VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 31, 2016) - ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSX VENTURE:SNM)(OMX:SNM) is providing the following corporate update concerning a review by the Financial Supervisory Authority of Norway ("Finanstilsynet" or "FSAN") of the financial reporting of General Exploration Partners, Inc. ("GEP"), a wholly owned subsidiary of the Company.
As previously communicated in the presentation that was issued on March 14, 2016 together with the summons letter for a bondholders meeting in the Company's USD 150 million bond, the Finanstilsynet has, since mid-2015, undertaken a review of certain aspects of the financial reporting of GEP in its audited financial statements for the year ended December 31, 2014 and for the unaudited financial statements for the 9 months ended September 30, 2015 both of which were prepared in accordance with International Financial Reporting Standards ("IFRS").
On March 30, 2016 the FSAN provided an advance notice of final decision ("Advance Notice of Decision") of its intention to issue a correction order under the Norwegian Securities Trading Act and Regulations requiring GEP and the Company to restate certain published financial statement disclosures for the years ended December 31, 2014 and 2015.
GEP and GEP's auditor, PricewaterhouseCoopers AG ("PwC"), have been in ongoing discussions with the FSAN concerning the accounting issues, which are discussed in more detail below, and are in the process of preparing a comprehensive response to the FSAN to provide further clarification of its position. GEP and PwC are of the view that the audited financial statements of GEP and of the Company for the years ended December 31, 2014 and 2015 give a true and fair view of the state of GEP's and the Company's affairs in accordance with IFRS. ShaMaran believes that the outcome of the review by the FSAN should not impact GEP's ability to generate future cash flows from sales of oil production from the Atrush Block oil and gas asset nor should it impact the underlying fair value.
The Company maintains its recommendation to proceed with the financing arrangement proposed to GEP's bondholders, which was previously announced on March 14, 2016, and which is required for the Company to provide its share of the estimated 2016 investments needed to deliver the Atrush field into production. The Lundin Family Trust has reconfirmed its commitment to underwrite the proposed placement of the Super Senior Bonds by GEP. However, in order to provide GEP's bondholders with sufficient additional time to assess this new information the Company has agreed with the Nordic Trustee to cancel the meeting of the bondholders scheduled for April 1, 2016. The Company will revert early next week with a new date for the bondholder meeting.
In its Advance Notice of Decision the FSAN has advised GEP of its intention, subject to its assessment of any new information and new arguments which GEP may provide, to order GEP to make the following corrections in respect of its financial statements:
As mentioned above GEP and PwC remain of the view that GEP's audited financial statements for the years ended December 31, 2014 and 2015 give a true and fair view of the state of the Company's affairs in accordance with IFRS.
ABOUT SHAMARAN
ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration company with a 26.8% direct interest in the Atrush oil discovery until such time that the Kurdistan Regional Government has completed the exercise of its right to acquire up to a 25% interest. The Atrush Block is currently undergoing an appraisal and development campaign.
ShaMaran 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". 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 OMX First North.
The Company's condensed interim consolidated financial statements, notes to the financial statements and management's discussion and analysis have been filed on SEDAR (www.sedar.com) and are also available on the Company's website (www.shamaranpetroleum.com).
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 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.
Contact Information: