VANCOUVER, Aug. 7, 2019 /CNW/ - ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSX VENTURE: SNM) (OMX: SNM) today released its financial and operating results and related management discussion and analysis for the three and six months ended June 30, 2019. Unless otherwise stated all currency amounts indicated as "$" in this news release are expressed in thousands of United States dollars.
"In the second quarter, we increased our ownership interest in the Atrush Block, saw more production brought online as planned and continued to generate consistent cash flow," said ShaMaran President and CEO Dr. Adel Chaouch. "Our strengthened interest of 27.6% in Atrush Block provides a stable foundation for future growth. We are generating cash flow that can fund organic growth and the Company is now strongly positioned to act on new accretive opportunities."
SECOND QUARTER 2019 HIGHLIGHTS AND SIGNIFICANT SUBSEQUENT EVENTS
SELECTED OPERATING AND FINANCIAL INFORMATION
The following table includes selected operating and financial information of the Company for the periods indicated. A further discussion of the Company's operating and financial information for these periods are included in the unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2019 and the related Management's Discussion and Analysis report. These documents are available on the Company's website at www.shamaranpetroleum.com or on SEDAR at www.sedar.com.
Three months ended June 30 | Six months ended June 30 | |||
2019 | 2018 | 2019 | 2018 | |
Production information | ||||
Atrush average daily oil production - gross 100% field (Mbopd) | 28.3 | 15.8 | 27.3 | 19.7 |
ShaMaran working interest in Atrush average daily oil production (Mbopd) | 6.4 | 3.2 | 5.8 | 4.0 |
Atrush oil sales - gross 100% field (Mbbl) | 2,575 | 1,435 | 4,940 | 3,562 |
ShaMaran entitlement of Atrush oil sales (Mbbl) | 284 | 259 | 537 | 777 |
Financial information (unaudited) | ||||
Revenue | 15,071 | 15,328 | 27,142 | 41,829 |
Gross margin on oil sales | 2,838 | 8,338 | 4,602 | 22,671 |
Profit from operating activities | 439 | 7,395 | 621 | 20,799 |
Net finance cost | 5,214 | 2,572 | 13,873 | 6,359 |
Net gain on Atrush Acquisition | 750 | - | 750 | - |
(Loss)/income for the period | (4,068) | 4,812 | (12,563) | 14,413 |
Cash flow from operations | (5,411) | 21,864 | 3,699 | 29,327 |
Cash in bank | 19,585 | 27,224 | ||
Positive / (negative) working capital | 48,647 | (128,898) | ||
Total liabilities | 223,255 | 203,875 |
Atrush average daily oil production in Q2 2019 was 80% higher than Q2 2018 principally due to:
ShaMaran entitlement of Atrush oil sales was higher by only 10% between Q2.2019 and Q2.2018 due to the production entitlement for the first six months of 2018 being inflated due to an adjustment for the cost sharing arrangement which concluded between these two parties in June 2018.
Revenue from oil sales in Q2 2019 was slightly lower compared Q2 2018 due to the lower average netback price combined and lower production entitlement share, and despite a higher daily average production rate. The priority arrangement with TAQA for sharing initial exploration cost oil created a significant uplift in the Company's production entitlement share and revenues compared to the first half of 2019.
The decrease in gross margin on oil sales was driven by additional per barrel lifting costs related mainly to the costs of the CK-8 well workover incurred in the period, higher other costs of production related to the HOEWT and an increased cost of depletion per barrel due to an upward revision in estimated future development costs at the end of 2018.
The increase in finance cost between Q2 2019 and Q2 2018 is due to more bonds outstanding over the period at a slightly higher coupon rate and to a decrease in capitalized borrowing costs due to a significant number of development projects having been completed for their intended use.
Cash flow from operations was lower in Q2 2019 compared to Q2 2018 mainly due to lower gross margin on oil sales and cash out on the acquisition of an additional interest in Atrush.
OTHER
This information is information that ShaMaran Petroleum Corp is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, at 5:30 p.m. Eastern Time on August 7, 2019.
ABOUT SHAMARAN
ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration company which currently holds a 27.6% direct interest in the Atrush Block.
ShaMaran is a Canadian oil and gas company listed on the TSX Venture Exchange and the NASDAQ First North Exchange (Stockholm) under the symbol "SNM". 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. Pareto Securities AB is the Company's Certified Advisor on NASDAQ First North, +46 8 402 5000, [email protected] .
The Company plans to publish on November 5, 2019 its financial and operational results for the three and nine months ended September 30, 2019.
FORWARD LOOKING STATEMENTS
This news release contains statements and information 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. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking information. Forward-looking information typically contains statements with words such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "outlook", "budget" or the negative of those terms or similar words suggesting future outcomes. The Company cautions readers regarding the reliance placed by them on forward?looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company.
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 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.
Reserves and resources: ShaMaran Petroleum Corp.'s reserve and contingent resource estimates are as at December 31, 2018 and have been prepared and audited in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Unless otherwise stated, all reserves estimates contained herein are the aggregate of "proved reserves" and "probable reserves", together also known as "2P reserves". Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
Contingent resources: Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development but are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. There is no certainty that it will be commercially viable for the Company to produce any portion of the contingent resources.
BOEs: BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf per 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
SOURCE ShaMaran Petroleum Corp.
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