New Production Sharing Contract for ShaMaran

ShaMaran Petroleum has announced that its wholly owned subsidiary ShaMaran Petroleum BV (“ShaMaran BV”) has exercised its option under an Option Agreement signed in July 2009 with the Kurdistan Regional Government (KRG), to enter into a Production Sharing Contract (PSC) in respect of the Taza Block (formerly Block K42) in the Kurdistan Region of Iraq, and that this has now been approved.

ShaMaran BV holds a 20% working interest in the PSC, and OSIL is the operator with a 60% working interest, while the KRG holds a 20% working interest, with costs carried by ShaMaran BV and OSIL.

The 511 square kilometres Taza Block lies between the Pulkhana Block to the southwest and the Kormor block operated by Dana Gas to the northeast. Under the Option Agreement, the Joint Venture acquired 232 line-kilometres of 2D seismic data in 2010, which identified a significant four-way dip closed structure. This closure lies on structural trend with the giant producing Jambur field to the northwest, with reported reserves of over 1 billion barrels of oil, and the recently announced Western Zagros Sarqala oil discovery to the southeast, with reported test rates of over 9,000 barrels of oil per day from the Jeribe formation. The Jeribe will be one of the main targets for the upcoming exploration well on the identified prospect which is expected to be drilled in 2012.

Pradeep Kabra, President and CEO of ShaMaran, commented:

"We are very pleased to have signed the Taza Block PSC. Taza is very prospective block in the prolific petroleum province of the Kurdistan Region of Iraq. We look forward to continuing our partnership with Oil Search in the exploration of this exciting block."

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