Atrush Block: World-Class Oil Project

ShaMaran is a Canadian oil and gas company listed on the TSX Venture Exchange and the NASDAQ First North Growth Market (Sweden) under the symbol “SNM.” The Company has a 27.6% ownership interest in Atrush Block, a high‐quality oil field in Kurdistan that has a large production base with significant growth potential. As a Lundin Group Company, ShaMaran can leverage the expertise and strength of a group that has been building resource companies around the world for more than 40 years.

Oil production from Atrush commenced in July 2017. Installed production facilities have a capacity of over 50,000 barrels of oil per day (“bopd”). Fourteen wells have been drilled to date and ten wells are currently producing with a year to date 2020 production average of 46,504 bopd. Oil prices in the third quarter of 2020 have recovered and stabilized relative to the volatility in prices which prevailed in the first two quarters of the year following the onset of the coronavirus (“COVID‐19”)1 pandemic. At that time the Atrush partners reacted quickly to take responsible measures to scale back the development program in the current cycle yet retain the flexibility to allow for the ramp up of development activity in case of strengthening oil prices and at the same time preserve the magnitude and stability of Atrush oil production. Partners have continued to prudently manage Atrush on this basis and Atrush production guidance for 2020 is maintained at 44,000 to 50,000 bopd.

The Atrush Block is located in the Kurdistan Region of Iraq, approximately 85 kilometres northwest of Erbil, the capital of Kurdistan. The Atrush Block is 269 square kilometres in area and has oil proven in Jurassic fractured carbonates in the Chiya Khere structure. Total discovered oil in place in the Atrush Block is a low estimate of 1.6 billion barrels, a best estimate of 2.0 billion barrels and a high estimate of 2.6 billion barrels.

Atrush is continuously being appraised and further phases of development, including further drilling and possible facilities expansion, will be defined based on production data, appraisal information and economics.

Atrush Owership Interest

Atrush Owership Interest

Simplified Atrush Production Sharing Agreement

Simplified Atrush Production Sharing Agreement Learn More

Production

Oil Production at Atrush Block commenced July 2017

ShaMaran is a Canadian oil and gas company listed on the TSX Venture Exchange and the NASDAQ First North Growth Market (Sweden) under the symbol “SNM.” ShaMaran has created a foundation for growth. The Company has a 27.6% interest in the Atrush Block, a high-quality oil field in Kurdistan that has a large production base with significant growth potential. Atrush generates cash flow that can fund organic growth and the Company is strongly positioned to act on new accretive opportunities as they present themselves. As a Lundin Group Company, ShaMaran can leverage the expertise and strength of a family that has been building resource companies around the world for more than 40 years.

Oil production from Atrush commenced in July 2017. Installed production facilities have a capacity of over 50,000 barrels of oil per day. Fourteen wells have been drilled to date and ten wells are currently producing. Atrush’s production guidance for 2020 is 44,000 to 50,000 bopd. The deployment of additional installed well capacity will optimize currently underutilized productive facilities and harvest cash flows for future development plans. Plans include commencing construction of a gas solution at the Atrush Permanent Production Facilities which will sweeten gas for displacement of current diesel use for use in the facilities and will significantly reduce and ultimately eliminate gas flaring in the block, an important step forward in environmentally responsible development.

The Atrush Block is located in the Kurdistan Region of Iraq, approximately 85 kilometres northwest of Erbil, the capital of Kurdistan. The Atrush Block is 269 square kilometres in area and has oil proven in Jurassic fractured carbonates in the Chiya Khere structure. Total discovered oil in place in the Atrush Block is a low estimate of 1.6 billion barrels, a best estimate of 2.0 billion barrels and a high estimate of 2.6 billion barrels. Atrush is continuously being appraised and further phases of development, including further drilling and possible facilities expansion, will be defined based on production data, appraisal information and economic circumstances.

Monthly Production

Monthly Production

Quarterly Production Data

Quarterly PeriodTotal Field Production (bbl)Average Daily Production (bpd)Average NetbackAverage Lifting Cost
Q3 20171.3 million14,600$36.88$8.54
Q4 20172.0 million21,700$47.00$8.09
Q1 20182.1 million23,600$51.14$6.06
Q2 20181.44 million15,800$58.88$7.97
Q3 20182.0 million21,700$59.72$7.92
Q4 20182.52 million27,400$52.58$7.84
Q1 20192.37 million26,300$47.76$8.89
Q2 20192.58 million28,300$53.06$9.28
Q3 20193.06 million33,167$46.43$7.62
Q4 20193.83 million41,700$47.92$5.32
Q1 20204.25 million46,700$35.21$5.90
Q2 20204.27 million46,900$13.87$5.36
Q3 20204.24 million46,100$27.26$3.97

Strong Cash Flow

In Million USDQ3.2020Q2.2020Q1.2020Q4.2019
Operating cash, net of G&A and other cash expenses9.0(1.5)7.315.6
Net gain on Atrush acquisition0.00.00.00.0
Receivable/payable and working capital adjustments(4.5)2.6(5.5)(13.8)
     Cash in from operations4.41.11.81.8
KRG loans, interest and KRG carry receivables collected2.61.82.12.3
Purchase of additional interest in Atrush 10.00.00.00.0
Atrush Development(1.5)(2.0)(3.5)(8.6)
     Cash (out on) / in from investments1.1(0.2)(1.3)(6.3)
Bonds repaid0.00.00.0(0.0)
Bond coupon interst payments(11.4)0.0(11.4)(0.0)
Nemesia Guarantee22.80.00.00.0
     Cash out on financing11.40.0(11.4)0.0
Total change in cash16.90.9(10.9)(4.5)
Opening cash5.54.615.520.0
     Ending cash22.45.54.615.5

The Atrush Block is a high-quality oil field that has a large production base with significant growth potential.

The Atrush Block is located approximately 85 kilometers northwest of Erbil, the capital of Kurdistan, is 269 square kilometers in area and has oil proven in Jurassic fractured carbonates in the Chiya Khere structure. The structure is expressed at surface by the Chiya Khere mountain which runs east‐west for approximately 25 kilometers with an approximate width of 3.5 kilometers.

30,000
bopd
2017 Startup Capacity
45,000 - 50,000
bopd
2019 Exit Rate
44,000 - 50,000 bopd
2020 Guidance
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