News Column

ShaMaran Q2 2013 Financial and Operating Results

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VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/19/13 -- ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSX VENTURE: SNM)(OMX: SNM) is pleased to announce its financial and operating results for the three and six months ended June 30, 2013. Unless otherwise stated all currency amounts indicated as "$" in this news release are expressed in thousands of United States dollars.


-- A Field Development Plan for the Atrush Block was submitted for approval to the KRG on May 6 2013 which is in accordance with the terms of the Atrush Block PSC.-- The Atrush-3 appraisal well, located 6.5 kilometers to the east of the Atrush-2 appraisal well, was spudded on March 25, 2013 and reached total depth of 1,806 meters on June 23, 2013. The well testing program is nearing conclusion with results expected by end of August 2013.-- The Company announced on February 4, 2013 an increase of 35% in Best Estimate 2C Contingent Resources (gross) for the Atrush Block, from 465 MMBOE at December 31, 2011 to 627 MMBOE at the end of 2012. The estimates were provided by the Company's independent qualified resources evaluator, McDaniel & Associates Consultants Ltd., in a Detailed Property Report prepared as at December 31, 2012.-- On March 12, 2013 the Contractor entities to the Atrush Block PSC were notified by the Kurdistan regional Government ("KRG") that it had exercised its option to acquire a 25% Government Interest in accordance with the provisions of the Atrush Block PSC.-- At June 30, 2013 the Company had a cash balance of $28.6 million and working capital of $18.4 million.

Financial and Operating Results for the three and six months ended June 30th 2013

During the three and six months ended June 30, 2013 the Company continued its appraisal and development campaign in respect of the Atrush petroleum property located in the Kurdistan Region of Iraq which constitutes the continuing operations of the Company. Atrush currently generates no revenues. The net loss in the first half principally relates to the general and administrative expenses and share based payments expense incurred in respect of the continuing operations of the Company.

Condensed Interim Consolidated Statement of Comprehensive Income(Unaudited, expressed in thousands of United States Dollars) Three months Six months ended June 30, ended June 30, 2013 2012 2013 2012----------------------------------------------------------------------------Expenses from continuing operationsGeneral and administrative expense (355) (459) (805) (843)Depreciation and amortisation expense (16) (48) (35) (97)Share based payments expense (565) (8) (566) (6)Share of loss of associate - (46) - (112)Impairment (loss) / recovery (84) 945 (84) 697Relinquishment costs - - - (25,732)----------------------------------------------------------------------------(Loss) / income before finance items and income tax expense (1,020) 384 (1,490) (26,093)----------------------------------------------------------------------------Finance cost (23) (360) - (360)Finance income 10 25 37 416----------------------------------------------------------------------------Total finance (cost) / income (13) (335) 37 56----------------------------------------------------------------------------(Loss) / income before income tax expense (1,033) 49 (1,453) (26,037)Income tax expense (10) (28) (50) (52)----------------------------------------------------------------------------(Loss) / income from continuing operations (1,043) 21 (1,503) (26,089)Discontinued operationsLoss from discontinued operations (7) (13) (27) (50)----------------------------------------------------------------------------(Loss) / income for the period (1,050) 8 (1,530) (26,139)--------------------------------------------------------------------------------------------------------------------------------------------------------Other comprehensive income / (loss) :Items that may be reclassified subsequently to net income:Currency translation differences 11 (50) (77) (17)----------------------------------------------------------------------------Total other comprehensive income / (loss) 11 (50) (77) (17)----------------------------------------------------------------------------Total comprehensive loss for the period (1,039) (42) (1,607) (26,156)--------------------------------------------------------------------------------------------------------------------------------------------------------Condensed Interim Consolidated Balance Sheet(Unaudited, expressed in thousands of United States Dollars) At June 30, At December 2013 31, 2012----------------------------------------------------------------------------AssetsNon-current assetsIntangible assets 313,871 303,549Property, plant and equipment 214 257---------------------------------------------------------------------------- 314,085 303,806----------------------------------------------------------------------------Current assetsOther current assets 366 127Inventories - 198Other receivables 44 204Cash and cash equivalents 28,575 41,216---------------------------------------------------------------------------- 28,985 41,745----------------------------------------------------------------------------Assets associated with discontinued operations - 3----------------------------------------------------------------------------Total assets 343,070 345,554--------------------------------------------------------------------------------------------------------------------------------------------------------LiabilitiesCurrent liabilitiesAccounts payable and accrued expenses 5,555 7,027Current tax liabilities 53 90Deferred liability 5,000 5,000---------------------------------------------------------------------------- 10,608 12,117----------------------------------------------------------------------------Non-current liabilitiesProvisions 181 120---------------------------------------------------------------------------- 181 120----------------------------------------------------------------------------Liabilities associated with discontinued operations 1,946 1,941----------------------------------------------------------------------------Total liabilities 12,735 14,178----------------------------------------------------------------------------EquityShare capital 534,068 534,068Share based payments reserve 4,402 3,836Cumulative translation adjustment (69) 8Accumulated deficit (208,066) (206,536)----------------------------------------------------------------------------Total equity 330,335 331,376----------------------------------------------------------------------------Total liabilities and equity 343,070 345,554--------------------------------------------------------------------------------------------------------------------------------------------------------

The cash position of the Company decreased by $12.6 million during first two quarters of 2013. The decrease in the cash position was due to outflows of funds of $10.3 million on appraisal and development operations on the Atrush Block, $1.3 million net on changes in working capital items and $1.0 million on G&A and other cash expenses. The Company has a number of additional financing possibilities which will be pursued as required.

Condensed Interim Consolidated Cash Flow Statement(Unaudited, expressed in thousands of United States Dollars) Three months Six months ended June 30, ended June 30, 2013 2012 2013 2012----------------------------------------------------------------------------Operating activitiesNet loss for the period from continuing operations (1,043) 21 (1,503) (26,089)Adjustments for: Interest income (10) (1) (19) (25) Interest expense on equity based finance fee - 360 - 360 Foreign exchange gain / (loss) 23 (24) (18) (391) Depreciation and amortisation expense 16 48 35 97 Income tax (10) (70) (37) (72) Impairment loss / (recovery) 84 (945) 84 (697) Share-based payment expense 565 8 566 6 Share of loss of associates - 46 - 112 Changes in trade and other receivables 2 696 160 (546) Changes in other current assets 29 170 (239) 440 Changes in inventories 114 1,403 114 2,705 Changes in accounts payable and accrued expenses 1,421 (4,145) (1,472) (19,717) Changes in provisions 61 - 61 -Cash used in discontinued operations (17) (337) (19) (554)----------------------------------------------------------------------------Net cash inflows from / (outflows to) operating activities 1,235 (2,770) (2,287) (44,371)----------------------------------------------------------------------------Investment activitiesPurchase of intangible assets (7,957) (1,749) (10,320) (4,181)Purchase of property, plant & equipment - (446) - (252)Investment in associate - (4,691) - (4,691)Interest received on cash deposits 10 1 19 25----------------------------------------------------------------------------Net cash outflows to investing activities (7,947) (6,885) (10,301) (9,099)----------------------------------------------------------------------------Financing activitiesProceeds from borrowings - 10,000 - 10,000----------------------------------------------------------------------------Net cash inflows from financing activities - 10,000 - 10,000----------------------------------------------------------------------------Effect of exchange rate changes on cash and cash equivalents (13) (26) (53) 374----------------------------------------------------------------------------Change in cash and cash equivalents (6,725) 319 (12,641) (43,096)Cash and cash equivalents, beginning of the period 35,300 5,670 41,216 49,085----------------------------------------------------------------------------Cash and cash equivalents, end of the period 28,575 5,989 28,575 5,989--------------------------------------------------------------------------------------------------------------------------------------------------------


The outlook to the end of the year 2013 is as follows:

Atrush Block

The Operator (TAQA) submitted to the KRG for approval a Field Development Plan ("FDP") in May 2013 and discussions will continue with the Ministry of Natural Resources to obtain necessary approvals. In the meantime, work will continue with preparations for the implementation of the Phase 1 development.

The Atrush-3 appraisal well testing program is nearing conclusion with the results expected to be announced by the end of August 2013.

Final processing of the complete 3D seismic survey is expected in the third quarter of 2013. The enhanced data will be used for the development drilling program. The Atrush-4 appraisal/development well is planned to commence drilling in the third quarter 2013. Atrush-4 will be a high-deviation appraisal/development well from the AT-1 drilling pad targeting the undrilled crest of the field.

The Company is currently considering a number of financing initiatives.

New Ventures

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

About ShaMaran

ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration vehicle with a 20.1% direct interest in the Atrush Block located in the region. This project is nearby and on trend with existing fields and recent discoveries.

Kurdistan lies within the northern extension of the Zagros Folded Belt. The area is highly underexplored and is currently undergoing a significant exploration and development campaign by over 40 mid to large size international oil companies.

ShaMaran Petroleum 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".

The Company's condensed interim consolidated financial statements, notes to the financial statements and management's discussion and analysis have been filed on SEDAR ( and are available on the Company's website (

Forward-Looking Statements

This press release contains statements 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. 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.

On behalf of the Board,

Pradeep Kabra, President and CEO

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.

ShaMaran Petroleum's Certified Advisor on NASDAQ OMX First North is Pareto Ohman AB.

ShaMaran Petroleum Corp.
Keith Hill
(604) 806-3583

ShaMaran Petroleum Corp.
Pradeep Kabra
President and CEO
0041 22 560 8605

ShaMaran Petroleum Corp.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)

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