VANCOUVER, BC, March 3, 2021 /CNW/ - ShaMaran Petroleum
Corp. ("ShaMaran" or the "Company") (TSXV: SNM) (Nasdaq First
North Growth Market: SNM) today released its financial and
operating results and related management's discussion and analysis
(MD&A) for the three months and year ended December 31, 20211. View PDF
version
Dr. Adel Chaouch, President and
Chief Executive Officer of ShaMaran, commented "We have witnessed
in 2020 the profound impact of the global coronavirus pandemic and
the collapse of crude prices on the oil and gas industry
worldwide. Despite these tremendous challenges, ShaMaran
remained resilient, delivering on its targets with a record
production in excess of 16MM barrels in Atrush and a continuation
of full replacement of 2P reserves year on year. The Company
also successfully implemented rigorous cost reduction measures and
secured new agreements with the bondholders that not only resolved
its liquidity shortfall but also that put the Company on a stronger
financial footing.
We are entering 2021 cautiously optimistic despite continuous
uncertainties in the global market. Our early focus will
remain on financial discipline to generate strong cash flow and pay
down debt. As markets recover, we believe we are well
positioned to enhance production growth, and benefit from new
market opportunities."
2020 Operational Highlights
- 2020 oil production increase of 39% (2020 vs 2019);
- Cumulative production of 40 million barrels achieved on
January 4, 2021 despite a
significantly reduced 2020 development program due to the global
pandemic and first quarter 2020 collapse of crude oil prices;
- Average production of approximately 40,800 barrels of oil per
day ("bopd") for the fourth quarter of 2020; lower than the year's
average due deferral of capital development wells, and operational
interventions aggregated in this quarter;
- Full year 2020 average production of approximately 45,100 bopd
in line with 2020 guidance;
- Full year 2020 lifting costs per barrel of $5.08 in line with 2020 guidance and a 31%
decrease vs. 2019 lifting costs;
- Full year 2020 capital expenditure of $34 million ($9.4
million net to ShaMaran) in line with the capex program as
revised in April 2020 in response to
the global pandemic and collapse of oil prices; and
- Atrush Property gross 2P reserves2 increased to
109.9 MMbbls as at December 31, 2020
from 108.5 in 2019 being a 108% reserves replacement and Company's
gross 2P reserves from 29.9 MMbbls to 30.3 MMbbls;
_________________________________
|
1 All
currency amounts indicated as "$" in this news release are
expressed in United States Dollars.
|
2 Reserves
estimates, contingent resource estimates and estimates of future
net revenue in respect of ShaMaran's oil and gas assets in the
Atrush Block are effective as at December 31, 2020, and are
included in the report prepared by McDaniel & Associates
Consultants Ltd. (McDaniel), an independent qualified reserves
evaluator, in accordance with National Instrument 51-101 –
Standards of Disclosure for Oil and Gas Activities (NI 51-101) and
the Canadian Oil and Gas Evaluation Handbook (the COGE
Handbook) and using McDaniel's January 1, 2021 price
forecasts.
|
2020 Financial Highlights
|
Three months ended
Dec 31
|
Year ended Dec
31
|
USD
Thousands
|
2020
|
2019
|
2020
|
2019
|
Revenue
|
14,081
|
24,345
|
56,673
|
70,291
|
Gross margin on oil
sales
|
10,253
|
10,274
|
7,106
|
20,032
|
Net result
|
(1,785)
|
1,586
|
(144,425)
|
(13,397)
|
Cash flow from
operations
|
5,350
|
1,882
|
12,860
|
14,629
|
EBITDA
|
6,614
|
14,833
|
20,052
|
36,378
|
- Liquidity shortfall successfully resolved and strengthened
Company financial position;
- Consistent oil sales and entitlement payments from the KRG for
the months March 2020 to December 2020;
- Full year 2020 operating cash flow of $12.9 million and $5.4
million for the fourth quarter 2020; and
- Full year 2020 net result of ($144
million) and ($2 million) for
the fourth quarter 2020 including a non-cash impairment charge of
$116 million made to oil and gas
assets in the first quarter of 2020.
CORPORATE UPDATE
Mr. Brenden Johnstone, Chief
Financial Officer, will be leaving the Company later this month.
Dr. Chaouch commented, "We thank Brenden for his dedicated
service to the Company over the past decade and wish him all the
best in his future endeavors." Financial reporting and other
financial-related responsibilities for the Company are being
allocated to other members of the Company's management and
staff.
As part of ShaMaran's continued implementation of prudent 2021
cashflow management this year's corporate budget was reduced by 30%
as compared to 2020 as previously reported in the Company's news
release dated February 15,
2021. This spending reduction has necessitated staff
reductions in March 2021 and other
non-critical activities to be discontinued.
OTHER
This information is information that ShaMaran is obliged to make
public pursuant to the EU Market Abuse Regulation. The information
was submitted for publication, through the agency of the contact
persons set out below, on March 3,
2021 at 5:30 p.m. Eastern
Time. Pareto Securities AB is the Company's Certified
Advisor on Nasdaq First North Growth Market (Stockholm), +46 8402 5000,
certifiedadviser.se@paretosec.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FORWARD LOOKING STATEMENTS
This news release contains statements and information about
expected or anticipated future events and financial results that
are forward–looking in nature and, as a result, are subject to
certain risks and uncertainties, such as legal and political risk,
civil unrest, general economic, market and business conditions, the
regulatory process and actions, technical issues, new legislation,
competitive and general economic factors and conditions, the
uncertainties resulting from potential delays or changes in plans,
the occurrence of unexpected events and
management's capacity to execute and implement its future plans.
The Covid-19 virus and the restrictions and disruptions
related to it have had a drastic adverse effect on the world demand
for, and prices of, oil and gas as well as the market price of the
shares of oil and gas companies generally, including the Company's
common shares. There can be no assurance that these adverse
effects will not continue or that commodity prices will not
decrease or remain volatile in the future. These factors are
beyond the control of ShaMaran and it is difficult to assess how
these, and other factors, will continue to affect the Company and
the market price of ShaMaran's common shares. In light of the
current situation, as at the date of this news release, the Company
continues to review and assess its business plans and assumptions
regarding the business environment, as well as its estimates of
future production, cash flows, operating costs and capital
expenditures.
Any statements that are contained in this news release that
are not statements of historical fact may be deemed to be
forward–looking information. Forward– looking information typically
contains statements with words such as "may", "will", "should",
"expect", "intend", "plan", "anticipate", "believe", "estimate",
"projects", "potential", "scheduled", "forecast", "outlook",
"budget" or the negative of those terms or similar words suggesting
future outcomes. The Company cautions readers regarding the
reliance placed by them on forward–looking information as by its
nature, it is based on current expectations regarding future events
that involve a number of assumptions, inherent risks and
uncertainties, which could cause actual results to differ
materially from those anticipated by the Company.
Actual results may differ materially from those projected by
management. Further, any forward–looking information is made only
as of a certain date and the Company undertakes no obligation to
update any forward– looking information or statements to reflect
events or circumstances after the date on which such statement is
made or reflect the occurrence of unanticipated events, except as
may be required by applicable securities laws. New factors emerge
from time to time, and it is not possible for management of the
Company to predict all of these factors and to assess in advance
the impact of each such factor on the Company's business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward–looking information.
ABOUT SHAMARAN
ShaMaran is a Kurdistan focused
oil development and exploration company which holds a 27.6% working
interest, through its wholly-owned subsidiary General Exploration
Partners, Inc., in the Atrush Block.
ShaMaran is a Canadian oil and gas company listed on the TSX
Venture Exchange and the Nasdaq First North Growth Market
(Sweden) under the symbol
"SNM".
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SOURCE ShaMaran Petroleum Corp.