SHAMARAN ANNOUNCES NEW RECORD QUARTERLY OIL SALES REVENUES AND RECORD OPERATING CASH FLOW

VANCOUVER, BC, May 23, 2022 /CNW/ – ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) NMS (Nasdaq First North Growth Market (Sweden): SNM) today released its financial and operating results and related MD&A for the three months ended March, 31st, 2022¹. See the PDF version.

dr. Adel ChaouchChairman and Chief Executive Officer of ShaMaran, said: “We started 2022 with another set of very strong results, improving on the fourth quarter of 2021. During the first quarter of 2022, the company reached a new record of oil sales revenue from $38.8 millionup 88% compared to the first quarter of 2021, as well as record cash flow from operations of $23.8 million, almost five times that of the same quarter last year. In Q1 2022, ShaMaran’s EBITDAX² more than doubled compared to Q1 2021, continuing to demonstrate the company’s strong profitability in the current oil price environment.

We are excited about the upcoming closing of the Sarsang acquisition and the impact it will have on the company. By year-end 2022, the combined business is expected to have an unrestricted cash balance between $130 million and $150 million based on Brent oil prices of $90 for $100 per barrel. In addition to this, the Company will have $36 million held in the form of restricted cash in accordance with the terms of the 2025 bonds, which translates into a leverage effect at the end of 2022 of less than 1x net debt compared to EBITDAX. This rapid deleveraging will allow ShaMaran to continue to actively seek additional growth through accretive acquisitions like Sarsang. Finally, we successfully completed the rights offering in Sweden and Canada and will provide details in due course.”

Financial Highlights of Arush

• The Company achieved oil sales in Q1 2022 of $38.8 millionhighest quarterly revenue ever;
• Q1 2022 operating cash flow was a record $23.8 millionalmost five times that of Q1 2021;
• EBITDAX in Q1 2022 was very strong at $30.5 million, more than double the EBITDAX of Q1 2021; and
• The Kurdistan Regional Government (“KRG”) reimbursed $34.71 million receivables due for November 2019 for February 2020the rest $6.99 million should be paid by the end of the second quarter of 2022.

Atrush Operational Highlights

• Average production of approximately 38,812 bpd in Q1 2022, similar to Q1 2021 production of 38,212 bpd and in line with 2022 guidance;
• Q1 2022 removal costs per barrel of $5.53 is slightly higher than Q1 2021 lift costs of $5.12 per barrel. This slight increase is mainly due to the increase in diesel prices, but within the framework of our forecast for 2022 which takes into account cost inflation; and
• The CK-16 well was drilled March 2022. The primary purpose of the CK-16 well is to serve as a water injection well, providing additional capacity and redundancy to CK-9, Atrush’s first water injection well. The CK-16 well reached TD earlier than expected on May 20, 2022and the well is currently being logged.

Acquisition of Sarsang

• In July 2021 the Company has started the implementation of its growth plans by signing an agreement to acquire a subsidiary of TotalEnergies SE (“TTE”) holding an 18% interest in the Sarsang block. During the first quarter of 2022, the Company made progress towards the closing of this acquisition through dialogue with representatives of ARK and TTE and closing is now expected in the second quarter of 2022;
• As announced on July 30, 2021the Company has successfully issued and settled $111.5 million principal amount of the $300 million 2021/2025 12% Senior Unsecured Bond (the “2025 Bond”). This portion of the 2025 Bond and the $188.5 million the balance will be issued to refinance the Company’s existing debt in connection with the Company’s acquisition of the unoperated 18% interest in the Sarsang block and subject to its realization; and
• Following the closing of the Sarsang acquisition, the combined activity is expected to result in an unrestricted cash balance at the end of 2022 between $130 million and $150 million based on Brent oil prices of $90 for $100 per barrel. This cash balance combined with the $36 million held in restricted cash in accordance with the 2025 bond agreement will result in leverage of less than 1x net debt to EBITDAX at year-end 2022.

OTHER

This information is information that ShaMaran is required to make public under the EU Market Abuse Regulation. The information has been submitted for publication, through the contact persons listed below, on May 23, 2022 to 5:30 p.m. Eastern Time. Arctic Securities AS (Swedish Branch) is the company’s certified advisor on the Nasdaq First North Growth Market (Sweden), +46 844 68 61 00, Certifiedadviser@arctic.com.

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.

FORWARD-LOOKING STATEMENTS

This press release contains statements and information about expected or anticipated future events and financial results that are forward-looking in nature and, therefore, are subject to certain risks and uncertainties, such as legal and political risks, civil unrest , general economic issues, market and business conditions, regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, uncertainties resulting from potential delays or changes in plans , the occurrence of unexpected events and management’s ability to execute and implement its future plans.

The Covid-19 virus as well as the Russia–Ukraine conflict and the ensuing restrictions and disruptions have had a significant adverse effect on global demand and prices for oil and gas as well as the market price of oil and gas company shares generally, including common shares of the society. There can be no assurance that such adverse effects will not continue or that the prices of the Commodities will not decline or remain volatile in the future. These factors are beyond ShaMaran’s control and it is difficult to assess how these and other factors will continue to affect the Company and the market price of ShaMaran’s common stock. In light of the current situation, as of the date of this press release, the Company continues to review and assess its business plans and assumptions regarding the business environment, as well as its estimates of future production, cash flow, operating costs and capital expenditures. expenses.

All statements contained in this press release that are not statements of historical fact can be considered forward-looking information. Forward-looking information generally contains statements with words such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”. , “estimate”, “projects”, “potential”, “planned”, “forecast”, “prospects”, “budget” or the negative form of these terms or similar words suggesting future results. The Company cautions readers about relying on forward-looking information because, by its nature, it is based on current expectations about future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from actual results. those provided 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 statement to reflect events or circumstances after the date such statement is made. or reflect the occurrence of unforeseen events. events, except as required by applicable securities laws. New factors emerge from time to time, and it is not possible for the management of the Company to predict all of these factors and to assess in advance the impact of each of these factors on the Company’s business or the extent to which any factor, or combination of factors, could cause actual results to differ materially from those contained in the forward-looking information.

ABOUT SHAMARAN

ShaMaran is a Kurdistan a focused oil exploration and development company that holds a 27.6% working interest, through its wholly owned subsidiary General Exploration Partners, Inc., in the Atrush Block and, following the acquisition of Sarsang successfully concluded, will also hold an 18% interest through its then wholly owned subsidiary TEPKRI Sarsang A/S in the Sarsang block.

ShaMaran is a Canadian oil and gas company listed on the TSX Venture Exchange and the Nasdaq First North Growth Market (Sweden) under the symbol “SNM”.

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SOURCEShaMaran Petroleum Corp.

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