ShaMaran Announces Financial and Operating Results

By John Lee.

ShaMaran Petroleum has announce its financial and operating results for the three and nine months ended September 30, 2012.

Highlights

  • On November 7, 2012 General Exploration Partners Ltd, operator of the Atrush Block and acting on behalf of the Contractor Group under the Atrush Block Production Sharing Contract, submitted to the Atrush Block Management Committee a Declaration of Commercial Discovery with effect from November 7, 2012.
  • 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. Following the conclusion of the comprehensive well testing program the Company announced on September 13, 2012 that the main reservoir in Atrush-2 produced a combined flow rate of more than 42,200 barrels of oil per day (“bopd”) and that additional oil resources were confirmed in two additional formations.
  • The Atrush 1 discovery well which was drilled last year was completed in November 2012. The well is now ready to be connected to production facilities and put on stream as a future producer.
  • Civil works for road access and site preparation for the Atrush-3 appraisal well are nearing completion. The drilling rig used to drill Atrush-2 and complete Atrush-1 will be moved to Atrush-3 which is expected to spud before the end of this year.
  • 3D seismic acquisition on the Atrush Block was completed on August 11, 2012. Final processing of the complete 3D seismic survey is expected in the first quarter of 2013.
  • The tendering process has been completed for a contract to install and operate extended test facilities (“ETF”) on the Atrush Block with a production capacity of up to 5,000 bopd. The ETF is expected to be commissioned in the first quarter of the year 2013 with production coming from the Atrush-1 well.
  • The Company announced on August 20, 2012 that it sold its entire 20% undivided participating interest in the Taza production sharing contract (“PSC”) to a subsidiary of Total S.A. for a USD 48 million purchase price 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 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.
  • The Company has re-engaged McDaniel & Associates Consultants Ltd (“McDaniels”), its independent qualified resources evaluator, to provide the Company with a Detailed Property Report (“DPR”) which will include the results of an evaluation of the reserves and resources data of the Company as at December 31, 2012.
  • In August 2012 the Company repaid in full the short term financing of $10 million which had been obtained in April 2012 from two related parties.
  • The Company reported net income of nil and a net loss of $26.2 million for the three and nine months ended September 30, 2012 (2011: net losses of $2.8 million and 3.3 million). The cash balance of the Company was $43.3 million as at September 30, 2012 (December 31, 2011: $49.1 million).

Please click here to download the full results.

(Picture: ShaMaran President and CEO Pradeep Kabra)

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