Molla (100% working interest)
. TransAtlantic recently drilled the Bahar-1 well at a location approximately seven miles (11 kilometers) north of the Goksu wells. During drilling, oil shows were encountered in the Hazro and Mardin formations and oil and natural gas was encountered in the Bedinan. Approximately 40 feet (12 meters) of core was taken from the Dadaş shale formation. The Bedinan has not previously been shown to be productive in this immediate area. After perforation, the well has recovered 36 API oil and 1,200 btu natural gas but has high skin damage. TransAtlantic plans to stimulate the Bedinan, after which the Company expects to perform a vertical fracture stimulation into the Dadaş shale while the frac crew is in southeastern Turkey. TransAtlantic plans to spud a horizontal well targeting the Dadaş shale later in 2012 or in early 2013.
The Company expects to spud the Goksu-3H during the third quarter of 2012, targeting the Mardin formation at an offsetting location to the Goksu-1 and Goksu-2 locations. The well is being planned to include a 3,000 foot (1,000 meter) horizontal section.
Gaziantep (62.5% working interest)
. TransAtlantic and its partners have recently drilled the Alibey-1H, the Company's first horizontal well drilled in Turkey. The well has been logged and is awaiting completion while log data is fully analyzed. Extensive natural fractures were identified during logging.
Selmo (100% working interest)
. Net sales at the Selmo oil field in the second quarter of 2012 averaged approximately 2,223 bbls per day, compared to approximately 2,268 bbls per day in the second quarter of 2011 and 2,225 bbls per day during the first quarter of 2012. During the second quarter of 2012, the Company completed three wells and began drilling activity on four additional wells. TransAtlantic expects to frac approximately 15 new and existing wells in the Selmo field during August and September 2012.
Arpatepe (50% working interest)
. Net sales at the Arpatepe oil field averaged 107 bbls per day during the second quarter of 2012, as compared to approximately 125 bbls per day in the second quarter of 2011 and 111 bbls per day during the first quarter of 2012. During the second quarter of 2012, the non-operated Arpatepe-5 development well was placed onto production at an initial seven day average gross rate of 63 bbls per day. The Arpatepe-6 well is awaiting completion. The Company's working interest partner recently reached total depth on the Bati Arpatepe-1 well, which is currently awaiting completion.
The Company expects net production during the third quarter of 2012 to average between approximately 4,200 and 4,300 boe per day, with an exit rate influenced by the late quarter benefit of the Selmo frac program. TransAtlantic currently has four operated rigs running, including two rigs in the Thrace Basin and two rigs in southern Turkey. For the remainder of 2012, capital expenditures are expected to range between $50 million and $75 million. Approximately 50% of our planned spending will be directed toward the Thrace Basin, with the balance predominately directed toward projects in southeastern Turkey, including the Molla and Selmo fields.