ShaMaran Reports Second Quarter 2024 Results
Corporate Highlights:
- The closure of the Iraq-Türkiye pipeline ("ITP") since
March 25, 2023 , continues to have a material impact on ShaMaran's operations and financial results. The Company is actively engaging with the relevant parties to resume pipeline exports; - In Q2 2024, average gross daily oil production from Atrush and Sarsang combined was 54,800 bopd, more than three times the level achieved in Q2 2023 (18,000 bopd in Q2 2023 from Sarsang only as Atrush was shut in immediately after the ITP closure);
- As a result of higher production from both blocks, revenue from local sales in Q2 2024 was
$22.6 million , approximately three-and-a-half times the$6.5 million delivered during Q2 2023; and - In
June 2024 , the Company retired$47 million of the ShaMaran 2025 bond through a tender process and$5.9 million of its own bonds, and announced bondholder approval for amendments to the bond terms, including a two-year extension of the maturity date toJuly 2027 .
Financial Highlights:
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Six months ended |
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USD Thousands |
2024 |
2023 |
2024 |
2023 |
Revenue |
22,630 |
6,542 |
45,218 |
49,922 |
Gross margin on oil sales |
7,405 |
(4,199) |
14,245 |
17,899 |
Net result |
(509) |
(27,199) |
(1,002) |
(17,600) |
Cash flow from operations |
15,830 |
(734) |
34,145 |
17,532 |
EBITDAX |
14,707 |
(4,876) |
28,941 |
25,351 |
- ShaMaran generated
$15.8 million in operating cash flow during Q2 2024 from local sales (negative$0.7 million in Q2 2023); - The Company produced free cash flow before debt service2 of
$16.8 million in Q2 2024 (negative$6.8 million in Q2 2023) with tight cost control; - EBITDAX has consistently increased since the ITP shutdown, with Q2 2024 EBITDAX at
$14.7 million (negative$4.9 million in Q2 2023); - Q2 2024 oil sales to the
Kurdistan local market averaged a net oil price of$37.80 /bbl from the two blocks ($41.28 /bbl in Q2 2023 from Sarsang only), 8% lower than Q2 2023; and - At
June 30, 2024 , the Company had cash of$38.7 million and gross debt of$217.7 million (including the$202.1 million bond and$15.6 million related-party loan). Net debt3 was$179 million .
__________ |
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1 |
EBITDAX is a non-IFRS financial measure. Refer to the MD&A for more information. |
2 |
Free cash flow before debt service is a non-IFRS financial measure. Refer to the MD&A for more information. |
3 |
Net debt is a non-IFRS financial measure. Refer to the MD&A for more information. |
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Operational Highlights:
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2024 |
2023 |
2024 |
2023 |
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Average daily oil production – gross 100% field (Mbopd) |
|
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|
|
|
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- Atrush |
|
25.1 |
- |
22.5 |
15.2 |
||
- Sarsang |
|
29.7 |
18.0 |
33.6 |
27.0 |
||
Total |
|
54.8 |
18.0 |
56.1 |
42.2 |
||
Oil sales – gross 100% field (Mbbl) |
|
|
|
|
|
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- Atrush |
|
2,279 |
- |
4,096 |
2,729 |
||
- Sarsang |
|
2,622 |
1,234 |
5,967 |
4,387 |
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Total |
|
4,901 |
1,234 |
10,063 |
7,116 |
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- At Atrush, production averaged 25,100 bopd in Q2 2024 and remains stable; and
- At Sarsang, production averaged 29,700 bopd in Q2 2024 due to maintenance activities and facility downtime. Daily rates in late June and early
July 2024 have exceeded 36,000 bopd. During Q3 2024, a two-well drilling program will commence that is expected to increase production towards year-end.
Subsequent Event:
- On
August 6, 2024 , the Company closed the acquisition ofTAQA Atrush B.V . and the subsequent sale of an indirect interest in Atrush toHKN Energy IV, Ltd. announced onJanuary 22, 2024 . The two-step transaction increased the Company's indirect 27.6% stake in the Atrush Block to a 50% working interest (66.67% paying interest) following the sale of an indirect 25% working interest (33.33% paying interest) toHKN Energy IV, Ltd. An affiliate of HKN Energy is now operator of the Atrush Block, and theKurdistan Regional Government's 25% working interest in the Atrush Block has been converted to a carried interest.
Abbreviations:
bbl |
Barrels of crude oil |
bopd |
Barrels of crude oil per day |
Mbbl |
Thousand barrels of crude oil |
Mbopd |
Thousand barrels of crude oil per day |
ShaMaran plans to publish its financial statements for the nine months ending
About
ShaMaran is a Canadian independent oil and gas company focused on the
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Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or the Company's future performance, business prospects and opportunities, which are based on assumptions of management.
The use of any of the words "will", "expected", "planned" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of certain future events. Certain information set forth in this news release contains forward-looking statements including, but not limited to, expectations and timing of the ITP reopening and its effect on the Company, expected increase in production in Sarsang and Atrush and the impact of the completion of the TAQA/HKN transaction in the Atrush Block. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, including results, timing and costs of seismic, drilling and development related activity in the Company's area of operations, uninsured risks, regulatory changes, defects in title, availability of funds required to participate in the development activities, availability of financing on reasonable terms, availability of materials and equipment on satisfactory terms, outcome of commercial negotiations with government and other regulatory authorities, timeliness of government or other regulatory approvals, actual performance of facilities, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. The risks outlined above should not be construed as exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in the Company's annual information form for the year ended
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