Garrett Soden, President and CEO of ShaMaran, commented: “The Sarsang and Atrush blocks performed well in Q1 2024 with the highest quarterly EBITDAX¹ since we started selling to the local market last year. We continue to focus on optimizing cash flow with our operating partners while looking to reach a commercial solution on the restart of exports through the Iraq-Türkiye pipeline. The timing of the pipeline reopening remains uncertain, but the relevant parties are working to resolve outstanding issues following the recent diplomacy between leaders of Kurdistan, Iraq and Türkiye. In the meantime, we look forward to closing the Atrush transaction with TAQA and HKN.”

Corporate Highlights:

• The closure of the Iraq-Türkiye (“ITP”) pipeline 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;
• ShaMaran generated $18.3 million in operating cash flow during the quarter from local sales, matching Q1 2023 operating cash flow (the last quarter prior to the ITP shutdown);
• The Q1 EBITDAX of $14.2 million is higher than the combined EBITDAX of the business in the previous three quarters since the ITP shutdown, further highlighting the Company’s progress in generating strong cash flow through local sales; and
• Both Sarsang and Atrush delivered the highest quarterly production since the ITP shutdown, and we expect to increase production in both assets during the remainder of the year.

EBITDAX is a non-IFRS financial measure. Refer to the MD&A for more information.

• In Q1 2024, average gross daily oil production from Atrush and Sarsang combined was 57,400 bopd (66,800 bopd in Q1 2023), 14% lower than Q1 2023, while lifting costs were 42% lower than Q1 2023, primarily due to the continued focus on savings since the ITP closure;
• Q1 2024 oil sales to the Kurdistan local market averaged a net oil price of $36.49/bbl ($60.53/bbl in Q1 2023) and generated revenues to the Company of $22.6 million, 48% lower revenue than Q1 2023, mainly due to the lower net oil price in the local sales market;
• ShaMaran generated $17.5 million of free cash flow before debt service² in Q1 2024 ($6.7 million in Q1 2023) as tight cost and capital expenditure controls helped optimize cash flow during the quarter;
• At March 31, 2024, the Company had cash of $71.6 million (including restricted cash of $25.3 million) and gross debt of $270.6 million (including the $255 million bond and $15.6 million related-party loan). Net debt³ was $193.1 million (including $5.9 million in ShaMaran 2025 bonds held by the Company); and
• At May 7, 2024, the Company had cash of $80.9 million (including restricted cash of $25.3 million) and gross debt of $270.6 million (including the $255 million bond and $15.6 million related-party loan). Net debt was $183.8 million (including $5.9 million in ShaMaran 2025 bonds held by the Company).

ShaMaran plans to publish its financial statements for the six months ending June 30, 2024, on August 8, 2024. Except as otherwise indicated, all currency amounts indicated as “$” in this news release are expressed in United States dollars.

About ShaMaran Petroleum Corp.

ShaMaran is a Canadian independent oil and gas company focused on the Kurdistan region of Iraq. The Company indirectly holds an 18% working interest (22.5% paying interest) in the Sarsang Block, and, subject to closing the previously announced transaction, will increase its indirect 27.6% working interest in the Atrush Block to 50%. The Company is listed in Toronto on the TSX Venture Exchange and in Stockholm on Nasdaq First North Growth Market (ticker “SNM”). ShaMaran is part of the Lundin Group of Companies.

SOURCE ShaMaran Petroleum Corp.