VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 21, 2011) - ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSX VENTURE:SNM)(OMX:SNM) is pleased to announce its financial and operating results for the three and nine months ended September 30, 2011.
Highlights
Financial and Operating Results for the three and nine months ended September 30th 2011 |
(Unaudited: Expressed in thousands of United States Dollars) |
In the first nine 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.
Consolidated Interim Statement of Comprehensive Income |
(Unaudited: Expressed in thousands of United States Dollars) |
Three months ended September 30, |
Nine months ended September 30, |
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2011 | 2010 | 2011 | 2010 | |||||
Expenses from continuing operations | ||||||||
General and administrative (expense) / recovery | 202 | (643 | ) | (799 | ) | (1,222 | ) | |
Share based payments | (70 | ) | (73 | ) | (243 | ) | (488 | ) |
Depreciation expense | (58 | ) | (41 | ) | (166 | ) | (96 | ) |
Share of loss of associate | (173 | ) | (73 | ) | (282 | ) | (73 | ) |
Operating loss | (99 | ) | (830 | ) | (1,490 | ) | (1,879 | ) |
Finance costs | (2,780 | ) | (457 | ) | (1,984 | ) | (1,363 | ) |
Finance income | 147 | 600 | 424 | 670 | ||||
Net finance (costs) / income | (2,633 | ) | 143 | (1,560 | ) | (693 | ) | |
Loss before income tax expense | (2,732 | ) | (687 | ) | (3,050 | ) | (2,572 | ) |
Income tax expense | (32 | ) | (16 | ) | (106 | ) | (43 | ) |
Net loss from continuing operations | (2,764 | ) | (703 | ) | (3,156 | ) | (2,615 | ) |
Discontinued operations | ||||||||
Loss from discontinued operations | (46 | ) | (47 | ) | (167 | ) | (886 | ) |
Net loss for the period | (2,810 | ) | (750 | ) | (3,323 | ) | (3,501 | ) |
Other comprehensive income: | ||||||||
Currency translation differences | (61 | ) | 111 | 8 | 85 | |||
Total other comprehensive income / (loss) | (61 | ) | 111 | 8 | 85 | |||
Total comprehensive loss for the period | (2,871 | ) | (639 | ) | (3,315 | ) | (3,416 | ) |
The Company increased its investment in exploration, evaluation and other intangible assets by $77.0 million during the first nine 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. Accounts payable and accrued expenses increased by $15.9 million over the balance at December 31, 2010 primarily due to the increase in activity associated with the Company's exploration campaign in Kurdistan.
Consolidated Interim Balance Sheet |
(Unaudited: Expressed in thousands of United States Dollars) |
September 30, 2011 |
December 31, 2010 |
January 1, 2010 |
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Assets | ||||||
Non-current assets | ||||||
Exploration, evaluation and other intangible assets | 226,855 | 149,892 | 185,035 | |||
Property, plant & equipment | 775 | 330 | 145 | |||
Investment in associate | 49,145 | 44,282 | - | |||
276,775 | 194,504 | 185,180 | ||||
Current assets | ||||||
Other current assets | 562 | 447 | 376 | |||
Inventories | 3,426 | 2,656 | - | |||
Other receivables | 146 | 124 | 31 | |||
Cash and cash equivalents | 28,617 | 58,684 | 63,565 | |||
32,751 | 61,911 | 63,972 | ||||
Assets associated with discontinued operations | 89 | 74 | 847 | |||
Total assets | 309,615 | 256,489 | 249,999 | |||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable and accrued expenses | 21,019 | 5,156 | 2,087 | |||
Current tax liabilities | 96 | 103 | 12 | |||
Deferred consideration | - | 12,643 | - | |||
21,115 | 17,902 | 2,099 | ||||
Non-current liabilities | ||||||
Provisions | 1,344 | - | - | |||
Other long-term liabilities | - | - | 170 | |||
1,344 | - | 170 | ||||
Liabilities associated with discontinued operations | 2,793 | 3,069 | 3,167 | |||
Total liabilities | 25,252 | 20,971 | 5,436 | |||
Equity | ||||||
Share capital | 484,827 | 432,506 | 379,673 | |||
Equity share rights | - | - | 61,349 | |||
Share premium account | 3,807 | 3,968 | 3,405 | |||
Cumulative translation adjustment | 13 | 5 | 4 | |||
Accumulated deficit | (204,284 | ) | (200,961 | ) | (199,868 | ) |
Total equity | 284,363 | 235,518 | 244,563 | |||
Net liabilities and equity | 309,615 | 256,489 | 249,999 |
The cash position of the Company decreased by $43,350 during the third quarter of 2011 and $30,067 during the first nine months of 2011. The main reason for the decrease in the cash position was the outflow of funds in the amount $74.5 million for its exploration properties in Kurdistan and $17.8 million on the investment in GEP. This decrease in cash was offset by 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).
Consolidated Cash Flow Statement |
(Unaudited: Expressed in thousands of United States Dollars) |
Three months ended September 30, |
Nine months ended September 30, |
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2011 | 2010 | 2011 | 2010 | ||||||
Operating activities | |||||||||
Net loss for the period from continuing operations | (2,764 | ) | (703 | ) | (3,156 | ) | (2,615 | ) | |
Adjustments for: | |||||||||
Interest income | (147 | ) | (99 | ) | (424 | ) | (239 | ) | |
Foreign exchange (gain) / loss | 2,572 | (501 | ) | 1,320 | (431 | ) | |||
Depreciation expense | 58 | 41 | 166 | 96 | |||||
Income tax | (98 | ) | 19 | (7 | ) | 46 | |||
Share-based payment expense | 70 | 73 | 243 | 488 | |||||
Share of loss of associates | 173 | 73 | 282 | 73 | |||||
Capitalized expenses | (473 | ) | - | (1,070 | ) | - | |||
Changes in trade and other receivables | 14 | 47 | (22 | ) | (74 | ) | |||
Changes in other current assets | 489 | (534 | ) | (115 | ) | (337 | ) | ||
Changes in inventories | (210 | ) | - | (770 | ) | - | |||
Changes in accounts payable and accrued expenses | 8,136 | 3,413 | 15,863 | 3,366 | |||||
Cash used in discontinued operations | (104 | ) | 549 | (458 | ) | (382 | ) | ||
Net cash inflows / (outflows) from operating activities | 7,716 | 2,378 | 11,852 | (9 | ) | ||||
Investment activities | |||||||||
Exploration, evaluation and other intangible assets | (46,222 | ) | (8,952 | ) | (74,549 | ) | (17,567 | ) | |
Property, plant & equipment | (9 | ) | (155 | ) | (611 | ) | (283 | ) | |
Investment in associate | (2,345 | ) | (24,342 | ) | (17,788 | ) | (24,342 | ) | |
Interest received on cash deposits | 147 | 99 | 424 | 239 | |||||
Cash provided by discontinued operations | - | - | - | 277 | |||||
Net cash outflows to investing activities | (48,429 | ) | (33,350 | ) | (92,524 | ) | (41,676 | ) | |
Financing activities | |||||||||
Net proceeds / (costs) on issuance of shares | (4 | ) | 47,815 | 51,917 | 47,815 | ||||
Net cash inflows / (outflows) from financing activities | (4 | ) | 47,815 | 51,917 | 47,815 | ||||
Effect of exchange rate changes on cash and cash equivalents | (2,633 | ) | 415 | (1,312 | ) | 319 | |||
Change in cash and cash equivalents | (43,350 | ) | 17,258 | (30,067 | ) | 6,449 | |||
Cash and cash equivalents, beginning of the period | 71,967 | 52,756 | 58,684 | 63,565 | |||||
Cash and cash equivalents, end of the period | 28,617 | 70,014 | 28,617 | 70,014 |
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
3D seismic is currently in progress and operations are expected to continue until the winter weather window closes operations in the high mountains for 2011. The Atrush-2 well location is under construction and operator, GEP, is tendering for a rig that can commence drilling operations in Q2 2012.
Pulkhana Block
The geological sidetrack and openhole testing of the Shiranish & Balambo formations in Pulkhana 9 should be completed in December, and the rig moved drilling Pulkhana-10. The workover operations on Pulkhana-8 should be completed. Planning for Pulkhana-11 will commence.
The Company will progress with the feasibility study and design for the Pulkhana Early Production Facility ("EPF") planned to be installed in 2012 using information gathered from current operations.
Arbat Block
Construction of the Arbat-1 well location will commence and the design for the well finalized. The ongoing infill 2D seismic should be completed by year end with data processing initiated.
Taza Block (Formerly Block K42)
Well planning for the Taza exploration well will continue following approval of the surface location. Civil engineering works for access road and the well location are under preparation.
New Ventures
As part of its normal business the Company is 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 40 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.
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