ShaMaran Reports Record Profits and EBITDAX Over 6 Times Higher Than 2020

Source: www.gulfoilandgas.com 8/10/2021, Location: Middle East

ShaMaran Petroleum Corp. has released its financial and operating results and related management’s discussion and analysis for the three and six months ended June 30, 20211.

Dr. Adel Chaouch, President and Chief Executive Officer of ShaMaran, commented: “ShaMaran continues to focus on financial discipline and the second quarter’s extremely positive results for the Company demonstrates record profits. Our six months EBITDAX in 2021 of $31.9 million is more than six times that of the same period last year and we continue to consistently sustain positive cash generation. We have accelerated the amortization obligation due in December 2021 by acquiring our bonds at attractive market rates. We have already reduced that obligation by two thirds from $15 million down to $5 million.

These are very exciting times for ShaMaran as we work towards completing the acquisition of TotalEnergies interest in Sarsang which will transform the Company by supplementing our portfolio with high API and low sulphur oil with complimentary production horizons as well as de-leveraging our debt. We continue to be optimistic about the remainder of 2021 and believe that ShaMaran is well positioned to benefit from new market opportunities as they arise.”

Corporate Highlights

- The second quarter of 2021 saw a record profit with net result of $ 6.8 million, resulting in a profit for the first six months of 2021 of $9.3 million;

- Cumulative production of 45 million barrels achieved on May 13, 2021 despite the challenges of the global coronavirus pandemic (“COVID-19”)[2]; and

- Average production of approximately 39,538 barrels of oil per day (“bopd”) for the second quarter of 2021. With the resumption of capital development spending, Atrush has seen a return to sustained quarter on quarter production growth in 2021 (current production rates are approximately 42,000 bopd).

Sarsang Acquisition

- The Company has

- signed an agreement to acquire an affiliate of TotalEnergies (the “Acquisition”) that holds an 18% non-operated participating interest in Sarsang, adjacent to the Atrush block;

- successfully placed its new $300 million bond (the “2025 Bond”);

- announced the approval of proposals for the conditional refinancing of the existing bond (the “2023 Bond”) as well as necessary waivers for the issuance of the 2025 Bond; and

- agreed with Nemesia S.à.r.l. that the planned $30 million rights offering will be underwritten by them.

- Upon the successful closing of the Acquisition, the interest in Sarsang block effective as of January 1, 2021:

- adds immediate incremental participating interest production of approximately 5,000 bopd of light crude oil (36 – 38 API);

- is expected to double ShaMaran’s Q2 2021 average net production, exceeding 20,000 bopd, following the completion of the processing facility expansion at Swara Tika field by mid-2022; and

- enhances ShaMaran’s oil reserves through the addition of high API and low sulphur oil that achieves a low discount to Brent.

Atrush Operations

- Cumulative production of 45 million barrels achieved on May 13, 2021 despite the challenges of the global COVID-19 pandemic;

- Average production of approximately 39,538 barrels of oil per day (“bopd”) for the second quarter of 2021. With the resumption of capital development spending Atrush now sees a return to sustained quarter-on- quarter production growth in 2021 (current production rate at approximately 42,000 bopd); and

- Atrush development drilling activities resumed with the spudding from Pad A of the CK-17 well on April 1, 2021. The CK-17 well was drilled and completed ontime, below budget and came online at an initial rate of 2,000 bopd and brought the Atrush production well count to eleven.

Atrush Financial

- The second quarter of 2021 saw a record profit with net result of $ 6.8 million, resulting in $ 9.3 million net profit for the six months of 2021;

- A very strong EBITDAX of $18.4 million for Q2 2021 and $31.9 million for the six months of 2021, over six times the EBITDAX result for the six months of 2020;

- The KRG continues to repay the $41.7 million of outstanding receivables for November 2019 to February 2020. At the date of this news release $13.8 million has been invoiced to the KRG and $9.6 million paid; and

- The Company’s 2023 Bond amortization payment due in December 2021 has been reduced from $15 million to $5 million, due to the Company purchasing 2023 Bonds and retiring them in the first six months of 2021, the total of ShaMaran 2023 Bonds outstanding is $180 million and 2025 Bonds is $111.5 million as at the date of this news release.


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