Shares in ShaMaran Petroleum gained 5 percent on Thursday after the company announced its financial and operating results for year ended December 31, 2016. Unless otherwise stated all currency amounts indicated as "$" in this news release are expressed in thousands of United States dollars.
Highlights and accomplishments included:
- Construction of the 30,000 bopd Atrush Phase 1 Production Facility is complete and final commissioning is in progress.
- Four production wells are now completed, connected to the Production Facility and ready for start-up.
- Work on the Spur Pipeline being constructed between the Production Facility and the Atrush block boundary and construction of the pump station and the intermediate pigging and pressure reduction station is substantially complete.
- Work has commenced on the 35km Feeder Pipeline between the Atrush block boundary and the main export pipeline in Kurdistan and completion is expected in the second quarter of 2017.
- On November 7, 2016 the 4th PSC Amendment and Atrush Facilitation Agreement were concluded between the Non-Government Contractors and the Kurdistan Regional Government ("KRG") resulting in, among other things, the KRG acquiring a 25% participating interest in the Atrush PSC and in a 20.1% interest for General Exploration Partners, Inc. (a wholly owned subsidiary of the Company). These agreements also include terms for repayment of costs paid for on behalf of the KRG, including those relating to the Feeder Pipeline.
- In January 2017 the Company completed the issue of 360 million common shares of ShaMaran on a private placement basis at a price per share of CAD 0.10 (equal to SEK 0.67) which resulted in gross proceeds to the Company of $27.3 million ($26.4 million net of transaction related costs).
- In early May 2016 the Company completed a financing arrangement which has provided the Company with additional liquidity in 2016 of approximately $33 million due to the issuance of $17 million of new super senior bonds, the conversion of $18 million of existing senior bonds into 218,863,000 ShaMaran common shares, and providing terms for the Company to pay future bond coupon interest in kind by issuing additional bonds.
- In February 2016 the Company reported on a property gross basis estimates as at December 31, 2016 of 85.1 MMbbl of Total Field Proven plus Probable ("2P") Reserves and 389 MMboe Total Field Unrisked Best Estimate Discovered Recoverable Resources ("2P + 2C")1 2. Reserves and resources are unchanged from prior year estimates.
Chris Bruijnzeels, President and CEO of ShaMaran, commented:
"We are pleased to see the light at the end of the tunnel. Our production facilities are ready, the producing wells are connected and the pipeline project is progressing. We are expecting first oil in Q2 2017."
FINANCIAL AND OPERATING RESULTS FOR THE YEAR ENDED DECEMBER 31, 2016
During the reporting period the Company continued with the first phase of the development program in respect of the Atrush petroleum property located in the Kurdistan Region of Iraq which constitutes the continuing operations of the Company. Atrush currently generates no revenues.
The Company reports a net loss of $9.2 million in the year ended December 31, 2016 which was primarily driven by routine general and administrative expenses, share based payment expenses and finance cost, the substantial portion of which was expensed borrowing costs on the Company's bonds. These charges have been offset by service fee revenues, interest income on Atrush cost loans and interest on cash held in short term deposits.
(Source: ShaMaran Petroleum)