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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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

As of ~~May 3, 2019,~~June 12, 2020, the registrant had ~~52,496,666~~62,719,448‬ common shares outstanding.

As previously disclosed in the Current Report on Form 8-K filed by TransAtlantic Petroleum Ltd. (together with its subsidiaries, “we,” “us,” “our,” the “Company,” or “TransAtlantic”) on May 14, 2020, we delayed the filing of this Quarterly Report on Form 10-Q due to circumstances related to the COVID-19 pandemic and in reliance on the order of the U.S. Securities and Exchange Commission (the “SEC”) under Section 36 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and certain rules thereunder (Release No. 34-88465) (the “Order”). The Order allows a registrant up to an additional 45 days after the original due date of certain reports required to be filed with the SEC if a registrant’s ability to file such report timely is affected due to COVID-19.

Our business has experienced disruptions due to the unprecedented conditions surrounding the COVID-19 pandemic, including, but not limited to, the limited availability of key personnel and professional advisors who are needed to prepare this Quarterly Report on Form 10-Q due in part to suggested and mandated social quarantining and work from home orders. This has, in turn, delayed our ability to prepare this Quarterly Report on Form 10-Q in a timely manner.

Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of applicable U.S. and Canadian securities legislation. Additionally, forward-looking statements may be made orally or in press releases, conferences, reports, on our website or otherwise, in the future, by us or on our behalf. Such statements are generally identifiable by the terminology used such as “plans,” “expects,” “estimates,” “budgets,” “intends,” “anticipates,” “believes,” “projects,” “indicates,” “targets,” “objective,” “could,” “should,” “may,” or other similar words.

By their very nature, forward-looking statements require us to make assumptions that may not materialize or that may not be accurate. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements, including the factors discussed under Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. Such factors include, but are not limited to, the following: our ability to continue as a going concern; well development results; access to sufficient ~~capital to fund our operations; fluctuations in and volatility of the~~capital; market prices for ~~oil and~~ natural gas, ~~products;~~natural gas liquids, and oil products, including price changes resulting from COVID-19 fears as well as oil oversupply concerns; estimates of reserves and economic assumptions; the ability to produce and transport natural gas, natural gas liquids, and oil ~~and natural gas;~~products, including price changes resulting from coronavirus fears as well as oil oversupply concerns; the results of exploration and development drilling and related activities; ~~global~~the effects of the coronavirus on our operations, demand for oil and natural gas as well as governmental actions in response to the coronavirus; economic conditions ~~particularly~~ in the countries and provinces in which we carry on business, especially economic slowdowns; actions by governmental ~~authorities including~~authorities; the unwinding of our hedges against a decline in the price of oil; receipt of required approvals; increases in ~~taxes,~~taxes; legislative and regulatory initiatives ~~related~~relating to fracture stimulation ~~activities,~~activities; changes in environmental and other ~~regulations, and~~regulations; renegotiations of contracts; political uncertainty, including sanctions, armed conflicts, and actions by insurgent ~~groups or other conflicts;~~groups; outcomes of litigation; the negotiation and closing of material contracts or sale of assets; future capital requirements and the availability of financing; risks associated with drilling, operating and decommissioning wells; actions of third-party co-owners of interests in properties in which we also own an interest;contracts; and the other factors discussed in other documents that we file with or furnish to the ~~U.S. Securities and Exchange Commission (the “SEC”)~~SEC and Canadian securities regulatory authorities. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are interdependent upon other factors and our course of action would depend upon our assessment of the future, considering all information then available. In that regard, any statements as to: liquidity; ability to continue as a going concern; COVID-19; access to sufficient capital; future oil or natural gas production levels; capital expenditures; asset sales; the allocation of capital expenditures to exploration and development activities; sources of funding for our capital expenditure programs or operations; drilling of new wells; demand for oil and natural gas products; expenditures and allowances relating to environmental matters; dates by which certain areas will be developed or will come on-stream; expected finding and development costs; future production rates; ultimate recoverability of reserves, including the ability to convert probable and possible reserves to proved reserves; dates by which transactions are expected to close; future cash flows, uses of cash flows, collectability of receivables and availability of trade credit; expected operating costs; changes in any of the foregoing; and other statements using forward-looking terminology are forward-looking statements, and there can be no assurance that the expectations conveyed by such forward-looking statements will, in fact, be realized.

Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on information available to us on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity, achievements or financial condition.

Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above, as well as others not now anticipated. The foregoing statements are not exclusive and further information concerning us, including factors that potentially could materially affect our financial results, may emerge from time to time. We do not intend to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements, except as required by law.

	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	19,734		$	9,892		$	12,780		$	9,664
Accounts receivable, net
Oil and natural gas sales		21,852			12,912			6,181			13,299
Joint interest and other		1,061			982			1,267			1,218
Related party		898			878			456			561
Prepaid and other current assets		9,304			8,696			12,380			12,375
Note receivable - related party		–			5,828
Inventory		4,830			5,167			3,763			7,091
Total current assets		57,679			44,355			36,827			44,208
Property and equipment:
Oil and natural gas properties (successful efforts method)
Proved		155,808			163,006			126,597			167,948
Unproved		15,195			15,695			10,872			12,978
Equipment and other property		13,559			14,408			12,947			10,202
		184,562			193,109			150,416			191,128
Less accumulated depreciation, depletion and amortization		(102,607	)		(105,850	)		(91,286	)		(106,610	)
Property and equipment, net		81,955			87,259			59,130			84,518
Other long-term assets:
Other assets		3,380			986			3,524			3,827
Note receivable - related party		4,609			–			3,732			3,951
Total other assets		7,989			986			7,256			7,778
Total assets	$	147,623		$	132,600		$	103,213		$	136,504
LIABILITIES, SERIES A PREFERRED SHARES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,074		$	3,896		$	3,189		$	4,555
Accounts payable - related party		2,667			2,922			6,985			4,262
Accrued liabilities		16,877			13,073			12,790			15,244
Derivative liability		110			–			–			966
Loans payable		21,186			22,000			10,643			17,143
Total current liabilities		46,914			41,891			33,607			42,170
Long-term liabilities:
Asset retirement obligations		4,490			4,667			3,602			4,749
Accrued liabilities		9,620			7,259			9,592			10,370
Deferred income taxes		20,531			20,314			18,747			22,728
Loans payable		15,714			–			–			2,857
Total long-term liabilities		50,355			32,240			31,941			40,704
Total liabilities		97,269			74,131			65,548			82,874
Commitments and contingencies
Series A preferred shares, $0.01 par value, 426,000 shares authorized; 426,000 shares issued and outstanding with a liquidation preference of $50 per share as of March 31, 2019 and December 31, 2018		21,300			21,300
Series A preferred shares-related party, $0.01 par value, 495,000 shares authorized; 495,000 shares issued and outstanding with a liquidation preference of $50 per share as of March 31, 2019 and December 31, 2018		24,750			24,750
Series A preferred shares, $0.01 par value, 100,000 shares authorized; 100,000 shares issued and outstanding with a liquidation preference of $50 per share as of March 31, 2020 and December 31, 2019								5,000			5,000
Series A preferred shares-related party, $0.01 par value, 821,000 shares authorized; 821,000 shares issued and outstanding with a liquidation preference of $50 per share as of March 31, 2020 and December 31, 2019								41,050			41,050
Shareholders' equity:
Common shares, $0.10 par value, 200,000,000 shares authorized; 52,496,666 shares and 52,413,588 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		5,249			5,241
Common shares, $0.10 par value, 200,000,000 shares authorized; 62,349,063 shares and 62,230,058 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively								6,235			6,223
Treasury stock		(970	)		(970	)		(970	)		(970	)
Additional paid-in-capital		577,493			577,488			582,426			582,359
Accumulated other comprehensive loss		(146,247	)		(142,021	)		(139,426	)		(147,347	)
Accumulated deficit		(431,221	)		(427,319	)		(456,650	)		(432,685	)
Total shareholders' equity		4,304			12,419
Total shareholders' equity (deficit)								(8,385	)		7,580
Total liabilities, Series A preferred shares and shareholders' equity	$	147,623		$	132,600		$	103,213		$	136,504

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

	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Revenues:
Oil and natural gas sales	$	18,861		$	16,661		$	8,343		$	18,861
Other		180			265			17			180
Total revenues		19,041			16,926			8,360			19,041
Costs and expenses:
Production		2,502			2,869			3,519			2,502
Transportation and processing		1,319			1,193			1,160			1,319
Exploration, abandonment and impairment		5,113			40			20,338			5,113
Seismic and other exploration		77			159			45			77
General and administrative		3,054			3,337			2,352			3,054
Depreciation, depletion and amortization		3,716			4,459			2,989			3,716
Accretion of asset retirement obligations		52			46			53			52
Total costs and expenses		15,833			12,103			30,456			15,833
Operating income (loss)		3,208			4,823			(22,096	)		3,208
Other income (expense):
Loss on sale								(10,128	)		-
Interest and other expense		(2,478	)		(2,782	)		(2,212	)		(2,478	)
Interest and other income		174			254			121			174
Loss on derivative contracts		(110	)		(725	)
Gain (loss) on derivative contracts								7,513			(110	)
Foreign exchange loss		(1,273	)		(2,058	)		(128	)		(1,273	)
Total other expense		(3,687	)		(5,311	)		(4,834	)		(3,687	)
Loss from operations before income taxes		(479	)		(488	)		(26,930	)		(479	)
Income tax expense		(3,423	)		(1,287	)
Income tax benefit (expense)								2,965			(3,423	)
Net loss		(3,902	)		(1,775	)		(23,965	)		(3,902	)
Other comprehensive income (loss):
Foreign currency translation adjustment		(4,226	)		(2,343	)		7,921			(4,226	)
Comprehensive loss	$	(8,128	)	$	(4,118	)	$	(16,044	)	$	(8,128	)

Net loss per common share
Basic net loss per common share	$	(0.07	)	$	(0.04	)	$	(0.38	)	$	(0.07	)
Weighted average common shares outstanding		52,483			50,374			62,310			52,483
Diluted net loss per common share	$	(0.07	)	$	(0.04	)	$	(0.38	)	$	(0.07	)
Weighted average common and common equivalent shares outstanding		52,483			50,374			62,310			52,483

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

Consolidated Statement of Equity for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019

																Accumulated																					Accumulated						Total
													Additional			Other						Total												Additional			Other						Shareholders'
	Common		Treasury					Common		Treasury			Paid-in			Comprehensive			Accumulated			Shareholders'			Common		Treasury		Common		Treasury			Paid-in			Comprehensive			Accumulated			Equity
	Shares		Shares		Warrants			Shares		Stock			Capital			Loss			Deficit			Equity
Balance at December 31, 2017		50,319		333		700		$	5,032	$	(970	)	$	575,411		$	(124,766	)	$	(422,103	)	$	32,604
Expiration of warrants		-		-		(700	)		-		-			-			-			-			-
Issuance of restricted stock units		64		-		-			6		-			(6	)		-			-			-
Share-based compensation		-		-		-			-		-			101			-			-			101
Tax effect of restricted stock		-		-		-			-		-			-			-			-			-
Foreign currency translation adjustment		-		-		-			-		-			-			(2,343	)		-			(2,343	)
Net loss		-		-		-			-		-			-			-			(1,775	)		(1,775	)
Balance at March 31, 2018		50,383		333		-		$	5,038	$	(970	)	$	575,506		$	(127,109	)	$	(423,878	)	$	28,587
																									Shares		Shares		Shares		Stock			Capital			Loss			Deficit			(Deficit)
Balance at December 31, 2018		52,413		333		–		$	5,241	$	(970	)	$	577,488		$	(142,021	)	$	(427,319	)	$	12,419			52,413		333	$	5,241	$	(970	)	$	577,488		$	(142,021	)	$	(427,319	)	$	12,419
Issuance of restricted stock units		83		-		-			8		-			(8	)		-			-			-			83		-		8		-			(8	)		-			-			-
Share-based compensation		-		-		-			-		-			102			-			-			102			-		-		-		-			102			-			-			102
Tax effect of restricted stock		-		-		-			-		-			(89	)		-			-			(89	)		-		-		-		-			(89	)		-			-			(89	)
Foreign currency translation adjustment		-		-		-			-		-			-			(4,226	)		-			(4,226	)		-		-		-		-			-			(4,226	)		-			(4,226	)
Net loss		-		-		-			-		-			-			-			(3,902	)		(3,902	)		-		-		-		-			-			-			(3,902	)		(3,902	)
Balance at March 31, 2019		52,496		333		-		$	5,249	$	(970	)	$	577,493		$	(146,247	)	$	(431,221	)	$	4,304			52,496		333	$	5,249	$	(970	)	$	577,493		$	(146,247	)	$	(431,221	)	$	4,304

Balance at December 31, 2019																										62,230		333	$	6,223	$	(970	)	$	582,359		$	(147,347	)	$	(432,685	)	$	7,580
Issuance of restricted stock units																										119		-		12		-			(12	)		-			-			-
Share-based compensation																										-		-		-		-			115			-			-			115
Tax effect of restricted stock																										-		-		-		-			(36	)		-			-			(36	)
Foreign currency translation adjustment																										-		-		-		-			-			7,921			-			7,921
Net loss																										-		-		-		-			-			-			(23,965	)		(23,965	)
Balance at March 31, 2020																										62,349		333	$	6,235	$	(970	)	$	582,426		$	(139,426	)	$	(456,650	)	$	(8,385	)

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

	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Operating activities:
Net loss	$	(3,902	)	$	(1,775	)	$	(23,965	)	$	(3,902	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation		102			101			115			102
Foreign currency loss		1,637			2,634			255			1,637
Loss on derivative contracts		110			725
(Gain) loss on derivative contracts								(7,513	)		110
Cash settlement on derivative contracts		–			(1,339	)		6,547			–
Loss on sale								10,128			–
Amortization on loan financing costs		10			10			7			10
Deferred income tax expense		1,769			767
Deferred income tax (benefit) expense								(1,804	)		1,769
Exploration, abandonment and impairment		5,113			40			20,338			5,113
Depreciation, depletion and amortization		3,716			4,459			2,989			3,716
Accretion of asset retirement obligations		52			46			53			52
Changes in operating assets and liabilities:
Accounts receivable		(10,216	)		(548	)		7,302			(10,216	)
Prepaid expenses and other assets		(3,757	)		(1,091	)		(950	)		(3,757	)
Accounts payable and accrued liabilities		9,880			3,781			589			9,880
Net cash provided by operating activities		4,514			7,810			14,091			4,514
Investing activities:
Additions to oil and natural gas properties		(9,326	)		(6,337	)		(2,937	)		(9,326	)
Additions to equipment and other properties		–			(677	)		(158	)		–
Proceeds from sale								1,451			–
Net used in provided by investing activities		(9,326	)		(7,014	)		(1,644	)		(9,326	)
Financing activities:
Tax withholding on restricted share units		(88	)		–			(36	)		(88	)
Note receivable - related party		1,000			–			–			1,000
Loan proceeds		20,000			–			–			20,000
Loan repayment		(5,100	)		(4,125	)		(9,357	)		(5,100	)
Net cash provided by (used in) financing activities		15,812			(4,125	)		(9,393	)		15,812
Effect of exchange rate on cash flows, cash equivalents, and restricted cash		(1,018	)		(716	)		62			(1,018	)
Net increase (decrease) in cash, cash equivalents and restricted cash		9,982			(4,045	)		3,116			9,982
Cash, cash equivalents and restricted cash, beginning of period (1)		9,892			20,431			9,804			9,892
Cash, cash equivalents and restricted cash, end of period (2)	$	19,874		$	16,386		$	12,920		$	19,874
Supplemental disclosures:
Cash paid for interest	$	526		$	3,104		$	1,851		$	526
Cash paid for taxes	$	1,178		$	657		$	214		$	1,178

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

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 ~~May 3, 2019,~~June 22, 2020, approximately ~~48%~~49.9% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors. Persons and entities associated with Mr. Mitchell also owned 739,000 of our 12.0% Series A Convertible Redeemable Preferred Shares (“Series A Preferred Shares”). Mr. Mitchell’s affiliates are currently prohibited from converting any of their Series A Preferred Shares to common shares if such conversion would cause Mr. Mitchell or his affiliates to obtain beneficial ownership in excess of 49.9% of the outstanding common shares; however, Mr. Mitchell, upon 61 days’ prior notice, may increase or decrease such percentage cap.

We are a holding company with two operating segments – Turkey and Bulgaria. Our assets consist of our ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

Our consolidated financial statements are expressed in U.S. ~~Dollar~~Dollars (“USD”) 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 USD unless otherwise indicated. The unaudited consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 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.

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 SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

~~During~~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 $24.0 million for the three months ended March 31, ~~2019,~~2020. At March 31, 2020, we ~~repaid $5.1~~had cash and cash equivalents of $12.8 million, ~~of outstanding~~$ 10.6 million in short-term debt, and ~~entered into~~a working capital surplus of $5.9 million, compared to cash and cash equivalents of $9.7 million, $2.9 million in long-term debt, $17.1 million in short-term debt and a working capital surplus of $2.0 million at December 31, 2019.

In March 2020, crude oil prices declined to approximately $25 per barrel for Brent crude as a result of market concerns about the economic impact from the COVID-19 as well as the ability of OPEC and Russia to agree on a perceived need to implement further production cuts in response to weaker worldwide demand. Since then, Brent crude prices have rebounded to approximately $39.00 per barrel as of June 12, 2020 and remain volatile and unpredictable. The current futures forward curve for Brent crude indicates that prices may continue at or near current prices for an extended time.

As a result of the decline in Brent crude prices, the current near term price outlook and resulting lower current and projected cash flows from operations, we have reduced our planned capital expenditures to those necessary for production lease maintenance and those projecting a return on invested capital at current prices. In order to mitigate the impact of reduced prices on our 2020 cash flows and liquidity, we implemented cost reduction measures to reduce our operating costs and general and administrative expenses. In

connection therewith, we intend to prioritize funding operating expenditures over general and administrative expenditures, whenever possible.

On March 9, 2020, we unwound our commodity derivative contracts with respect to our future crude oil production. In connection with these transactions, we received $6.5 million. In order to reduce future interest expense, we used these proceeds to pay down the 2019 Term Loan (as defined in Note 8. “Loans Payable”). On April 3, 2020, we entered into a new swap contract with DenizBank, A.S. (“DenizBank”), which hedged approximately 2,000 barrels of oil per day. The swap contract is in place from May 2020 through February 2021, has an ICE Brent Index strike price of $36.00 per barrel, and is settled monthly. Therefore, DenizBank is required to make a payment to us if the average monthly ICE Brent Index price is less than $36.00 per barrel, and we are required to make a payment to DenizBank if the average monthly ICE Brent Index price is greater than $36.00 per barrel.

Türkiye Petrol Rafinerileri A.Ş. (“TUPRAS”), a privately-owned oil refinery in Turkey, purchases substantially all of our crude oil production. The price of substantially all of the oil delivered pursuant to the purchase and sale agreement with TUPRAS is tied to Arab Medium oil prices adjusted upward based on an API adjustment, Suez Canal tariff costs, and freight charges. Recently, there has been a significant widening of the differential between the ICE Brent Index price and our realized oil prices. In 2018 and 2019, the average monthly differential between the ICE Brent Index Price and our realized oil prices was $2.44 and $0.17 per barrel, respectively. In April and May 2020, the average monthly differential between the ICE Brent Index Price and our realized oil prices was $6.90 and $8.34 per barrel, respectively. The widening of the differential between ICE Brent Index Price and our realized oil prices has rendered our hedges less effective, resulting in significantly lowered revenues. This differential may expand or contract in the future.

The price of the oil delivered pursuant to the purchase and sale agreement with TUPRAS is determined under the Petroleum Market Law No. 5015 under the laws of the Republic of Turkey. In November 2019, TUPRAS filed a lawsuit seeking restitution from us for ~~$20.0 million (see Note 7 “Loans Payable”~~alleged overpayments resulting from a February 2019 amendment to the Turkish domestic crude oil pricing formula under Petroleum Market Law No. 5015 (the “Pricing Amendment”). TUPRAS also claimed that the Pricing Amendment violates the Constitution of the Republic of Turkey and seeks to have the Pricing Amendment cancelled. Additionally, in April 2020, TUPRAS notified us that it intends to extend payment terms for oil purchases by 60 days. The outcome of the TUPRAS lawsuit and negotiations regarding the extension of payment terms is uncertain; however, a conclusion of the lawsuit in TUPRAS’s favor or an extension of payment terms would reduce or delay our cash flow and decrease our cash balances.

In the second quarter of 2020, we borrowed approximately $626,000 pursuant to the U.S. Payment Protection Program (the “PPP”) to cover certain payroll, benefit, and rent expenses. We have forecast that amounts borrowed or received pursuant to the PPP will be forgiven for cash flow purposes. New guidance on the criteria for forgiveness continues to be released. Additionally, in the second quarter of 2020, the Turkish government passed legislation permitting employers to reduce the working hours of employees, reducing payroll and benefit expenses, through the end of June 2020. The projected reduction in payroll and benefit expenses due to this legislation is approximately $360,000.

As of March 31, ~~2019,~~2020, we had ~~$15.7~~$10.6 million of ~~long-term debt, $21.2~~outstanding principal under the 2019 Term Loan. The 2019 Term Loan is payable in one monthly installment of $0.6 million in June 2020 and seven monthly installments of ~~short-term debt, $19.7~~$1.4 million plus accrued interest from July 2020 through the maturity date in February 2021. In addition, dividends on our Series A Preferred Shares are payable quarterly at our election in cash, common shares, or a combination of cash and common shares at an annual dividend rate of 12.0% of the liquidation preference if paid in cash or 16.0% of the liquidation preference if paid in common shares. If paid partially in cash and ~~a $10.8 million work capital surplus.~~ partially in common shares, the dividend rate on the cash portion is 12.0%, and the dividend rate on the common share portion is 16.0%. In order to conserve cash, we elected to pay the second dividend in 2020 in common shares.

~~Based~~As of the date hereof, based on ~~current forecasted oil prices for 2019 and beyond, we believe that our cash flows from operations and existing~~ cash on hand and projected future cash flow from operations, our current liquidity position is severely constrained and is forecast to worsen during 2020 as revenues are ~~sufficient~~insufficient to ~~conduct our planned operations and~~ meet our ~~contractual requirements, including license~~ordinary course expenditures and debt obligations. Based on our current cash flow forecasts, we may be unable to pay the scheduled monthly installments on the 2019 Term Loan in the fourth quarter of 2020 unless we can increase revenues, obtain additional financing, or restructure our current obligations. To date, we have been unable to restructure our current obligations ~~through June 30, 2020.~~or obtain additional financing to alleviate these liquidity issues. As a result, substantial doubt exists regarding our ability to continue as a going concern. Our management is actively pursuing improving our working capital position in order to remain a going concern for the foreseeable future.

2.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.

In ~~February~~June 2016, the Financial Accounting Standards Board (“FASB”) ~~issued Accounting Standards Update (“ASU”) No. 2016-02,~~ ~~Leases (Topic 842),~~ which establishes a new lease accounting model for leases. The most significant changes include the clarification of the definition of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. Expenses are recognized in the consolidated statement of income in a manner similar to current accounting guidance. Lessor accounting under the new standard is substantially unchanged. The new standard became effective for us beginning with the first quarter of 2019. We adopted the accounting standard using a prospective transition approach, which applied the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We also made an accounting policy election to keep leases with an initial term of

~~twelve months or less off of the consolidated balance sheet. On January 1, 2019, we also recognized $2.7 million of additional right-of-use assets and liabilities on our consolidated balance sheet.~~

~~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.

In ~~May 2017, the FASB issued ASU 2017-09,~~ ~~Scope of Modification Accounting, which clarifies Topic 718,~~ ~~Compensation – Stock Compensation~~ (“ASU 2017-09”), such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the modification and the ASU indicates that if the modification does not affect any of the inputs to the valuation technique used to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification. The ASU is effective for fiscal years beginning after December 15, 2017. We adopted ASU 2017-09 effective January 1, 2018. The adoption of this update had no impact our consolidated financial statements and results of operations.

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815)~~: Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification (“ASC”) Topic 815. The new standard provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and for interim periods therein. The Company adopted this standard effective January 1, 2019. The adoption of this update had no impact our consolidated financial statements and results of operations.

~~In June 2018, the FASB issued ASU 2018-07,~~ ~~Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting~~. This update applied the existing employee guidance to nonemployee share-based transactions, with the exception of specific guidance related to the attribution of compensation cost. This update is effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted this standard effective January 1, 2019. The adoption of this update had no impact on our consolidated financial statements and results of operations.

In November 2018, the FASB ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. This update clarifies that receivables arising from operating leases are not in scope of this topic, but rather Topic 842, ~~Leases.~~Leases. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We adopted this standard effective January 1, 2020. The ~~Company does not believe the~~ adoption of this ~~standard will have an~~update had no impact on ~~its~~our consolidated financial ~~statements.~~statements and results of operations.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. This update removes certain exceptions to the general principles in Topic 740 and provides clarifications related to certain franchise taxes, transactions with a government that result in a step-up in the tax basis of goodwill, allocation of current and deferred income tax expense and the annual effective tax rate. This update is effective January 1, 2021. We are currently assessing the potential impact of this update 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.

As of March 31, ~~2019~~2020 and ~~2018,~~2019, we had 921,000 outstanding ~~shares of our 12.0% Series A Convertible Redeemable Preferred Shares (“~~Series A Preferred ~~Shares”).~~Shares. The Series A Preferred Shares contain a substantive conversion option, are mandatorily redeemable and convert into a fixed number of common shares. As a result, under U.S. GAAP, we have classified the Series A Preferred Shares within mezzanine equity in our consolidated balance sheets. As of March 31, ~~2019,~~2020, there were ~~$21.3~~$5.0 million of Series A Preferred Shares and ~~$24.8~~$41.1 million of Series A Preferred Shares – related party outstanding (See Note ~~13.~~15. “Related party transactions”).

Pursuant to the Certificate of Designations for the Series A Preferred Shares ~~(the~~(as amended to date, the “Certificate of Designations”), each Series A Preferred Share may be converted at any time, at the option of the holder, into 45.754 common shares (which is equal to an initial

conversion price of approximately $1.0928 per common share and is subject to customary adjustments for stock splits, stock dividends, recapitalizations or other fundamental changes).

If not converted sooner, on November 4, 2024, we are required to redeem the outstanding Series A Preferred Shares in cash at a price per share equal to the liquidation preference plus accrued and unpaid dividends. At any time on or after November 4, 2020, we may redeem all or a portion of the Series A Preferred Shares at the redemption prices listed below (expressed as a percentage of the liquidation preference amount per share) plus accrued and unpaid dividends to the date of redemption, if the closing sale price of the common shares equals or exceeds 150% of the conversion price then in effect for at least 10 trading days (whether or not consecutive) in a period of 20 consecutive trading days, including the last trading day of such 20 trading day period, ending on, and including, the trading day immediately preceding the business day on which we issue a notice of optional redemption. The redemption prices for the 12-month period starting on the dates below are:

Additionally, upon the occurrence of a change of control (as defined in the Certificate of Designations), we are required to offer to redeem the Series A Preferred Shares within 120 days after the first date on which such change of control occurred, for cash at a redemption price equal to the liquidation preference per share, plus any accrued and unpaid dividends. A change of control excludes a transaction with Mr. Mitchell, his family members, and their affiliates.

Dividends on the Series A Preferred Shares are payable quarterly at our election in cash, common shares or a combination of cash and common shares at an annual dividend rate of 12.0% of the liquidation preference if paid all in cash or 16.0% of the liquidation preference if paid in common shares. If paid partially in cash and partially in common shares, the dividend rate on the cash portion is

12.0%, and the dividend rate on the common share portion is 16.0%. Dividends are payable quarterly on March 31, June 30, September 30, and December 31 of each ~~year.~~year, except for the first dividend payable after March 31, 2020, which dividend will be payable thirty business days following our public filing of this Quarterly Report on Form 10-Q. The holders of the Series A Preferred Shares also are entitled to participate pro-rata in any dividends paid on the common shares on an as-converted-to-common shares basis. For the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we paid $1.3 million in cash dividends on the Series A Preferred Shares, which is recorded in our consolidated statements of comprehensive (loss) income under the caption “Interest and other expense”.In order to conserve cash, we have elected to pay the second dividend in 2020 in common shares.

Except as required by Bermuda law, the holders of Series A Preferred Shares have no voting rights, except that for so long as at least 400,000 Series A Preferred Shares are outstanding, the holders of the Series A Preferred Shares voting as a separate class have the right to elect two directors to our Board of Directors. For so long as between 80,000 and 399,999 Series A Preferred Shares are outstanding, the holders of the Series A Preferred Shares voting as a separate class have the right to elect one director to our Board of Directors. Upon less than 80,000 Series A Preferred Shares remaining outstanding, any directors elected by the holders of Series A Preferred Shares shall immediately resign from our Board of Directors.

The Certificate of Designation also provides that without the approval of the holders of a majority of the outstanding Series A Preferred Shares, we will not issue indebtedness for money borrowed or other securities which are senior to the Series A Preferred Shares in excess of the greater of (i) $100 million or (ii) 35% of our PV-10 of proved reserves as disclosed in our most recent independent reserve report filed or furnished by us on EDGAR.

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

	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(in thousands)						(in thousands)
Oil and natural gas properties, proved:
Turkey	$	155,306		$	162,494		$	126,107		$	167,446
Bulgaria		502			512			490			502
Total oil and natural gas properties, proved		155,808			163,006			126,597			167,948
Oil and natural gas properties, unproved:
Turkey		15,195			14,965			10,872			12,978
Bulgaria		–			730
Total oil and natural gas properties, unproved		15,195			15,695			10,872			12,978
Gross oil and natural gas properties		171,003			178,701			137,469			180,926
Accumulated depletion		(97,449	)		(100,582	)		(86,281	)		(101,232	)
Net oil and natural gas properties	$	73,554		$	78,119		$	51,188		$	79,694

The decline in oil and natural gas properties during the three months ended March 31, 2019 was primarily driven by the devaluation of the New Turkish Lira (“TRY”) versus the USD. From December 31, 2018 to March 31, 2019, the TRY to the USD declined 7.0%. At March 31, 2019, the exchange rate was 5.6284 as compared to 5.2609 at December 31, 2018. For the three months ended March 31, 2019, foreign currency translations reduced oil and natural gas properties and increased accumulated other comprehensive loss within shareholders’ equity on our consolidated balance sheet.

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we excluded $0.3 million and ~~$0.5~~$0.2 million, respectively, from the depletion calculation for proved development wells currently in progress and for costs associated with fields currently not in production.

At March 31, ~~2019,~~2020, the capitalized costs of our oil and natural gas properties, net of accumulated depletion, included ~~$6.9~~$3.4 million relating to acquisition costs of proved properties, which are being depleted by the unit-of-production method using total proved reserves, and ~~$51.2~~$56.8 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, ~~2018,~~2019, the capitalized costs of our oil and natural gas properties included ~~$6.5~~$5.0 million relating to acquisition costs of proved properties, which are being amortized by the unit-of-production method using total proved reserves, and ~~$58.7~~$63.8 million relating to well costs and additional development costs, which are being amortized by the unit-of-production method using proved developed reserves.

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 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 months ended March 31, 2020, we recorded $2.1 million of exploratory dry-hole costs and $18.2 million of impairment of proved properties, which are primarily measured using Level 3 inputs. During the three months ended March 31, 2019, ~~and 2018,~~ we recorded $5.1 million of exploratory dry-hole costs, ~~and $0.1 million of impairment of proved properties, respectively,~~ which are primarily measured using Level 3 inputs.

As of March 31, ~~2019,~~2020, there were no exploratory well costs greater than one year.

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

	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(in thousands)						(in thousands)
Other equipment	$	1,159		$	1,240		$	1,156		$	1,121
Land		140			149			121			132
Inventory		6,323			6,791			6,671			3,209
Gas gathering system and facilities		182			194			78			172
Vehicles		317			336			252			304
Leasehold improvements, office equipment and software		5,438			5,698			4,669			5,264
Gross equipment and other property		13,559			14,408			12,947			10,202
Accumulated depreciation		(5,158	)		(5,268	)		(5,005	)		(5,378	)
Net equipment and other property	$	8,401		$	9,140		$	7,942		$	4,824

At March 31, ~~2019,~~2020, in addition to the above, we have classified ~~$4.8~~$3.8 million of inventory as a current asset, which represents our expected inventory consumption during the next twelve months. We classify our remaining materials and supply inventory as a long-term asset because such materials will ultimately be classified as a long-term asset when the material is used in the drilling of a well.

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we excluded ~~$11.2~~$10.4 million and ~~$12.0~~$10.3 million of inventory, respectively, from depreciation as the inventory had not been placed into service.

The following table summarizes the changes in our asset retirement obligations (“ARO”) for the three months ended March 31, ~~2019~~2020 and for the year ended December 31, ~~2018:~~2019:

	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(in thousands)						(in thousands)
Asset retirement obligations at beginning of period	$	4,667		$	4,727		$	4,749		$	4,667
Liabilities settled		-			–			(791	)		–
Foreign exchange change effect		(288	)		(1,270	)		(409	)		(519	)
Additions		59			1,036			–			388
Accretion expense		52			174			53			213
Asset retirement obligations at end of period	$	4,490		$	4,667		$	3,602		$	4,749

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.

During the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we recorded accretion expense of $0.1 million and $0.1 million, respectively.

We use derivative instruments to manage certain risks related to commodity prices and foreign currency exchange rates. The use of derivative instruments for risk management is covered by operating policies and is closely monitored by our senior management. We do not hold any derivatives for speculative purposes and do not use derivatives with leveraged or complex features. 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 ~~foreign exchange~~oil derivative contracts are settled based upon ~~the contract rate.~~Brent crude oil pricing. We recognize gains and losses related to these contracts on a fair value basis in our consolidated statements of operations and comprehensive ~~(loss) income~~loss under the caption “(Loss) gain on derivative contracts.” Settlements of derivative contracts are included in operating activities on our consolidated statements of cash flows under the caption “Cash settlement on derivative contracts.”

On March 9, 2020, we unwound our three-way collar contract with DenizBank, which hedged approximately 1,000 Bbl/d of our oil production in Turkey. The three-way collar contract had a Brent floor of $55.00, a Brent ceiling of $72.90, and a Brent long call of $80.00, and was in place through April 30, 2020. We also unwound our swap contract with DenizBank, which hedged approximately 1,000 Bbl/d of our oil production in Turkey. The swap contract had a Brent strike price of $60.30 and was in place through December 31, 2020. In connection with these transactions, we received approximately $6.5 million. We used these proceeds to pay down the 2019 Term Loan to reduce our future interest expense.

At March 31, 2020, we did not have any commodity or foreign exchange derivative contracts. At December 31, 2019, we had outstanding ~~foreign exchange~~commodity derivative contracts with respect to our future crude oil production as set forth in the tables below:

Fair Value of Foreign Exchange Derivative Instruments as of March 31, 2019

Buy

Sell

Estimated Fair

Type

Buy/Sell

Rate

Settlement Date

Buy Currency

Currency Amount

Sell Currency

Currency Amount

Value of Asset (Liability)

(in thousands)

FXOPT

Buy

5.750

04/29/19

TRY

8,625,000

USD

1,500,000

8

FXOPT

Sell

5.750

04/29/19

USD

2,250,000

TRY

12,937,500

(59
)
FXOPT

Buy

5.750

06/03/19

TRY

8,625,000

USD

1,500,000

8

FXOPT

Sell

5.750

06/03/19

USD

2,250,000

TRY

12,937,500

(41
)
FXOPT

Buy

5.750

07/01/19

TRY

8,625,000

USD

1,500,000

7

FXOPT

Sell

5.750

07/01/19

USD

2,250,000

TRY

12,937,500

(33
)
Total Estimated Fair Value of Liability

$
(110
)


				Weighted		Weighted
				Average		Average		Additional		Estimated Fair
		Quantity		Minimum		Maximum Price		Call Ceiling		Value of Asset
Type	Period	(Bbl/day)		Price (per Bbl)		(per Bbl)		(per Bbl)		(Liability)
										(in thousands)
Three-way collar	January 1, 2020 - April 30, 2020		1,000	$	55.00	$	72.90	$	80.00		21
Swap	January 1, 2020 - December 31, 2020		986	$	60.30						(987	)
Total Estimated Fair Value of Liability										$	(966	)

During the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we recorded a net ~~loss~~gain on derivative contracts of ~~$0.1~~$7.5 million and ~~$0.7~~a net loss of $0.1 million, respectively.

The following table summarizes both: (i) the gross fair value of our derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in our consolidated balance sheets at ~~March~~December 31, 2019, and (ii) the net recorded fair value as reflected on our consolidated balance sheet at December 31, 2019. At March 31, ~~2019.~~2020 we did not have any commodity or foreign exchange derivative contracts.

On April 3, 2020, we entered into a new swap contract DenizBank, which hedged approximately 2,000 barrels of oil per day. The swap contract is in place from May 2020 through February 2021, has an ICE Brent Index strike price of $36.00 per barrel, and is settled monthly. Therefore, DenizBank is required to make a payment to us if the average monthly ICE Brent Index price is less than $36.00 per barrel, and we are required to make a payment to DenizBank if the average monthly ICE Brent Index price is greater than $36.00 per barrel.

7.On May 20, 2020, we entered into foreign exchange forward contracts to hedge against currency fluctuations between the TRY and USD. The forward contract settlement dates are from June through August for $1.0 million at a strike price of 6.84 TRY to $1.00 USD.

	March 31,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
Fixed and floating rate loans	(in thousands)				(in thousands)
Term Loans (1)	$	36,900	$	22,000	$	10,643	$	20,000
Less: current portion		21,186		22,000		10,643		17,143
Long-term portion	$	15,714	$	–	$	–	$	2,857

On August 23, 2016, the Turkish branch of TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”) entered into a Credit Agreement (the “Credit Agreement”) with DenizBank. The Credit Agreement is a master agreement pursuant to which DenizBank may make loans to TEMI from time to time pursuant to additional loan agreements.

On August 31, 2016, ~~DenizBank entered into a $30.0 million term loan (the “2016 Term Loan”) with TEMI under the Credit Agreement. In addition,~~ we and DenizBank entered into additional agreements with respect to up to $20.0 million of non-cash facilities, including guarantee letters and treasury instruments for future hedging transactions.

The 2016 Term Loan bore interest at a fixed rate of 5.25% (plus 0.2625% for Banking and Insurance Transactions Tax per the Turkish government) per annum and was payable in six monthly installments of $1.25 million each through February 2017 and thereafter in twelve monthly installments of $1.88 million each through February 2018. On April 27, 2017, TEMI and DenizBank approved a revised amortization schedule for the 2016 Term Loan. Pursuant to the revised amortization schedule, the maturity date of the 2016 Term Loan was extended from February 2018 to June 2018, and the monthly principal payments were reduced from $1.88 million to $1.38 million. The other terms of the 2016 Term Loan remained unchanged. ~~Amounts repaid under the 2016 Term Loan could not be re-borrowed and early repayments under the 2016 Term Loan were subject to early repayment fees.~~

The 2016 Term Loan was guaranteed by DMLP, Ltd. (“DMLP”), TransAtlantic Turkey, Ltd. (“TransAtlantic Turkey”), Talon Exploration, Ltd. (“Talon Exploration”), and TransAtlantic Worldwide, Ltd. (“TransAtlantic Worldwide”).

The 2016 Term Loan contained standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2016 Term Loan prohibited Amity Oil International Pty Ltd (“Amity”) and Petrogas Petrol Gaz ve Petrokimya Urunleri Insaat Sanayi ve Ticaret A.S. (“Petrogas”) from incurring additional debt. An event of default under the 2016 Term Loan included, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2016 Term Loan was secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim ve Ticaret A.S. (“Gundem Yatirim”), and (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Selami Erdem Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2016 Term Loan. Gundem Yatirim is beneficially owned by Mr. Mitchell, his adult children, and Mr. Uras. Mr. Mitchell is our chief executive officer and chairman of our board of directors. Mr. Uras is our executive vice president, Turkey.

~~On June 28, 2018, we repaid the 2016 Term Loan in full in accordance with its terms.~~

On November 17, 2017, DenizBank entered into a $20.4 million term loan (the “2017 Term Loan”) with TEMI under the Credit Agreement.

The 2017 Term Loan ~~bears~~bore interest at a fixed rate of 6.0% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2017 Term Loan had a grace period which bore no interest or payments due until July 2018. Thereafter, the 2017 Term Loan iswas payable in one monthly installment of $1.38 million, nine monthly installments of $1.2 million each through April 2019 and thereafter in eight monthly installments of $1.0 million each through December 2019, with the exception of one monthly installment of $1.2 million occurring in October 2019. ~~The 2017 Term Loan matures in~~

On December ~~2019. Amounts~~30, 2019, we repaid ~~under~~ the 2017 Term Loan may not be re-borrowed, and early repayments under the 2017 Term Loan are subject to early repayment fees. The 2017 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

~~The 2017 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on~~in full in accordance with its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2017 Term Loan prohibits Amity and Petrogas from incurring additional debt. An event of default under the 2017 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2017 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2017 Term Loan.

~~At March 31, 2019, we had $9.4 million outstanding under the 2017 Term Loan and no availability, and we were in compliance with the covenants in the 2017 Term Loan.~~terms.

On May 28, 2018, DenizBank entered into a $10.0 million term loan (the “2018 Term Loan”) with TEMI under the Credit Agreement.

The 2018 Term Loan ~~bears~~bore interest at a fixed rate of 7.25% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2018 Term Loan had a grace period through July 2018 during which no payments were due. Thereafter, accrued interest on the 2018 Term Loan iswas payable monthly and the principal on the 2018 Term Loan iswas payable in five monthly installments of $0.2 million each through December 2018, four monthly installments of $0.5 million each through April 2019, four monthly installments of $1.0 million each through August 2019, and four monthly installments of $0.75 million each through December 2019. ~~The 2018 Term Loan matures in~~

On December ~~2019. Amounts~~30, 2019, we repaid ~~under~~ the 2018 Term Loan may not be reborrowed, and early repayments under the 2018 Term Loan are subject to early repayment fees. The 2018 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

~~The 2018 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of~~in full in accordance with its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2018 Term Loan prohibits Amity, Talon Exploration, DMLP, and TransAtlantic Turkey from incurring additional debt. An event of default under the 2018 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2018 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2018 Term Loan.

~~At March 31, 2019, we had $7.5 million outstanding under the 2018 Term Loan and no availability, and we were in compliance with the covenants in the 2018 Term Loan.~~terms.

On February 22, 2019, DenizBank entered into a $20.0 million term loan (the “2019 Term Loan”) with TEMI under the Credit Agreement.

The 2019 Term Loan bears interest at a fixed rate of 7.5% (plus 0.375% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2019 Term Loan ~~has~~had a grace period through December 2019 during which no payments ~~are~~were due. Thereafter, accrued interest on the 2019 Term Loan iswas payable monthly, and the principal on the 2019 Term Loan iswas payable in 14 monthly installments of $1.4 million each. ~~The~~

On March 9, 2020, we unwound our three-way collar contract with DenizBank and received approximately $6.5 million in proceeds, which we used to pay down the 2019 Term Loan. As part of the pay down, DenizBank extended a grace period for principal repayments until June 29, 2020, at which time we will resume principal payments for one monthly installment in June 2020 of $0.6 million and seven monthly installments of $1.4 million beginning in July 2020.The 2019 Term Loan matures in February 2021. Amounts repaid under the 2019 Term Loan may not be reborrowed, and early repayments under the 2019 Term Loan are subject to early repayment fees. The 2019 Term Loan is guaranteed by ~~Petrogas,~~ Amity Oil International Pty Ltd (“Amity”), Talon Exploration, Ltd. (“Talon Exploration”), DMLP, Ltd. (“DMLP”), and TransAtlantic ~~Turkey.~~Turkey, Ltd. (“TransAtlantic Turkey”).

The 2019 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2019 Term Loan prohibits Amity, Talon Exploration, DMLP, and TransAtlantic Turkey from incurring additional debt. An event of default under the 2019 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2019 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain ~~real estate owned by Petrogas, (iv) certain~~ Gundem real estate and Muratli real estate owned by Gundem ~~Yatirim, (v)~~(as defined in Note 15. “Related party transactions”), (iv) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and ~~(vi)~~(v) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2019 Term Loan.

At March 31, ~~2019,~~2020, we had ~~$20.0~~$10.6 million outstanding under the 2019 Term Loan and no availability, and we were in compliance with the covenants in the 2019 Term Loan.

For the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we recorded interest expense related to the ~~2016, 2017 and 2018 Term Loans~~term loans of $0.3 million and ~~$0.1~~$0.3 million, respectively.

Our wholly-owned subsidiaries operating in Turkey are party to unsecured, non-interest bearing lines of credit with a Turkish bank. At March 31, 2019, we had no outstanding borrowings under these lines of credit.

We lease office space in Dallas, Texas, Bulgaria and Turkey. We also lease apartments, vehicles and operations yards in Turkey. The terms of our lease agreements generally range from one to five years, with some containing options to renew or cancel. We determine if an arrangement meets the definition of a lease at inception, at which time we also perform an analysis to determine whether the lease qualifies as an operating or financing lease. ~~We currently do not have any~~

~~Operating~~ leases are included in ~~prepaid and other current assets and~~ other assets and accrued liabilities (current and long-term) on our consolidated balance sheet. Lease expense for our operating leases is recognized in our consolidated statements of comprehensive (loss) income under the caption “General and administrative”. Lease expense for our operating leases for our operations yards in Turkey is recognized in our consolidated statements of comprehensive (loss) income under the caption “Production”.

Lease right-of-use assets and lease liabilities are measured using the present value of future minimum lease payments over the lease term at commencement date. The right-of-use asset also includes any lease payments made on or before the commencement date of the lease, less any lease incentives received. As the rate implicit in the lease is not readily determinable in our leases, we use our incremental borrowing rates based on the information available at the lease commencement date in determining the present value of lease payments.

For leases with an initial non-cancelable lease term of less than one year and no option to purchase, we have elected not to recognize the lease on our consolidated balance sheets and instead recognize lease payments on a straight-line basis over the lease term.

Future non-cancelable minimum lease payments under our operating lease commitments as of March 31, ~~2019~~2020 are as follows for each of the next ~~fives~~five years and thereafter:

	March 31, 2019		March 31, 2020
	(in thousands)		(in thousands)
Remainder of 2019	$	756
2020		731
Remainder of 2020			$	677
2021		658		867
2022		648		867
2023		327		557
2024		-		200
2025				-
Thereafter		-		-
Total	$	3,120	$	3,168
Less: Imputed interest		567		290
Present value of lease liabilities	$	2,553	$	2,878

As of March 31, ~~2019,~~2020, the weighted average remaining lease term in years is ~~4.25~~3.7 years and the weighted average discount rate used was 7.55%.

Future non-cancelable minimum lease payments under our operating lease commitments as of December 31, ~~2018~~2019 were as follows for each of the next five years and thereafter:

	December 31, 2018		December 31, 2019
	(in thousands)		(in thousands)
2019	$	963
2020		710	$	960
2021		636		867
2022		626		867
2023		316		557
2024				200
Thereafter		-		-
Total	$	3,251	$	3,451

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 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.

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 Bulgarian 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 Minister of Energy filed a suit in the Sofia City Court against Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”), claiming $200,000 in liquidated damages for Direct Bulgaria’s alleged failure to fulfill its obligations under the Aglen exploration permit work program. In May 2018, the Sofia City Court concluded that Direct Bulgaria did not fail to fulfill its obligations under the Aglen exploration permit work program as Direct Bulgaria received a force majeure event recognition as a result of a fracture stimulation ban in 2012, imposed by the Bulgarian Parliament, which force majeure event had not been terminated before the expiry of Direct Bulgaria’s obligations under the Aglen exploration permit work program. Additionally, the Sofia City Court concluded that, even if Direct Bulgaria had failed to fulfill its obligations under the Aglen exploration permit work program, the Bulgarian Minister of Energy failed to file suit within the three-year limitation period. Therefore, the Sofia City Court dismissed all claims of the Bulgarian Minister of Energy and ordered the Bulgarian Minister of Energy to pay Direct Bulgaria’s attorney’s fees and

legal costs for court experts. In June 2018, the Bulgarian Minister of Energy filed an appeal in the Sofia Court of Appeal. In November 2018, the Sofia Court of Appeal concluded that the judgement of the Sofia City Court was correct and, therefore, dismissed the Bulgarian Minister of Energy’s appeal. In January 2019, the Bulgarian Minister of Energy filed an appeal in the Supreme Court of Cassation. ~~We continue to vigorously defend against this claim.~~

As The Supreme Court of Cessation held a ~~result~~court hearing on October 21, 2019. A ruling was issued on March 10, 2020, by virtue of which the Supreme Court of Cessation decided that the appeal of the ~~judgement~~Bulgarian Minister of Energy in its substance is inadmissible. The Bulgarian Minister of Energy has no further rights to appeal.

We sell all of our Southeastern Turkey oil to TUPRAS pursuant to a domestic crude oil purchase and sale agreement between TUPRAS and TEMI. The price of the ~~Sofia~~oil delivered pursuant to the purchase and sale agreement is determined under the Petroleum Market Law No. 5015 under the laws of the Republic of Turkey. In February 2019, Turkey entered into the Pricing Amendment to change the statutory pricing formula for purchases of Turkish domestic crude oil.

In November 2019, TUPRAS filed a lawsuit against us, and filed similar lawsuits against other domestic oil producers, in the Batman 4th Civil Court of ~~Appeal, we are currently evaluating an~~First Instance seeking restitution from TEMI for alleged overpayments resulting from the implementation of the Pricing Amendment plus interest thereon. In addition, TUPRAS claimed that the Pricing Amendment violates the Constitution of the Republic of Turkey and seeks to have the Pricing Amendment cancelled. TEMI is vigorously defending against these allegations. Any adjustment ~~to our contingencies relating to production leases~~arising out of the claims will be recorded when it becomes probable and ~~exploration permits.~~measurable.

We recorded share-based compensation expense of $0.1 million and $0.1 million for awards of restricted stock units (“RSUs”) for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

As of March 31, ~~2019,~~2020, we had approximately ~~$0.2~~$0.3 million of unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of ~~0.8~~0.7 years.

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 months ended March 31, ~~2019~~2020 and ~~2018~~2019 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 months ended March 31, ~~2019~~2020 and ~~2018~~2019 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 and preferred shares, whether exercisable or not. For the three months ended March 31, ~~2019,~~2020, 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						Three Months Ended
	March 31,						March 31,
(in thousands, except per share amounts)	2019			2018			2020			2019
Net loss	$	(3,902	)	$	(1,775	)	$	(23,965	)	$	(3,902	)
Basic net loss earnings per common share:
Shares:
Weighted average common shares outstanding		52,483			50,374			62,310			52,483
Basic net loss per common share:	$	(0.07	)	$	(0.04	)	$	(0.38	)	$	(0.07	)
Diluted net loss per common share:
Shares:
Weighted average common shares outstanding		52,483			50,374			62,310			52,483
Diluted net loss per common share:	$	(0.07	)	$	(0.04	)	$	(0.38	)	$	(0.07	)

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

	Corporate			Turkey		Bulgaria			Total			Corporate			Turkey			Bulgaria			Total
	(in thousands)											(in thousands)
For the three months ended March 31, 2020
Total revenues												$	-		$	8,360		$	-		$	8,360
Loss from operations before income taxes													(3,516	)		(23,291	)		(123	)		(26,930	)
Capital expenditures												$	-		$	2,937		$	-		$	2,937
For the three months ended March 31, 2019
Total revenues	$	-		$	19,041	$	-		$	19,041		$	-		$	19,041		$	-		$	19,041
(Loss) income from operations before income taxes		(2,873	)		7,616		(5,222	)		(479	)		(2,873	)		7,616			(5,222	)		(479	)
Capital expenditures	$	-		$	9,857	$	-		$	9,857		$	-		$	9,857		$	-		$	9,857
For the three months ended March 31, 2018
Total revenues	$	-		$	16,926	$	-		$	16,926
(Loss) income from operations before income taxes		(3,806	)		3,364		(46	)		(488	)
Capital expenditures	$	-		$	5,246	$	-		$	5,246
Segment assets
March 31, 2019	$	11,244		$	134,831	$	1,548		$	147,623
December 31, 2018	$	8,358		$	122,325	$	1,917		$	132,600
March 31, 2020												$	10,520		$	92,025		$	668		$	103,213
December 31, 2019												$	7,810		$	127,986		$	708		$	136,504

We are exposed to interest rate risk as a result of our variable rate short-term cash holdings.

We have underlying foreign currency exchange rate exposure. Our currency exposures primarily relate to transactions denominated in the Bulgarian Lev, the European Union Euro, and the TRY. We are also subject to foreign currency exposures resulting from translating the functional currency of our subsidiary financial statements into the USD reporting currency. At March 31, ~~2019,~~2020, we had ~~1.2~~23.2 million TRY (approximately ~~$0.2~~$3.6 million) in cash and cash equivalents, which exposes us to exchange rate risk based on fluctuations in the value of the TRY. At March 31, ~~2019,~~2020, we were a party to foreign exchange derivative contracts (See Note 6.7. “Derivative instruments”).

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 March 31, ~~2019 and December 31, 2018,~~2020, we were not party to any commodity derivative contracts.

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 (“TPAO”), the national oil company of Turkey, Zorlu Dogal Gaz Ithalat Ihracat ve Toptan Ticaret A.S. (“Zorlu”), a privately owned natural gas distributor in Turkey, and TUPRAS, which purchase the majority of our oil and natural gas production. The receivables are not collateralized. To date, we have experienced minimal bad debts and have no allowance for doubtful accounts for TUPRAS. The majority of our cash and cash equivalents are held by four financial institutions in the United States and Turkey.

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 March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, due to the short maturity of those instruments.

The following table summarizes the valuation of our financial ~~assets and~~ liabilities as of March 31, ~~2019:~~2020:

	Fair Value Measurement Classification											Fair Value Measurement Classification
	Quoted Prices in											Quoted Prices in
	Active Markets for											Active Markets for
	Identical Assets or		Significant Other			Significant						Identical Assets or		Significant Other		Significant
	Liabilities		Observable Inputs			Unobservable Inputs						Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)			Total			(Level 1)		(Level 2)		(Level 3)			Total
	(in thousands)											(in thousands)
Measured on a recurring basis
Liabilities:
Foreign exchange derivative contracts	$	-	$	(110	)	$	-		$	(110	)
Disclosed but not carried at fair value
Liabilities:
2019 Term Loan		-		-			(15,981	)		(15,981	)		-		-		(9,157	)		(9,157	)
2018 Term Loan		-		-			(7,014	)		(7,014	)
2017 Term Loan		-		-			(8,789	)		(8,789	)
Total	$	-	$	-		$	(31,784	)	$	(31,784	)	$	-	$	-	$	(9,157	)	$	(9,157	)

The following table summarizes the valuation of our financial ~~assets and~~ liabilities as of December 31, ~~2018:~~2019:

	Fair Value Measurement Classification										Fair Value Measurement Classification
	Quoted Prices in										Quoted Prices in
	Active Markets for										Active Markets for
	Identical Assets or		Significant Other		Significant						Identical Assets or		Significant Other			Significant
	Liabilities		Observable Inputs		Unobservable Inputs						Liabilities		Observable Inputs			Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)			Total			(Level 1)		(Level 2)			(Level 3)			Total
	(in thousands)										(in thousands)
Measured on a recurring basis
Liabilities:
Commodity derivative contracts											$	-	$	(966	)	$	-		$	(966	)
Disclosed but not carried at fair value
Liabilities:
2018 Term Loan		-		-		(8,192	)		(8,192	)
2017 Term Loan		-		-		(11,938	)		(11,938	)
2019 Term Loan												-		-			(17,333	)		(17,333	)
Total	$	-	$	-	$	(20,130	)	$	(20,130	)	$	-	$	-		$	(17,333	)	$	(17,333	)

We remeasure our derivative contracts on a recurring basis, with changes flowing through earnings. At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, the fair values of the 2019 ~~Term Loan, the 2018 Term Loan, and the 2017~~ Term Loan were estimated using a discounted cash flow analysis based on unobservable Level 3 inputs, including our own credit risk associated with the loans payable.

On February 24, 2020, we sold the shares in our wholly-owned subsidiary Petrogas Petrol Gaz ve Petrokemya Urunleri Insaat Sanayive Ticaret A.S. (“Petrogas”), which held the Edirne, Dogu Adatepe, Adatepe, and Gocerler production leases (the “Petrogas Leases”) and 14 employees, to Reform Ham Petrol Dogal Gaz Arama Uretim Sanayi ve Ticaret A.S. (“Reform”) in exchange for $1.5 million and a release of all plugging and abandonment obligations for 65 wells on the Petrogas leases and certain former leases.

For the three months ended March 31, 2020, we recorded a net loss of $10.1 million on the sale of Petrogas. The loss primarily related to the reclassification of the accumulated foreign currency translation adjustment that was realized into earnings from accumulated other comprehensive loss within shareholders’ equity and presented below:

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

	March 31,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
	(in thousands)				(in thousands)
Related party accounts receivable:
Service Agreement	$	412	$	526	$	293	$	433
PSI MSA		486	352			163	128
Total related party accounts receivable	$	898	$	878	$	456	$	561
Related party accounts payable:
Service Agreement	$	309	$	372	$	184	$	204
PSI MSA		1,677		2,439		5,533		3,959
Interest payable on Series A Preferred		681		-		1,228		-
Gundem Fee						25		-
Other - board of directors fees		-		111		15		99
Total related party accounts payable	$	2,667	$	2,922	$	6,985	$	4,262

We are a party to a Service Agreement (as amended, the “Service Agreement”) with Longfellow Energy, LP (“Longfellow”), Viking Drilling, LLC (“Viking Drilling”), Riata Management, LLC (“Riata”), LFN Holdco LLC (“LFN”), Red Rock Minerals, LP (“RRM”), Red Rock Minerals II, LP (“RRM II”), Red Rock Advisors, LLC (“RRA”), Production Solutions International Limited (“PSIL”), and NexLube Operating, LLC (“NexLube”) and their subsidiaries (collectively, the “Riata Entities”), under which we and the Riata Entities agreed to provide technical and administrative services to each other from time to time on an as-needed basis. Under the terms of the Service Agreement, the Riata Entities agree to provide us upon our request certain computer services, payroll and benefits services, insurance administration services, and entertainment services, and we and the Riata Entities agree to provide to each other certain management consulting services, oil and natural gas services, and general accounting services (collectively, the “Services”). Under the terms of the Service Agreement, we pay, or are paid, for the actual cost of the Services rendered plus the actual cost of reasonable expenses on a monthly basis. We or any Riata Entity may terminate the Service Agreement at any time by providing advance notice of termination to the other parties.

As of March 31, ~~2019,~~2020, we had $~~0.4~~$0.3 million of outstanding receivables and $~~0.3~~$0.2 million of outstanding payables pursuant to the Service Agreement.

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 Production Solutions International Petrol Arama Hizmetleri Anonim Sirketi (“PSI”). PSI is beneficially owned by PSIL, which 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 “PSI MSA”) with PSI on substantially similar terms to our then current master services agreements with Viking International, VOS, and Viking Geophysical. Pursuant to the PSI MSA, PSI performs the services on behalf of TEMI and its affiliates. On February 28, 2019, TEMI and PSI entered into an amendment (the “PSI MSA Amendment”) to the PSI MSA, pursuant to which PSI and TEMI agreed to extend the primary term of the PSI MSA to February 26, 2021, with automatic successive renewal terms of one (1) year each, unless terminated by PSI or TEMI by written notice at least sixty (60) days prior to the end of the primary term or any successive renewal term. The master services agreement with each of Viking International, VOS, and Viking Geophysical currently remain in effect.

As of March 31, ~~2019,~~2020, we had ~~$0.5~~$0.2 million of outstanding receivables and ~~$1.7~~$5.5 million of outstanding payables pursuant to the PSI MSA.

On August 7, 2018 and effective as of June 14, 2018, TransAtlantic USA entered into a sublease agreement (the “Sublease”) with Longfellow to lease corporate office space located at 16803 North Dallas Parkway, Addison, Texas. The Sublease was approved by the audit committee of the board of directors.

TransAtlantic USA subleases approximately 10,000 square feet of corporate office space in Addison, Texas. The initial lease term under the Sublease commenced on June 14, 2018 (the “Commencement Date”) and expires on June 30, 2020, unless earlier terminated in accordance with the Sublease. From the Commencement Date until June 30, 2019, TransAtlantic USA is required to pay monthly

rent of $18,333.33 to Longfellow, plus utilities, real property taxes, and liability insurance (to the extent that TransAtlantic USA does not obtain its own liability insurance). The monthly rent increases by $416.67 for the period commencing June 30, 2019 and ending June 30, 2021.

Pursuant to the Sublease, effective as of June 14, 2018, TransAtlantic USA and Longfellow agreed to terminate the Amended and Restated Office Lease, dated June 26, 2017, by and between TransAtlantic USA and Longfellow.

On June 13, 2012, we closed the sale of our oilfield services business, which was substantially comprised of our wholly owned subsidiaries, Viking International and Viking Geophysical, to a joint venture owned by Dalea Partners, LP (“Dalea”) and funds advised by Abraaj Investment Management Limited for an aggregate purchase price of $168.5 million, consisting of approximately $157.0 million in cash and a $11.5 million promissory note from Dalea (the “Original Note”). The promissory note bore interest at a rate of 3.0% per annum and was guaranteed by Mr. Mitchell. The promissory note was payable five years from the date of issuance or earlier upon the occurrence of certain specified events.

On April 19, 2016, we entered into a note amendment agreement (the “Note Amendment Agreement”) with Mr. Mitchell and 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 $7,964,053 in exchange for the cancellation of an account payable of approximately $3.5 million (the “Account Payable”) owed by TransAtlantic Albania Ltd. (“TransAtlantic Albania”), our former subsidiary, 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 PSI MSA. PSI is beneficially owned by PSIL, which 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 PSI to less than 50%; (ii) the sale or transfer by Dalea or PSI of all or substantially all of its assets to any person (a “Transferee”) that does not own a controlling interest in Dalea or PSI 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 PSI; (iv) termination of the PSI MSA other than as a result of an uncured default thereunder by TEMI; (v) default by PSI under the PSI MSA, which default is not remedied within a period of 30 days after notice thereof to PSI; and (vi) insolvency or bankruptcy of PSI. 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 November 4, 2016, Dalea exchanged $2.0 million of 2017 Notes for 40,000 Series A Preferred Shares.

On February 28, 2019, we and Dalea entered into an amendment (the “Note Amendment”) to the Amended Note (as amended by the Note Amendment, the “Note”), pursuant to which Dalea and we agreed to extend the maturity date of the Note to February 26, 2021 (unless otherwise accelerated in accordance with the terms of the Note).

During the three months ended March 31, 2019, we reduced the principal amount of the Note by $1.0 million for amounts prepaid by Dalea on February 28, 2019 in conjunction with the Note Amendment and by $0.1 million for cash dividends paid on the Series A Preferred Shares.

During the three months ended March 31, 2020, we reduced the principal amount of the Note by $0.1 million for cash dividends paid on the Series A Preferred Shares.

As of March 31, ~~2019,~~2020, the amount receivable under the Note was ~~$4.6~~$3.7 million.

In connection with the pledge of certain Gundem real estate and Muratli real estate to DenizBank as collateral for ~~the 2016 Term Loan,~~certain loans, on August 31, 2016, we entered into a pledge fee agreement (the “Gundem Fee Agreement”) with Gundem Turizm Yatirim ve Isletme A.S., predecessor-in-interest to Gundem Yatirim with respect to the Gundem real estate and Muratli real estate pledged as collateral for the Term Loans (“Gundem”). Pursuant to the Gundem Fee Agreement, we pay Gundem ~~Yatirim~~a fee equal to 5% per annum of the collateral value of the Gundem real estate and Muratli real estate pledged as collateral for the Term Loans. Pursuant to the Gundem Fee Agreement, the Gundem real estate has a deemed collateral value of $10.0 million and the Muratli real estate has a deemed collateral value of $5.0 million.

In connection with the pledge of the Diyarbakir real estate to DenizBank as collateral for ~~the 2016 Term Loan,~~certain loans, on August 31, 2016, we entered into a pledge fee agreement with Messrs. Mitchell and Uras (the “Diyarbakir Fee Agreement”) pursuant to which we pay Mr. Mitchell and Mr. Uras a fee of 5% per annum of the collateral value of the Diyarbakir real estate. Pursuant to the Diyarbakir Fee Agreement, the Diyarbakir real estate has a deemed collateral value of $5.0 million.

Amounts payable to Mr. Mitchell under the Gundem Fee Agreement and the Diyarbakir Fee Agreement are used to reduce the outstanding principal amount of the Amended Note. During the three months ended March 31, ~~2019,~~2020, we reduced the principal amount of the Amended Note by ~~$0.1~~$0.2 million for amounts paid under the pledge fee agreements.

On April 3, 2020, we entered into an oil swap contract with DenizBank to hedge 2,000 Bbl/day of our oil production in Turkey. The term began on May 1, 2020 and extends through February 28, 2021, with a swap price of $36.00 per barrel.

On April ~~24, 2019,~~21, 2020, the special committee of the board of directors (the “Committee”) received an unsolicited offer (the “April Offer”) from a group of our current shareholders affiliated with Mr. Mitchell and his children (collectively, the “Mitchell Group”) to acquire 100% of our outstanding common shares, subject to certain conditions. The Committee engaged a financial advisor to assist with its review and evaluation of the April Offer and any other offers that might be received. After consultation with our legal and financial advisors, the Committee rejected the April Offer. On May 28, 2020, the Committee received a revised, non-binding offer (the “May Offer”) from the Mitchell Group to acquire 100% of our outstanding common shares, subject to certain conditions. After consultation with our legal and financial advisors, the Committee rejected the May Offer. The Committee continues to engage in discussions with the Mitchell Group. There is no assurance that discussions with the Mitchell Group will result in a sale of the Company or any other transaction.

On May 20, 2020, we entered into foreign exchange ~~option and~~ forward contracts to hedge against currency fluctuations between the TRY and USD. The ~~option~~forward contract settlement dates are ~~between April and July~~from June through August for $1.0 million at a strike price of ~~5.60~~6.84 TRY to $1.00 USD.

On May 22, 2020, in order to correspond to the revised timing for the filing of this Quarterly Report on Form 10-Q, the holders of the Series A Preferred Shares, unanimously approved Amendment No. 1 to the Certificate of Designations of the Series A Preferred Shares (the “Amendment”). The ~~forward contracts settlement dates are between June and September~~Amendment revised the definitions for ~~$1.5 million at a strike price of 5.87 TRY to $1.00 USD.~~

~~On April 16, 2019, we entered into a t~~hree-way costless collar with DenizBank to hedge 1,000 Bbl/day of our oil production in Turkey. The three-way collar term begins on May 1, 2019 and extends through April 30, 2020, with a weighted average minimum price of $55.00 per barrel, a weighted average maximum price of $72.90 per barrel, and an additional call ceiling of $80.00 per barrel.

~~On April 17, 2019 and effective as of August 1, 2017, we and our subsidiaries~~Dividend Payment Date and the ~~Riata Entities entered into~~Dividend Record Date for the ~~Third Amendment (the “Third Amendment”) to~~upcoming dividend on the Service Agreement, dated August 6, 2008 and effective as of May 1, 2008, as previously amended by the Amendment, dated February 9, 2009 and effective as of October 1, 2008, and the Second Amendment, dated and effective as of March 20, 2017. The Third Amendment added and removed certain of the Riata Entities. Each of the Riata Entities is an affiliate of Mr. Mitchell.Series A Preferred Shares.

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 USD.

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 March 31, ~~2019,~~2020, we held interests in ~~372,050~~365,171 and ~~162,500~~162,800 net acres of developed and undeveloped oil and natural gas properties in Turkey and Bulgaria, respectively. As of ~~May 3, 2019,~~June 22, 2020, approximately ~~48%~~49.9% of our outstanding common shares were beneficially owned by N. Malone Mitchell 3rd, our chief executive officer and chairman of our board of directors. Persons and entities associated with Mr. Mitchell also owned 739,000 Series A Preferred Shares. Mr. Mitchell’s affiliates are currently prohibited from converting any of their Series A Preferred Shares to common shares if such conversion would cause Mr. Mitchell or his affiliates to obtain beneficial ownership in excess of 49.9% of the outstanding common shares; however, Mr. Mitchell, upon 61 days’ prior notice, may increase or decrease such percentage cap.

On April 21, 2020, the Committee received the April Offer from the Mitchell Group to acquire 100% of our outstanding common shares, subject to certain conditions. The Committee engaged a financial advisor to assist with its review and evaluation of the April Offer and any other offers that might be received. After consultation with our legal and financial advisors, the Committee rejected the April Offer. On May 28, 2020, the Committee received the May Offer from the Mitchell Group to acquire 100% of our outstanding common shares, subject to certain conditions. After consultation with our legal and financial advisors, the Committee rejected the May Offer. The Committee continues to engage in discussions with the Mitchell Group. There is no assurance that discussions with the Mitchell Group will result in a sale of the Company or any other transaction.

On May 22, 2020, in order to correspond to the revised timing for the filing of this Quarterly Report on Form 10-Q, the holders of the Series A Preferred Shares, unanimously approved the Amendment, which revised the definitions for Dividend Payment Date and the Dividend Record Date for the upcoming dividend on the Series A Preferred Shares.

We are a holding company with two operating segments – Turkey and Bulgaria. Our assets consist of our ownership interests in subsidiaries that primarily own assets in Turkey and Bulgaria.

The following summarizes our financial and operational performance for the first quarter of ~~2019:~~2020:

During the first quarter of 2019, we spud two wells and continued workover and recompletion production optimizations in southeastern Turkey. Additionally, we re-drilled and tested one well in Bulgaria.

During 2020, we plan to cointinue our recompletion, workover, and production optimization plans in our producing fields, including Bahar, Yeniev, ~~Field.~~ ~~Both the Yeniev-1~~Goksu, Pinar, Southeast Bahar, Catak, and ~~West Yeniev-1~~Karagoz. Drilling additional wells continue flowing naturally with little water. In November 2018, we spud the East Yeniev-1 appraisal well to further delineate the structure. The well was drilled to a total measured depth of 9,900 feet and encountered hydrocarbon shows in the Mardin and Bedinan formations. Completion operations began in January 2019 and resulted in a discovery in the Mardin formation.will be dependent on oil prices.

Bahar Field. ~~We spud~~In the ~~Southeast Bahar-1~~first quarter of 2020, we started construction of phase II electrification of the Bahar field to replace diesel generated power with gas generated power, which will be distributed to each well in ~~March 2019.~~the field. The ~~well~~phase II electrification was ~~drilled to a total measured depth of 11,000 feet~~completed and ~~encountered oil shows in the Mardin, Hazro, and Bedinan formations. We expect to begin completion operations~~operational in the second quarter of ~~2019.~~2020.

~~Other.~~ Goksu Field. We ~~spud~~whipstocked the ~~Blackeye-1~~Goksu-4H well in January ~~2019.~~2020. The well was drilled to a total measured depth of 11,105 feet and encountered oil shows in the Hazro, Mardin, and Bedinan formations. The well was completed in the Hazro formation and put on production in the first quarter of 2019.

~~We have applied for conversion of the New Molla exploration license into a production lease and expect a final determination with respect to our application in the second quarter of 2019.~~

We have completed the initial phase of operations in the Selmo-1 well to re-enter and test the Permian formation, establishing the productivity of the Permian formation. During a short-term flow test of a previously untested interval, the Selmo-1 well tested 45.6 API condensate along with natural gas containing a high carbon dioxide percentage component.

We continue to evaluate our prospects in the Thrace Basin’s Basin Center Gas Accumulation (“Thrace Basin BCGA”) in light of the recent production test results at the Yamalik-1 exploration well operated by Valeura Energy Inc. (“Valeura”) with their partner Equinor ASA (formerly Statoil ASA) (“Equinor”). The Yamalik-1 exploration well is located on a license directly adjacent to our 120,000 net acres in the Thrace Basin of which we believe approximately 50,000 net acres (100% working interest, 87.5% net revenue interest) is in the Thrace Basin BCGA and analogous to the Valeura and Equinor acreage.

Subsequent to drilling and testing of the Yamalik-1 well, the joint venture between Valeura and Equinor announced a three-well program. In the first quarter of 2019, Valeura and Equinor announced that they drilled and cased a second well in the Thrace Basin BCGA, the Inanli-1 well. According to Valeura and Equinor, the well was drilledre-drilled to a total depth of 4,885 meters and encountered 1,615 meters of high net-to-gross sandstone, which they interpreted to contain over-pressured gas. In the first quarter of 2019, Valeura and Equinor announced that they commenced completion operations for the Inanli-1 well. In the second quarter of 2019, Valeura and Equinor announced that they drilled the Devepinar-1 appraisal well to a total depth of 4,796 meters and encountered 1,066 meters of high-pressure gas saturated rock.

~~We expect to spud a shallow exploration well on our license in the Thrace Basin in the second quarter of 2019.~~

~~We commenced the side-track and re-drilling of the Deventci R-1 well in December 2018, targeting the Ozirovu and Dolmi Dabnik formations. The well was drilled to a total depth of 16,450~~5,720 feet. Although we encountered high permeability in the ~~targeted formations,~~Mardin formation, tests did not indicate commercial quantities of ~~reservoir quality rock. The~~oil.

Arpatepe Field. In the first quarter of 2020, we started implementation of a full field waterflood of the Arpatepe field. We plan to recomplete four wells in the field as water injection wells and one well ~~was plugged~~as a water source well. Additionally, we plan to build a central facility and ~~abandoned at a cost of $5.1 million as of March 31, 2019.~~ gathering system to handle increased volumes, however this is subject to change due to budget constraints and partner requests.

During 2020, we plan to continue our recompletion, workover, and production optimization operations in the Selmo field.

We expect that cash on hand and cash flow from operations will be sufficient to fund the remainder of our 2019 net field capital expenditures. If not, we will either curtail our discretionary capital expenditures or seek other funding sources.for recompletions. Our projected ~~remaining 2019~~2020 capital expenditure budget is subject to ~~change.~~change.

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 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, ~~2018~~2019 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.

Results of Operations—Three Months Ended March 31, ~~2019~~2020 Compared to Three Months Ended March 31, ~~2018~~2019

Our results of operations for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 were as follows:

	Three Months Ended March 31,						Change			Three Months Ended March 31,						Change
	2019			2018			2019-2018			2020			2019			2020-2019
	(in thousands of U.S. Dollars, except per unit amounts and production volumes)									(in thousands of U.S. Dollars, except per unit amounts and production volumes)
Sales volumes:
Oil (Mbbl)		269			248			21			218			269			(51	)
Natural gas (Mmcf)		50			67			(17	)		56			50			6
Total production (Mboe)		277			260			17			227			277			(50	)
Average daily sales volumes (Boepd)		3,082			2,885			197			2,498			3,082			(584	)
Average prices:
Oil (per Bbl)	$	69.00		$	65.71		$	3.29		$	37.18		$	69.00		$	(31.82	)
Natural gas (per Mcf)	$	5.94		$	5.00		$	0.94		$	4.30		$	5.94		$	(1.64	)
Oil equivalent (per Boe)	$	68.00		$	64.17		$	3.83		$	36.71		$	68.00		$	(31.29	)
Revenues:
Oil and natural gas sales	$	18,861		$	16,661		$	2,200		$	8,343		$	18,861		$	(10,518	)
Other		180			265			(85	)		17			180			(163	)
Total revenues		19,041			16,926			2,115			8,360			19,041			(10,681	)
Costs and expenses (income):
Production		2,502			2,869			(367	)		3,519			2,502			1,017
Transportation and processing		1,319			1,193			126			1,160			1,319			(159	)
Exploration, abandonment and impairment		5,113			40			5,073			20,338			5,113			15,225
Seismic and other geological and geophysical		77			159			(82	)		45			77			(32	)
General and administrative		3,054			3,337			(283	)		2,352			3,054			(702	)
Depletion		3,579			4,197			(618	)		2,877			3,579			(702	)
Depreciation and amortization		137			262			(125	)		112			137			(25	)
Interest and other expense		2,478			2,782			(304	)		2,212			2,478			(266	)
Interest and other income		(174	)		(254	)		80			(121	)		(174	)		53
Foreign exchange loss		1,273			2,058			(785	)		128			1,273			(1,145	)
Gain (loss) on derivative contracts:
Cash settlements on derivative contracts		-			(1,339	)		1,339			6,547			-			6,547
Change in fair value on derivative contracts		(110	)		614			(724	)		966			(110	)		1,076
Total loss on derivative contracts		(110	)		(725	)		615			7,513			(110	)		7,623
Oil and natural gas costs per Boe:
Production	$	7.90		$	10.28		$	(2.38	)	$	13.55		$	7.90		$	5.65
Depletion	$	11.29		$	14.53		$	(3.24	)	$	11.08		$	11.29		$	(0.21	)

Oil and Natural Gas Sales. Total oil and natural gas sales revenues ~~increased~~decreased to ~~$18.9~~$8.3 million for the three months ended March 31, ~~2019~~2020 from ~~$16.7~~$18.9 million for the same period in ~~2018.~~2019. The ~~increase~~decrease was primarily due to ~~an increase~~a decrease in the average realized price per Boe. Our average price received ~~increased $3.83~~decreased $31.29 per Boe to ~~$68.00~~$36.71 per Boe for the three months ended March 31, ~~2018~~2019 from ~~$64.17~~$68.00 per Boe for the same period in ~~2018.~~2019. The ~~increase~~decrease was also due to ~~an increase~~a decrease in our average daily sales volumes of ~~197~~584 Boe per day (“Boepd”) for the three months ended March 31, ~~2019~~2020 as compared to the same period in ~~2018.~~2019.

Production. Production expenses ~~decreased~~increased to ~~$2.5~~$3.5 million, or ~~$7.90~~$13.55 per Boe, for the three months ended March 31, ~~2019~~2020 from ~~$2.9~~$2.5 million, or ~~$10.28~~$7.90 per Boe, for the same period in ~~2018.~~2019. The ~~decrease~~increase was primarily due to ~~a devaluation~~an increase in contract labor costs and personnel expenses of ~~the TRY to the USD, as most~~$0.5 million and an increase in workover expenses of ~~our production expenses are denominated in TRY.~~$0.4 million.

Transportation and Processing. Transportation and processing expense ~~increased~~decreased to ~~$1.3~~$1.2 million for the three months ended March 31, ~~2019~~2020 from ~~$1.2~~$1.3 million for the same period in ~~2018.~~2019. The ~~increase~~decrease in transportation expenses was primarily due to the ~~increase~~decrease in our average daily sales volumes ~~197~~of 584 Boepd.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment cost increased to ~~$5.1~~$20.3 million for the three months ended March 31, ~~2019~~2020 from ~~$0.1~~$5.1 million for the same period in ~~2018.~~2019. The increase was due to proved property impairments of our Selmo and Bahar fields due to the oil price decline and the exploratory dry hole write-off of the Bati-Yasince ~~Deventci R-1~~ well.

General and Administrative. General and administrative expense decreased to ~~$3.1~~$2.4 million for the three months ended March 31, ~~2019~~2020 from ~~$3.3~~$3.1 million for the same period in ~~2018.~~2019. The decrease was primarily due to a $0.7 million decrease in ~~professional and accounting fees associated with~~personnel expenses compared to the ~~strategic transaction~~same period in ~~2018.~~2019.

Depletion. Depletion expense decreased to ~~$3.6~~$2.9 million, or ~~$11.29~~$11.08 per Boe, for the three months ended March 31, ~~2019~~2020 from ~~$4.2~~$3.6 million, or ~~$14.53~~$11.29 per Boe, for the same period of ~~2018.~~2019. The decrease was primarily due to the devaluation of the TRY to the ~~USD.~~USD and a decrease in production volumes.

Interest and Other Expense. Interest and other expense decreased to ~~$2.5~~$2.2 million for the three months ended March 31, ~~2019~~2020 from ~~$2.8~~$2.5 million for the same period in ~~2018.~~2019. The decrease was due to our lower average debt balances outstanding during the three months ended March 31, ~~2019~~2020 versus the same period in ~~2018.~~2019.

Foreign Exchange Loss. We recorded a foreign exchange loss of ~~$1.3~~$0.1 million for the three months ended March 31, ~~2019~~2020 as compared to ~~$2.1~~$1.3 million for the same period in ~~2018.~~2019. Foreign exchange gains and losses are primarily unrealized (non-cash) in nature and result from the re-measuring of specific transactions and monetary accounts in a currency other than the functional currency. For example, a USD transaction which occurs in Turkey is re-measured at the period-end to the TRY amount if it has not been settled previously. Generally, a strengthening of the USD relative to the TRY increases our foreign exchange loss. The foreign exchange loss for the three months ended March 31, ~~2019~~2020 was due to a decrease in the value of the TRY compared to the USD. ~~From December 31, 2018 to March 31, 2019, the TRY to the USD declined 7.0%. At March 31, 2019, the exchange rate was 5.6284 as compared to 5.2609 at December 31, 2018.~~

Gain (Loss) on Derivative Contracts. We recorded a net ~~loss~~gain on derivative contracts of ~~$0.1~~$7.5 million for the three months ended March 31, ~~2019~~2020 as compared to ~~$0.7~~a net loss of $0.1 million for the same period in ~~2018.~~2019. During the three months ended March 31, 2020, we recorded a $1.0 million gain to mark our currency derivative contracts to their fair value and a $6.5 million gain on settled contracts. During the same period in 2019, we recorded a $0.1 million loss to mark our ~~currency~~commodity derivative contracts to their fair value. ~~During the same period in 2018, we recorded a $0.6 million gain to mark our commodity derivative contracts to their fair value and a $1.3 million loss on settled contracts.~~

For the three months ended March 31, ~~2019,~~2020, we incurred ~~$9.9~~$2.9 million in capital expenditures, including seismic and corporate expenditures, as compared to ~~$5.2~~$9.9 million for the same period in ~~2018.~~2019.

We expect our net field capital expenditures for the remainder of ~~2019~~2020 to range between ~~$15.0~~$1.0 million and ~~$20.0~~$1.5 million. We expect net field capital expenditures during ~~the remainder of 2019~~2020 to include between ~~$14.5~~$0.5 million and ~~$19.5~~$1.5 million to implement a waterflood in ~~drilling~~the Bedinan sandstone in the Arpatepe field and ~~completion expense and approximately~~up to $0.5 million in recompletion expense. We expect that cash on hand and cash flow from operations will be sufficient to fund the remainder of our 2019 net field capital expenditures. If not, we will either curtail our discretionary capital expenditures or seek other funding sources.for recompletions. Our projected ~~remaining 2019~~2020 capital expenditure budget is subject to ~~change.~~change.

Net cash provided by operating activities during the three months ended March 31, ~~2019~~2020 was ~~$4.5~~$14.1 million, ~~a decrease~~an increase from net cash provided by operating activities of ~~$7.8~~$4.5 million for the same period in ~~2018.~~2019. The ~~decrease~~increase was primarily due to ~~an increase~~the changes in our ~~accounts receivable which was~~current assets and current liabilities partially offset by ~~an increase~~a decrease in our revenues.

Net cash used in investing activities during the three months ended March 31, ~~2019~~2020 was ~~$9.3~~$1.6 million, ~~an increase~~a decrease from net cash used in investing activities of ~~$7.0~~$9.3 million for the same period in ~~2018.~~2019. The ~~increase~~decrease was primarily due to ~~an increase~~a decrease in our capital expenditures as compared to the same period in ~~2017.~~2019.

Net cash ~~provided by~~used in financing activities during the three months ended March 31, ~~2019~~2020 was ~~$15.8~~$9.4 million, ~~an increase~~a decrease from net cash ~~used in~~provided by financing activities of ~~$4.1~~$15.8 million for the same period in ~~2018.~~2019. The change was primarily due to ~~an increase~~a decrease in our outstanding ~~loans.~~loan.

Our primary sources of liquidity for the first quarter of 2020 were our cash and cash equivalents, cash flow from operations and the sale of assets. At March 31, 2020, we had cash and cash equivalents of $12.8 million, $10.6 million in short-term debt, and a working capital surplus of $5.9 million, compared to cash and cash equivalents of $9.7 million, $2.9 million in long-term debt, $17.1 million in short-term debt and a working capital surplus of $2.0 million at December 31, 2019.

On March 9, 2020, we unwound our commodity derivative contracts with respect to our future crude oil production. In connection with these transactions, we received $6.5 million. In order to reduce future interest expense, we used these proceeds to pay down the 2019 Term Loan. On April 3, 2020, we entered into a new swap contract with DenizBank, which hedged approximately 2,000 barrels of oil per day. The swap contract is in place from May 2020 through February 2021, has an ICE Brent Index strike price of $36.00 per barrel, and is settled monthly. Therefore, DenizBank is required to make a payment to us if the average monthly ICE Brent Index price is less than $36.00 per barrel, and we are required to make a payment to DenizBank if the average monthly ICE Brent Index price is greater than $36.00 per barrel.

TUPRAS purchases substantially all of our crude oil production. The price of substantially all of the oil delivered pursuant to the purchase and sale agreement with TUPRAS is tied to Arab Medium oil prices adjusted upward based on an API adjustment, Suez Canal tariff costs, and freight charges. Recently, there has been a significant widening of the differential between the ICE Brent Index price and our realized oil prices. In 2018 and 2019, the average monthly differential between the ICE Brent Index Price and our realized oil prices was $2.44 and $0.17 per barrel, respectively. In April and May 2020, the average monthly differential between the ICE Brent Index Price and our realized oil prices was $6.90 and $8.34 per barrel, respectively. The widening of the differential between ICE Brent Index Price and our realized oil prices has rendered our hedges less effective, resulting in significantly lowered revenues. This differential may expand or contract in the future.

The price of the oil delivered pursuant to the purchase and sale agreement with TUPRAS is determined under the Petroleum Market Law No. 5015 under the laws of the Republic of Turkey. In November 2019, TUPRAS filed a lawsuit seeking restitution from us for alleged overpayments resulting from the Pricing Amendment. TUPRAS also claimed that the Pricing Amendment violates the Constitution of the Republic of Turkey and seeks to have the Pricing Amendment cancelled. Additionally, in April 2020, TUPRAS notified us that it intends to extend payment terms for oil purchases by 60 days. The outcome of the TUPRAS lawsuit and negotiations regarding the extension of payment terms is uncertain; however, a conclusion of the lawsuit in TUPRAS’s favor or an extension of payment terms would reduce or delay our cash flow and decrease our cash balances.

In the second quarter of 2020, we borrowed approximately $626,000 pursuant to the PPP to cover certain payroll, benefit, and rent expenses. We have forecast that amounts borrowed or received pursuant to the PPP will be forgiven for cash flow purposes. New guidance on the criteria for forgiveness continues to be released. Additionally, in the second quarter of 2020, the Turkish government passed legislation permitting employers to reduce the working hours of employees, reducing payroll and benefit expenses, through the end of June 2020. The projected reduction in payroll and benefit expenses due to this legislation is approximately $360,000.

As of March 31, ~~2019,~~2020, we had ~~$36.9~~$10.6 million of ~~indebtedness, not including $8.7~~outstanding principal under the 2019 Term Loan. The 2019 Term Loan is payable in one monthly installment of $0.6 million in June 2020 and seven monthly installments of ~~trade payables, as further described below. We believe that~~$1.4 million plus accrued interest from July 2020 through the maturity date in February 2021. In addition, dividends on our Series A Preferred Shares are payable quarterly at our election in cash, common shares, or a combination of cash and common shares at an annual dividend rate of 12.0% of the liquidation preference if paid in cash or 16.0% of the liquidation preference if paid in common shares. If paid partially in cash and partially in common shares, the dividend rate on the cash portion is 12.0%, and the dividend rate on the common share portion is 16.0%. In order to conserve cash, we elected to pay the second dividend in 2020 in common shares.

As of the date hereof, based on cash on hand and projected future cash flow from operations, ~~will be sufficient~~our current liquidity position is severely constrained and is forecast to worsen during 2020 as revenues are insufficient to meet our ~~normal operating requirements~~ordinary course expenditures and debt obligations. Based on our current cash flow forecasts, we may be unable to ~~fund planned capital expenditures during~~pay the ~~next 12 months.~~scheduled monthly installments on the 2019 Term Loan in the fourth quarter of 2020 unless we can increase revenues, obtain additional financing, or restructure our current obligations. To date, we have been unable to restructure our current obligations or obtain additional financing to alleviate these liquidity issues. As ~~of March 31, 2019, we had~~ a result, substantial doubt exists regarding our ability to continue as a going concern. Our management is actively pursuing improving our working capital ~~surplus of $10.8 million.~~position in order to remain a going concern for the foreseeable future.

~~2016 Term Loan.~~ On August 23, 2016, the Turkish branch of TEMI entered into the Credit Agreement with DenizBank. The Credit Agreement is a master agreement pursuant to which DenizBank may make loans to TEMI from time to time pursuant to additional loan agreements.

On August 31, 2016, DenizBank entered the 2016 Term Loan under the Credit Agreement. In addition, we and DenizBank entered into additional agreements with respect to up to $20.0 million of non-cash facilities, including guarantee letters and treasury instruments for future hedging transactions. The 2016 Term Loan bore interest at a fixed rate of 5.25% (plus 0.2625% for Banking and Insurance Transactions Tax per the Turkish government) per annum and was payable in monthly installments of $1.38 million through June 2018. Amounts repaid under the 2016 Term Loan could not be re-borrowed and early repayments under the 2016 Term Loan were subject to early repayment fees. The 2016 Term Loan was guaranteed by DMLP, TransAtlantic Turkey, Talon Exploration, and TransAtlantic Worldwide.

The 2016 Term Loan contained standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2016 Term Loan prohibited Amity and Petrogas from incurring additional debt. An event of default under the 2016 Term Loan included, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties and obligations, bankruptcy or insolvency and the occurrence of a material adverse effect.

~~On June 28, 2018 we repaid the 2016 Term Loan in full in accordance with its terms.~~

2017 Term Loan. On November 17, 2017, DenizBank entered into the 2017 Term Loan under the Credit Agreement. The 2017 Term Loan ~~bears~~bore interest at a fixed rate of 6.0% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2017 Term Loan had a grace period which bore no interest or payments due until July 2018. Thereafter, the 2017 Term Loan iswas payable in one monthly installment of $1.38 million, nine monthly installments of $1.2 million each through April 2019 and thereafter in eight monthly installments of $1.0 million each through December 2019, with the exception of one monthly installment of $1.2 million occurring in October 2019. ~~The 2017 Term Loan matures in~~

On December ~~2019. Amounts~~30, 2019 we repaid ~~under~~ the 2017 Term Loan may not be re-borrowed, and early repayments under the 2017 Term Loan are subject to early repayment fees. The 2017 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey. in full in accordance with its terms.

The 2017 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on granting of liens on its assets, incurring additional debt, dissolving, liquidating, merging, consolidating, paying dividends, making certain investments, selling assets or transferring revenue, and other similar matters. In addition, the 2017 Term Loan prohibits Amity and Petrogas from incurring additional debt. An event of default under the 2017 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties and obligations, bankruptcy or insolvency and the occurrence of a material adverse effect.

~~At March 31, 2019, we had $9.4 million outstanding under the 2017 Term Loan and no availability, and we were in compliance with the covenants in the 2017 Term Loan.~~

2018 Term Loan. On May 28, 2018, DenizBank entered into the 2018 Term Loan under the Credit Agreement. The 2018 Term Loan ~~bears~~bore interest at a fixed rate of 7.25% (plus 0.3% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2018 Term Loan had a grace period through July 2018 during which no payments were due. Thereafter, accrued interest on the 2018 Term Loan iswas payable monthly and the principal on the 2018 Term Loan iswas payable in five monthly installments of $0.2 million each through December 2018, four monthly installments of $0.5 million each through April 2019, four monthly installments of $1.0 million each through August 2019, and four monthly installments of $0.75 million each through December 2019. ~~The 2018 Term Loan matures in~~

On December ~~2019. Amounts~~30, 2019 we repaid ~~under~~ the 2018 Term Loan ~~may not be reborrowed, and early repayments under the~~

~~2018 Term Loan are subject to early repayment fees. The 2018 Term Loan is guaranteed by Petrogas, Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.~~

~~The 2018 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of~~in full in accordance with its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2018 Term Loan prohibits Amity, Talon Exploration, DMLP, and Transatlantic Turkey from incurring additional debt. An event of default under the 2018 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2018 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain real estate owned by Petrogas, (iv) certain Gundem real estate and Muratli real estate owned by Gundem Yatirim, (v) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and (vi) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI will assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2018 Term Loan.

~~At March 31, 2019, we had $7.5 million outstanding under the 2018 Term Loan and no availability, and we were in compliance with the covenants in the 2018 Term Loan.~~terms.

2019 Term Loan. On February 22, 2019, DenizBank entered into the 2019 Term Loan under the Credit Agreement.

The 2019 Term Loan bears interest at a fixed rate of 7.5% (plus 0.375% for Banking and Insurance Transactions Tax per the Turkish government) per annum. The 2019 Term Loan had a grace period through December 2019 during which no payments ~~are~~were due. Thereafter, accrued interest on the 2019 Term Loan iswas payable monthly and the principal on the 2019 Term Loan iswas payable in 14 monthly installments of $1.4 million each.

On March 9, 2020, we unwound our three-way collar contract with DenizBank and received approximately $6.5 million in proceeds which we used to pay down the 2019 Term Loan. As part of the pay down, DenizBank extended a grace period for principal repayments until June 29, 2020 at which time we will resume principal payments for one monthly installment in June 2020 of $0.6 million and seven monthly installments of $1.4 million beginning in July 2020. The 2019 Term Loan matures in February 2021. Amounts repaid under the 2019 Term Loan may not be reborrowed, and early repayments under the 2019 Term Loan are subject to early repayment fees. The 2019 Term Loan is guaranteed by ~~Petrogas,~~ Amity, Talon Exploration, DMLP, and TransAtlantic Turkey.

The 2019 Term Loan contains standard prohibitions on the activities of TEMI as the borrower, including prohibitions on encumbering or creating restrictions or limitations on all or a part of its assets, revenues, or properties, giving guaranties or sureties, selling assets or transferring revenues, dissolving, liquidating, merging, or consolidating, incurring additional debt, paying dividends, making certain investments, undergoing a change of control, and other similar matters. In addition, the 2019 Term Loan prohibits Amity, Talon Exploration, DMLP, and Transatlantic Turkey from incurring additional debt. An event of default under the 2019 Term Loan includes, among other events, failure to pay principal or interest when due, breach of certain covenants, representations, warranties, and obligations, bankruptcy or insolvency, and the occurrence of a material adverse effect.

The 2019 Term Loan is secured by a pledge of (i) the stock of TEMI, DMLP, TransAtlantic Turkey, and Talon Exploration, (ii) substantially all of the assets of TEMI, (iii) certain ~~real estate owned by Petrogas, (iv) certain~~ Gundem real estate and Muratli real estate owned by Gundem, ~~Yatirim, (v)~~(iv) certain Diyarbakir real estate owned 80% by Mr. Mitchell and 20% by Mr. Uras, and ~~(vi)~~(v) certain Ankara real estate owned 100% by Mr. Uras. In addition, TEMI will assigned its Turkish collection accounts and its receivables from the sale of oil to DenizBank as additional security for the 2019 Term Loan.

At March 31, ~~2019,~~2020, we had ~~$20.0~~$10.6 million outstanding under the 2019 Term Loan and no availability, and we were in compliance with the covenants in the 2019 Term Loan.

Series A Preferred Shares. As of March 31, ~~2019,~~2020, we had 921,000 Series A Preferred Shares outstanding. The Series A Preferred Shares contain a substantive conversion option, are mandatorily redeemable, and convert into a fixed number of common shares. As a result, under U.S. GAAP, we have classified the Series A Preferred Shares within mezzanine equity in our consolidated balance sheets. As of March 31, ~~2019,~~2020, we had ~~$21.3~~$5.0 million of Series A Preferred Shares and ~~$24.8~~$41.1 million of Series A Preferred Shares – related party outstanding (See Note 3. “Series A Preferred Shares”).

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 principal accounting and financial officer, as appropriate to allow timely decisions regarding required disclosure.

As of March 31, ~~2019,~~2020, management carried out an evaluation, under the supervision and with the participation of our chief executive officer and principal accounting and 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 principal accounting and financial officer concluded that, as of March 31, ~~2019,~~2020, 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.

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the first quarter of ~~2019,~~2020, 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, ~~2018.~~2019, other than the developments described below:

Bulgarian Minister of Energy. In October 2015, the Bulgarian Minister of Energy filed a suit in the Sofia City Court against Direct Petroleum Bulgaria EOOD (“Direct Bulgaria”), claiming $200,000 in liquidated damages for Direct Bulgaria’s alleged failure to fulfill its obligations under the Aglen exploration permit work program. In May 2018, the Sofia City Court concluded that Direct Bulgaria did not fail to fulfill its obligations under the Aglen exploration permit work program as Direct Bulgaria received a force majeure event recognition as a result of a fracture stimulation ban in 2012, imposed by the Bulgarian Parliament, which force majeure event had not been terminated before the expiry of Direct Bulgaria’s obligations under the Aglen exploration permit work program. Additionally, the Sofia City Court concluded that, even if Direct Bulgaria had failed to fulfill its obligations under the Aglen exploration permit work program, the Bulgarian Minister of Energy failed to file suit within the three-year limitation period. Therefore, the Sofia City Court dismissed all claims of the Bulgarian Minister of Energy and ordered the Bulgarian Minister of Energy to pay Direct Bulgaria’s attorney’s fees and legal costs for court experts. In June 2018, the Bulgarian Minister of Energy filed an appeal in the Sofia Court of Appeal. In November 2018, the Sofia Court of Appeal concluded that the judgement of the Sofia City Court was correct and, therefore, dismissed the Bulgarian Minister of Energy’s appeal. In January 2019, the Bulgarian Minister of Energy filed an appeal in the Supreme Court of Cassation. The Supreme Court of Cassation held a court hearing on October 21, 2019. A ruling was issued on March 10, 2020, by virtue of which the Supreme Court of Cessation decided that the appeal of the Bulgarian Minister of Energy in its substance is inadmissible. The Bulgarian Minister of Energy has no further rights to appeal.

During the first quarter of ~~2019,~~2020, there were no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

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.

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)

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets as of March 31, ~~2019~~2020 (Unaudited) and December 31, ~~2018~~2019	4

Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	5

Unaudited Consolidated Statement of Shareholders’ Equity for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	6

Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	7

Notes to Unaudited Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3. Quantitative and Qualitative Disclosures About Market Risk	29

Item 4. Controls and Procedures	2930

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	31

Item 1A. Risk Factors	31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 3. Defaults Upon Senior Securities	31

Item 4. Mine Safety Disclosures	31

Item 5. Other Information	31

Item 6. Exhibits	32


Period Commencing	Redemption Price
November 4, 2020	105.000%
November 4, 2021	103.000%
November 4, 2022	101.000%
November 4, 2023 and thereafter	100.000%

	Loss on Sale
	(in thousands)
Total cash proceeds for Petrogas	$	1,451
Less: Petrogas net liabilities		(652	)
Gain on sale before accumulated foreign currency translation adjustment		2,103
Less: Petrogas accumulated foreign currency translation adjustment		(12,231	)
Net loss on sale of Petrogas	$	(10,128	)

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).

3.4		Certificate of Designations of 12.0% Series A Convertible Redeemable Preferred Shares of TransAtlantic Petroleum Ltd. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 31, 2016, filed with the SEC on November 4, 2016).

3.5		Memorandum of Increase of Share Capital of TransAtlantic Petroleum Ltd., dated July 2017 (incorporated by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2019).

3.6		Amendment No. 1 to the Certificate of Designations of 12.0% Series A Convertible Redeemable Preferred Shares of TransAtlantic Petroleum Ltd. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 22, 2020, filed with the SEC on May 27, 2020).

4.1		Amended and Restated Registration Rights Agreement, dated December 30, 2008, by and between TransAtlantic Petroleum Corp. and Riata Management, LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated December 30, 2008, filed with the SEC on January 6, 2009).

4.2		Specimen Common Share certificate (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K dated March 4, 2014, filed with the SEC on March 6, 2014).

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 Principal Accounting and 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 Principal Accounting and 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.

Fair Value of Foreign Exchange Derivative Instruments as of March 31, 2019



						Buy			Sell		Estimated Fair
Type	Buy/Sell	Rate		Settlement Date	Buy Currency	Currency Amount		Sell Currency	Currency Amount		Value of Asset (Liability)
											(in thousands)
FXOPT	Buy		5.750	04/29/19	TRY		8,625,000	USD		1,500,000		8
FXOPT	Sell		5.750	04/29/19	USD		2,250,000	TRY		12,937,500		(59	)
FXOPT	Buy		5.750	06/03/19	TRY		8,625,000	USD		1,500,000		8
FXOPT	Sell		5.750	06/03/19	USD		2,250,000	TRY		12,937,500		(41	)
FXOPT	Buy		5.750	07/01/19	TRY		8,625,000	USD		1,500,000		7
FXOPT	Sell		5.750	07/01/19	USD		2,250,000	TRY		12,937,500		(33	)
Total Estimated Fair Value of Liability											$	(110	)

	March 31, 2019
	(in thousands)
Operations yards	$	146
Office rent		58
Vehicles		36
Other		23
Total lease costs	$	263

By:		/s/ N. MALONE MITCHELL 3rd
		N. Malone Mitchell 3rd Chief Executive Officer

By:		/s/ MICHAEL P. HILL
		Michael P. Hill Chief Accounting Officer

Date: ~~May 8, 2019~~June 17, 2020

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company