ShaMaran Petroleum provide 2012 year end financial and operating results

Monday, March 18, 2013
  • The Company announced on February 4, 2013 an increase of 35% in Best Estimate 2C Contingent Resources (gross) for the Atrush Block, from 465.6 MMBOE at December 31, 2011 to 627.3 MMBOE at the end of 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.
  • The Company signed final binding agreements with the Kurdistan Regional Government ("KRG") in January 2012 to relinquish the 60% working interests previously held in each of the Arbat and Pulkhana PSCs.

ShaMaran Petroleum Corp. (TSX VENTURE:SNM)(OMX:SNM) is pleased to announce its financial and operating results for the year ended December 31, 2012. Unless otherwise stated all currency amounts indicated as "$" in this news release are expressed in thousands of United States Dollars.

Highlights

  • The Company announced on February 4, 2013 an increase of 35% in Best Estimate 2C Contingent Resources (gross) for the Atrush Block, from 465.6 MMBOE at December 31, 2011 to 627.3 MMBOE at the end of 2012. The estimates were provided by an independent qualified resources evaluator, McDaniel & Associates Consultants Ltd., in a Detailed Property Report prepared as at December 31, 2012.
  • On November 7, 2012 General Exploration Partners Inc. ("GEP") then 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 from three separate cased hole tests of more than 42,200 barrels of oil per day ("bopd") and that additional oil resources were confirmed in two additional formations.
  • The Company announced on August 20, 2012 that it sold its entire 20% direct interest in the Taza production sharing contract ("PSC") to a subsidiary of Total S.A. for a $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 Kurdistan Regional Government ("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.
  • In August 2012 the Company repaid in full the short term loan of $10 million which had been obtained in April 2012 from two related parties.
  • The cash balance of the Company was $41.2 million as at December 31, 2012 (2011: $49.1 million).
  • On March 12, 2013 the Contracting entities to the Atrush Block PSC were notified by the KRG that it had exercised its option to acquire a 25% Government Interest in accordance with the provisions of the Atrush Block PSC.

Financial and Operating Results for the year ended December 31st 2012

During the year ended December 31, 2012 the Company continued its exploration and appraisal campaign in respect of petroleum properties located in the Kurdistan Region of Iraq which constitute the continuing operations of the Company. These petroleum properties have generated no revenues.

On December 31, 2012 GEP completed two principal transactions resulting in the sale of a 53.2% direct interest in the Atrush Block to TAQA Atrush B.V. ("TAQA"), a subsidiary of Abu Dhabi National Energy Company PJSC, and the repurchase from Aspect Energy International, LLC ("Aspect") of the entire 66.5% shareholding interest which Aspect held in GEP. As a result of the transactions the Company has acquired a 100% shareholding interest in and control of GEP which then held a 26.8% direct interest in the Atrush Block.

The $205 million net income in the year 2012 was primarily comprised of income from associate of $129 million related to the sale by GEP on December 31, 2012 of the 53.2% interest in the Atrush Block and by the gain of $103 million relating to the fair valuation (required by International Financial Reporting Standards on acquiring control) of GEP's net assets and liabilities (together, the "Fair Value Increase") offset by $25.7 million of relinquishment fees and other costs relating to the termination of the Pulkhana and Arbat Block PSCs in January 2012. Also during the year the Company sold the 20% direct interest which it held in the Taza Block PSC for net proceeds of $53.3 million resulting in a net gain of $1.1 million.

Consolidated Statement of Comprehensive Income
(Audited, expressed in thousands of United States Dollars)
For the year ended December 31,
2012 2011

Expenses from continuing operations
General and administrative expense (2,852) (1,082)
Share based payments expense (8) (264)
Depreciation and amortisation expense (183) (221)
Share of income / (loss) of associate 129,000 (271)
Impairment recovery / (loss) 1,814 (207,504)
Gain on fair valuation of net assets of subsidiary 102,735 -
Gain on sale of asset 1,100 -
Relinquishment costs (25,732) -
Income / (loss) before finance items and income tax expense 205,874 (209,342)
Finance cost (719) (1,777)
Finance income 359 518
Net finance loss (360) (1,259)
Income / (loss) before income tax expense 205,514 (210,601)
Income tax expense (89) (137)
Net income / (loss) from continuing operations 205,425 (210,738)
Discontinued operations
Loss from discontinued operations (61) (201)
Net income / (loss) for the year 205,364 (210,939)
Other comprehensive income / (loss):
Currency translation differences 26 (23)
Total other comprehensive income / (loss) 26 (23)
Total comprehensive income / (loss) for the year 205,390 (210,962)

Consolidated Balance Sheet
(Audited, expressed in thousands of United States Dollars)
As at December 31,
2012 2011
Assets
Non-current assets
Intangible assets 303,549 45,836
Property, plant and equipment 257 382
Investment in associate - 51,835
303,806 98,053
Current assets
Other current assets 127 647
Inventories 198 3,328
Other receivables 204 105
Cash and cash equivalents 41,216 49,085
41,745 53,165
Assets associated with discontinued operations 3 21
Total assets 345,554 151,239
Liabilities
Current liabilities
Accounts payable and accrued expenses 7,027 23,245
Current tax liabilities 90 122
Deferred liability 5,000 -
12,117 23,367
Non-current liabilities
Provisions 120 -
120 -
Liabilities associated with discontinued operations 1,941 2,613
Total liabilities 14,178 25,980
Equity
Share capital 534,068 533,349
Share based payments reserve 3,836 3,828
Cumulative translation adjustment 8 (18)
Accumulated deficit (206,536) (411,900)
Total equity 331,376 125,259
Total liabilities and equity 345,554 151,239


The total assets reported at the end of the year 2012 have increased by $194 million which was mainly due to recording the Fair Value Increase of $232 million relating to the Atrush Block oil and gas assets and net cash out on other operating and investing activities of $38 million.


Article Tags

ShaMaran Petroleum Iraq Middle East Finance Operations Update Production Update Spud Watch Well testing


This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More


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