ShaMaran Q2 2013 Financial and Operating Results

ShaMaran Q2 2013 Financial and Operating Results

August 19, 2013

VANCOUVER, BRITISH COLUMBIA–(Marketwired - Aug. 19, 2013) -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 six months ended June 30, 2013. Unless otherwise stated all currency amounts indicated as “$” in this news release are expressed in thousands of United States dollars.


  • A Field Development Plan for the Atrush Block was submitted for approval to the KRG on May 6 2013 which is in accordance with the terms of the Atrush Block PSC.
  • The Atrush-3 appraisal well, located 6.5 kilometers to the east of the Atrush-2 appraisal well, was spudded on March 25, 2013 and reached total depth of 1,806 meters on June 23, 2013. The well testing program is nearing conclusion with results expected by end of August 2013.
  • The Company announced on February 4, 2013 an increase of 35% in Best Estimate 2C Contingent Resources (gross) for the Atrush Block, from 465 MMBOE at December 31, 2011 to 627 MMBOE at the end of 2012. The estimates were provided by the Company’s independent qualified resources evaluator, McDaniel & Associates Consultants Ltd., in a Detailed Property Report prepared as at December 31, 2012.
  • On March 12, 2013 the Contractor entities to the Atrush Block PSC were notified by the Kurdistan regional Government (“KRG”) that it had exercised its option to acquire a 25% Government Interest in accordance with the provisions of the Atrush Block PSC.
  • At June 30, 2013 the Company had a cash balance of $28.6 million and working capital of $18.4 million.

Financial and Operating Results for the three and six months ended June 30th 2013

During the three and six months ended June 30, 2013 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 net loss in the first half principally relates to the general and administrative expenses and share based payments expense incurred in respect of the continuing operations of the Company.

Condensed Interim Consolidated Statement of Comprehensive Income
(Unaudited, expressed in thousands of United States Dollars)
  Three months 
ended June 30,
Six months 
ended June 30,
  2013 2012 2013 2012
Expenses from continuing operations        
General and administrative expense (355) (459) (805) (843)
Depreciation and amortisation expense (16) (48) (35) (97)
Share based payments expense (565) (8) (566) (6)
Share of loss of associate - (46) - (112)
Impairment (loss) / recovery (84) 945 (84) 697
Relinquishment costs - - - (25,732)
(Loss) / income before finance items and income tax expense (1,020) 384 (1,490) (26,093)
Finance cost (23) (360) - (360)
Finance income 10 25 37 416
Total finance (cost) / income (13) (335) 37 56
(Loss) / income before income tax expense (1,033) 49 (1,453) (26,037)
Income tax expense (10) (28) (50) (52)
(Loss) / income from continuing operations (1,043) 21 (1,503) (26,089)
Discontinued operations        
Loss from discontinued operations (7) (13) (27) (50)
(Loss) / income for the period (1,050) 8 (1,530) (26,139)
Other comprehensive income / (loss) :        
Items that may be reclassified subsequently to net income:Currency translation differences 11 (50) (77) (17)
Total other comprehensive income / (loss) 11 (50) (77) (17)
Total comprehensive loss for the period (1,039) (42) (1,607) (26,156)
Condensed Interim Consolidated Balance Sheet
(Unaudited, expressed in thousands of United States Dollars)
  At June 30, 2013   At December 31, 2012  
Non-current assets        
Intangible assets 313,871   303,549  
Property, plant and equipment 214   257  
  314,085   303,806  
Current assets        
Other current assets 366   127  
Inventories -   198  
Other receivables 44   204  
Cash and cash equivalents 28,575   41,216  
  28,985   41,745  
Assets associated with discontinued operations -   3  
Total assets 343,070   345,554  
Current liabilities        
Accounts payable and accrued expenses 5,555   7,027  
Current tax liabilities 53   90  
Deferred liability 5,000   5,000  
  10,608   12,117  
Non-current liabilities        
Provisions 181   120  
  181   120  
Liabilities associated with discontinued operations 1,946   1,941  
Total liabilities 12,735   14,178  
Share capital 534,068   534,068  
Share based payments reserve 4,402   3,836  
Cumulative translation adjustment (69 ) 8  
Accumulated deficit (208,066 ) (206,536 )
Total equity 330,335   331,376  
Total liabilities and equity 343,070   345,554  

The cash position of the Company decreased by $12.6 million during first two quarters of 2013. The decrease in the cash position was due to outflows of funds of $10.3 million on appraisal and development operations on the Atrush Block, $1.3 million net on changes in working capital items and $1.0 million on G&A and other cash expenses. The Company has a number of additional financing possibilities which will be pursued as required.

Condensed Interim Consolidated Cash Flow Statement
(Unaudited, expressed in thousands of United States Dollars)
  Three months 
ended June 30,
Six months 
ended June 30,
  2013 2012 2013 2012
Operating activities        
Net loss for the period from continuing operations (1,043) 21 (1,503) (26,089)
Adjustments for:        
  Interest income (10) (1) (19) (25)
  Interest expense on equity based finance fee - 360 - 360
  Foreign exchange gain / (loss) 23 (24) (18) (391)
  Depreciation and amortisation expense 16 48 35 97
  Income tax (10) (70) (37) (72)
  Impairment loss / (recovery) 84 (945) 84 (697)
  Share-based payment expense 565 8 566 6
  Share of loss of associates - 46 - 112
  Changes in trade and other receivables 2 696 160 (546)
  Changes in other current assets 29 170 (239) 440
  Changes in inventories 114 1,403 114 2,705
  Changes in accounts payable and accrued expenses 1,421 (4,145) (1,472) (19,717)
  Changes in provisions 61 - 61 -
Cash used in discontinued operations (17) (337) (19) (554)
Net cash inflows from / (outflows to) operating activities 1,235 (2,770) (2,287) (44,371)
Investment activities        
Purchase of intangible assets (7,957) (1,749) (10,320) (4,181)
Purchase of property, plant & equipment - (446) - (252
Investment in associate - (4,691) - (4,691)
Interest received on cash deposits 10 1 19 25
Net cash outflows to investing activities (7,947) (6,885) (10,301) (9,099)
Financing activities        
Proceeds from borrowings - 10,000 - 10,000
Net cash inflows from financing activities - 10,000 - 10,000
Effect of exchange rate changes on cash and cash equivalents (13) (26) (53) 374
Change in cash and cash equivalents (6,725) 319 (12,641) (43,096)
Cash and cash equivalents, beginning of the period 35,300 5,670 41,216 49,085
Cash and cash equivalents, end of the period 28,575 5,989 28,575 5,989


The outlook to the end of the year 2013 is as follows:

Atrush Block

The Operator (TAQA) submitted to the KRG for approval a Field Development Plan (“FDP”) in May 2013 and discussions will continue with the Ministry of Natural Resources to obtain necessary approvals. In the meantime, work will continue with preparations for the implementation of the Phase 1 development.

The Atrush-3 appraisal well testing program is nearing conclusion with the results expected to be announced by the end of August 2013.

Final processing of the complete 3D seismic survey is expected in the third quarter of 2013. The enhanced data will be used for the development drilling program. The Atrush-4 appraisal/development well is planned to commence drilling in the third quarter 2013. Atrush-4 will be a high-deviation appraisal/development well from the AT-1 drilling pad targeting the undrilled crest of the field.

The Company is currently considering a number of financing initiatives.

New Ventures

As part of its normal business the Company continues to evaluate new opportunities in the MENA region.

About ShaMaran

ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration vehicle with a 20.1% direct interest in the Atrush Block located in the region. This project is 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”.

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 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

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 Öhman AB.

ShaMaran Petroleum Corp.
Keith Hill
(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)
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