SHAMARAN 2011 YEAR END FINANCIAL AND OPERATING RESULTS

ShaMaran Petroleum Corp 

30.03.2012 08:15
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March 29, 2012 (SNM-TSXV & NASDAQ OMX: SNM). ShaMaran Petroleum Corp.
('ShaMaran' or the 'Company') (TSX VENTURE: SNM) (NASDAQ OMX: SNM) is pleased
to announce its financial and operating results for the year ended December 31,
2011. 

Highlights

  -- A major oil discovery in the Atrush Block was announced by the Company on
     April 13, 2011. The Atrush 1 well flowed at rates totalling over 6,393 bopd
     of 26.5 API oil from three tests in the Middle and Upper Jurassic
     reservoirs and well analysis indicated that the intervals are capable of
     much higher rates when completed for production. The well was drilled in
     budget and on time to a total depth of 3,400 meters.
  -- The Appraisal Work Programme and Budget on the Atrush Block has been
     submitted to the KRG. The Programme consists of 3D seismic and a number of
     appraisal wells and studies. 3D seismic acquisition is in progress and the
     construction of the location for the Atrush-2 appraisal well is underway
     with drilling operations planned to commence in May 2012. Planning for an
     Early Production facility to conduct a long term test in the field is also
     underway.
  -- The Company's 100% owned subsidiary ShaMaran Petroleum BV entered into a
     production sharing contract ('PSC') on July 27, 2011 in respect of the Taza
     Block (formerly Block K42) in the Kurdistan Region of Iraq.   ShaMaran
     holds a 20% working interest in the PSC, and Oil Search Iraq Limited
     ('OSIL') is the operator with a 60% working interest in the PSC.  The
     Kurdistan Regional Government of Iraq ('KRG') holds a 20% working interest
     in the PSC with costs carried by ShaMaran and OSIL.  Planning is underway
     for an exploration well with drilling operations expected to commence near
     the end of the second quarter of 2012.
  -- Operations were discontinued in December 2011 in Pulkhana after
     disappointing testing results from the Pulkhana 9 well.  On January 17,
     2012 the Company signed a final binding agreement with the KRG to
     relinquish to the KRG the 60% working interests previously held in each of
     the Arbat and Pulkhana Production Sharing Contracts.
  -- In February 2012 the Company received a Detailed Property Report ('the
     Report') from its third party auditors, McDaniel & Associates
     Consultants Ltd. The Report includes 124,782 Mboe as best estimate of Gross
     Estimated Contingent Resources and 87,910 Mboe as the unrisked best
     estimate of Gross Estimated Prospective Resources net to ShaMaran for the
     Company's two assets. These estimates are exclusive of amounts relating to
     the Pulkhana and Arbat Blocks which were relinquished in January 2012.
  -- Cash proceeds of $CAD 51.0 million were raised by the Company ($CAD 49.7
     million net of issuance costs) through a private placement of 127.5 million
     common shares at $CAD 0.40 per share which was concluded on November 15,
     2011. In May 2011 the Company raised
 c
ash proceeds of $CAD 50.4 million ($CAD 49.5 million net of issuance costs)
     through a private placement of 56 million common shares at $CAD 0.90 per
     share.
  -- The Company had a net loss of $210.9 million for the year ended December
     31st, 2011 (2010: $1,093,000). The cash balance of the Company was $49.1
     million as at December 31st, 2011 (2010: $58.7 million).



Financial and Operating Results for the year ended December 31st 2011

(Unaudited: Expressed in thousands of United States Dollars)

During the year 2011 the Company continued its exploration campaign in respect
of its petroleum properties in Kurdistan constituting the continuing operations
of the Company which currently have no corresponding revenue. The net loss in
2011 was driven by the impairment losses relating to the suspension in December
2011 of all operations associated with the Pulkhana and Arbat Blocks and the
relinquishment of these PSCs which was completed on January 17, 2012. 



Consolidated Interim Statement of Comprehensive Income

(Unaudited: Expressed in thousands of United States Dollars)

                                           For the year ended December 31,
                                                          2011        2010
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Expenses from continuing operations                                       
General and administrative expenses                    (1,082)       (594)
Share based payments                                     (264)       (570)
Depreciation and amortisation expense                    (221)       (139)
Impairment losses                                    (207,504)           -
Share of loss of associate                               (271)        (27)
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Operating loss                                       (209,342)     (1,330)
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Finance costs                                          (1,777)     (1,353)
Finance income                                             518       2,631
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Net finance (costs) / income                           (1,259)       1,278
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Loss before income tax expense                       (210,601)        (52)
Income tax expense                                       (137)        (81)
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Net loss from continuing operations                  (210,738)       (133)
Discontinued operations                                                   
Loss from discontinued operations                        (201)       (960)
Net loss for the year                                (210,939)     (1,093)
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Other comprehensive income:                                               
Currency translation differences                          (23)           1
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Total other comprehensive income / (loss)                 (23)           1
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Total comprehensive loss for the year                (210,962)     (1,092)
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The Company spent $103 million on exploration and evaluation activities in 2011
consisting primarily of drilling, workover and testing costs incurred on the
Pulkhana 8 and Pulkhana 9 wells and a capacity building payment issued to the
KRG associated with the signing of the Taza Block PSC.  Also during the year
2012 the Company increased by $7.5 million its investment in GEP, the company
operating the Atrush Block, primarily through cash contributions which were
required to fund the work program and budget on the Atrush Block. The $207.5
million provision for impairment related to the Pulkhana and Arbat PSC
relinquishment offset the exploration and investment charges capitalized and
drive the net decrease by $105.3 million in total assets reported on the
balance sheet relative to the amount reported at the end of the previous year. 



Consolidated Interim Balance Sheet

(Unaudited: Expressed in thousands of United States Dollars)

                                                        As at December 31,  
                                                             2011       2010
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Assets                                                                      
Non-current assets                                                          
Intangible assets                                          45,836    149,892
Property, plant and equipment                                 382        330
Investment in associate                                    51,835     44,282
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                                                           98,053    194,504
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Current assets                                                              
Other current assets                                          647        447
Inventories                                                 3,328      2,656
Other receivables                                             105        124
Cash and cash equivalents                                  49,085     58,684
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                                                           53,165     61,911
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Assets associated with discontinued operations                 21         74
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Total assets                                              151,239    256,489
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Liabilities                                                                 
Current liabilities                                                         
Accounts payable and accrued expenses                      23,245      5,156
Current tax liabilities                                       122        103
Deferred consideration                                          -     12,643
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                                                           23,367     17,902
Liabilities associated with discontinued operations         2,613      3,069
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Total liabilities                                          25,980     20,971
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Equity                                                                      
Share capital                                             533,349    432,506
Share based payments reserve                                3,828      3,968
Cumulative translation adjustment                            (18)          5
Accumulated deficit                                     (411,900)  (200,961)
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Total equity                                              125,259    235,518
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Total liabilities and equity                              151,239    256,489
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The cash position of the Company decreased by $9.6 million during year 2011. 
The main reason for the decrease in the cash position was the outflow of funds
on exploration activities in Kurdistan and the investment in GEP. This decrease
in cash was offset by the receipt by the Company in May and November 2011 of
funds related to the private placement of 183.5 million common shares of the
Company for proceeds net of issuance costs in amounts totalling of $99.8
million. 



Consolidated Cash Flow Statement

(Unaudited: Expressed in thousands of United States Dollars)

                                                              For the year ended
                                                                    December 31,
                                                                  2011      2010
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Operating activities                                                            
Net loss for the year from continuing operations             (210,738)     (133)
Adjustments for:                                                                
Interest income                                                  (518)     (416)
Foreign exchange loss / (gain)                                     862   (2,215)
Depreciation and amortisation expense                              221       139
Income tax                                                          19        91
Impairment losses                                              207,504         -
Share-based payment expense                                        264       570
Share of loss of associates                                        271        27
Capitalized expenses                                           (1,656)         -
Changes in trade and other receivables                              19      (93)
Changes in other current assets                                  (200)      (71)
Changes in inventories                                         (1,915)   (2,656)
Changes in accounts payable and accrued expenses                18,089     3,069
Cash used in discontinued operations                           (1,682)     (562)
Net cash inflows / (outflows) from operating activities         10,540   (2,250)
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Investing activities                                                            
Exploration, evaluation and other intangible assets          (100,087)  (26,376)
Property, plant and equipment                                    (735)     (324)
Investment in associate                                       (20,467)  (26,666)
Interest received on cash deposits                                 518       416
Cash provided by discontinued operations                         1,078       277
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Net cash outflows to investing activities                    (119,693)  (52,673)
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Financing activities                                                            
Proceeds net of costs on issuance of shares                    100,439    47,826
Net cash inflows from financing activities                     100,439    47,826
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Effect of exchange rate changes on cash and cash                 (885)     2,216
 equivalents                                                                    
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Change in cash and cash equivalents                            (9,599)     4,881
Cash and cash equivalents, beginning of the year                58,684    63,565
Cash and cash equivalents, end of the year                      49,085    58,684
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Outlook

The outlook for the year 2012 for the two blocks which the Company holds
interests in Kurdistan is as follows: 



Atrush Block

The operating company (GEP) had completed more than half of the planned 309
square kilometers for the 3D seismic acquisition program by the end of December
2011 when operations were suspended because of the winter weather. Operations
to acquire the balance portion of the 3D Seismic will commence by the end of
the first quarter 2012 and are likely to be completed by the end of second
quarter 2012. The Atrush-2 well location is under construction and GEP is in
the process of tendering for a rig for a planned commencement of drilling
operations in May 2012. 



Taza Block (Formerly Block K42)

Preparations for drilling the first Taza exploration well will continue over
the coming months. The surface location of the well has been selected and civil
engineering works for site access road and the site preparation are under way. 
The planned commencement of drilling operations is for the end of the second
quarter of 2012. 



New Ventures

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



About ShaMaran

ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration
vehicle. It has two projects in the region: the Atrush Block and Taza Block
(formerly K42) exploration blocks. These projects are 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'. 



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
Öhman AB. 



FOR FURTHER INFORMATION PLEASE CONTACT:

ShaMaran Petroleum Corp.
Keith Hill
Chairman
(604) 806-3583
khill@namdo.com


or

ShaMaran Petroleum Corp.
Pradeep Kabra
President and CEO
0041 22 560 8605
pradeep.kabra@shamaranpetroleum.com


or

ShaMaran Petroleum Corp.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)
sophias@namdo.com
www.shamaranpetroleum.com



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For complete report, please see attached file.
News Source: NASDAQ OMX



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Language:     English
Company:      ShaMaran Petroleum Corp
              
               
              Canada
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         CA8193201024
WKN:          
 
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