ShaMaran Petroleum Q2 Results

ShaMaran Petroleum has announced its financial and operating results for the three and six months ended June 30, 2012:

Highlights

  • The Appraisal Work Program and Budget on the Atrush Block has been approved by the KRG. The Program consists of 3D seismic and a number of appraisal wells and studies.
  • The Atrush-2 appraisal well was spudded on May 23, 2012 and a total depth of 1,750 meters was reached ahead of schedule on July 10, 2012. A comprehensive well testing program is currently underway and the operator of the Atrush Block, General Exploration Partners Inc, will release the test results on the completion of the testing program.
  • 3D seismic acquisition on the Atrush Block was completed on August 11, 2012. Processing of the complete 3D seismic survey is expected at the end of the current year.
  • Planning is underway for a program to complete the Atrush 1 well drilled last year as a future producer. The work is scheduled for the fourth quarter of 2012.
  • Tendering for the Early Well Test Facility (EWTF) for the Atrush Block is underway. The EWTF is expected to be commissioned in the first half of the year 2013.
  • The Taza-1 exploration well was spudded on July 3, 2012. The well is targeting the proven regional Tertiary reservoirs of the Miocene Jeribe formation (which is confirmed as oil-bearing and highly productive, and is on trend to the Sarqala-1 well), the Miocene Euphrates formation and the Oligocene Kirkuk Group.
  • On August 20, 2012 the Company announced that it had sold its entire 20% undivided participating interest in the Taza PSC, held by the fully-owned subsidiary ShaMaran Petroleum B.V., to a subsidiary of Total S.A. for the cash sum of USD 48 million plus a reimbursement of costs incurred on joint operations from April 1, 2012 until the closing date.
  • The Company signed final binding agreements with the KRG in January 2012 to relinquish the 60% working interests previously held in each of the Arbat and Pulkhana Production Sharing Contracts (“PSCs”). An amount of $25 million was paid in January 2012 to the KRG as relinquishment fees to fulfill all outstanding financial commitments on these two blocks. The agreements relieve the Company of any further obligations under these PSCs. Disappointing testing results from the Pulkhana 9 well led the Company to this decision.
  • In February 2012 the Company received a Detailed Property Report (“the Report”) from its independent qualified resources evaluator, McDaniel & Associates Consultants Ltd. The Report is as at December 31, 2011 and includes 124,782 Mboe as best estimate of Gross Estimated Contingent Resources and 87,910 Mboe as the unrisked best estimate of Gross Estimated Prospective Resources net to ShaMaran for the Company’s two assets. These estimates are exclusive of amounts relating to the Pulkhana and Arbat Blocks which were relinquished in January 2012.
  • On April 2, 2012 the Company secured short term financing of $10 million from two related parties.
  • The Company reported net income of nil and a net loss of $26.1 million for the three and six months ended June 30, 2012 (2011: net losses of $1.0 million and 0.5 million). The cash balance of the Company was $6.0 million as at June 30, 2012 (December 31, 2011: $49.1 million).
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