,870
Basic net loss per common share:
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)
Diluted net loss per common share:
Shares:
Weighted average common shares outstanding		41,001			40,973			40,870			40,870
Diluted net loss per common share:
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)

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Segment information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment information

10. Segment information

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

	Corporate			Turkey			Bulgaria			Total
	(in thousands)
For the three months ended June 30, 2016
Total revenues	$	-		$	17,698		$	-		$	17,698
Loss from continuing operations before income    taxes		(3,990	)		(567	)		(138	)		(4,695	)
Capital expenditures	$	-		$	911		$	-		$	911
For the three months ended June 30, 2015
Total revenues	$	-		$	25,053					$	25,053
(Loss) income from continuing operations before income    taxes		(5,405	)		4,970			(3,866	)		(4,301	)
Capital expenditures	$	108		$	4,418		$	-		$	4,526
For the six months ended June 30, 2016
Total revenues				$	33,264					$	33,264
(Loss) income from continuing operations before income    taxes		(8,990	)		679			(203	)		(8,514	)
Capital expenditures	$	-		$	3,191		$	-		$	3,191
For the six months ended June 30, 2015
Total revenues	$	-		$	50,810		$	-		$	50,810
(Loss) income from continuing operations before income    taxes		(11,903	)		9,177			(3,967	)		(6,693	)
Capital expenditures	$	163		$	10,776		$	41		$	10,980
Segment assets(1)
June 30, 2016	$	10,477		$	217,677		$	618		$	228,772
December 31, 2015	$	14,689		$	231,388		$	601		$	246,678

(1) Excludes assets from our discontinued Albanian and Moroccan operations of $1.6 million and $51.5 million at June 30, 2016 and December 31, 2015, respectively.

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Financial instruments

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Financial instruments

11. Financial instruments

Cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and our loans payable were each estimated to have a fair value approximating the carrying amount at June 30, 2016 and December 31, 2015, 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 Senior Credit Facility.

Foreign currency risk

We have underlying foreign currency exchange rate exposure. Our currency exposures relate to transactions denominated in the Canadian Dollar, Bulgarian Lev, European Union Euro, Romanian New Leu and Turkish Lira (“TRY”). 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 June 30, 2016, we had 28.6 million TRY (approximately $9.9 million) in cash and cash equivalents and restricted cash, which exposes us to exchange rate risk based on fluctuations in the value of the TRY.

Commodity price risk

We are exposed to fluctuations in commodity prices for oil and natural gas. Commodity prices are affected by many factors, including, but not limited to, supply and demand. At June 30, 2016 and December 31, 2015, we were a party to commodity derivative contracts (see Note 6, “Commodity derivative instruments”).

Concentration of credit risk

The majority of our receivables are within the oil and natural 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, and Turkiye Petrol Rafinerileri A.Ş., a privately owned oil refinery in Turkey, which purchases all of our oil production. The receivables are not collateralized. To date, we have experienced minimal bad debts from customers in Turkey. 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 June 30, 2016:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	2,914	$	-		$	2,914
Disclosed but not carried at fair value
Liabilities:
Senior Credit Facility		-		-		(22,082	)		(22,082	)
2017 Notes		-		-		(47,826	)		(47,826	)
Total	$	-	$	2,914	$	(69,908	)	$	(66,994	)

The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2015:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	6,605	$	-		$	6,605
Disclosed but not carried at fair value
Liabilities:
Senior Credit Facility		-		-		(30,050	)		(30,050	)
2017 Notes		-		-		(44,489	)		(44,489	)
Total	$	-	$	6,605	$	(74,539	)	$	(67,934	)

We remeasure our derivative contracts on a recurring basis, with changes flowing through earnings.  At June 30, 2016 and December 31, 2015, the fair values of the Senior Credit Facility and 2017 Notes were estimated using a discounted cash flow analysis based on unobservable Level 3 inputs, including our own credit risk associated with the loans payable.

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Related Party Transactions

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Related party transactions

12. Related party transactions

The following table summarizes related party accounts receivable and accounts payable as of the dates indicated:

	June 30,		December 31,
	2016		2015
	(in thousands)
Related party accounts receivable:
Riata Management service agreement	$	230	$	194
PSIL MSA		249		-
Viking International master services agreement		-		220
Total related party accounts receivable	$	479	$	414
Related party accounts payable:
PSIL MSA	$	1,818	$	-
Riata Management service agreement		304		384
Viking International master services agreement		-		2,300
Total related party accounts payable	$	2,122	$	2,684

Services transactions

On March 3, 2016, Mr. Mitchell closed a transaction whereby he sold his interests in Viking Services B.V. (“Viking Services”), the beneficial owner of Viking International Limited (“Viking International”), Viking Petrol Sahasi Hizmetleri A.S. (“VOS”) and Viking Geophysical Services Ltd. (“Viking Geophysical”), to a third party.  As part of the transaction, Mr. Mitchell acquired certain equipment used in the performance of stimulation, wireline, workover and similar services, which equipment is owned and operated by a new entity, Production Solutions International Petrol Arama Hizmetleri Anonim Sirketi (“PSIL”).  PSIL is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. Consequently, on March 3, 2016, TEMI entered into a master services agreement (the “PSIL MSA”) with PSIL on substantially similar terms to the current master services agreements with Viking International, VOS and Viking Geophysical.  Pursuant to the PSIL MSA, PSIL performs the services on behalf of TEMI and its affiliates.  The master service agreements with each of Viking International, VOS and Viking Geophysical will remain in effect through the remainder of the five-year term of the agreements ending on June 13, 2017.

Dalea Amended Note and Pledge Agreement

On April 19, 2016, we entered into a note amendment agreement (the “Note Amendment Agreement”) with Mr. Mitchell, and Dalea Partners, LP (“Dalea”), pursuant to which Dalea agreed to deliver an amended and restated promissory note (the “Amended Note”) in favor of us, in the principal sum of $7,964,053, which Amended Note would amend and restate that certain promissory note, dated June 13, 2012, made by Dalea in favor of us in the principal amount of $11.5 million (the “Original Note”). The Note Amendment Agreement reduced the principal amount of the Original Note to $8.0 million in exchange for the cancellation of an account payable of approximately $3.5 million (the “Account Payable”) owed by TransAtlantic Albania Ltd. (“TransAtlantic Albania”), a former subsidiary of the Company, to Viking International.  We have indemnified a third party for any liability relating to the payment of the Account Payable.

Pursuant to the Note Amendment Agreement, on April 19, 2016, we entered into the Amended Note, which amended and restated the Original Note that was issued in connection with our sale of our subsidiaries, Viking International and Viking Geophysical Services, to a joint venture owned by Dalea and Abraaj Investment Management Limited in June 2012. In the Amended Note, we and Dalea acknowledged that (i) while the sale of Dalea’s interest in Viking Services enabled us to take the position that the Original Note was accelerated in accordance with its terms, the principal purpose of including the acceleration events in the Original Note was to ensure that certain oilfield services provided by Viking Services to us would continue to be available to us, and (ii) such services will now be provided pursuant to the PSIL MSA.  PSIL is beneficially owned by Dalea Investment Group, LLC, which is controlled by Mr. Mitchell. As a result, the Amended Note revised the events triggering acceleration of the repayment of the Original Note to the following: (i) a reduction of ownership by Dalea (and other controlled affiliates of Mr. Mitchell) of equity interest in PSIL to less than 50%; (ii) the sale or transfer by Dalea or PSIL of all or substantially all of its assets to any person (a “Transferee”) that does not own a controlling interest in Dalea or PSIL and is not controlled by Mr. Mitchell (an “Unrelated Person”), or the subsequent transfer by any Transferee that is not an Unrelated Person of all or substantially all of its assets to an Unrelated Person; (iii) the acquisition by an Unrelated Person of more than 50% of the voting interests of Dalea or PSIL; (iv) termination of the PSIL MSA other than as a result of an uncured default thereunder by TEMI; (v) default by PSIL under the PSIL MSA, which default is not remedied within a period of 30 days after notice thereof to PSIL; and (vi) insolvency or bankruptcy of PSIL. The maturity date of the Amended Note was extended to June 13, 2019. The interest rate on the Amended Note remains at 3.0% per annum and continues to be guaranteed by Mr. Mitchell.  The Amended Note contains customary events of default.

In addition, pursuant to the Note Amendment Agreement, on April 19, 2016, we entered into a pledge agreement (the “Pledge Agreement”) with Dalea, whereby Dalea pledged the $2.0 million principal amount of the 2017 Notes owned by Dalea (the “Dalea Convertible Notes”), including any future securities for which the Dalea Convertible Notes are converted or exchanged, as security for the performance of Dalea’s obligations under the Amended Note. The Pledge Agreement provides that interest payable to Dalea under the Dalea Convertible Notes (or any future securities for which the Dalea Convertible Notes are converted or exchanged) will be credited first against the outstanding principal balance of the Amended Note and, upon full repayment of the outstanding principal balance of the Amended Note, any accrued and unpaid interest on the Amended Note. The Pledge Agreement contains customary events of default.

On June 30, 2016, we entered into a waiver with Dalea, whereby we waived our right under the Pledge Agreement to receive the interest payment due July 1, 2016 under the Dalea Convertible Notes in connection with the payment of 201,459 common shares to Dalea with respect to the 2017 Note interest payment paid on June 30, 2016.

Private placements

On June 30, 2016, we issued an aggregate of 5,773,305 common shares in private placements under the Securities Act. Of the 5,773,305 common shares, (i) 1,974,452 common shares were issued to Dalea, the trusts of Mr. Mitchell’s four children and Pinon Foundation, a nonprofit entity controlled by Mrs. Mitchell, at their election to receive common shares in lieu of cash interest on the 2017 Notes; (ii) 355,826 common shares were issued to ANBE in lieu of cash interest on the Note and (iii) 814,627 common shares were issued to Dalea and the trusts of Mr. Mitchell’s four children for cash, which was used to pay cash interest to certain holders of the 2017 Notes (see Note 9, “Shareholders’ equity”).

Indemnity agreement

On May 9, 2016, Mr. Mitchell guaranteed the payment of director and officer liability premiums in the amount of $0.4 million(the “Guaranteed Payments”) payable to US Premium Finance solely in the event of a change of control of the Company.  On May 9, 2016, we entered into an Indemnity Agreement with Mr. Mitchell pursuant to which we agreed to indemnify him for any damages he incurs related to the Guaranteed Payments.

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Discontinued Operations

6 Months Ended

Jun. 30, 2016

Discontinued Operations And Disposal Groups [Abstract]

Discontinued operations

13. Discontinued operations

Discontinued operations in Albania

As of December 31, 2015 and June 30, 2016, we classified our Albania segment as assets and liabilities held for sale and presented the operating results within discontinued operations for all periods presented.  

In February 2016, we sold all of the outstanding equity in Stream Oil & Gas Ltd. (“Stream”) to GBC Oil Company Ltd. (“GBC Oil”) in exchange for (i) the future payment of $2.3 million to Raiffeisen Bank Sh.A. (“Raiffeisen”) to pay down the term loan facility dated as of September 17, 2014 (the “Term Loan Facility”) between Stream’s wholly-owned subsidiary, TransAtlantic Albania and Raiffeisen, and (ii) the assumption of $29.2 million of liabilities owed by Stream, consisting of $23.1 million of accounts payable and accrued liabilities and $6.1 million of debt.  TransAtlantic Albania owns all of our former Albanian assets and operations.  In addition, GBC Oil issued us a warrant pursuant to which we have the option to acquire up to 25% of the fully diluted equity interests in TransAtlantic Albania for nominal consideration at any time on or before March 1, 2019.  Prior to the sale of Stream to GBC Oil, TransAtlantic Albania entered into an assignment and assumption agreement pursuant to which TransAtlantic Albania will assign its Delvina natural gas assets and $12.9 million of associated liabilities to Delvina Gas Company Ltd. (“Delvina Gas”), our newly formed, wholly owned subsidiary, to be effective immediately upon receipt of required contractual consents. There is no assurance that we will be able to obtain the required contractual consents.  In addition, we agreed to indemnify GBC Oil and Stream for the $12.9 million of liabilities related to the Delvina gas operations.  We are currently negotiating a joint venture with a third party for the purchase of a portion of Delvina Gas.  There is no assurance that we will be able to complete a joint venture for the purchase of a portion of Delvina Gas.  If the Delvina natural gas assets are not transferred to Delvina Gas due to a breach of the purchase agreement by GBC Oil or its affiliates, we believe we have contractual damages claims that would offset any such indemnification obligations, including the Account Payable.  Subsequent to the divestiture, we reduced the $12.9 million of indemnification liabilities to $9.5 million due to the cancellation of the Account Payable discussed in Note 12, “Related party transactions”.

Discontinued operations in Morocco

On June 27, 2011, we decided to discontinue our operations in Morocco. We have substantially completed the process of winding down our operations in Morocco. We have presented the Moroccan segment operating results as discontinued operations for all periods presented.

The assets and liabilities held for sale at June 30, 2016 and December 31, 2015 were as follows:

	Albania		Morocco		TotalHeld for Sale
	(in thousands)
As of June 30, 2016
Assets
Cash	$	-	$	16	$	16
Other current assets		1,551		12		1,563
Total current assets held for sale	$	1,551	$	28	$	1,579
Liabilities
Accounts payable and other accrued liabilities	$	9,421	$	6,596	$	16,017
Total current liabilities held for sale	$	9,421	$	6,596	$	16,017
As of December 31, 2015
Assets
Cash	$	1,201	$	16	$	1,217
Other current assets		1,853		11		1,864
Property and equipment, net		48,430		-		48,430
Total current assets held for sale	$	51,484	$	27	$	51,511
Liabilities
Accounts payable and other accrued liabilities	$	37,888	$	6,352	$	44,240
Accounts payable - related party		3,540		-		3,540
Loans payable		6,123		-		6,123
Deferred tax liability		15,286		-		15,286
Total current liabilities held for sale	$	62,837	$	6,352	$	69,189

Loans payable

As of the dates indicated, TransAtlantic Albania’s third-party debt consisted of the following:

	June 30,		December 31,
	2016		2015
Fixed and floating rate loans	(in thousands)
Term Loan Facility	$	-	$	6,123
Loans payable	$	-	$	6,123

Term Loan Facility

TransAtlantic Albania was a party to the Term Loan Facility with Raiffeisen.  The loan was scheduled to mature on December 31, 2016 and bore interest at the rate of LIBOR plus 5.5%, with a minimum interest rate of 7.0%. TransAtlantic Albania was required to pay 1/16th of the total commitment each quarter on the last business day of each of March, June, September and December each year. The loan was guaranteed by TransAtlantic Albania’s parent company, Stream. TransAtlantic Albania could prepay the loan at its option in whole or in part, subject to a 3.0% penalty plus breakage costs.  The Term Loan Facility was secured by substantially all of the assets of TransAtlantic Albania.

As of December 31, 2015, TransAtlantic Albania had $6.1 million outstanding under the Term Loan Facility and no availability.  As of December 31, 2015, TransAtlantic Albania was in default under the Term Loan Facility for failure to repay $1.1 million due on December 31, 2015.  On February 29, 2016, we sold all the equity interest in Stream, the parent company of TransAtlantic Albania, to GBC Oil, who assumed the Term Loan Facility.

Our operating results from discontinued operations for the three and six months ended June 30, 2016 and 2015 are summarized as follows:

	Albania			Morocco		Total
	(in thousands)
For the three months ended June, 2016
Total revenues	$	-		$	-	$	-
Production and transportation expense		-			-		-
Total other costs and expenses		118			-		118
Loss before income taxes	$	(118	)	$	-	$	(118	)
Gain on disposal of discontinued operations		-			-		-
Income tax benefit		-			-		-
Loss from discontinued operations	$	(118	)	$	-	$	(118	)
For the three months ended June, 2015
Total revenues	$	3,437		$	-	$	3,437
Production and transportation expense		3,763			-		3,763
Total other costs and expenses		1,801			-		1,801
Total other income		(8	)		-		(8	)
Loss before income taxes	$	(2,135	)	$	-	$	(2,135	)
Income tax benefit		574			-		574
Loss from discontinued operations	$	(1,561	)	$	-	$	(1,561	)
For the six months ended June, 2016
Total revenues	$	626		$	-	$	626
Production and transportation expense		1,155			-		1,155
Total other costs and expenses		527			-		527
Loss before income taxes	$	(1,056	)	$	-	$	(1,056	)
Gain on disposal of discontinued operations		749			-		749
Income tax benefit		204			-		204
Loss from discontinued operations	$	(103	)	$	-	$	(103	)
For the six months ended June, 2015
Total revenues	$	4,676		$	-	$	4,676
Production and transportation expense		6,138			-		6,138
Total other costs and expenses		3,836			-		3,836
Total other income		1,583			-		1,583
Loss before income taxes	$	(3,715	)	$	-	$	(3,715	)
Income tax benefit		683			-		683
Loss from discontinued operations	$	(3,032	)	$	-	$	(3,032	)

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General (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Nature of operations

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 have established, yet underexplored petroleum systems, are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing, royalty rates and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey and Bulgaria. As of August 8, 2016, approximately 36% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors.

TransAtlantic is a holding company with two operating segments – Turkey and Bulgaria.  Its assets consist of its ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

Basis of presentation

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 United States (“U.S. GAAP”). All amounts in the notes to the consolidated financial statements are in U.S. Dollars unless otherwise indicated. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews estimates, including those related to fair value measurements associated with acquisitions and financial derivatives, the recoverability and impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.  During the six months ended June 30, 2016, we reclassified certain balance sheet amounts previously reported on our consolidated balance sheet at December 31, 2015 to conform to current year presentation.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2015.

Recent Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), an amendment to Accounting Standards Codification (“ASC”) Subtopic 330-10.  The amendment states that entities should measure inventory at the lower of cost and net realizable value.  The amendment does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method.  The amendment applies to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost.  ASU 2015-11 is effective for fiscal years beginning after December 31, 2016, including interim periods within those fiscal years.  We are currently assessing the potential impact of ASU 2015-11 on our consolidated financial statements and results of operations.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”).  ASU 2016-08 does not change the core principle of Topic 606 but clarifies the implementation guidance on principal versus agent considerations.  ASU 2016-08 is effective for the annual and interim periods beginning after December 15, 2017.  We are currently assessing the potential impact of ASU 2016-08 on our consolidated financial statements and results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”).  ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted.  We are currently assessing the potential impact of ASU 2016-09 on our consolidated financial statements and results of operations.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”).  ASU 2016-10 does not change the core principle of Topic 606 but clarifies the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.  ASU 2016-10 is effective for annual and interim periods beginning after December 15, 2017.  We are currently assessing the potential impact of ASU 2016-10 on our consolidated financial statements and results of operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”).  ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently assessing the potential impact of ASU 2016-13 on our consolidated financial statements and results of operations.

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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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2016

Property Plant And Equipment [Abstract]

Capitalized Costs under Successful Efforts Method for Oil and Natural Gas Properties

The following table sets forth the capitalized costs under the successful efforts method for our oil and natural gas properties as of:

	June 30, 2016			December 31, 2015
	(in thousands)
Oil and natural gas properties, proved:
Turkey	$	273,619		$	270,591
Bulgaria		496			489
Total oil and natural gas properties, proved		274,115			271,080
Oil and natural gas properties, unproved:
Turkey		31,346			31,135
Total oil and natural gas properties, unproved		31,346			31,135
Gross oil and natural gas properties		305,461			302,215
Accumulated depletion		(154,645	)		(139,002	)
Net oil and natural gas properties	$	150,816		$	163,213

Historical Cost of Equipment and Other Property on Gross Basis with Accumulated Depreciation

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

	June 30, 2016			December 31, 2015
	(in thousands)
Inventory	$	20,978		$	21,338
Leasehold improvements, office equipment and software		7,836			7,794
Gas gathering system and facilities		4,821			4,798
Other equipment		2,390			2,378
Vehicles		401			400
Gross equipment and other property		36,426			36,708
Accumulated depreciation		(10,078	)		(9,216	)
Net equipment and other property	$	26,348		$	27,492

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Asset Retirement obligations (Tables)

6 Months Ended

Jun. 30, 2016

Asset Retirement Obligation Disclosure [Abstract]

Changes in Asset Retirement Obligations

The following table summarizes the changes in our asset retirement obligations (“ARO”) for the six months ended June 30, 2016 and for the year ended December 31, 2015:

	June 30, 2016		December 31, 2015
	(in thousands)
Asset retirement obligations at beginning of period	$	9,237	$	10,543
Change in estimates		-		385
Foreign exchange change effect		59		(2,137	)
Additions		-		78
Accretion expense		188		368
Asset retirement obligations at end of period		9,484		9,237
Less: current portion		-		-
Long-term portion	$	9,484	$	9,237

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Commodity derivative instruments (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments of Future Crude Oil Production

At June 30, 2016 and December 31, 2015, 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 June 30, 2016

		Puts
				Weighted
				Average		Estimated Fair
		Quantity		Price		Value of
Type	Period	(Bbl/day)		(per Bbl)		Asset
						(in thousands)
Put	July 1, 2016— December 31, 2016		738	$	50.00	$	336
Put	January 1, 2017— December 31, 2017		610	$	50.00		1,190
Put	January 1, 2018— December 31, 2018		494	$	50.00		1,135
Put	January 1, 2019— March 31, 2019		443	$	50.00		253
Total estimated fair value of asset						$	2,914

Fair Value of Derivative Instruments as of December 31, 2015

		Puts
				Weighted
				Average		Estimated Fair
		Quantity		Price		Value of
Type	Period	(Bbl/day)		(per Bbl)		Asset
						(in thousands)
Put	January 1, 2016— December 31, 2016		808	$	50.00	$	3,235
Put	January 1, 2017— December 31, 2017		610	$	50.00		1,798
Put	January 1, 2018— December 31, 2018		494	$	50.00		1,292
Put	January 1, 2019— March 31, 2019		443	$	50.00		280
Total estimated fair value of asset						$	6,605

Summary of Gross Fair Value of Commodity Derivative Instruments by Balance Sheet Classification

The following table summarizes both: (i) the gross fair value of our commodity derivative instruments by the appropriate balance sheet classification even when the commodity derivative instruments are subject to netting arrangements and qualify for net presentation in our consolidated balance sheets at June 30, 2016 and December 31, 2015, and (ii) the net recorded fair value as reflected on our consolidated balance sheets at June 30, 2016 and December 31, 2015.

		As of June 30, 2016
				Gross
				Amount		Net Amount of
		Gross		Offset in the		Assets
		Amount of		Consolidated		Presented in the
		Recognized		Balance		Consolidated
Underlying Commodity	Location on Balance Sheet	Assets		Sheet		Balance Sheet
		(in thousands)
Crude oil	Current assets	$	913	$	-	$	913
Crude oil	Long-term assets	$	2,001	$	-	$	2,001

		As of December 31, 2015
				Gross
				Amount		Net Amount of
		Gross		Offset in the		Assets
		Amount of		Consolidated		Presented in the
		Recognized		Balance		Consolidated
Underlying Commodity	Location on Balance Sheet	Assets		Sheet		Balance Sheet
		(in thousands)
Crude oil	Current assets	$	3,235	$	-	$	3,235
Crude oil	Long-term assets	$	3,370	$	-	$	3,370

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Loans payable (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt

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

	June 30,			December 31,
	2016			2015
Fixed and floating rate loans	(in thousands)
2017 Notes	$	34,350		$	34,400
2017 Notes - Related Party		20,650			20,600
Senior Credit Facility		24,243			32,075
Unamortized deferred financing cost - Senior Credit Facility and    2017 Notes		(892	)		(1,260	)
TBNG credit facility		872			5,192
ANBE Note		3,593			3,592
West Promissory Notes		1,000			1,000
Loans payable		83,816			95,599
Less: current portion		28,816			40,599
Long-term portion	$	55,000		$	55,000

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Shareholders' equity (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Basic and Diluted Earnings Per Common Share Computations

The following table presents the basic and diluted earnings per common share computations:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands, except per share amounts)	2016			2015			2016			2015
Net loss from continuing operations	$	(6,544	)	$	(5,689	)	$	(12,110	)	$	(9,712	)
Net loss from discontinued operations	$	(118	)	$	(1,561	)	$	(103	)	$	(3,032	)
Basic net loss per common share:
Shares:
Weighted average common shares outstanding		41,001			40,973			40,870			40,870
Basic net loss per common share:
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)
Diluted net loss per common share:
Shares:
Weighted average common shares outstanding		41,001			40,973			40,870			40,870
Diluted net loss per common share:
Continuing operations	$	(0.16	)	$	(0.14	)	$	(0.30	)	$	(0.24	)
Discontinued operations	$	(0.00	)	$	(0.04	)	$	(0.00	)	$	(0.07	)

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Segment information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Financial Information of Geographic Segments

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

	Corporate			Turkey			Bulgaria			Total
	(in thousands)
For the three months ended June 30, 2016
Total revenues	$	-		$	17,698		$	-		$	17,698
Loss from continuing operations before income    taxes		(3,990	)		(567	)		(138	)		(4,695	)
Capital expenditures	$	-		$	911		$	-		$	911
For the three months ended June 30, 2015
Total revenues	$	-		$	25,053					$	25,053
(Loss) income from continuing operations before income    taxes		(5,405	)		4,970			(3,866	)		(4,301	)
Capital expenditures	$	108		$	4,418		$	-		$	4,526
For the six months ended June 30, 2016
Total revenues				$	33,264					$	33,264
(Loss) income from continuing operations before income    taxes		(8,990	)		679			(203	)		(8,514	)
Capital expenditures	$	-		$	3,191		$	-		$	3,191
For the six months ended June 30, 2015
Total revenues	$	-		$	50,810		$	-		$	50,810
(Loss) income from continuing operations before income    taxes		(11,903	)		9,177			(3,967	)		(6,693	)
Capital expenditures	$	163		$	10,776		$	41		$	10,980
Segment assets(1)
June 30, 2016	$	10,477		$	217,677		$	618		$	228,772
December 31, 2015	$	14,689		$	231,388		$	601		$	246,678

(1) Excludes assets from our discontinued Albanian and Moroccan operations of $1.6 million and $51.5 million at June 30, 2016 and December 31, 2015, respectively.

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Financial instruments (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Valuation of Financial Assets and Liabilities

The following table summarizes the valuation of our financial assets and liabilities as of June 30, 2016:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	2,914	$	-		$	2,914
Disclosed but not carried at fair value
Liabilities:
Senior Credit Facility		-		-		(22,082	)		(22,082	)
2017 Notes		-		-		(47,826	)		(47,826	)
Total	$	-	$	2,914	$	(69,908	)	$	(66,994	)

The following table summarizes the valuation of our financial assets and liabilities as of December 31, 2015:

	Fair Value Measurement Classification
	Quoted Prices in
	Active Markets for
	Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)
Measured on a recurring basis
Assets:
Commodity derivative contracts	$	-	$	6,605	$	-		$	6,605
Disclosed but not carried at fair value
Liabilities:
Senior Credit Facility		-		-		(30,050	)		(30,050	)
2017 Notes		-		-		(44,489	)		(44,489	)
Total	$	-	$	6,605	$	(74,539	)	$	(67,934	)

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Related Party Accounts Receivable and Accounts Payable

The following table summarizes related party accounts receivable and accounts payable as of the dates indicated:

	June 30,		December 31,
	2016		2015
	(in thousands)
Related party accounts receivable:
Riata Management service agreement	$	230	$	194
PSIL MSA		249		-
Viking International master services agreement		-		220
Total related party accounts receivable	$	479	$	414
Related party accounts payable:
PSIL MSA	$	1,818	$	-
Riata Management service agreement		304		384
Viking International master services agreement		-		2,300
Total related party accounts payable	$	2,122	$	2,684

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2016

Summary of Assets and Liabilities Held for Sale and Operating Results from Discontinued Operations

The assets and liabilities held for sale at June 30, 2016 and December 31, 2015 were as follows:

	Albania		Morocco		TotalHeld for Sale
	(in thousands)
As of June 30, 2016
Assets
Cash	$	-	$	16	$	16
Other current assets		1,551		12		1,563
Total current assets held for sale	$	1,551	$	28	$	1,579
Liabilities
Accounts payable and other accrued liabilities	$	9,421	$	6,596	$	16,017
Total current liabilities held for sale	$	9,421	$	6,596	$	16,017
As of December 31, 2015
Assets
Cash	$	1,201	$	16	$	1,217
Other current assets		1,853		11		1,864
Property and equipment, net		48,430		-		48,430
Total current assets held for sale	$	51,484	$	27	$	51,511
Liabilities
Accounts payable and other accrued liabilities	$	37,888	$	6,352	$	44,240
Accounts payable - related party		3,540		-		3,540
Loans payable		6,123		-		6,123
Deferred tax liability		15,286		-		15,286
Total current liabilities held for sale	$	62,837	$	6,352	$	69,189

Our operating results from discontinued operations for the three and six months ended June 30, 2016 and 2015 are summarized as follows:

	Albania			Morocco		Total
	(in thousands)
For the three months ended June, 2016
Total revenues	$	-		$	-	$	-
Production and transportation expense		-			-		-
Total other costs and expenses		118			-		118
Loss before income taxes	$	(118	)	$	-	$	(118	)
Gain on disposal of discontinued operations		-			-		-
Income tax benefit		-			-		-
Loss from discontinued operations	$	(118	)	$	-	$	(118	)
For the three months ended June, 2015
Total revenues	$	3,437		$	-	$	3,437
Production and transportation expense		3,763			-		3,763
Total other costs and expenses		1,801			-		1,801
Total other income		(8	)		-		(8	)
Loss before income taxes	$	(2,135	)	$	-	$	(2,135	)
Income tax benefit		574			-		574
Loss from discontinued operations	$	(1,561	)	$	-	$	(1,561	)
For the six months ended June, 2016
Total revenues	$	626		$	-	$	626
Production and transportation expense		1,155			-		1,155
Total other costs and expenses		527			-		527
Loss before income taxes	$	(1,056	)	$	-	$	(1,056	)
Gain on disposal of discontinued operations		749			-		749
Income tax benefit		204			-		204
Loss from discontinued operations	$	(103	)	$	-	$	(103	)
For the six months ended June, 2015
Total revenues	$	4,676		$	-	$	4,676
Production and transportation expense		6,138			-		6,138
Total other costs and expenses		3,836			-		3,836
Total other income		1,583			-		1,583
Loss before income taxes	$	(3,715	)	$	-	$	(3,715	)
Income tax benefit		683			-		683
Loss from discontinued operations	$	(3,032	)	$	-	$	(3,032	)

Debt

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

	June 30,			December 31,
	2016			2015
Fixed and floating rate loans	(in thousands)
2017 Notes	$	34,350		$	34,400
2017 Notes - Related Party		20,650			20,600
Senior Credit Facility		24,243			32,075
Unamortized deferred financing cost - Senior Credit Facility and    2017 Notes		(892	)		(1,260	)
TBNG credit facility		872			5,192
ANBE Note		3,593			3,592
West Promissory Notes		1,000			1,000
Loans payable		83,816			95,599
Less: current portion		28,816			40,599
Long-term portion	$	55,000		$	55,000

TransAtlantic Albania [Member]

Debt

As of the dates indicated, TransAtlantic Albania’s third-party debt consisted of the following:

	June 30,		December 31,
	2016		2015
Fixed and floating rate loans	(in thousands)
Term Loan Facility	$	-	$	6,123
Loans payable	$	-	$	6,123

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General - Additional Information (Detail) - Segment	6 Months Ended
	Jun. 30, 2016	Aug. 08, 2016
Nature Of Business [Line Items]
Number of operating segments	2
Subsequent Event [Member]
Nature Of Business [Line Items]
Percentage of common shares owned		36.00%

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Going Concern - Additional Information (Detail) - USD ($)		3 Months Ended		6 Months Ended
	Aug. 08, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 30, 2015
Going Concern [Line Items]
Net income (loss)		$ 6,662,000	$ 7,250,000	$ 12,213,000	$ 12,744,000
Adjustment for net (gain) loss from discontinued operations		118,000	$ 1,561,000	103,000	$ 3,032,000
Outstanding principal debt		84,700,000		84,700,000
Working capital deficit				19,800,000
Line of credit facility outstanding		83,816,000		83,816,000		$ 95,599,000
Restricted cash		7,168,000		7,168,000		3,758,000
Debt service obligation, 2016		29,700,000		29,700,000
Debt service obligation, 2017		55,000,000		55,000,000
Subsequent Event [Member]
Going Concern [Line Items]
Line of credit facility borrowing capacity	$ 17,900,000
Line of credit facility outstanding	23,300,000
Restricted cash	12,000,000
Senior Credit Facility [Member]
Going Concern [Line Items]
Borrowing base deficiency							$ 18,800,000
Line of credit facility outstanding		24,200,000		24,200,000
Line of credit facility, remaining borrowing capacity		$ 0		$ 0
Senior Credit Facility [Member] | Subsequent Event [Member]
Going Concern [Line Items]
Line of credit facility, repayment	900,000
13.0% convertible notes due in 2017 [Member] | Convertible Debt [Member]
Going Concern [Line Items]
Debt instrument interest rate stated percentage		13.00%		13.00%
Debt instrument extended maturity date				Apr. 01, 2019
Line of credit facility outstanding		$ 34,350,000		$ 34,350,000		$ 34,400,000
Line of Credit [Member] | Senior Credit Facility [Member]
Going Concern [Line Items]
Line of credit facility borrowing capacity		18,800,000		18,800,000
Line of credit facility outstanding		24,200,000		24,200,000
Line of credit facility, remaining borrowing capacity		0		0
Line of Credit [Member] | Senior Credit Facility [Member] | Subsequent Event [Member]
Going Concern [Line Items]
Line of credit facility borrowing capacity	17,900,000
Line of credit facility outstanding	23,300,000
Line of credit facility, repayment	$ 900,000
Line of Credit [Member] | Senior Credit Facility [Member] | BNP Paribas and IFC [Member]
Going Concern [Line Items]
Line of credit facility borrowing capacity		5,400,000		5,400,000			$ 5,400,000
Borrowing base deficiency		$ 18,800,000		$ 18,800,000

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Property and Equipment - Capitalized Costs under Successful Efforts Method for Oil and Natural Gas Properties (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property Plant And Equipment [Line Items]
Oil and natural gas properties, proved	$ 274,115	$ 271,080
Oil and natural gas properties, unproved	31,346	31,135
Gross oil and natural gas properties	305,461	302,215
Accumulated depletion	(154,645)	(139,002)
Net oil and natural gas properties	150,816	163,213
Turkey [Member]
Property Plant And Equipment [Line Items]
Oil and natural gas properties, proved	273,619	270,591
Oil and natural gas properties, unproved	31,346	31,135
Bulgaria [Member]
Property Plant And Equipment [Line Items]
Oil and natural gas properties, proved	$ 496	$ 489

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Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Property Plant And Equipment [Line Items]
Proved development wells excluded from depletion	$ 0.1	$ 0.1	$ 0.7
Acquisition costs of proved properties		18.8	20.0
Well costs and additional development costs	100.6	100.6	111.4
Exploratory dry hole costs	0.1	1.4
Inventory [Member]
Property Plant And Equipment [Line Items]
Property plant and equipment excluded from depreciation	21.0	21.0	$ 21.3
Hayrabolu-10 well [Member] | Turkey [Member]
Property Plant And Equipment [Line Items]
Exploratory drilling costs capitalized	1.3	1.3
Pinar - 1 well [Member] | Turkey [Member]
Property Plant And Equipment [Line Items]
Exploratory drilling costs capitalized	$ 2.2	$ 2.2

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Property and Equipment - Historical Cost of Equipment and Other Property on Gross Basis with Accumulated Depreciation (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property Plant And Equipment [Line Items]
Gross equipment and other property	$ 36,426	$ 36,708
Accumulated depreciation	(10,078)	(9,216)
Net equipment and other property	26,348	27,492
Inventory [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	20,978	21,338
Leasehold improvements, office equipment and software [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	7,836	7,794
Gas gathering system and facilities [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	4,821	4,798
Other equipment [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	2,390	2,378
Vehicles [Member]
Property Plant And Equipment [Line Items]
Gross equipment and other property	$ 401	$ 400

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Asset Retirement Obligations - Changes in Asset Retirement Obligations (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations at beginning of period			$ 9,237	$ 10,543	$ 10,543
Change in estimates					385
Foreign exchange change effect			59		(2,137)
Additions					78
Accretion expense	$ 96	$ 93	188	$ 189	368
Asset retirement obligations at end of period	9,484		9,484		9,237
Long-term portion	$ 9,484		$ 9,484		$ 9,237

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Commodity Derivative Instruments - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivative Instruments And Hedging Activities Disclosure [Abstract]
(Loss) gain on commodity derivative contracts	$ (3,003)	$ (3,274)	$ (2,232)	$ 538

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Commodity Derivative Instruments - Fair Value of Derivative Instruments of Future Crude Oil Production (Detail) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016 USD ($) $ / bbl bbl	Dec. 31, 2015 USD ($) $ / bbl bbl
Derivatives Fair Value [Line Items]
Estimated Fair Value of Asset	$ 2,914	$ 6,605
Put [Member] | July 1, 2016 - December 31, 2016 [Member]
Derivatives Fair Value [Line Items]
Quantity (Bbl/day) | bbl	738
Collars Weighted Average Minimum Price (per Bbl) | $ / bbl	50.00
Estimated Fair Value of Asset	$ 336
Put [Member] | January 1, 2017 - December 31, 2017 [Member]
Derivatives Fair Value [Line Items]
Quantity (Bbl/day) | bbl	610	610
Collars Weighted Average Minimum Price (per Bbl) | $ / bbl	50.00	50.00
Estimated Fair Value of Asset	$ 1,190	$ 1,798
Put [Member] | January 1, 2018 - December 31, 2018 [Member]
Derivatives Fair Value [Line Items]
Quantity (Bbl/day) | bbl	494	494
Collars Weighted Average Minimum Price (per Bbl) | $ / bbl	50.00	50.00
Estimated Fair Value of Asset	$ 1,135	$ 1,292
Put [Member] | January 1, 2019 - March 31, 2019 [Member]
Derivatives Fair Value [Line Items]
Quantity (Bbl/day) | bbl	443	443
Collars Weighted Average Minimum Price (per Bbl) | $ / bbl	50.00	50.00
Estimated Fair Value of Asset	$ 253	$ 280
Put [Member] | January 1, 2016 - December 31, 2016 [Member]
Derivatives Fair Value [Line Items]
Quantity (Bbl/day) | bbl		808
Collars Weighted Average Minimum Price (per Bbl) | $ / bbl		50.00
Estimated Fair Value of Asset		$ 3,235

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Commodity Derivative Instruments - Summary of Gross Fair Value of Commodity Derivative Instruments by Balance Sheet Classification (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Derivatives Fair Value [Line Items]
Estimated Fair Value of Asset	$ 2,914	$ 6,605
Net Amount of Assets Presented in the Consolidated Balance Sheet, Current assets	913	3,235
Net Amount of Assets Presented in the Consolidated Balance Sheet, Long-term assets	2,001	3,370
Crude Oil | Current Assets [Member]
Derivatives Fair Value [Line Items]
Estimated Fair Value of Asset	913	3,235
Crude Oil | Long Term Assets [Member]
Derivatives Fair Value [Line Items]
Estimated Fair Value of Asset	$ 2,001	$ 3,370

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Loans Payable - Debt (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Loans payable	$ 83,816	$ 95,599
Less: current portion	28,816	40,599
Long-term portion	55,000	55,000
Senior Credit Facility [Member]
Debt Instrument [Line Items]
Loans payable	24,243	32,075
13.0% convertible notes due in 2017 [Member] | Convertible Debt [Member]
Debt Instrument [Line Items]
Loans payable	34,350	34,400
13.0% Convertible Notes due in 2017 and Senior Credit Facility [Member]
Debt Instrument [Line Items]
Unamortized deferred financing cost	(892)	(1,260)
TBNG credit facility [Member]
Debt Instrument [Line Items]
Loans payable	872	5,192
ANBE Note [Member]
Debt Instrument [Line Items]
Loans payable	3,593	3,592
West Promissory Notes [Member]
Debt Instrument [Line Items]
Loans payable	1,000	1,000
Related Party [Member] | 13.0% convertible notes due in 2017 [Member] | Convertible Debt [Member]
Debt Instrument [Line Items]
Loans payable	$ 20,650	$ 20,600

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Loans Payable - Additional Information (Detail) - USD ($)						6 Months Ended
	Aug. 08, 2016	Jun. 30, 2016	Apr. 19, 2016	Aug. 21, 2015	May 06, 2014	Jun. 30, 2016	Dec. 31, 2015	Dec. 30, 2015	Aug. 31, 2015
Line Of Credit Facility [Line Items]
Loans payable		$ 83,816,000				$ 83,816,000	$ 95,599,000
Restricted cash		$ 7,168,000				$ 7,168,000	3,758,000
Subsequent Event [Member]
Line Of Credit Facility [Line Items]
Line of credit facility borrowing capacity	$ 17,900,000
Loans payable	23,300,000
Restricted cash	12,000,000
Senior Credit Facility [Member]
Line Of Credit Facility [Line Items]
Borrowing base deficiency								$ 18,800,000
Description of variable rate basis						LIBOR plus 7.00% per annum (7.63% at June 30, 2016)
Debt instrument basis spread on variable rate		7.63%	7.00%
Lenders aggregate commitments			$ 30,500,000
Individual commitments			$ 15,200,000
Loans payable		$ 24,200,000				$ 24,200,000
Line of credit facility, remaining borrowing capacity		$ 0				$ 0
Senior Credit Facility [Member] | Subsequent Event [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, repayment	900,000
13.0% convertible notes due in 2017 [Member] | Private Placement [Member]
Line Of Credit Facility [Line Items]
Common stock, shares issued for cash interest		2,905,737				2,905,737
13.0% convertible notes due in 2017 [Member] | Convertible Debt [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 34,350,000				$ 34,350,000	34,400,000
Notes payable		$ 55,000,000				$ 55,000,000
Debt instrument interest rate stated percentage		13.00%				13.00%
Debt Instrument, Maturity Date						Jul. 01, 2017
Debt Instrument, Convertible, Conversion Ratio		$ 6.80				$ 6.80
West Promissory Notes [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 1,000,000				$ 1,000,000	1,000,000
West Promissory Notes [Member] | TransAtlantic USA [Member]
Line Of Credit Facility [Line Items]
Line of credit facility borrowing capacity		1,000,000				1,000,000
Loans payable				$ 500,000
Debt instrument interest rate stated percentage				9.00%
Debt Instrument, Maturity Date				Oct. 01, 2016
Line Of Credit Facility Maximum Borrowing Capacity									$ 1,500,000
ANBE Note [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 3,593,000				$ 3,593,000	$ 3,592,000
ANBE Note [Member] | TransAtlantic USA [Member] | Convertible Promissory Note [Member]
Line Of Credit Facility [Line Items]
Line of credit facility borrowing capacity								$ 3,600,000
Debt instrument interest rate stated percentage								13.00%
Debt Instrument, Maturity Date						Jun. 30, 2016
Debt Instrument, Convertible, Conversion Ratio		$ 1.3755				$ 1.3755
Line Of Credit Facility Maximum Borrowing Capacity								$ 5,000,000
Debit instrument, percentage of conversion price per common share						105.00%
Extender ANBE Note [Member] | TransAtlantic USA [Member] | Convertible Promissory Note [Member]
Line Of Credit Facility [Line Items]
Line of credit facility borrowing capacity		$ 3,600,000				$ 3,600,000
Line of credit facility, remaining borrowing capacity		$ 1,400,000				$ 1,400,000
Debt Instrument, Maturity Date						Aug. 31, 2016
Extender ANBE Note [Member] | Private Placement [Member]
Line Of Credit Facility [Line Items]
Common stock, shares issued for cash interest		355,826				355,826
Line of Credit [Member] | Senior Credit Facility [Member]
Line Of Credit Facility [Line Items]
Line of credit facility borrowing capacity		$ 18,800,000				$ 18,800,000
Loans payable		24,200,000				24,200,000
Line of credit facility, remaining borrowing capacity		0				$ 0
Line of Credit [Member] | Senior Credit Facility [Member] | Subsequent Event [Member]
Line Of Credit Facility [Line Items]
Line of credit facility borrowing capacity	17,900,000
Loans payable	23,300,000
Line of credit facility, repayment	$ 900,000
BNP Paribas and IFC [Member] | Line of Credit [Member] | Senior Credit Facility [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, initiation date						May 06, 2014
Line of credit facility borrowing capacity		5,400,000				$ 5,400,000		$ 5,400,000
Borrowing base deficiency		18,800,000				$ 18,800,000
Description of variable rate basis						LIBOR plus 5.00% per annum (5.63% at June 30, 2016)
Debt instrument basis spread on variable rate					5.00%	5.63%
Field life coverage ratio for debt value calculation						150.00%
Loan life coverage ratio for debt value calculation						130.00%
Turkish Bank [Member] | Line of Credit [Member] | TBNG Credit Facility [Member]
Line Of Credit Facility [Line Items]
Loans payable		$ 900,000				$ 900,000
Monthly principal installment payment start date						Aug. 29, 2016
Turkish Bank [Member] | Line of Credit [Member] | TBNG Credit Facility [Member] | Mitchell, and his Children [Member]
Line Of Credit Facility [Line Items]
Line of credit facility ownership percentage						97.50%

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Contingencies Relating to Production Leases and Exploration Permits - Additional Information (Detail) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 30, 2014	Feb. 28, 2013	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2014	Dec. 31, 2012	Apr. 17, 2016	Mar. 15, 2016	Oct. 31, 2015
Loss Contingencies [Line Items]
General and administrative			$ 3,899,000	$ 6,692,000	$ 8,742,000	$ 13,815,000
Direct Petroleum Exploration, LLC [Member] | Deventci-R2 well [Member]
Loss Contingencies [Line Items]
Contingent liability reversed	$ 2,500,000
Amendment [Member] | Direct Petroleum Exploration, LLC [Member]
Loss Contingencies [Line Items]
Settlement agreement on common shares issued									225,000	225,000
Amendment [Member] | Direct Petroleum Exploration, LLC [Member] | Common Shares [Member]
Loss Contingencies [Line Items]
Liquidated damages of common shares, value							$ 5,000,000
Morocco | Government
Loss Contingencies [Line Items]
Recovery of contractual obligations								$ 5,500,000
Bank guarantee		$ 1,000,000
Accrued liabilities relating to our Tselfat exploration permit								5,000,000
Bulgaria [Member]
Loss Contingencies [Line Items]
Recovery of contractual obligations								2,000,000
Estimated Litigation Liability											$ 200,000
Bulgaria [Member] | Aglen Exploration Permit Work Program [Member]
Loss Contingencies [Line Items]
General and administrative								$ 2,000,000

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Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended		6 Months Ended
	Jun. 30, 2016	Apr. 17, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Dilutive securities included in the calculation of diluted earnings per share			0		0
Restricted Stock Units [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense			$ 0.2	$ 0.2	$ 0.4	$ 0.5
Unrecognized compensation expense	$ 0.6		$ 0.6		$ 0.6
Unrecognized compensation expense recognition period					1 year 6 months
Direct Petroleum Exploration, LLC [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Issuance of common shares		225,000
Private Placement [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Issuance of common shares	5,773,305
Issuance of common shares, price per share	$ 0.6599		$ 0.6599		$ 0.6599
Threshold percentage of common share weighted average price	75.00%
Threshold trading period of common share weighted average price	10 days
Private Placement [Member] | 2017 Notes [Member}
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Issuance of common shares	2,511,742
Common shares issued for debt conversion	2,905,737
Private Placement [Member] | ANBE Note [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common shares issued for debt conversion	355,826

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Shareholders' Equity - Basic and Diluted Earnings Per Common Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Equity [Abstract]
Net loss from continuing operations	$ (6,544)	$ (5,689)	$ (12,110)	$ (9,712)
Net loss from discontinued operations	$ (118)	$ (1,561)	$ (103)	$ (3,032)
Weighted average common shares outstanding	41,001	40,973	40,870	40,870
Continuing operations	$ (0.16)	$ (0.14)	$ (0.30)	$ (0.24)
Discontinued operations	$ 0.00	$ (0.04)	$ 0.00	$ (0.07)
Weighted average common shares outstanding	41,001	40,973	40,870	40,870
Continuing operations	$ (0.16)	$ (0.14)	$ (0.30)	$ (0.24)
Discontinued operations	$ 0.00	$ (0.04)	$ 0.00	$ (0.07)

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Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016 Segment
Segment Reporting [Abstract]
Number of reportable geographic segments	2

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Segment Information - Financial Information of Geographic Segments (Detail) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total revenues		$ 17,698	$ 25,053	$ 33,264	$ 50,810
(Loss) income from continuing operations before income taxes		(4,695)	(4,301)	(8,514)	(6,693)
Capital expenditures		911	4,526	3,191	10,980
Segment assets	[1]		228,772		228,772	$ 246,678
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
(Loss) income from continuing operations before income taxes		(3,990)	(5,405)	(8,990)	(11,903)
Capital expenditures			108		163
Segment assets	[1]		10,477		10,477	14,689
Operating Segments [Member] | Turkey [Member]
Segment Reporting Information [Line Items]
Total revenues		17,698	25,053	33,264	50,810
(Loss) income from continuing operations before income taxes		(567)	4,970	679	9,177
Capital expenditures		911	4,418	3,191	10,776
Segment assets	[1]		217,677		217,677	231,388
Operating Segments [Member] | Bulgaria [Member]
Segment Reporting Information [Line Items]
(Loss) income from continuing operations before income taxes		$ (138)	(3,866)	$ (203)	(3,967)
Capital expenditures					41
Segment assets	[1]		$ 618		$ 618	$ 601

[1] Excludes assets from our discontinued Albanian and Moroccan operations of $1.6 million and $51.5 million at June 30, 2016 and December 31, 2015, respectively.

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Segment Information - Financial Information of Geographic Segments (Parenthetical) (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Segment Reporting [Abstract]
Assets from discontinued operations and services	$ 1.6	$ 51.5

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Financial Instruments - Additional Information (Detail) - 6 months ended Jun. 30, 2016 TRY in Millions, $ in Millions	USD ($) Institution	TRY
Financial Statement Line Items With Differences In Reported Amount And Reporting Currency Denominated Amounts [Line Items]
Currency risk descriptions	We have underlying foreign currency exchange rate exposure. Our currency exposures relate to transactions denominated in the Canadian Dollar, Bulgarian Lev, European Union Euro, Romanian New Leu and Turkish Lira (“TRY”). 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 June 30, 2016, we had 28.6 million TRY (approximately $9.9 million) in cash and cash equivalents and restricted cash, which exposes us to exchange rate risk based on fluctuations in the value of the TRY.
Number of financial institutions	3
Cash and cash equivalents and restricted cash [Member]
Financial Statement Line Items With Differences In Reported Amount And Reporting Currency Denominated Amounts [Line Items]
Cash and cash equivalents	$ 9.9	TRY 28.6

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Financial Instruments - Valuation of Financial Assets and Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (liabilities), fair value	$ (66,994)	$ (67,934)
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (liabilities), fair value	2,914	6,605
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (liabilities), fair value	(69,908)	(74,539)
Measured on a recurring basis [Member] | Derivative Financial Instruments (commodity) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, fair value	2,914	6,605
Measured on a recurring basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivative Financial Instruments (commodity) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, fair value	2,914	6,605
Disclosed but not carried at fair value [Member] | 2017 Notes [Member}
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(47,826)	(44,489)
Disclosed but not carried at fair value [Member] | Senior Credit Facility [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(22,082)	(30,050)
Disclosed but not carried at fair value [Member] | Significant Unobservable Inputs (Level 3) [Member] | 2017 Notes [Member}
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	(47,826)	(44,489)
Disclosed but not carried at fair value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Senior Credit Facility [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value	$ (22,082)	$ (30,050)

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Related Party Transactions - Related Party Accounts Receivable and Accounts Payable (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Total related party accounts receivable	$ 479	$ 414
Total related party accounts payable	2,122	2,684
Riata Management Service Agreement [Member]
Related Party Transaction [Line Items]
Total related party accounts receivable	230	194
Total related party accounts payable	304	384
PSIL MSA [Member]
Related Party Transaction [Line Items]
Total related party accounts receivable	249
Total related party accounts payable	$ 1,818
Viking International Master Services Agreement [Member]
Related Party Transaction [Line Items]
Total related party accounts receivable		220
Total related party accounts payable		$ 2,300

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Related Party Transactions - Additional Information (Detail) - USD ($)				6 Months Ended
	Jun. 30, 2016	May 09, 2016	Apr. 19, 2016	Jun. 30, 2016	Dec. 31, 2015	Jun. 13, 2012
Related Party Transaction [Line Items]
Note receivable - related party	$ 7,964,000			$ 7,964,000	$ 11,500,000	$ 11,500,000
Payment Guarantee
Related Party Transaction [Line Items]
Payment of director and officer liability premium		$ 400,000
Private Placement [Member]
Related Party Transaction [Line Items]
Issuance of common shares	5,773,305
ANBE Note [Member] | Private Placement [Member]
Related Party Transaction [Line Items]
Issuance of common shares	355,826
Dalea and Funds [Member] | Private Placement [Member] | Cash [Member]
Related Party Transaction [Line Items]
Issuance of common shares	814,627
Dalea and Funds [Member] | 2017 Notes [Member}
Related Party Transaction [Line Items]
Payment of common shares	201,459			201,459
Dalea and Funds [Member] | 2017 Notes [Member} | Private Placement [Member]
Related Party Transaction [Line Items]
Issuance of common shares	1,974,452
Viking International Master Services Agreement [Member]
Related Party Transaction [Line Items]
Service agreements term				5 years
Service agreements expiration date				Jun. 13, 2017
Joint Venture [Member] | Promissory Note [Member] | Dalea and Funds [Member]
Related Party Transaction [Line Items]
Note receivable - related party			$ 7,964,053
Cancellation of purchase price in promissory note			$ 3,500,000
Debt Instrument, Maturity Date			Jun. 13, 2019
Debt instrument interest rate stated percentage			3.00%
Promissory note, collateral amount			$ 2,000,000
Dalea Promissory Note [Member]
Related Party Transaction [Line Items]
Promissory notes default remedy period			30 days
Dalea Promissory Note [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Noncontrolling equity voting interest percentage			50.00%

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Discontinued Operations - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Apr. 19, 2016	Feb. 29, 2016	Dec. 31, 2015
Discontinued Operations And Disposal Groups [Line Items]
Disposal group, accounts payable and accrued liabilities	$ 16,017			$ 44,240
Disposal group, debt				6,123
Loans payable	$ 83,816			95,599
TransAtlantic Albania [Member]
Discontinued Operations And Disposal Groups [Line Items]
Loans payable				6,123
TransAtlantic Albania [Member] | Term Loan Facility [Member]
Discontinued Operations And Disposal Groups [Line Items]
Loans payable				6,100
Debt failure to paid, amount				1,100
TransAtlantic Albania [Member] | Raiffeisen Bank Sh A | Term Loan Facility [Member] | Line of Credit [Member]
Discontinued Operations And Disposal Groups [Line Items]
Line of credit facility expiration date	Dec. 31, 2016
Line of Credit Facility, Frequency of Payments	TransAtlantic Albania was a party to the Term Loan Facility with Raiffeisen. The loan was scheduled to mature on December 31, 2016 and bore interest at the rate of LIBOR plus 5.5%, with a minimum interest rate of 7.0%. TransAtlantic Albania was required to pay 1/16th of the total commitment each quarter on the last business day of each of March, June, September and December each year.
Penalty Plus Breakage Costs	3.00%
TransAtlantic Albania [Member] | Raiffeisen Bank Sh A | Term Loan Facility [Member] | Line of Credit [Member] | LIBOR [Member]
Discontinued Operations And Disposal Groups [Line Items]
Debt instrument basis spread on variable rate	5.50%
Minimum [Member] | TransAtlantic Albania [Member] | Raiffeisen Bank Sh A | Term Loan Facility [Member] | Line of Credit [Member] | LIBOR [Member]
Discontinued Operations And Disposal Groups [Line Items]
Revolving Credit Facility With Company Libor Minimum Rate	7.00%
Albania [Member]
Discontinued Operations And Disposal Groups [Line Items]
Disposal group, accounts payable and accrued liabilities	$ 9,421			37,888
Disposal group, debt				$ 6,123
Albania [Member] | Stream Oil and Gas Ltd [Member]
Discontinued Operations And Disposal Groups [Line Items]
Receivable from sale of outstanding equities			$ 2,300
Disposal group, liabilities			29,200
Disposal group, accounts payable and accrued liabilities			23,100
Disposal group, debt			6,100
Albania [Member] | Stream Oil and Gas Ltd [Member] | Delvina Natural Gas [Member]
Discontinued Operations And Disposal Groups [Line Items]
Disposal group, liabilities			12,900
Disposal group, liabilities indemnified		$ 9,500	$ 12,900
Albania [Member] | Stream Oil and Gas Ltd [Member] | Maximum [Member]
Discontinued Operations And Disposal Groups [Line Items]
Option to acquire ownership interest, percentage			25.00%

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Discontinued Operations - Assets and Liabilities Held for Sale (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets
Cash	$ 16	$ 1,217
Other current assets	1,563	1,864
Property and equipment, net		48,430
Total current assets held for sale	1,579	51,511
Liabilities
Accounts payable and other accrued liabilities	16,017	44,240
Accounts payable - related party		3,540
Loans payable		6,123
Deferred tax liability		15,286
Total current liabilities held for sale	16,017	69,189
Albania [Member]
Assets
Cash		1,201
Other current assets	1,551	1,853
Property and equipment, net		48,430
Total current assets held for sale	1,551	51,484
Liabilities
Accounts payable and other accrued liabilities	9,421	37,888
Accounts payable - related party		3,540
Loans payable		6,123
Deferred tax liability		15,286
Total current liabilities held for sale	9,421	62,837
Morocco
Assets
Cash	16	16
Other current assets	12	11
Total current assets held for sale	28	27
Liabilities
Accounts payable and other accrued liabilities	6,596	6,352
Total current liabilities held for sale	$ 6,596	$ 6,352

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Discontinued Operations - Summary of Third Party Debt (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Loans payable	$ 83,816	$ 95,599
TransAtlantic Albania [Member]
Debt Instrument [Line Items]
Loans payable		6,123
TransAtlantic Albania [Member] | Term Loan Facility [Member]
Debt Instrument [Line Items]
Loans payable		$ 6,123

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Discontinued Operations - Operating Results from Discontinued Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Discontinued Operations And Disposal Groups [Line Items]
Total revenues		$ 3,437	$ 626	$ 4,676
Production and transportation expense		3,763	1,155	6,138
Total other costs and expenses	$ 118	1,801	527	3,836
Total other income		(8)		1,583
Loss before income taxes	(118)	(2,135)	(1,056)	(3,715)
Gain on disposal of discontinued operations			749
Income tax benefit		574	204	683
Net loss from discontinued operations	(118)	(1,561)	(103)	(3,032)
Albania [Member]
Discontinued Operations And Disposal Groups [Line Items]
Total revenues		3,437	626	4,676
Production and transportation expense		3,763	1,155	6,138
Total other costs and expenses	118	1,801	527	3,836
Total other income		(8)		1,583
Loss before income taxes	(118)	(2,135)	(1,056)	(3,715)
Gain on disposal of discontinued operations			749
Income tax benefit		574	204	683
Net loss from discontinued operations	$ (118)	$ (1,561)	$ (103)	$ (3,032)