TRANSATLANTIC PETROLEUM LTD.

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.

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, 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; market prices for natural gas, 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 products, including price changes resulting from coronavirus fears as well as oil oversupply concerns; the results of exploration and development drilling and related activities; 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 in the countries and provinces in which we carry on business, especially economic slowdowns; actions by governmental authorities; the unwinding of our hedges against a decline in the price of oil; receipt of required approvals; increases in taxes; legislative and regulatory initiatives relating to fracture stimulation activities; changes in environmental and other regulations; renegotiations of contracts; political uncertainty, including sanctions, armed conflicts, and actions by insurgent groups; outcomes of litigation; the negotiation and closing of material contracts; and the other factors discussed in other documents that we file with or furnish to the 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.

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.

On April 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.

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.