VANCOUVER, BC, Sept. 14, 2022 /CNW/ - ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSXV: SNM) (Nasdaq First North Growth Market (Sweden): SNM) is pleased to announce that the acquisition of TEPKRI Sarsang A/S ("TEPKRI"), that was previously announced in the Company's news release of July 12, 2021, has been completed today. View PDF
In addition, the Company has filed the necessary paperwork in Denmark to change TEPKRI's name to ShaMaran Sarsang A/S and also to change its Copenhagen registered office address.
Dr. Adel Chaouch, President and Chief Executive Officer of ShaMaran stated, "This is a momentous day for ShaMaran as with this acquisition (effective date of January 1, 2021) we have transformed ShaMaran from being a single asset company into one owning a portfolio of stakes in three world class producing oil fields (Atrush, Swara Tika and East Swara Tika) in Kurdistan with improved oil qualities and complementary production horizons. Based on the guidance from the operator of Sarsang, net production to ShaMaran will more than double on a pro-forma basis, positioning ShaMaran among the top five International Oil Companies in Kurdistan on a net production basis. We also expect our reserves to also more than double and the Company will update the market on this sizeable reserve acquisition in due course.
As part of the transaction closing, the two outstanding bonds of the Company are being merged into a single $300 million issue with maturity in 2025. Interest on the two bonds will be paid on Monday September 26, 2022 prior to bond conversion to be completed on Tuesday September 27, 2022. The interest period for the $300 million 2025 bond will be September 27, 2022 until the next scheduled interest payment in January 2023. During the third quarter of 2022 ShaMaran has bought back a number of its own bonds through competitive market transactions which when combined with the previously disclosed acquisitions means that the Company now owns in excess of 10% of the new 2025 bonds.
At closing the Company has a very strong cash position. Total cash reserves (inclusive of restricted cash) are in excess of $118 million following the acquisition of over $30 million in the Company's own bonds, with pro-forma leverage well under 1x net debt to EBITDA – our stated year end target. It is the Company's intent to imminently retire the $20 million convertible instrument issued to TotalEnergies as part of the purchase price, 11 months ahead of the originally announced schedule. Going forward the Company's financial metrics will strengthen even further and in the current oil price environment, we expect strong cashflows from our three producing oil fields. We look forward to seeing the value created through our successful operations, and acquisitions translate into much stronger growth in shareholder value for years to come."