VANCOUVER, BC, May 5, 2021 /CNW/ - ShaMaran Petroleum
Corp. ("ShaMaran" or the "Company") (TSXV: SNM) (Nasdaq First
North Growth Market: SNM) today released its financial and
operating results and related management's discussion and analysis
for the three months ended March 31,
20201. View PDF
Dr. Adel Chaouch, President and
Chief Executive Officer of ShaMaran, commented: "ShaMaran's focus
on financial discipline and reducing our debt has resulted in
extremely positive results for the Company. Our Q1 EBITDA of
$13.5 million is more than double
that of the same period last year and we are consistently
sustaining positive cash generation. We have accelerated the
amortization obligation due in December
2021 by acquiring our bonds at attractive market
rates. We have already reduced that obligation by two thirds
from $15 million down to $5 million.
We also have resumed a number of the suspended capital programs
and re-established the pre-covid trend of quarter-on-quarter
production growth. The current production is now averaging 42,000
barrels per day, up from Q1 and in line with our guidance,
positioning Atrush as the second largest IOC producing field in
Kurdistan. Also in line with
our financial and corporate strategy, we have implemented
substantial cost saving measures as well as operating efficiencies
which have allowed us to lower production costs while improving
output.
We continue to be optimistic about 2021 and believe that
ShaMaran is well positioned to benefit from new market
opportunities as they arise."
Q1 2021 Operational Highlights
- Cumulative production of 40 million barrels achieved on
January 4, 2021 despite the
challenges of the global COVID pandemic with its impact on crude
oil prices, and a significantly reduced capital development program
in 2020;
- Average production of approximately 38,212 barrels of oil per
day ("bopd") for the first quarter of 2021; slightly lower than the
2020 average as expected due to the deferral of capital development
wells and as a result of operational interventions aggregated in
the first quarter;
- First quarter 2021 lifting costs per barrel of $5.12 in line with 2021 guidance and a 13%
decrease vs Q1 2020 lifting costs due to improved operating
efficiencies; and
- Atrush Property gross 2P reserves2 increased 108% to
109.9 MMbbls as at December 31, 2020
from 108.5 in 2019. The Company's gross 2P reserves increased from
29.9 MMbbls to 30.3 MMbbls. A consistent record of reserves
replacement year on year since the inception of production.
____________________________________
|
1 All
currency amounts indicated as "$" in this news release are
expressed in United States Dollars.
|
2 Reserves
estimates, contingent resource estimates and estimates of future
net revenue in respect of ShaMaran's oil and gas assets in the
Atrush Block are effective as at December 31, 2020, and are
included in the report prepared by McDaniel & Associates
Consultants Ltd. (McDaniel), an independent qualified reserves
evaluator, in accordance with National Instrument 51-101 –
Standards of Disclosure for Oil and Gas Activities (NI 51-101) and
the Canadian Oil and Gas Evaluation Handbook (the COGE Handbook)
and using McDaniel's January 1, 2021 price
forecasts.
|
Q1 2021 Financial Highlights
|
Three months ended
March 31
|
USD
Thousands
|
2021
|
2020
|
Revenue
|
20,606
|
19,841
|
Gross margin on oil
sales
|
10,254
|
(930)
|
Net result
|
2,469
|
(125,211)
|
Cash flow from
operations
|
5,285
|
1,861
|
EBITDA
|
13,500
|
6,613
|
- The first quarter of 2021 saw a positive net result of
$2.5 million, the first quarter to
achieve a positive net income since the COVID-19 pandemic
commenced;
- A strong EBITDA of $13.5 million
for Q1 2021, more than twice the EBITDA of Q1 2020;
- The Kurdistan Regional Government ("KRG") has started repayment
of the $41.7 million of outstanding
receivables owed to the Company for November
2019 to February 2020. At the
date of this news release $12.9
million net to the Company has been invoiced to the KRG and
$4.4 million net to the Company has
been paid. Full recovery of the KRG receivable is expected within
12 months due to forecasted oil prices; and
- After approval in January 2021 by
Bondholders for the Company to buy back its Bonds in the market,
the Company is pleased to report that it has purchased in total
this year $10 million of its 12%
Bonds at attractive market rates and that all of these Bonds have
been retired. The Company's Bond amortization payment due in
December 2021 has correspondingly
been reduced by two-thirds (from $15
million to $5 million) and the
total outstanding principal amount of ShaMaran bonds reduced to
$180 million.
CORPORATE UPDATE
Ms. Terry Allen, Director who
joined the Board in 2018, has elected not to stand for re-election
at the next Annual General Meeting of Shareholders scheduled for
June 23, 2021. Chris
Bruijnzeels, Chairman of the Board commented "We thank Terry for
her dedicated service to the Corporation and her leadership on the
audit committee of the Board. We wish Terry all the
best."
Management of the Company will be seeking the affirmative vote
of its Shareholders at the next Annual General Meeting on
June 23, 2021 to approve the
reduction of the number of directors of the Company from six (6) to
five (5).
OTHER
This information is information that ShaMaran is obliged to make
public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact persons set out below, on May 5,
2021 at 5:30 p.m. Eastern
Time. Pareto Securities AB is the Company's Certified
Advisor on Nasdaq First North Growth Market (Stockholm), +46 8402 5000,
certifiedadviser.se@paretosec.com.
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.
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.
The Covid-19 virus and the restrictions and disruptions
related to it have had a drastic adverse effect on the world demand
for, and prices of, oil and gas as well as the market price of the
shares of oil and gas companies generally, including the Company's
common shares. There can be no assurance that these adverse
effects will not continue or that commodity prices will not
decrease or remain volatile in the future. These factors are
beyond the control of ShaMaran and it is difficult to assess how
these, and other factors, will continue to affect the Company and
the market price of ShaMaran's common shares. In light of the
current situation, as at the date of this news release, the Company
continues to review and assess its business plans and assumptions
regarding the business environment, as well as its estimates of
future production, cash flows, operating costs and capital
expenditures.
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", "outlook",
"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 Company.
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.
ABOUT SHAMARAN
ShaMaran is a Kurdistan focused
oil development and exploration company which holds a 27.6% working
interest, through its wholly-owned subsidiary General Exploration
Partners, Inc., in the Atrush Block.
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".
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SOURCE ShaMaran Petroleum Corp.