Mr. Garrett Soden reports

SHAMARAN REPORTS SECOND QUARTER 2024 RESULTS

Shamaran Petroleum Corp. today released its financial and operating results, and the related management's discussion and analysis (MD&A), for the three and six months ended June 30, 2024. Except as otherwise indicated, all currency amounts in this news release are expressed in United States dollars.

Garrett Soden, president and chief executive officer of Shamaran, commented: "Our two blocks in Kurdistan continue to deliver solid EBITDAX (1) and cash flow from local market sales. The recent TAQA/HKN transaction closing will allow us to increase production and local sales at Atrush. With the bond maturity extension in Q2 2024, we now have the strategic flexibility to pursue additional growth opportunities in Kurdistan. Long term, we look forward to a commercial solution for the restart of exports through the Iraq-Turkey pipeline."

Corporate highlights:

• The closure of the Iraq-Turkey pipeline (ITP) 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.
• In Q2 (second quarter) 2024, average gross daily oil production from Atrush and Sarsang combined was 54,800 barrels of oil per day (bopd), more than three times the level achieved in Q2 2023 (18,000 bopd in Q2 2023 from Sarsang only as Atrush was shut in immediately after the ITP closure).
• As a result of higher production from both blocks, revenue from local sales in Q2 2024 was $22.6-million, approximately 3.5 times the $6.5-million delivered during Q2 2023.
• In June, 2024, the company retired $47-million of the Shamaran 2025 bond through a tender process and $5.9-million of its own bonds, and announced bondholder approval for amendments to the bond terms, including a two-year extension of the maturity date to July, 2027.

Financial highlights:

• Shamaran generated $15.8-million in operating cash flow during Q2 2024 from local sales (negative $700,000 in Q2 2023).
• The company produced free cash flow before debt service (2) of $16.8-million in Q2 2024 (negative $6.8-million in Q2 2023) with tight cost control.
• EBITDAX (earnings before interest, taxes, depreciation, amortization and exploration expenses) (1) has consistently increased since the ITP shutdown, with Q2 2024 EBITDAX at $14.7-million (negative $4.9-million in Q2 2023).
• Q2 2024 oil sales to the Kurdistan local market averaged a net oil price of $37.80 per barrel (bbl) from the two blocks ($41.28 per bbl in Q2 2023 from Sarsang only), 8 per cent lower than Q2 2023.
• At June 30, 2024, the company had cash of $38.7-million and gross debt of $217.7-million (including the $202.1-million bond and $15.6-million related-party loan). Net debt (3) was $179-million.

(1) EBITDAX is a non-IFRS (international financial reporting standards) financial measure. Refer to the MD&A for more information.

(2) Free cash flow before debt service is a non-IFRS financial measure. Refer to the MD&A for more information.

(3) Net debt is a non-IFRS financial measure. Refer to the MD&A for more information.

Operational highlights:

• At Atrush, production averaged 25,100 bopd in Q2 2024 and remains stable.
• At Sarsang, production averaged 29,700 bopd in Q2 2024, due to maintenance activities and facility downtime. Daily rates in late June and early July, 2024, have exceeded 36,000 bopd. During Q3 (third quarter) 2024, a two-well drilling program will commence, which is expected to increase production toward year-end.

Subsequent event:

• On Aug. 6, 2024, the company closed the acquisition of TAQA Atrush B.V. and the subsequent sale of an indirect interest in Atrush to HKN Energy IV Ltd., announced on Jan. 22, 2024. The two-step transaction increased the company's indirect 27.6-per-cent stake in the Atrush block to a 50-per-cent working interest (66.67-per-cent paying interest) following the sale of an indirect 25-per-cent working interest (33.33-per-cent paying interest) to HKN Energy IV. An affiliate of HKN Energy is now operator of the Atrush block and the Kurdistan regional government's 25-per-cent working interest in the Atrush block has been converted to a carried interest.

Shamaran plans to publish its financial statements for the nine months ending Sept. 30, 2024, on Nov. 7, 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 a 50-per-cent working interest (66.67-per-cent paying interest) in the Atrush block. The company is listed in Toronto on the TSX Venture Exchange and in Stockholm on Nasdaq First North Growth Market (ticker SNM). Shamaran is part of the Lundin Group of Companies.

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