VANCOUVER, BRITISH COLUMBIA — (Marketwire) — 03/29/12 — ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) (TSX VENTURE: SNM)(OMX: SNM) is pleased to announce its financial and operating results for the year ended December 31, 2011.
Highlights
Financial and Operating Results for the year ended December 31st, 2011
(Unaudited: Expressed in thousands of United States Dollars)
During the year 2011 the Company continued its exploration campaign in respect of its petroleum properties in Kurdistan constituting the continuing operations of the Company which currently have no corresponding revenue. The net loss in 2011 was driven by the impairment losses relating to the suspension in December 2011 of all operations associated with the Pulkhana and Arbat Blocks and the relinquishment of these PSCs which was completed on January 17, 2012.
The Company spent $103 million on exploration and evaluation activities in 2011 consisting primarily of drilling, workover and testing costs incurred on the Pulkhana 8 and Pulkhana 9 wells and a capacity building payment issued to the KRG associated with the signing of the Taza Block PSC. Also during the year 2012 the Company increased by $7.5 million its investment in GEP, the company operating the Atrush Block, primarily through cash contributions which were required to fund the work program and budget on the Atrush Block. The $207.5 million provision for impairment related to the Pulkhana and Arbat PSC relinquishment offset the exploration and investment charges capitalized and drive the net decrease by $105.3 million in total assets reported on the balance sheet relative to the amount reported at the end of the previous year.
The cash position of the Company decreased by $9.6 million during year 2011. The main reason for the decrease in the cash position was the outflow of funds on exploration activities in Kurdistan and the investment in GEP. This decrease in cash was offset by the receipt by the Company in May and November 2011 of funds related to the private placement of 183.5 million common shares of the Company for proceeds net of issuance costs in amounts totalling of $99.8 million.
Outlook
The outlook for the year 2012 for the two blocks which the Company holds interests in Kurdistan is as follows:
Atrush Block
The operating company (GEP) had completed more than half of the planned 309 square kilometers for the 3D seismic acquisition program by the end of December 2011 when operations were suspended because of the winter weather. Operations to acquire the balance portion of the 3D Seismic will commence by the end of the first quarter 2012 and are likely to be completed by the end of second quarter 2012. The Atrush-2 well location is under construction and GEP is in the process of tendering for a rig for a planned commencement of drilling operations in May 2012.
Taza Block (Formerly Block K42)
Preparations for drilling the first Taza exploration well will continue over the coming months. The surface location of the well has been selected and civil engineering works for site access road and the site preparation are under way. The planned commencement of drilling operations is for the end of the second quarter of 2012.
New Ventures
As part of its normal business the Company continues to evaluate new opportunities in the region.
About ShaMaran
ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration vehicle. It has two projects in the region: the Atrush Block and Taza Block (formerly K42) exploration blocks. These projects are nearby and on trend with existing fields and recent discoveries.
Kurdistan lies within the northern extension of the Zagros Folded Belt. The area is highly underexplored and is currently undergoing a significant exploration and development campaign by over 40 mid to large size international oil companies.
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”.
Forward-Looking Statements
This press release contains statements 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. 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.
On behalf of the Board,
Pradeep Kabra, President and CEO
ShaMaran Petroleum–s Certified Advisor on NASDAQ OMX First North is Pareto Ohman AB.
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.
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)