VANCOUVER, BRITISH COLUMBIA — (Marketwire) — 08/05/11 — ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) (TSX VENTURE: SNM)(OMX: SNM) is pleased to announce its financial and operating results for the second quarter of 2011.
Highlights
Financial and Operating Results for the three and six months ended June 30th 2011
(Unaudited: Expressed in thousands of United States Dollars)
In the first six months of 2011 the Company continued its exploration campaign in respect of its petroleum properties in Kurdistan constituting the continuing operations of the Company which currently have no corresponding revenue. The net losses in 2011 were driven by normal operational and corporate expenses incurred over the reporting periods.
The Company increased its investment in exploration, evaluation and other intangible assets by $29.9 million during the first six months of 2011 relating to its exploration properties located in Kurdistan. In addition the deferred consideration liability outstanding at December 31, 2010 was discharged completely by providing funds to the associate of the Company, General Exploration Partners Inc (“GEP”), for its approved work program on the Atrush Block. Trade and other accounts payable increased by $7.7 million over the balance at December 31, 2010 primarily due to the increase in activity associated with the Company–s exploration campaign in Kurdistan.
The cash position of the Company increased by $20,707 over the second quarter of 2011 and $13,283 during the first six months of 2011. The main reason for the increase in the cash position was the receipt by the Company in May 2011 of funds related to the private placement of 56 million common shares to $51.3 million ($CAD 49.5 million). This increase in cash was offset by the outflow of funds in the amount $28.3 million for its exploration properties in Kurdistan and $15.4 million on the investment in GEP.
Outlook
The outlook for the remainder of the year 2011 for the four blocks which the Company holds interests in Kurdistan is as follows:
Atrush Block
Atrush 1 was drilled to a total depth of 3,400 meters on January 21, 2011 and the comprehensive well testing program which concluded on April 13, 2011 confirmed a major oil discovery. Consistent with the Appraisal Work Program 3D seismic acquisition operations commenced on the block in July 2011. Planning for the Atrush-2 well is currently in progress and drilling is expected to commence in 2012.
Pulkhana Block
Pulkhana 9 was spudded by the Company on April 3, 2011 and a total depth of 2,333 meters was reached on July 23, 2011. Oil indications have been seen in all of the four targeted Pulkhana reservoirs. A comprehensive well testing program has commenced and is expected to be completed in early September 2011.
The Company has received KRG approval to contract the existing Sakson 101 rig for an additional two firm and two option wells. The rig is going to be moved directly to Pulkhana-10 once operations on Pulkhana-9 have been completed. A workover of the legacy Pulkhana-8 well will commence in the third quarter of 2011.
In addition the Company is progressing with the feasibility study and design for the Pulkhana Early Production Facility (“EPF”) planned to be installed in the year 2012. The first 3 wells (Pulkhana 8, 9 and 10) will be connected to the EPF, with the possibility to expand as future development wells are drilled.
Arbat Block
Following completion of seismic interpretation the Company has received MNR approval for the location of the first commitment exploration well (designated Arbat-A). Site construction will commence shortly. The well is to be situated approximately 3km north of Arbat town and is expected to start drilling before year end. The Company is preparing to go to tender for an infill 2D seismic program to better define several significant leads in the block as potential drilling prospects for the Company–s second obligation well.
Taza Block (Formerly Block K42)
Following the completion of 232.0 km of 2D seismic data acquisition the Company exercised its option to enter into a Production Sharing Contract and which was approved with the PSC signed on July 27, 2011. The Jeribe formation which has reported test rates of over 9,000 barrels of oil per day from the recently announced Western Zagros Sarqala oil discovery to the south of the Taza Block will be one of the main targets for the upcoming exploration well on the identified prospect which is expected to be drilled in 2012.
New Ventures
As part of its normal business the Company is actively pursuing new opportunities in the region.
About ShaMaran
ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration vehicle. It has four projects in the region: the Pulkhana development/appraisal block and the Arbat, Atrush and Taza Block (formerly K42) exploration blocks. These projects are nearby and on trend with existing fields and recent discoveries.
Kurdistan lies within the northern extension of the Zagros Folded Belt. The area is highly underexplored and is currently undergoing a significant exploration and development campaign by over 30 mid to large size international oil companies.
ShaMaran Petroleum is a Canadian oil and gas company listed on the TSX Venture Exchange and the NASDAQ OMX First North Exchange (Stockholm) under the symbol “SNM”.
Forward-Looking Statements
This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as legal and political risk, civil unrest, general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management–s capacity to execute and implement its future plans. Actual results may differ materially from those projected by management. Further, any forward-looking information is made only as of a certain date and the Company undertakes no obligation to update any forward-looking information or statements to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events, except as may be required by applicable securities laws. New factors emerge from time to time, and it is not possible for management of the Company to predict all of these factors and to assess in advance the impact of each such factor on the Company–s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information.
On behalf of the Board,
Pradeep Kabra, President and CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
ShaMaran Petroleum Corp.
Keith Hill
Chairman
(604) 806-3583
ShaMaran Petroleum Corp.
Pradeep Kabra
President and CEO
0041 22 560 8605
ShaMaran Petroleum Corp.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)