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 U.S. Dollars.

Executive Overview

We are an international oil and natural gas company engaged in acquisition, exploration, development and production. We have focused our operations in countries that are net importers of petroleum, have an existing petroleum transportation infrastructure and provide favorable commodity pricing and royalty and tax rates to exploration and production companies. We hold interests in developed and undeveloped oil and natural gas properties in Turkey, Bulgaria and Romania. As of June 30, 2012, approximately 40% of our outstanding common shares were beneficially owned by N. Malone Mitchell, 3rd, the chairman of our board of directors and chief executive officer.

Financial and Operational Performance Highlights. Highlights of our financial performance and operational performance for the second quarter of 2012 include:

• During the quarter ended June 30, 2012, we derived 69.8% of our revenues from the production of oil and 28.2% of our revenues from the production of natural gas.

• Total oil and natural gas revenues increased 3.6% to $31.9 million for the quarter ended June 30, 2012 from $30.8 million realized in the same period in 2011. The increase was the result of an increase in volumes of 51 thousand barrels of oil equivalent ("Mboe"), resulting in increased revenues of approximately $4.3 million, which was partially offset by a decrease of approximately $3.2 million from lower average prices received.

• Production increased to approximately 233 net thousand barrels ("Mbbls") of oil and approximately 1,081 net million cubic feet ("Mmcf") of natural gas for the second quarter of 2012, as compared to approximately 219 net Mbbls of oil and 862 net Mmcf of natural gas for the same period in 2011.

• As of June 30, 2012, we produced an aggregate of approximately 2,628 net barrels ("Bbls") of oil per day and approximately 10.4 net Mmcf of natural gas per day.

• For the quarter ended June 30, 2012, we incurred $13.8 million in capital expenditures, as compared to capital expenditures of $14.2 million for the quarter ended June 30, 2011.

• As of June 30, 2012, we had $32.8 million in outstanding debt and no short-term borrowings, as compared to $158.7 million in outstanding debt and short-term borrowings of $80.7 million as of December 31, 2011, excluding liabilities held for sale.

Recent Developments

Appointment of New Director. On June 28, 2012, Charles J. Campise was appointed to our board of directors. Mr. Campise brings more than 20 years of international oil and natural gas financial and accounting expertise to our board, including serving as senior vice president and chief financial officer of Toreador Resources Corporation from May 2006 to March 2010 and as corporate controller for Transmeridian Exploration Incorporated from December 2003 until May 2005.

Closing of Sale of Oilfield Services Business. On June 13, 2012, we closed the sale of our oilfield services business, which was substantially comprised of our wholly owned subsidiaries Viking International Limited ("Viking International") and Viking Geophysical Services, Ltd. ("Viking Geophysical"), to a joint venture owned by Dalea Partners, LP ("Dalea", an affiliate of Mr. Mitchell) and funds advised by Abraaj Investment Management Limited for an aggregate purchase price of $167.2 million, consisting of approximately $155.7 million in cash, subject to a net working capital adjustment, and a $11.5 million promissory note from Dalea. The transaction was approved by a special committee of our board of directors after the receipt of a fairness opinion solely for the benefit of the special committee, which was subject to certain assumptions and limitations as provided in such opinion. The promissory note is payable five years from the date of issuance or earlier upon the occurrence of certain specified events, including an initial public offering by the joint venture. Upon the consummation of an initial public offering by the joint venture and the prior approval of Dalea, we can elect to convert the outstanding balance of the promissory note, including accrued interest, into the number of shares offered in the initial public offering equal to such outstanding balance divided by the per share purchase price paid by the public in the initial public offering. The promissory note bears interest at a rate of 3.0% per annum and is guaranteed by Mr. Mitchell. We used a portion of the net proceeds from the sale to pay off our $73.0 million credit agreement with Dalea, our $11.0 million credit facility with Dalea, our $0.9 million promissory note with Viking Drilling, LLC ("Viking Drilling") and our $1.8 million credit agreement with a Turkish bank. In addition, we used a portion of the net proceeds from the sale to pay down approximately $45.2 million in outstanding indebtedness under our amended and restated senior secured credit facility (the "Amended and Restated Credit Facility") with Standard Bank Plc ("Standard Bank") and BNP Paribas (Suisse) SA ("BNP Paribas").

Entry Into Master Services Agreements. On June 13, 2012, we also entered into separate master services agreements with each of Viking International, Viking Petrol Sahasi Hizmetleri A.S. ("VOS") and Viking Geophysical in connection with the sale of our oilfield services business. Pursuant to the master services agreements with Viking International and VOS, we are entitled to receive certain oilfield services and materials, including, but not limited to, drilling rigs and fracture stimulation, that are needed for our operations in Bulgaria, Romania and Turkey. Pursuant to the master services agreement with Viking Geophysical, we are also

entitled to receive geophysical services and materials that are needed for our operations in those countries. Each of these master services agreement are for a five-year term and are divided into two separate phases. For the first four months of these agreements, Viking International, VOS and Viking Geophysical are required to provide us with any and all services and materials that they have available and we have the right of first refusal for any services that they offer to third parties. For the remainder of the agreements, we can contract for services and materials on a firm basis and, to the extent that we do not contract for all of their services or materials, Viking International, VOS and Viking Geophysical are allowed to contract with third parties for any remaining capacity.

Entry Into Transition Services Agreement. On June 13, 2012, we also entered into a transition services agreement with Viking Services Management, Ltd. ("Viking Management") in connection with the sale of our oilfield services business. Pursuant to the transition services agreement, we agreed to provide certain administrative services, including, but not limited to, continued use of certain of our employees and independent contractors, a guarantee of a lease for flats in Turkey, Turkish tax or legal advice and services, office space in Istanbul, Turkey, information technology support and certain software or licenses to Viking Management. The transition services agreement has a two-year term. Viking Management agreed to use commercially reasonable efforts to eliminate its need for such services as soon as practicable following the entry into the agreement.

Amendment to Ban on Fracture Stimulation in Bulgaria. In January 2012, the Bulgarian Parliament enacted legislation that was intended to ban fracture stimulation in the Republic of Bulgaria. The legislation also prevented conventional drilling and completion activities. The Bulgarian Parliament has since amended the legislation, and as a result we expect our conventional natural gas exploration, development and production activity in the country to resume after we receive a production license for our Koynare concession area. As long as the current legislation remains in effect, our unconventional natural gas exploration, development and production activities in Bulgaria will be significantly constrained.

Second Quarter 2012 Operational Update

During the second quarter of 2012, we continued to develop our Selmo and Arpatepe oil fields in southeastern Turkey and our Thrace Basin natural gas fields in northwestern Turkey, including the natural gas fields acquired in the acquisition of Thrace Basin Natural Gas (Turkiye) Corporation ("TBNG"). In addition, we continued to expand our inventory of exploration opportunities with new prospects identified on recently completed 3D seismic surveys.

Production. For the quarter ended June 30, 2012, we produced an average of approximately 2,564 net Bbls of oil per day and approximately 11.9 net Mmcf of natural gas per day.

Turkey-Thrace Basin. In the second quarter of 2012, we spud 18 wells, completed seven new wells, and performed three re-entry fracture stimulations on our TBNG acreage. Three of the seven new well completions were fracture stimulations.

As of June 30, 2012, we had $5.5 million of exploratory well costs capitalized for the Pancarkoy-1 well, which we began drilling in the fourth quarter of 2010. We have identified at least two more sands within the Mezardere formation that we expect to initially test by conventional means.

Turkey-Southeast.

• Selmo. We completed three wells and began drilling four additional wells during the second quarter of 2012.

• Arpatepe. In the second quarter of 2012, we spud the Bati-Arpatepe-1 well and completed the Arpatepe-5 well. We expect to complete the Arpatepe-6 well in the third quarter of 2012. This license is operated by Aladdin Middle East, Ltd.

• Molla. We drilled the Bahar-1 well to a total depth of 10,522 feet and are currently testing the natural gas shows encountered in the Bedinan sands formation. The Bahar-1 well also encountered oil and natural gas shows in the Mardin, Hazro and Dadas formations, which we expect to test in this well or future offset wells. In addition, we were awarded the West Molla exploration license covering approximately 62,000 acres adjacent to our existing Molla exploration license. This acreage is prospective for the Mardin and Bedinan formations as well as the Dadas shale formation. We have committed to drill one well on this license by June 2013.

Turkey-Central Basins. We began acquiring 1,000 kilometers of 2D seismic data and approximately 8,000 kilometers of airborne gravity gradiometry and magnetic data on our Sivas Basin exploration licenses covering approximately 1.6 million acres. We expect to complete the acquisition of the Sivas Basin data in the third quarter of 2012. Shell Upstream Turkey B.V. is co-funding the Sivas Basin data acquisition costs.

Planned Operations

We continue to actively explore and develop our existing oil and natural gas properties in Turkey and evaluate opportunities for further activities in Bulgaria and Romania. Our success will depend in part on discovering additional hydrocarbons in commercial quantities and then bringing these discoveries into production. For the remainder of 2012, we are focused on accomplishing the following objectives:

• Commence Tekirdag Field Area Development. We expect to begin drilling our infield tight gas development program in the Tekirdag field area in the Thrace Basin based upon our projected 50-acre drainage wells.

• Explore New Fault Blocks Identified by Recently Acquired Seismic Data. We plan to begin exploration drilling of new fault blocks identified by recently acquired 3D seismic data on our Hayrabolu and Gocerler licenses in the Thrace Basin and by recently acquired 2D seismic data on our Gurun license in southeastern Turkey.

• Expand Fracture Stimulation Program. During the third quarter of 2012, we plan to move fracture stimulation equipment to our Selmo oil field. We have approximately 14 wells scheduled for fracture stimulation at Selmo and anticipate the Selmo fracture stimulation program will take approximately 45 days. We plan to further refine and improve our Thrace Basin frac design and formation evaluation methods in order to optimize future fracture stimulations, and we plan to resume fracture stimulation activity in the Thrace Basin after the Selmo frac program is completed.

• Develop Southeastern Turkey Licenses. In the third quarter of 2012, we plan to complete the Alibey-1H well and drill the Goksu-3H well. Those wells will be our first horizontal wells to test the fractured Mardin carbonate formations found in southeastern Turkey. In addition, we plan to commence the acquisition of approximately 100 kilometers of 2D seismic data over our recently acquired West Molla exploration license.

• Reduce Exploration Risk Through Partnerships. In an effort to increase the pace of exploration activity, share exploration risk, and reduce our share of the capital commitments necessary to carry forward the exploration of our extensive acreage positions, we are currently seeking joint venture partners for our exploration acreage in Bulgaria, Romania and Turkey and plan to continue this effort during the remainder of 2012.

Capital expenditures for the remainder of 2012 are expected to range between $50.0 million and $75.0 million. Approximately 50% of these anticipated expenditures will occur in the Thrace Basin in Turkey, devoted to developing conventional and unconventional natural gas production, building infrastructure and acquiring seismic data. Most of the remaining 50% of these anticipated expenditures will occur in southeastern Turkey, devoted to drilling, completing and stimulating developmental and exploratory oil wells at Selmo, Arpatepe, Molla, Idil and Gurun.

We currently plan to execute the following drilling and exploration activities during the remainder of 2012:

Turkey. We plan to drill approximately 21 gross wells, eight of which we expect to fracture stimulate. In addition, we plan to perform up-hole recompletions in 18 wells in the Thrace Basin and fracture stimulate 14 wells at our Selmo oilfield. We also plan to construct the infrastructure necessary to produce and sell oil and natural gas from the productive wells we drill.

Bulgaria. We expect to receive a production license in the Koynare concession area during 2012, after which conventional operating activity in the region is expected to resume. We plan to complete our evaluation of the Peshtene-R11 exploration well core data and develop a conventional completion program for the well.

Romania. We plan to participate in a 200-kilometer 2D seismic survey on the Sud Craiova license by the end of 2012.

Discontinued Operations in Morocco

On June 27, 2011, we decided to discontinue our Moroccan operations. We have substantially completed the process of winding down our operations in Morocco. We have presented the Moroccan segment operating results as discontinued operations for all periods presented, and they are not included in results from continuing operations.

Discontinued Operations of Oilfield Services Business

On June 13, 2012, we closed the sale of our oilfield services business to a joint venture owned by Dalea and funds advised by Abraaj Investment Management Limited for an aggregate purchase price of $167.2 million, consisting of approximately $155.7 million in cash, subject to a net working capital adjustment, and a $11.5 million promissory note from Dalea. We have presented the oilfield services segment operating results as discontinued operations for all periods presented, and they are not included in results from continuing operations.

Significant Accounting Policies and Estimates

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 generally accepted accounting principles in the United States ("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, 2011 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. There have been no changes to the significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs ("ASU 2011-04"). ASU 2011-04 amends Accounting Standards Codification ("ASC") 820 Fair Value Measurements and Disclosures ("ASC 820"), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the ASC 820 disclosure requirements, particularly for Level 3 fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. We adopted ASU 2011-04 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In June 2011, FASB issued ASU 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"). ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. In December 2011, FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05 ("ASU 2011-12"). ASU 2011-12 deferred the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The amendments will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We adopted ASU 2011-05 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In September 2011, FASB issued ASU 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment("ASU 2011-08"). ASU 2011-08 allows both public and nonpublic entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity would no longer be required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU 2011-08 allows early adoption and will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted ASU 2011-08 on January 1, 2012. The adoption did not have a material effect on our financial statements.

In December 2011, FASB issued ASU No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities ("ASU 2011-11"). ASU 2011-11 will require entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. Application of ASU 2011-11 is required for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. We are currently evaluating the effects of adopting ASU 2011-11.

We have reviewed other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our 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 our current or future earnings or operations.

Results of Operations-Three Months Ended June 30, 2012 Compared to Three Months
Ended June 30, 2011

Our results of operations for the three months ended June 30, 2012 and 2011 were
as follows:



                                                             Three Months Ended June 30,                                         Change
                                                   2012                                     2011                                2012-2011
                                                     (in thousands of U.S. dollars, except per unit prices and production  volumes)
                                                                                      (as adjusted)
Production:
Oil (Mbbl)                                                    233                                        219                                  14
Natural gas (Mmcf)                                          1,081                                        862                                 219
Total production (Mboe)                                       413                                        362                                  51
Average prices:
Oil (per Bbl)                            $                  97.45               $                     109.28             $                (11.83 )
Natural gas (per Mcf)                    $                   8.48               $                       7.34             $                  1.14
Oil equivalent (per Boe)                 $                  77.18               $                      84.96             $                 (7.78 )

                                                           Three Months Ended June 30,                                          Change
                                                     2012                                    2011                             2012-2011
                                                     (in thousands of U.S. dollars, except per unit prices and production  volumes)
                                                                                      (as adjusted)
Revenues:
Oil and natural gas sales                 $                   31,876                  $           30,755               $                  1,121
Costs and expenses:
Production                                                     5,032                               4,156                                    876
Exploration, abandonment and
impairment                                                     6,884                               4,463                                  2,421
Seismic and other exploration                                    768                               1,725                                   (957 )
General and administrative                                     9,613                               9,319                                    294
Depreciation, depletion and
amortization                                                   9,434                               8,477                                    957
Interest and other expense                                     2,018                               3,560                                 (1,542 )
Gain on commodity derivative
contracts:
Cash settlements on commodity
derivative contracts                                            (773 )                            (1,890 )                                1,117
Non-cash change in fair value on
commodity derivative contracts                                15,077                               2,044                                 13,033

Total gain on commodity
derivative contracts                                          14,304                                 154                                 14,150

Oil and Natural Gas Sales. Total oil and natural gas revenues increased $1.1 million to $31.9 million for the three months ended June 30, 2012 from $30.8 million realized in the same period in 2011. Of this increase, $4.3 million was the result of increased production volumes of 51 Mboe, which was partially offset by a $3.2 million decrease in revenues from lower average prices received. Production volumes increased primarily due to the June 2011 acquisition of TBNG, which contributed approximately 65 Mboe of production. This was partially offset by a decrease in production due to the natural decline of our reserve base. For the three months ended June 30, 2012, our average price received was $77.18 per Boe, as compared to $84.96 per Boe for the same period in 2011.

Production. Production expenses for the three months ended June 30, 2012 increased to $5.0 million from $4.2 million for the same period in 2011. The increase was primarily attributable to a write-off of inventory of approximately $1.2 million resulting from a physical count of inventory, which was partially offset by a reduction in workover expenses.

Exploration, Abandonment and Impairment. Exploration, abandonment and impairment costs for the three months ended June 30, 2012 increased approximately $2.4 million to $6.9 million, from $4.5 million for the same period in 2011. During the three months ended June 30, 2012, there was a partial write-off of one well for $2.1 million, a complete write-off of one well for $1.7 million and complete write-offs of three wells at an average of approximately $0.4 million per well. During the three months ended June 30, 2011, there was a partial write-off of one well for $2.6 million and complete write-offs of six wells at an average of approximately $0.3 million per well. Additionally, during the three months ended June 30, 2012, we recorded $1.5 million of impairment charges on our proved properties, primarily due to downward revisions in natural gas reserves in our Alpullu field, as compared to no impairment in the three months ended June 30, 2011.

Seismic and Other Exploration. Seismic and other exploration costs decreased to $0.8 million for the three months ended June 30, 2012, as compared to $1.7 million for the same period in 2011. This decrease was due primarily to fewer seismic projects for the three months ended June 30, 2012, as compared to the same period in 2011.

General and Administrative. General and administrative expense was $9.6 million for the three months ended June 30, 2012, as compared to $9.3 million for the same period in 2011. The increase was primarily due a $2.0 million accrual for a contingency related to the Aglen exploration permit in Bulgaria and to including . . .