VANCOUVER, BC, March 6, 2024 /CNW/ – ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) (TSXV:SNM) (Nasdaq First North: SNM) today released its financial and operating results and related management’s discussion and analysis (MD&A) for the three and twelve months ended December 31, 2023. View PDF
Garrett Soden, President and CEO of ShaMaran, commented: “The Sarsang and Atrush blocks are generating significant cash flow from local sales following the closure of the Iraq–Turkey pipeline last year. We continue to work with our operating partners to increase local sales volumes, improve commercial terms for the oil offtake and maintain a low cost base. The TAQA/HKN transaction announced in January 2024 will almost double our working interest in Atrush when closed, and it will create significant synergies from having the same operator on the adjoining Atrush and Sarsang blocks. We expect local sales to continue for the time being, but we are actively engaging with the relevant parties to resume pipeline exports long-term.”
The closure of the Iraq–Turkey pipeline (“ITP”) since March 25, 2023, continues to have a material impact on ShaMaran’s operations and financial results. The Company is actively engaging with the relevant parties to resume pipeline exports;
Production from the Sarsang Block was initially reduced following the ITP closure due to market demand constraints when local sales commenced via trucking in April 2023, but production and sales in 2023 subsequently increased every quarter; and
Production from the Atrush Block was shut-in following the ITP closure, due to a lack of trucking facilities, until sales started to local refineries in November 2023 at reduced rates via pipeline flow reversal.
Three months ended December 31
Year ended December 31
USD Thousands
2023
2022
2023
2022
Revenue
20,320
53,173
82,886
176,665
Gross margin on oil sales
11,029
15,194
30,523
105,941
Net result
(904)
12,347
(26,706)
114,959
Cash flow from operations
9,824
12,551
40,482
105,283
EBITDAX
12,839
39,624
44,024
140,060
Q4 2023 oil sales to the Kurdistan local market averaged a net back price of $39.77/bbl and generated net revenues to the Company of $20.3 million; net revenues for the full-year 2023 were $82.9 million at an average net back price of $48.87/bbl (including Q1 2023 ITP export sales);
ShaMaran generated $9.8 million of operating cash flow in Q4 2023 ($40.5 million in operating cash flow during the year) primarily due to the strength of local sales from Sarsang and proactive cost-cutting at both the corporate and operating asset levels; and
At December 31, 2023, the Company had cash of $71.7 million (including restricted cash of …