VANCOUVER, BC, Nov. 9, 2022
/CNW/ - ShaMaran Petroleum Corp. ("ShaMaran" or the
"Company") (TSXV: SNM) (Nasdaq First North Growth Market
(Sweden): SNM) today released its
financial and operating results and related management's discussion
and analysis (MD&A) for the three and nine months ended
September 30, 2022¹. View PDF
version
Dr. Adel Chaouch, President and
Chief Executive Officer of ShaMaran, commented "The third quarter
of 2022 was transformational for ShaMaran. With the closing
of the Sarsang Acquisition, we now have stakes in three high
quality large producing oil fields (one field in Atrush and two
fields in Sarsang) with improved oil qualities and complementary
production horizons. Following the closing of this
acquisition, the Company's bonds were merged into one single
$300 million issue bond, of which the
Company has bought back and owns over 10%. The strong cash
position also enabled ShaMaran to pay in full, 11 months ahead of
the original timeline, the $20
million convertible loan note issued to the seller as part
of the acquisition consideration. We continue to generate strong
financial results as we grow revenue and profits. For the year to
date, we have delivered over $100
million in EBITDAX.
We are very excited for our future prospects and will continue
to execute on our strategic vision to be a best-in-class producer
in Kurdistan with sustainable
growth, low-leverage and significant cash flow generation. We
have a strong cash position which provides us with flexibility and
optionality, and in the current oil price environment, we expect
continued strengthening of our financial and operational
metrics."
Corporate Highlights – the Sarsang Acquisition
On September 14, 2022 the Company
announced the closing of the Sarsang Acquisition. The additional
interest in the Sarsang block:
- adds immediate incremental participating interest production of
over 5,000 bopd of light crude oil (36-39° API);
- is expected to double ShaMaran's average net production by the
end of 2022;
- enhances ShaMaran's oil reserves through the addition of high
API and low sulphur oil that achieves a low discount compared to
other producers; and
- the combined business is forecast to result in a 2022 year end
unrestricted cash balance of up to $105
million (up to $155 million
when taking into account the bond buybacks and the early repayment
of the Convertible Loan Note issued to an affiliate of
TotalEnergies SE) 1. This cash balance combined with the
$36 million held as restricted cash
in line with the 2025 bond agreement is forecast to result in
leverage of below 1x net debt to EBITDAX at year end 2022 (pro
forma for the Sarsang Acquisition).
_____________________________________________
|
1
|
Assuming continued
payment by the KRG for crude oil sales invoices within 90 days of
receipt.
|
Financial Highlights
|
Three months ended
September 30
|
Nine months ended
September 30
|
USD
Thousands¹
|
2022
|
2021
|
2022
|
2021
|
Revenue
|
39,812
|
29,070
|
123,492
|
74,884
|
Gross margin on oil
sales
|
28,860
|
12,020
|
90,747
|
37,227
|
Net result
|
66,428
|
19
|
102,678
|
9,322
|
Cash flow from
operations
|
28,250
|
12,544
|
92,732
|
40,567
|
EBITDAX
|
32,626
|
16,017
|
100,436
|
47,919
|
- The Company delivered oil sales in Q3 2022 of $40 million, 37% higher than Q3 2021;
- Cash flow from operations for Q3 2022 was $28 million, over twice that of Q3 2021;
- EBITDAX in Q3 2022 was very strong at $33 million, over double the EBITDAX of Q3
2021;
- Merger of existing bonds into one single $300 million issue bond, interest on all bonds
fully paid on September 26,
2022;
- During Q3 2022 the Company bought back more of its own bonds,
and currently owns in excess of 10% of the 2025 bond; and
- On October 3, 2022, the Company
announced that it had prepaid, 11 months ahead of the original
maturity date, in full (together with applicable interest) the
$20 million Convertible Loan Note
issued to an affiliate of TotalEnergies SE in connection with the
Sarsang Acquisition closing.
Operational Highlights
- The 50MM bbl cumulative production milestone for Sarsang was
reached during September 2022;
- During Q3 2022 the commissioning of a new 25,000 bopd facility
at Sarsang and commencement of oil export via pipeline from that
facility;
- Q3 2022 gross average production of approximately 71,358 bopd,
resulting in 16,206 bopd net to ShaMaran; and
- Q3 2022 lifting costs per barrel of $4.76 is higher than Q3 2021 lifting costs of
$4.34 per barrel. This increase is
mainly due to higher diesel prices, but within our 2022 Atrush
guidance which takes into account cost inflation.
OTHER
ShaMaran is also pleased to announce that the Company has
retained the services of Renmark Financial Communications Inc.
("Renmark"), with offices in Montreal, Toronto, New York
City and Atlanta, to join
its investor relations and media relations team.
The terms of the consulting agreement with Renmark, which
commences today for an initial seven-month term, provides for
compensation of CAD$9,000 per
month. Renmark does not have any interest, directly or
indirectly, in ShaMaran or its securities, or any right or intent
to acquire any such interest.
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 November 9,
2022 at 5:30 p.m. Eastern
Time. Arctic Securities AS (Swedish branch) is the
Company's Certified Advisor on Nasdaq First North Growth Market
(Sweden), +46 844 68 61 00,
certifiedadviser@arctic.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.
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 and an 18% interest through its
wholly-owned subsidiary ShaMaran Sarsang A/S in the Sarsang
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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¹ All currency amounts indicated as "$" in this news release are
expressed in United States
Dollars.
² Earnings before interest, tax, depreciation, amortization,
and exploration expense.
SOURCE ShaMaran Petroleum Corp.