Message from Dr. Adel Chaouch, President and CEO of ShaMaran Petroleum Corp.

The year 2022 was a year of action and extraordinary results - yet of heartfelt sadness as well.

We lost our founder, Lukas H. Lundin, to Glioblastoma last July. ShaMaran’s resilience and success through the ups and downs of the markets and oil industry are a tribute to Lukas’ unwavering support to the Company over the years. We have lost a friend, but his legacy will continue on strong through his four sons, the third generation of the Lundin family.

It has been a remarkable year of achievements for the Company. With our 27.6% interest in the Atrush Block and the acquisition of the 18% in the Sarsang Block we have become a key player in the Kurdistan oil industry. Gross cumulative field production from these two projects reached over 115 million barrels of oil representing a contribution to the Kurdish economy of nearly US $7 billion since we began production.

We look forward to full year results, but third quarter results were record breaking. Our third quarter EBITAX was double that of the previous year reaching over US $100 million for the first nine months. Cash flow doubled, oil sales were up 37% and the Company completed a rights offering which raised over US $30 million resulting in a very strong cash position for us.

With our focus on growth, we pursued and closed the acquisition of an interest in the Sarsang Block which comprises two producing fields with enormous upside. Sarsang was acquired from TotalEnergies and is located adjacent to the Atrush field. A new 25,000 production facility was completed and commissioned at Sarsang, a tie-in to the export pipeline completed and production via this new facility and export pipeline has commenced.

Concurrently with the Sarsang acquisition, the Company merged its outstanding bonds into a single $300 million issue, 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 Sarsang acquisition consideration.

As part of our commitment to the Company’s ESG policy, ShaMaran became the exclusive corporate sponsor to the Hasar Organization for Earth Sciences. Hasar is a Kurdish-based climate action NGO that is aiming to plant millions of indigenous trees in country to reduce the impact of emissions in urban settings. Hasar has already planted 180,000 new oak trees and is on track to plant in excess of 1 million trees over the next 2 years. This initiative will help ShaMaran significantly reduce its operational carbon footprint through a local impact initiative which is first of its kind in the Middle East.

The focus on growth remains at the forefront of our plans. The Company is in a good position for significant organic growth over the coming years and will continue to seek out and review good M&A opportunities in Kurdistan and elsewhere that are value accretive and provide continued profitable growth.

As we close our books on the past year and enter a new one, we thank you for your support. We are very grateful to our shareholders and stakeholders and commit to you that the ShaMaran team will be working hard in 2023 to continuously add value.

Thank you.

All the best for the New Year.

Adel Chaouch
President and CEO

January 10, 2023