TransAtlantic Petroleum Ltd. has entered a farm-out agreement with Koynare Development Ltd. (KDL), a private oil and gas company, according to a news release.

The agreement, between KDL and TransAtlantic's wholly owned subsidiary, TransAtlantic Worldwide Ltd. (Worldwide), provides that KDL will fund 75% of TransAtlantic’s initial US $40 million work program in Bulgaria. The funds will be used by Worldwide's subsidiary and operator, Direct Petroleum Bulgaria EOOD (Direct Bulgaria).

Under the agreement, Direct Bulgaria will assign KDL a 50% interest in the Koynare concession area. Direct Bulgaria also will assign a 50% interest in its ownership of the Stefanetz concession area in the event that the pending concession application is approved by the Bulgarian government, the release said.

The assignment of the 50% interest in the Koynare concession area is subject to Bulgarian government approval. Direct Bulgaria currently holds a 100% interest in the concession, according to the release.