VANCOUVER, BRITISH COLUMBIA — (Marketwired) — 10/21/14 — ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) (TSX VENTURE: SNM) (OMX: SNM) is pleased to announce its financial and operating results for the three and nine months ended September 30, 2014. Unless otherwise stated all currency amounts indicated as “$” in this news release are expressed in thousands of United States dollars.
HIGHLIGHTS
(1) Approved changes to terminology relating to the Atrush Block, effective from 2014, include well names. Following the Atrush-4 well all future wells on the Atrush block will be prefixed with “Chiya Khere” (or “CK”), rather than with “Atrush”.
FINANCIAL AND OPERATING RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014
During the reporting period the Company continued its appraisal and development campaign in respect of the Atrush petroleum property located in the Kurdistan Region of Iraq which constitutes the continuing operations of the Company. Atrush currently generates no revenues.
The Company reported a net loss of $1.5 million in the first three quarters of 2014, which was primarily driven by net bond interest expense, included within finance cost, as well as routine general and administrative expenses and share based payments expense.
Condensed Interim Consolidated Statement of Comprehensive Income
(Unaudited, expressed in thousands of United States dollars)
Condensed Interim Consolidated Balance Sheet
(Unaudited, expressed in thousands of United States Dollars)
The total assets reported at September 30, 2014 have decreased by $2.9 million relative to the total assets reported at the end of 2013, which was primarily due to the use of cash on expenses from continuing operations and accounts payable during the reporting period.
The decrease by $63.9 million in the cash position of the Company during the nine months ended September 30, 2014 was due to cash outflows of $51.6 million on Atrush Block appraisal and development activities, $8.6 million on interest payments to bondholders, $5.5 million on G&A and other cash expenses, $2.5 million in positive cash movements due to changes in working capital items, and $0.7 million used on discontinued operations.
Condensed Interim Consolidated Cash Flow Statement
(Unaudited, expressed in thousands of United States Dollars)
OUTLOOK
The outlook is as follows:
Atrush Block
Current drilling plans include completing drilling and testing operations on the CK-6 eastern area appraisal well in the fourth quarter of 2014, re-entering and testing the AT-3 Phase 2 eastern area appraisal well in early 2015, and planning and site preparations for additional development and or appraisal drilling in 2015.
Works are in progress to implement the 30,000 bopd Phase 1 production facility. The civil construction site preparation work for the facility is expected to be complete in the final quarter of 2014. Production modules for the facility are being fabricated for 2015 delivery. A workover rig will be used in early 2015 to conduct testing and, if successful, completion operations on CK-5 and CK-8, and to complete AT-2 and AT-4 for tie-in to the Chiya Khere production facility, which is scheduled for commissioning in the third quarter of 2015.
Front end engineering and design (“FEED”) has been completed on a dedicated feeder pipeline between the Chiya Khere production facility and the tie-in point on the main export pipeline at Kurdistan Crude Pipeline pumping station #2 (“KCP2”) at kilometre 92. Initial work on the elevated section of the right of way over the Chiya Khere mountain started in September 2014. Pipeline commissioning is expected to be completed in time for production start-up in the third quarter of 2015.
New Ventures
As part of its normal business the Company continues to evaluate new opportunities in the MENA region.
Budget
The Board of Directors approved a budget for the year 2014 which includes net capital spending on the Atrush Block appraisal and development program and debt service and other costs totalling $101.0 million. During the nine months ended September 30, 2014 the Company spent $64.8 million of the budgeted total for the year 2014.
The Company believes, based on the forecasts and projections it has prepared and the financing initiative being pursued by the Company at the time this MD&A was approved, that it will have financial resources sufficient to satisfy its contractual obligations and commitments under the agreed work program over the next 12 months. Nevertheless the potential remains that the Company–s financial resources will be insufficient to fund its obligations over the next 12 months. The Company has a number of financing possibilities which it believes it would be able to pursue as required.
ABOUT SHAMARAN
ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration vehicle with a 20.1% direct interest in the Atrush oil discovery, which is currently undergoing appraisal and development.
ShaMaran Petroleum is a Canadian oil and gas company listed on the TSX Venture Exchange and the NASDAQ OMX First North Exchange (Stockholm) under the symbol “SNM”. 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.
ShaMaran Petroleum–s Certified Advisor on NASDAQ OMX First North is Pareto Securities AB.
The Company–s condensed interim consolidated financial statements, notes to the financial statements and management–s discussion and analysis have been filed on SEDAR () and are available on the Company–s website ().
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”, “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 Corporation.
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 Corporation 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 Corporation to predict all of these factors and to assess in advance the impact of each such factor on the Corporation–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.
ON BEHALF OF THE BOARD,
Pradeep Kabra, President and CEO
Contacts:
ShaMaran Petroleum Corp.
Keith Hill
Chairman
(604) 806-3583
ShaMaran Petroleum Corp.
Pradeep Kabra
President and CEO
0041 22 560 8605
ShaMaran Petroleum Corp.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)