ShaMaran Petroleum Corp. has reported a significant increase in production and revenue for Q2 2024, with gross daily oil production more than tripling and revenue from local sales nearly quadrupling compared to the same period last year. The company has also successfully extended the maturity of its bonds, enhancing its financial flexibility for future growth.

Key Financial Results

• Revenue: US$22.6m (up 246% from 2Q 2023).

• Net loss: US$509.0k (loss narrowed by 98% from 2Q 2023).

Garrett Soden, President and CEO of ShaMaran, commented: “Our two blocks in Kurdistan continue to deliver solid EBITDAX¹ and cash flow from local market sales. The recent TAQA/HKN transaction closing will allow us to increase production and local sales at Atrush. With the bond maturity extension in Q2 2024, we now have the strategic flexibility to pursue additional growth opportunities in Kurdistan. Long-term, we look forward to a commercial solution for the restart of exports through the Iraq-Türkiye pipeline.”

Corporate Highlights:

• The closure of the Iraq-Türkiye 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;

• In Q2 2024, average gross daily oil production from Atrush and Sarsang combined was 54,800 bopd, more than three times the level achieved in Q2 2023 (18,000 bopd in Q2 2023 from Sarsang only as Atrush was shut in immediately after the ITP closure);

• As a result of higher production from both blocks, revenue from local sales in Q2 2024 was $22.6 million, approximately three-and-a-half times the $6.5 million delivered during Q2 2023; and

• In June 2024, the Company retired $47 million of the ShaMaran 2025 bond through a tender process and $5.9 million of its own bonds, and announced bondholder approval for amendments to the bond terms, including a two-year extension of the maturity date to July 2027.

Financial Highlights:

• ShaMaran generated $15.8 million in operating cash flow during Q2 2024 from local sales (negative $0.7 million in Q2 2023);

• The Company produced free cash flow before debt service² of $16.8 million in Q2 2024 (negative $6.8 million in Q2 2023) with tight cost control;

• EBITDAX has consistently increased since the ITP shutdown, with Q2 2024 EBITDAX at $14.7 million (negative $4.9 million in Q2 2023);

• Q2 2024 oil sales to the Kurdistan local market averaged a net oil price of $37.80/bbl from the two blocks ($41.28/bbl in Q2 2023 from Sarsang only), 8% lower than Q2 2023; and

• At June 30, 2024, the Company had cash of $38.7 million and gross debt of $217.7 million (including the $202.1 million bond and $15.6 million related-party loan). Net debt³ was $179 million.

• At Atrush, production averaged 25,100 bopd in Q2 2024 and remains stable; and

• At Sarsang, production averaged 29,700 bopd in Q2 2024 due to maintenance activities and facility downtime. Daily rates in late June and early July 2024 have exceeded 36,000 bopd. During Q3 2024, a two-well drilling program will commence that is expected to increase production towards year-end.