Mr. Garrett Soden reports

SHAMARAN REPORTS FOURTH QUARTER 2023 RESULTS

Shamaran Petroleum Corp. has released its financial and operating results and related management's discussion and analysis for the three and 12 months ended Dec. 31, 2023. Except as otherwise indicated, all currency amounts indicated as dollars in this news release are expressed in U.S. dollars.

Garrett Soden, president and chief executive officer of Shamaran, commented: "The Sarsang and Atrush blocks are generating significant cash flow from local sales following the closure of the Iraq-Turkey pipeline last year. We continue to work with our operating partners to increase local sales volumes, improve commercial terms for the oil offtake and maintain a low-cost base. The TAQA/HKN transaction announced in January, 2024, will almost double our working interest in Atrush when closed, and it will create significant synergies from having the same operator on the adjoining Atrush and Sarsang blocks. We expect local sales to continue for the time being, but we are actively engaging with the relevant parties to resume pipeline exports long term."

Corporate highlights:

• The closure of the Iraq-Turkey pipeline 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.
• Production from the Sarsang block was initially reduced following the ITP closure due to market demand constraints when local sales commenced through trucking in April, 2023, but production and sales in 2023 subsequently increased every quarter.
• Production from the Atrush block was shut in following the ITP closure, due to a lack of trucking facilities, until sales started to local refineries in November, 2023, at reduced rates through pipeline flow reversal.

• Fourth quarter 2023 oil sales to the Kurdistan local market averaged a netback price of $39.77 per barrel and generated net revenues to the company of $20.3-million. Net revenues for the full-year 2023 were $82.9-million at an average netback price of $48.87 per bbl (including first quarter 2023 ITP export sales).
• Shamaran generated $9.8-million of operating cash flow in Q4 2023 ($40.5-million in operating cash flow during the year) primarily due to the strength of local sales from Sarsang and pro-active cost-cutting at both the corporate and operating asset levels.
• At Dec. 31, 2023, the company had cash of $71.7-million (including restricted cash of $22.8-million) and gross debt of $293.1-million (including the $277.5-million bond and the $15.6-million related-party loan). Net debt was $193-million (including $28.4-million in Shamaran 2025 bonds held by the company).

Operational highlights:

• For 2023, total property gross production was 14.3 million bbl, and total company working interest production was 2.9 MMbbl.
• As of Dec. 31, 2023, Atrush has achieved cumulative production of approximately 70.5 MMbbl, and Sarsang has achieved cumulative production of approximately 66.1 MMbbl since development commenced in both fields in 2013.
• The company's working interest proven plus probable reserves decreased by 2023 production of 2.9 MMbbl from 68.3 MMbbl at Dec. 31, 2022, to 65.4 MMbbl at Dec. 31, 2023.
• The company's working interest best estimate of contingent resource volumes remained constant from 41.5 MMbbl at Dec. 31, 2022, to 41.5 MMbbl at Dec. 31, 2023.
• Sarsang average gross production was 36,400 barrels of oil per day during Q4 2023 and 29,600 bopd for the full-year 2023, with current gross production around 38,000 bopd.
• Atrush average gross production was 9,000 bopd during Q4 2023 and 9,800 bopd for the full-year 2023, with current gross production around 25,000 bopd.

2024 guidance:

• Due to the continued closure of the ITP and the unpredictability of the local sales market in Kurdistan, the company has not provided production guidance for 2024.

Subsequent events:

• The company refers to its news release on Jan. 22, 2024, regarding the signing of definitive agreements with TAQA International BV, a subsidiary of Abu Dhabi National Energy Company PJSC, and HKN Energy IV Ltd., an affiliate of HKN Energy Ltd., that, upon completion, will increase Shamaran's indirect ownership in the Atrush block from 27.6-per-cent to 50-per-cent working interest. Assuming the transaction had closed on Dec. 31, 2023, Shamaran's reserve and resource position would be impacted as follows:
  • Company working interest 2P reserves would increase by 28 per cent from 68.3 MMbbl at Dec. 31, 2022, to 87.7 MMbbl as at Dec. 31, 2023.
  • Company working interest 2P reserves replacement ratio would be 769 per cent for 2023.
• On Jan. 23, 2024, the company announced that it intended to use part of its owned bonds to satisfy the $22.5-million bond amortization amount due in January, 2024. These bonds were retired in January, 2024, leaving $5.9-million of company-owned bonds remaining. After the bond amortization and interest payments at the end of January, 2024, the company had gross debt of $271-million and net debt of $200-million (including restricted and unrestricted cash and company-owned bonds) in line with the company's news release.

Shamaran plans to publish its financial statements for the three months ended March 31, 2024, on May 8, 2024.

About Shamaran Petroleum Corp.

Shamaran is a Canadian independent oil and gas company focused on the Kurdistan region of Iraq. The company indirectly holds an 18-per-cent working interest (22.5-per-cent paying interest) in the Sarsang block and, subject to closing the previously announced transaction, will increase its indirect 27.6-per-cent working interest in the Atrush block to 50 per cent. The company is listed in Toronto on the TSX Venture Exchange and in Stockholm on the Nasdaq First North Growth Market (ticker SNM). Shamaran is part of the Lundin group of companies.

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