News Column

ShaMaran Q2 2014 Financial and Operating Results

September 12, 2014



By a News Reporter-Staff News Editor at Energy Weekly News -- net 1,307 - 2,643 - Share based payments expense 61 565 208 566 Depreciation and amortisation expense 13 16 24 35 Foreign exchange (gain) / loss (15) 23 6 (18) Impairment loss - 84 - 84 Interest income (11) (10) (13) (19) Changes in provisions 533 61 425 61 Changes in inventories - 114 - 114 Changes in other current assets 1,553 31 (52) (79) Changes in current tax liabilities 8 (10) (65) (37) Changes in accounts payable and accrued expenses 2,777 1,421 (1,154) (1,472) Cash used in discontinued operations (19) (17) (544) (19) Net cash inflows from / (outflows to) operating activities 4,365 1,235 (2,472) (2,287) Investing activities Interest received on cash deposits 11 10 13 19 Purchase of property, plant and equipment (7) - (43) - Purchases of intangible assets (14,948) (7,957) (28,665) (10,320) Net cash outflows to investing activities (14,944) (7,947) (28,695) (10,301) Financing activities Interest payments to bondholders (8,625) - (8,625) - Net cash outflows to financing activities (8,625) - (8,625) - Effect of exchange rate changes on cash and cash equivalents - (13) (16) (53) Change in cash and cash equivalents (19,204) (6,725) (39,808) (12,641) Cash and cash equivalents, beginning of the period 121,984 35,300 142,588 41,216 Cash and cash equivalents, end of the period 102,780 28,575 102,780 28,575

OUTLOOK

The outlook is as follows:

Atrush Block

The Abu Dhabi National Energy Company ("TAQA"), operator of the Atrush Block, announced on August 9, 2014 that, as a result of recent developments and escalating instability around the Kurdistan Region of Iraq, it had suspended its operations at the Atrush Block as a precautionary measure and significantly reduced staffing levels. The Company continues to closely monitor the security situation with its Atrush partners and the Kurdistan Regional Government ("KRG").

Drilling plans for the remainder of the year 2014 include resumption of drilling operations on CK-8, the fourth Phase 1 development well, and the CK-6 well, a Phase 2 appraisal well. CK-8, spudded on July 19, 2014, has now been safely suspended, and CK-6 is planned to spud in 2014. Further testing of the AT-3 well is also scheduled to be conducted during 2014 following a planned re-entry. CK-7 is expected to spud in 2015.

Works are in progress to implement the 30,000 gross bopd Phase 1 production facility. The FEED for the Phase 1 Production Facilities was completed in October 2013. The production modules for the facility are currently being fabricated.

The FEED contract has been awarded to KAR Group/ILF Consulting Engineers for a dedicated feeder pipeline between the Chiya Khere production facility and the tie-in point to the main export pipeline at KCP2 at kilometre 92. The definitive route is currently being finalized.

Plans are to mobilise a workover rig in 2015 which will complete the wells for production. Following testing and commissioning of the production facilities and feeder pipeline first production is anticipated in 2015.

Budget

The Board of Directors approved a budget for the year 2014 which includes net capital spending on the Atrush Block appraisal and development program and debt service and other costs totalling $101.0 million. During the six months ended June 30, 2014 the Company spent $37.8 million of the budgeted total for the year 2014.

The Company believes that based on the forecasts and projections they have prepared and potential financing initiatives which will be pursued as required the Company will have financial resources sufficient to satisfy its contractual obligations and commitments under the agreed work program over the next 12 months. Nevertheless the potential remains that the Company's financial resources will be insufficient to fund its obligations over the next 12 months. The Company has a number of financing possibilities which it believes it would be able to pursue as required.

New Ventures

As part of its normal business the Company continues to evaluate new opportunities in the MENA region.

Keywords for this news article include: Energy, Utilities.

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Source: Energy Weekly News


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