ShaMaran Petroleum (SNM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 248% year-over-year to $22.6 million, driven by resumed Atrush production, strong local sales from both Atrush and Sarsang blocks, and the TAQA/HKN transaction, despite the Iraq-Türkiye pipeline (ITP) closure.

• Average gross daily oil production reached 54,800 bopd in Q2 2024, up 204% from Q2 2023, reflecting the restart of Atrush and optimized Sarsang output.

• The company retired $47 million of its 2025 bond and extended the remaining bond maturity to July 2027, improving its debt profile and strategic flexibility.

• Net loss for Q2 2024 was $0.5 million, a significant improvement from a $27.2 million loss in Q2 2023.

• On August 6, 2024, the company increased its working interest in the Atrush Block to 50% through a two-step transaction.

Financial highlights

• Q2 2024 revenue: $22.6 million (Q2 2023: $6.5 million); six months ended June 30, 2024: $45.2 million (2023: $49.9 million).

• Gross margin on oil sales in Q2 2024 was $7.4 million, up from negative $4.2 million in Q2 2023.

• EBITDAX for Q2 2024 was $14.7 million, compared to negative $4.9 million in Q2 2023.

• Operating cash flow in Q2 2024 was $15.8 million (Q2 2023: negative $0.7 million); free cash flow before debt service was $16.8 million (Q2 2023: negative $6.8 million).

• Cash at June 30, 2024: $38.7 million; net debt: $179 million.

Outlook and guidance

• The company expects continued local sales from both blocks until ITP exports resume, with production at Atrush stable around 25,000 bopd and Sarsang expected to increase following a new drilling program in Q3 2024.

• Management anticipates further growth opportunities in Kurdistan, pending a commercial solution for pipeline exports.

• Uncertainty remains regarding timing and recovery of receivables from the Kurdistan Regional Government (KRG) and the reopening of the ITP.