Thrace BasinIn the Thrace Basin of northwestern Turkey, the Company's net sales of natural gas for the second quarter of 2012 averaged approximately 11.6 MMcf per day, compared to an average of approximately 9.1 MMcf per day in the second quarter 2011 and 14.9 MMcf per day in the three months ended March 31, 2012. Frac Program . TransAtlantic and its partners continue to advance the assessment phase of the Thrace Basin frac program and have recently executed the first three-stage frac completion. Since the program's inception, 32 re-entry fracs and 10 new drill completions have been executed including a single-stage, multi-zone completion and two multi-stage fracs. The program has entailed testing the productivity of individual zones within the Mezardere formation (Mezardere shale and Teslimkoy sands) in new and previously identified structures. Given the testing nature of the program, results have varied depending upon the structure, location and the characteristics of the individual zones being evaluated. In a development program, the Company expects to prioritize and optimize location and zone selection and stack multiple completions into a single wellbore, which is expected to improve average productivity per wellbore. To date, the Thrace Basin frac program has shown that natural gas trapped in some of the lower-porosity, lower-permeability zones of the Mezardere formation can be recovered via fracture stimulation. Deeper testing of the basin has identified approximately 1,000 additional meters of gas saturated sands that have zones with the right characteristics for hydrocarbon recovery. The program has also found indications that the deeper zones generally do not have enough permeability to economically produce the natural gas accumulations using current technology or generate water volumes that can challenge well economics. Using the information gathered to date, TransAtlantic and its partners have begun to delineate a distinct opportunity set from which to proceed with planning a continuous development program in the Tekirdag Field Area. Having established an optimal maximum vertical depth to drill each well and a probable range of completions per wellbore, the Company can better plan the logistics of current and future wells, which is expected to improve operational efficiency, reduce well costs and provide enough new production to more than offset base decline rates of existing production. The Tekirdag Field Area development program is currently expected to begin moving forward during the third quarter of 2012 with an expected ultimate spacing of 50-acres per well. While the frac crew executes a multi-well frac program in southeastern Turkey, the Company and its partners will continue drilling to build a completion inventory, and proceed with an ongoing comprehensive look-back analysis of the Thrace Basin frac program's drilling, completion and production activity.