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ShaMaran Petroleum Closes CAD 36 million Private Placement

Source: 1/30/2017, Location: North America

ShaMaran Petroleum has announced the closing of the private placement financing announced on January 19, 2017. The Company sold on a private placement basis an aggregate of 360,000,000 of its common shares at a price of CAD 0.10 (SEK 0.67) per share for gross proceeds of CAD 36 million (USD 27.3 million). After deducting brokerage fees of approx. USD 0.9 million paid to Pareto Securities, the manager and bookrunner for the private placement, the net proceeds received by the Company were USD 26.4 million which will be used primarily to fund the Company's expenditures related to the Atrush field development in the Kurdistan Region of Iraq as well as for general corporate purposes.

Two insiders of the Company, Lorito Holdings S.ŗ.r.l. and Zebra Holdings & Investments S.ŗ.r.l., have directly or indirectly purchased a total of 60,448,239 common shares under the private placement, constituting a 'related party transaction' as defined under Multilateral Instrument 61-101 ('MI 61-101'). These transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 by virtue of the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101 based on the fact that neither the fair market value of any common shares issued to nor the consideration paid by such persons exceeds 25% of the Company's market capitalization.

Shares issued pursuant to the private placement cannot be traded into Canada before the date that is 4 months and a day after the issue date.

Chris Bruijnzeels, President and CEO of ShaMaran, commented: 'We are very pleased with the result of this private placement, which was over-subscribed. It shows a strong market interest in the Company and should provide the Company with the liquidity needed until we receive positive cash flow from Atrush operations, without increasing Company debt.'

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