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Ready for the Next Oil Boom: Kurdistan’s Profitable Petro Play

Stockhouse Editorial
1 Comment| April 14, 2022

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(Image via ShaMaran Petroleum Corp.)

A Canada-based, Kurdistan-focused oil development and exploration company is advancing its business via a recent rights offering underwritten by major shareholder.

Click to enlarge

ShaMaran Petroleum Corp. (TSX-V: SNM, OTCMKTS: SNM, Forum) announced an equity rights offering in the amount of approximately $30.5 million (USD), in early April 2022.

$30 million (USD) is underwritten by its major shareholder, Nemesia Holdings S.à.r.l. The company intends to use the proceeds raised from the rights offering for general corporate and administrative purposes.

Speaking more on this news in a media release for investors, ShaMaran’s President and Chief Executive Officer, Dr. Adel Chaouch explained that the rights offering allows all shareholders to be part of the next steps in the growth of the company.

“We expect this rights offering to be for the benefit of all of ShaMaran's shareholders.”

ShaMaran will distribute one right to each shareholder for each share held. Four rights will entitle the holder to acquire one common share of ShaMaran for an exercise price of $0.07 (CAD).

The rights will only be issued to shareholders who are resident in an “eligible jurisdiction”, namely Sweden and Canada. The offering in Canada has been extended until 5:00 pm Eastern time on May 20th, 2022.

Nemesia Holdings has agreed to purchase all equity securities of ShaMaran under the rights offering not otherwise subscribed for by other rightsholders up to a maximum of $30 million (USD).

The rights will be listed for trading on TSX Venture Exchange under the symbol SNM.RT.

ShaMaran followed up this news with an announcement just days later that its board of directors, along with NASDAQ First North Growth Market (Sweden): SNM) had prepared a prospectus in connection with this $30.5 million (USD) rights issue. The company noted that discussions with the Kurdistan authorities and its representatives to approve the change of control of the TotalEnergies affiliate, are progressing towards finalization.

Updates such as these have done well to express the solid work by the ShaMaran team and its stock performance has risen in kind, 38% higher than when the year began, and 80% higher than this time, last year.

(ShaMaran Petroleum Corp. stock chart – April 2021 to April 2022. Click to enlarge.)

The Iraqi-Kurdish petroleum exploration and production sector offers a unique proposition for investors. With Kurdistan as the autonomous region of Iraq, it is in the third largest OPEC producer.

Kurdistan still stands as one of the frontier areas of oil and gas production and sits on 45 billion barrels of potential reserves on what they call the very prolific Western Zagros fault. A complex geological structure, these are fractured carbonates that only a few could capitalize upon.

For a company to succeed in this region, its team must have the know-how and understand how to deal with these types of reservoirs. However, this goes beyond just success in the financial sense, there comes a time to give back.

CEO Chaouch explained that environmental, social and governance were very important in the company’s decision to be the exclusive corporate sponsor to the Hasar Vision 2025 Program, supporting the Hasar multi-year urban re-forestation project.

He said the company is integrating it into its ESG policy to become a better citizen in Kurdistan.

“It will, among other activities, be planting over one million oak trees in the center of Erbil, the capital of Kurdistan, in order to reduce the impact of emissions in this urban setting. ShaMaran will also be assisting Hasar to secure carbon credit accreditation for the Million Oaks Project, a first in Kurdistan. Carbon credits will be sought and will be dedicated by ShaMaran to offsetting its carbon emissions for its activities in Kurdistan.”

Although those who have been involved have discovered several significant world-class fields, including Atrush field which are in as well as the Sarsang fields which we are entering.

All indications point to this being the midst of another oil rush in Kurdistan and the surrounding area, which will is likely to see a renewal and, in the years to come, with more oil to be found and also maturation of the current activities, ShaMaran Petroleum Corp. will be there.

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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.


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