In these troubled times it is good to get some great news.
The oil project is very well positioned going forward and the TransAtlantic team stated several times that a best case scenario – is an oil recession – which is exactly what is occurring at this time.
Like all of you, I am keen to watch the management team perform and, unlike so many other investments, we are confident all club projects “will see their way to the other side” of this economic hardship.
Trans Atlantic Investors,
I hope this finds you well – considering all that is going on in our country. Since we last sent an update many parts of American have been shut down due to COVID-19, unemployment is at 14.7% as of this writing, and oil futures went to -$37.63 at their lowest point. These are unprecedented times for the entire world.
We are consistently monitoring the global landscape to assure that TransAtlantic is strategically positioned to capitalize on these events.
Below is an update on TransAtlantic, its current holdings and how Management has positioned the company.
- TransAtlantic is over 99% in cash. The significance of this cannot be overstated! Our cash buying power is considerably compounded due to depressed energy prices. It would be nearly impossible for TransAtlantic be in a better position than it is in right now. We are at the beginning of an energy recession with a pile of cash ready to take advantage of the right opportunities.
- The Fund holds positions in the Keetch, Barton and York (10 wells) fields. Last month the Texas refiners (buyers of all product) cancelled purchase contracts with nearly all operators because of the lack of demand for gasoline due to the COVID shutdown.
Ground based storage facilities are full with an over supply of product, wells are being shut-in throughout Texas and rig count is consistently dropping. This affects the wells we own positions in. The operators have chosen not to shut-in these wells as it not economically feasible for the long-term. Additional storage tanks have been moved onsite and a new buyer for the product has been secured.
- As stated in the previous update, Management is focused on acquisitions of producing fields and has set aside drilling prospects for the time being. We expect opportunities to start presenting themselves this month and next – and for that to last for the next 6 months, possibly longer if the turmoil in the energy market remains or increases.
Thus far, operator bankruptcies have been minimal, but as bankruptcy filings hit their stride, opportunities should be plentiful. We have already had conversations and/or evaluated numerous acquisition prospects so we are in the position to respond quickly when the right opportunities present themselves.
As TransAtlantic shareholders, you have every reason to be optimistic about your investment. It is a rare occasion to be flush with cash at the beginning of a recession. Management is making every effort to wisely deploy cash in assets that are lucrative for many years to come. Should you have questions you may reply to this email and we can set up a time for a call. Thanks for your time.
TransAtlantic Energy Holdings LLC