GBC Oil takes over TransAtlantic Albania oil assets

TransAtlantic Holdings announced the completion of its divestiture of its Albanian oil assets, a summary of year-end 2015 reserves and its entry into a new master services agreement. Company entered into and closed a share purchase agreement with GBC Oil Company Ltd. (“GBC Oil”) for the sale of its Albanian oil assets.

On February 29, 2016, TransAtlantic Holdings, B.C. (“TAT Holdings”), a subsidiary of the Company, entered into and closed a Share Purchase Agreement (the “Purchase Agreement”) with GBC Oil.  Pursuant to the Purchase Agreement, TAT Holdings sold all of the equity interests in Stream Oil & Gas Ltd. (“Stream”), a subsidiary of TAT Holdings, to GBC Oil in exchange for (i) the future payment of $2.3 million to Raiffeisen Sh.A (“Raiffeisen”) to pay down a term loan facility (the “Term Loan Facility”) dated as of September 17, 2014 between Stream’s subsidiary, TransAtlantic Albania Ltd. (“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. In addition, GBC Oil issued a warrant to TAT Holdings pursuant to which TAT Holdings has the right 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.

The Purchase Agreement contains representations, warranties, covenants and indemnification provisions customary for transactions of this type. In addition, TAT Holdings has indemnified GBC Oil and Stream for approximately $12.9 million of liabilities related to the Delvina gas operations, which may be assumed by a subsidiary of the Company as described below.

Pursuant to the Purchase Agreement, TransAtlantic Albania executed an assignment and assumption agreement pursuant to which TransAtlantic Albania will assign its Delvina gas assets and approximately $12.9 million of associated liabilities (the “Delvina Assets and Liabilities”) to Delvina Gas Company Ltd. (“DelvinaCo”), a newly formed, wholly-owned subsidiary of the Company, to be effective immediately upon receipt of required contractual and governmental consents and the expiration of required notice periods.  TAT Holdings and GBC Oil have agreed to use commercially reasonable efforts to obtain the required contractual and governmental consents for the assignment of the Delvina Assets and Liabilities.  There is no assurance that TAT Holdings will be able to obtain the required contractual and governmental consents.

The Company is currently negotiating a joint venture with a third party for the purchase of a portion of DelvinaCo.  There is no assurance that the Company will be able to complete a joint venture for the purchase of a portion of DelvinaCo.