ShaMaran Reports Second Quarter 2025 Results

Executive Summary

• ShaMaran Petroleum Corp. reported its financial and operating results for the second quarter and six months ended June 30, 2025, showing significant growth in revenue, production, and cash flow compared to the prior year period.
• The company successfully reduced its net debt by nearly 50% over the last year, repaying $29.4 million of its corporate bond and $5.0 million of a related-party loan, while announcing the imminent repayment of the remaining Nemesia loan balance.
• Operational highlights include a substantial increase in average daily oil production at the Atrush and Sarsang blocks, driven by increased working interest at Atrush and higher production volumes, despite a temporary production shut-in at Sarsang due to facility damage from a suspected drone strike.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Revenue increased 56% to $35.4 million (from $22.6 million).
  • Gross margin on oil sales increased 73% to $12.8 million (from $7.4 million).
  • Free cash flow before debt service increased 66% to $27.9 million (from $16.8 million).
  • Adjusted EBITDAX increased 59% to $24.9 million (from $15.6 million).
• Financial Performance (Six Months Ended June 30, 2025 vs 2024):
  • Revenue increased to $71.3 million (from $45.2 million).
  • Gross margin on oil sales increased to $25.3 million (from $14.2 million).
  • Free cash flow before debt service increased to $65.7 million (from $34.3 million).
  • Adjusted EBITDAX increased to $49.3 million (from $30.8 million).
• Debt and Liquidity:
  • At June 30, 2025, the Company held cash of $67.2 million and gross debt of $154.4 million (including $143.8 million corporate bond and $10.6 million related-party loan), resulting in net debt of $87.2 million.
  • The Company repaid $29.4 million (17% of outstanding) of the corporate bond at par in April 2025.
  • The Company repaid $5.0 million (32% of outstanding) of the related-party loan in May 2025.
  • The Board authorized the repayment of the remaining Nemesia loan balance ($10.6 million plus accrued interest) subsequent to the release date, which will reduce gross debt to $143.8 million.
  • At August 6, 2025, net debt was reported at $90.3 million.
• Operational Metrics (Q2 2025):
  • Atrush Block: Average gross daily oil production was 35.1 Mbopd (up from 25.1 Mbopd in Q2 2024). The Company’s working interest increased to 50% effective August 7, 2024 (previously 27.6%).
  • Sarsang Block: Average gross daily oil production was 28.7 Mbopd (down from 29.7 Mbopd in Q2 2024). The Company holds an 18% working interest.
  • Total Gross Production: Combined average daily production was 63.8 Mbopd (up from 54.8 Mbopd in Q2 2024).
  • Total Net Production: Combined average daily net production was 22.7 Mbopd (up from 12.1 Mbopd in Q2 2024).
• Subsequent Events / Operational Updates:
  • On July 15, 2025, production at the Sarsang Block was shut-in following an explosion at a facility due to a suspected drone strike, which damaged three storage tanks and related pipes.
  • Production at Atrush was not impacted.
  • Production at Sarsang resumed at a reduced rate; approximately half of Sarsang's production capacity is expected to remain offline until late October 2025.
  • The closure of the Iraq-Türkiye pipeline since March 25, 2023, continues to materially impact operations, with the Company actively engaging parties to resume exports.

Notable Quotes

• "We remain focused on generating strong cash flow and accelerating debt repayment, as shown in the Q2 2025 results. Over the last year, we have reduced the Company's net debt by almost 50%, providing a solid base for potential future shareholder distributions. We continue to work with industry partners and the host government towards a lasting commercial solution for the Iraq-Türkiye pipeline reopening." — Garrett Soden, President and CEO