Iran “Ready to Export Technical, Engineering Services to Iraq”

By John Lee.

The CEO of the National Iranian Oil Company (NIOC) has said that Iran is ready to export technical and engineering services to Iraq.

Addressing a meeting of the Joint Working Group on Iran-Iraq Oil Cooperation, Mohsen Khojastehmehr, said:

"Iran wants to benefit from Iraq's participation in the development of the oil and gas industry ...

"It is time for Iran and Iraq to take practical steps to cooperate in the field of oil and gas activities and the scientific, technological and educational sectors."

The Iraqi delegation to the meeting was led by Deputy Minister of Oil, Bassem Mohammad Khedir,

(Source: Shana)

The post Iran "Ready to Export Technical, Engineering Services to Iraq" first appeared on Iraq Business News.

OPEC increases Iraq’s Oil Quota

By John Lee.

OPEC has reportedly agreed to increase Iraq's oil production to 4.5 million barrels per day (bpd) in June.

The state-controlled Iraqi News Agency (INA) quotes Iraq's representative to OPEC, Muhammad Saadoun, as saying that oil production will then increase by 50,000 bpd each month from July to September.

He also predicted an  average oil price in excess of $100 per barrel until the third quarter of this year.

(Source: INA)

The post OPEC increases Iraq's Oil Quota first appeared on Iraq Business News.

ShaMaran reports Record Oil Revenues at Atrush

ShaMaran Petroleum has released its financial and operating results and related management's discussion and analysis (MD&A) for the three months and year ended December 31, 2021.

Dr. Adel Chaouch, President and Chief Executive Officer of ShaMaran, commented:

"2021 has been a transformational year for ShaMaran. The Company generated the highest annual oil sales revenues in its history at $102.3 million. ShaMaran's 2021 EBITAX was more than triple that of 2020 and last year demonstrates the Company's cash generating ability with cashflow from operations increasing by almost 5 times versus the year before.  Atrush continues to prove itself as a world class field with cumulative production now in excess of 54MM barrels and a continuation of full replacement of 2P reserves year on year.

"We are entering 2022 in a strong financial position and are excited about the growth opportunities that lie ahead for Shamaran. The Sarsang acquisition, expected to close in the coming months, will double the size of the Company and we continue to actively look at other market opportunities to further develop ShaMaran. We recently announced a one-of-its-kind climate action corporate sponsorship with the Hasar Organization for Earth Sciences in Kurdistan. This initiative represents a key early step in ShaMaran's strategy towards significantly reducing its net carbon footprint."

2021 Financial Highlights

Three months ended Dec 31

Year ended Dec 31

USD Thousands

2021

2020

2021

2020

Revenue

27,439

14,081

102,323

56,673

Gross margin on oil sales

12,662

10,253

49,889

7,106

Net result

4,061

(1,785)

13,383

(144,425)

Cash flow from operations

23,336

5,350

63,903

12,860

EBITDAX

18,456

6,614

66,375

20,052

  • The fourth quarter generated oil sales revenue of $27.4 million and during 2021 the Company generated the highest-ever annual oil sales revenues at $102.3 million;
  • A strong EBITDAX of $18.5 million for the fourth quarter and $66.4 million for the full year 2021, 3.3 times the EBITDAX of 2020;
  • Consistent oil sales and entitlement payments from the KRG with 75% of the KRG outstanding receivables paid during 2021;
  • 2021 and fourth quarter operating cash flow of $63.9 million and $12.9 million respectively; and
  • Reduction of the principal amount of the Company's 2023 Bond by $15 million during 2021 with a further $3 million of the 2023 Bond bought back by the company at 2021 year end.

___________________________

1 All currency amounts indicated as "$" in this news release are expressed in United States Dollars. 

2021 Atrush Operational Highlights

  • Cumulative production of more than 54 million barrels of oil achieved by year end 2021;
  • Atrush Property gross 2P reserves2 had a 102% reserves replacement ratio increasing to 110.2 MMbbls as at December 31, 2021 from 109.9 in 2020, and Company gross 2P reserves increasing from 30.3 MMbbls to 30.4 MMbbls;
  • Full year 2021 average production of approximately 38,600 bopd, was very close to the 2021 guidance despite a longer than anticipated routine maintenance shutdown period in September 2021;
  • Full year 2021 lifting costs per barrel of $5.12 in line with 2021 guidance; and
  • Full year 2021 capital expenditure of $52.3 million ($14.2 million net to ShaMaran) in line with 2021 guidance.

Sarsang Acquisition

  • As announced on July 30, 2021, the Company has successfully issued and settled $111.5 million principal amount of the $300 million 12% senior unsecured bond 2021/2025 (the "2025 Bond"), which was issued at 98.5% of nominal value for gross cash proceeds to the Company of $109.8 million. This portion of the 2025 Bond and the $188.5 million balance will be issued to refinance existing indebtedness of the Company in connection with, and conditional upon completion of, the Company's acquisition of TotalEnergies' affiliate that holds an 18% non-operated participating interest in the Sarsang Block; and
  • The Company is currently finalizing the closing documentation for the completion of the Sarsang Acquisition and completion is expected in the first half of 2022.

2022 Atrush Guidance

  • 2022 average production guidance of 36,000 to 41,000 bopd;
  • Atrush capital expenditures for 2022 planned at $116 million ($32 million net to ShaMaran). This capital program includes:
    • The drilling and completion of three development wells, including one water injection well.
    • Initiation of the gas solution project which will significantly reduce emissions by using existing infrastructure to generate electrical power from produced gas. As the Atrush field is currently dependent on diesel-fueled generators for all electrical power, this project will also therefore greatly reduce future operating costs.
  • Atrush operating expenditure is forecast to be $76 million ($21 million net to ShaMaran) for 2022, in line with 2021 actual operating costs; and
  • Atrush average lifting costs per barrel are estimated to range from $4.80 to $5.80. Atrush lifting costs are mainly fixed costs and dollar-per-barrel estimates should decrease with increasing levels of production and operational efficiencies.

CORPORATE UPDATE

The Company is pleased to announce that the Record Date of May 6, 2022 has been set for the Annual General Meeting of Shareholders to be held on June 23, 2022.

____________________________

2 Reserves estimates, contingent resource estimates and estimates of future net revenue in respect of ShaMaran's oil and gas assets in the Atrush Block are effective as at December 31, 2021, and are included in the report prepared by McDaniel & Associates Consultants Ltd., an independent qualified reserves evaluator, in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (NI 51-101) and the Canadian Oil and Gas Evaluation Handbook (the COGE Handbook) and using McDaniel's January 1, 2022 price forecasts. Certain abbreviations and technical terms used in this MD&A are defined or described under the heading "Other Supplementary Information".

OTHER

This information is information that ShaMaran is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, on April 25, 2022 at 5:30 p.m. Eastern Time.  Arctic Securities AS (Swedish branch) is the Company's Certified Advisor on Nasdaq First North Growth Market (Sweden), +46 844 68 61 00, certifiedadviser@arctic.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

FORWARD LOOKING STATEMENTS

This news release contains statements and information about expected or anticipated future events and financial results that are forward‐looking in nature and, as a result, are subject to certain risks and uncertainties, such as legal and political risk, civil unrest, general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans.

The Covid-19 virus and the restrictions and disruptions related to it have had a drastic adverse effect on the world demand for, and prices of, oil and gas as well as the market price of the shares of oil and gas companies generally, including the Company's common shares.  There can be no assurance that these adverse effects will not continue or that commodity prices will not decrease or remain volatile in the future. These factors are beyond the control of ShaMaran and it is difficult to assess how these, and other factors, will continue to affect the Company and the market price of ShaMaran's common shares. In light of the current situation, as at the date of this news release, the Company continues to review and assess its business plans and assumptions regarding the business environment, as well as its estimates of future production, cash flows, operating costs, and capital expenditures.

Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward‐looking information. Forward‐ looking information typically contains statements with words such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "outlook", "budget" or the negative of those terms or similar words suggesting future outcomes.  The Company cautions readers regarding the reliance placed by them on forward‐looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company.

Actual results may differ materially from those projected by management. Further, any forward‐looking information is made only as of a certain date and the Company undertakes no obligation to update any forward‐ looking information or statements to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events, except as may be required by applicable securities laws. New factors emerge from time to time, and it is not possible for management of the Company to predict all of these factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐looking information.

ABOUT SHAMARAN

ShaMaran is a Kurdistan focused oil development and exploration company which holds a 27.6% working interest, through its wholly-owned subsidiary General Exploration Partners, Inc., in the Atrush Block and, upon successful closing of the Sarsang Acquisition, will then also hold an 18% interest through its then wholly-owned subsidiary TEPKRI Sarsang A/S in the Sarsang Block.

ShaMaran is a Canadian oil and gas company listed on the TSX Venture Exchange and the Nasdaq First North Growth Market (Sweden) under the symbol "SNM".

(Source: ShaMaran)

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DNO releases latest Production Data

By John Lee.

DNO has issued an update on production and sales volumes for the quarter as well as other key financial information.

Volumes (boepd):

Gross operated production Q1 2022 Q4 2021 Q1 2021
  Kurdistan 106,465 107,472 111,985
  North Sea - - -
Net entitlement production Q1 2022 Q4 2021 Q1 2021
  Kurdistan 26,670 29,367 28,593
  North Sea 12,700 13,571 15,173
Sales Q1 2022 Q4 2021 Q1 2021
  Kurdistan 26,670 29,367 28,593
  North Sea 10,689 23,289 10,953

Selected cash flow items

During the quarter, DNO received USD 206.6 million net from the Kurdistan Regional Government, of which USD 160.7 million represents the entitlement share of October, November and December 2021 Tawke license crude oil deliveries.

Of the balance, USD 13.8 million represents override payments equivalent to three percent of gross October and November 2021 Tawke license revenues and USD 32.1 million represents payments towards arrears built up from non-payment of certain invoices in 2019 and 2020.

DNO paid one tax installment of USD 12.6 million in Norway as tax losses for 2021 ended lower than estimated tax losses that were the basis for tax refunds received during H2 2021.

The Company paid a dividend of NOK 0.20 per share, totaling USD 22.2 million.

(Source: DNO)

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Deloitte report on Oil and Gas in Iraqi Kurdistan

As part of the KRG's drive to promote transparency, Deloitte have been commissioned to produce an audited report detailing oil and gas exports, production costs, and revenues for the second half of 2021.

The report, which analyzes the oil and gas industry on a quarterly basis, is now available as a PDF in English, Kurdish and Arabic on the KRG website.

Click here to download the reports.

(Source: KRG)

The post Deloitte report on Oil and Gas in Iraqi Kurdistan first appeared on Iraq Business News.

GKP Revenues Triple

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) closed up nearly 13 percent on Wednesday after the company announced that revenue for 2021 had almost tripled.

In its results for the full year ended 31 December 2021, Jon Harris, Gulf Keystone's Chief Executive Officer, said:

"I am pleased to report a year of strong operational and financial delivery in 2021. With a 19% increase in gross average production to 43,440 bopd, our leverage to the recovery in oil prices and continued cost and capital discipline, we generated substantial revenue and free cash flow.

"We continued to deliver on our strategy of balancing investment in sustainable growth and shareholder returns, as we resumed drilling activities and submitted a draft Field Development Plan to the Ministry of Natural Resources while also returning $100 million of dividends to our shareholders in 2021. Following the $50 million dividend that we paid in February 2022, we are pleased to announce today the declaration of an additional $90 million of dividends. This brings aggregate shareholder distributions declared since 2019 to $340 million.

"Looking ahead to the remainder of 2022, we remain focused on delivering gross annual production of 44,000-50,000 bopd by bringing SH-15 online in Q2 2022 and optimising production with well interventions and workovers. While constructive engagement continues with the MNR on the FDP, timing of approval remains uncertain and further progress is required before we fully execute FDP activity.

"Following my first year as GKP's CEO, I would like to personally thank the Company's teams in Kurdistan and the UK for all of their efforts. We are in a strong position and I am excited about safely delivering the significant growth potential of the Shaikan Field to drive sustainable value for all of our stakeholders."

Highlights to 31 December 2021 and post reporting period

Operational

  • Continued strong focus on safety in 2021 despite one previously reported lost time incident ("LTI"); currently no LTIs recorded for  over 160 days  
  • Third consecutive year of production growth with 2021 gross average production of 43,440 bopd, towards the upper end of our tightened guidance range of 42,000-44,000 bopd and a 19% increase versus 2020
  • 2022 YTD gross average production of c.45,500 bopd, following milestone achievement in February 2022 of 100 MMstb cumulative production since inception
  • Successfully restarted drilling activities in June, resulting in two new wells, SH-13 and SH-14, coming online towards the end of the year
  • After acid stimulations, current SH-13 production in line with expectations while we continue to explore options to further increase SH-14 production
  • Following the early appearance of trace quantities of water, SH-12 is currently shut-in while we investigate near-term production options ahead of installation of planned water handling facilities  
  • Spudded SH-15, which is currently being hooked up ahead of targeted start-up in Q2 2022

Draft Shaikan Field Development Plan ("FDP")

  • Submitted draft FDP to Ministry of Natural Resources in November 2021 comprising plan to increase Phase 1 gross production plateau to between 85,000-95,000 bopd while eliminating routine flaring and significantly reducing carbon intensity
  • While final timing of approval remains uncertain due to the complexity of the project, we are providing today an interim update on progress to date on Phase 1 of the draft FDP. As we continue to review opportunities to further optimise the project, final details and cost estimates may vary and we expect to provide an update upon FDP approval
  • Expected components of Phase 1 of draft FDP:
    • Expand Jurassic gross production plateau up to 85,000 bopd
    • Test Triassic reservoir, targeting gross production plateau of up to 10,000 bopd
    • Concurrently, execute Gas Management Plan to eliminate routine flaring through gas reinjection, underpinning target of more than halving scope 1 and 2 emissions per barrel by 2025
  • From FDP approval, expected duration of Phase 1 Jurassic and Triassic projects is 36 to 42 months and the Gas Management Plan is 18 to 24 months
  • Total Phase 1 gross Capex currently estimated to be $800-$925 million, up c.$160 million from previous FDP with the objective of increasing production towards 95,000 bopd through project optimisations

Financial

  • Strong free cash flow generation of $122.2 million (2020: $(22.9) million)
  • Total dividends of $100 million paid in 2021, including a 2020 annual dividend of $25 million, a special dividend of $25 million and an interim dividend for 2021 of $50 million. An additional $50 million interim dividend was paid to shareholders in February 2022
  • Revenue almost tripled to $301.4 million (2020: $108.4 million), contributing to a return to profit after tax of $164.6 million (2020: $47.3 million loss)
  • Adjusted EBITDA increased by almost four times to $222.7 million (2020: $56.7 million) driven by higher gross production, leverage to the recovery in oil prices and the Company's continued strict control of costs:
    • Gross average production increased 19% to 43,440 bopd (2020: 36,625 bopd)
    • Realised price more than doubled to $49.7/bbl (2020: $20.9/bbl)
    • Gross Opex per barrel of $2.7/bbl (2020: $2.6/bbl), in line with 2021 guidance of $2.5-$2.9/bbl
  • Revenue receipts of $221.7 million in 2021 from the KRG for crude oil sales related to the December 2020 to August 2021 invoices and partial repayment of arrears related to the outstanding November 2019 to February 2020 invoices
  • Since the beginning of 2022, the Company has received a further $106.4 million net to GKP for crude oil sales and arrears related to the September 2021 to November 2021 invoices. As at 29 March 2022, the outstanding arrears balance is $21.9 million net to GKP
  • Net Capex of $50.8 million (2020: $45.9 million), primarily related to the completion of the SH-13 and SH-14 wells and debottlenecking of PF-2
  • Robust cash balance of $182.7 million at 29 March 2022

Outlook

  • Remain focused on delivering 2022 gross average production of 44,000-50,000 bopd reflecting the anticipated production contribution from SH-15 and the benefits of well intervention and workover activities
  • 2022 net capital expenditure guidance of $85-$95 million:
    • Includes completion of SH-15 drilling, well interventions and workovers, and activity that enables us to expedite the FDP following approval 
    • With progress on the FDP, the Company expects to resume drilling and increase 2022 capital guidance
  • Gross Opex guidance of $2.9-$3.3/bbl, driven by increased operational activity and the continued catch up of previously scheduled work programmes deferred due to COVID-19
  • Today declaring $90 million of dividends, representing further delivery against GKP's strategic commitment of balancing investment in sustainable growth with shareholder returns:
    • $25 million final 2021 ordinary dividend subject to approval at AGM on 24 June 2022
    • $65 million interim dividend, expected to be paid on 13 May 2022, based on a record date of 29 April 2022 and ex-dividend date of 28 April 2022
    • The Company will disclose the US dollar and pounds sterling rate per share for both dividends prior to their ex-dividend dates
  • Assuming timely payment of invoices and continuing strong oil prices, we are expecting strong cash flow generation in 2022. This would provide flexibility to fund a potential increase in capital expenditure, with progress on the FDP, and the opportunity for further distributions to shareholders, while preserving adequate liquidity and maintaining a robust balance sheet

More here.

(Source: GKP)

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Genel Results: $400m Impairment, but Increased Divi

Genel Energy has announced its audited results for the year ended 31 December 2021.

Bill Higgs, Chief Executive of Genel, said:

"Our strategy and business model remain focused on cash generation. Prior to the invasion of Ukraine and the associated increase in the oil price, we were well positioned for our free cash flow to materially increase from $86 million in 2021 to around a quarter of a billion dollars this year. At the prevailing oil price, and given that there seems no quick resolution to the appalling events unfolding, this figure is expected to increase significantly.

"The forecast extent of our cash generation, from an existing position of financial strength, provides the potential to deliver significant growth and further returns to shareholders. Our priority is investment in production to maximise the value of our existing assets, and continuing to develop Sarta. Given the strong outlook and ongoing cash generation, we have increased our final dividend by 20%, continuing to fulfil our aim of paying a material and progressive dividend."

Results summary ($ million unless stated)

2021 2020
Average Brent oil price ($/bbl) 71 42
Production (bopd, working interest)  31,710  31,980
Revenue  334.9  159.7
EBITDAX1  275.1  114.6
  Depreciation and amortisation  (172.8)  (153.7)
  Exploration expense - (2.2)
  Impairment/write off of oil and gas assets (403.2) (286.3)
  Reversal of impairment / (impairment) of receivables 24.1 (36.9)
Operating loss (276.8) (364.5)
Cash flow from operating activities 228.1 129.4
Capital expenditure 163.7 109.7
Free cash flow2 85.9 (4.4)
Cash 313.7 354.5
Cash after settlement of bonds3 313.7 273.5
Total debt after settlement of bonds3 280.0 280.0
Net cash4 43.9 6.2
Basic LPS (¢ per share) (111.4) (152.0)
Underlying EPS / (LPS) (¢ per share)5 25.8 (34.2)
Dividends declared relating to financial year (¢ per share) 18 15
  1. EBITDAX is operating loss adjusted for the add back of depreciation and amortisation ($172.8 million), write-off of oil and gas assets ($403.2 million) and reversal of impairment on receivables ($24.1 million)
  2. Free cash flow is reconciled on page 12
  3. In December 2020, the Company gave notice to call the residual nominal $77.1 million of its 2022 bonds and thereby reduce its gross debt balance to $280.0 million. Under the terms of the bond settlement this took place on 8 January 2021 and reduced cash by $81.0 million
  4. Reported cash less IFRS debt (page 13)
  5. Underlying EPS / (LPS) is loss and total comprehensive income / (expense) adjusted for the add back of impairment / write-off of intangible assets, impairment of property, plant and equipment and reversal of impairment / (impairment) of receivables divided by weighted average number of ordinary shares

Highlights

  • Net production averaged 31,710 bopd in 2021 (2020: 31,980 bopd)
  • $281 million of cash proceeds were received from the KRG in 2021 (2020: $173 million)
  • Capital expenditure of $164 million (2020: $110 million), with c.$45 million spent at the Tawke PSC and c.$105 million at Sarta and Qara Dagh
  • Free cash flow of $86 million in 2021, pre dividend payments (2020: $4 million free cash outflow)
  • Following the termination of the Bina Bawi and Miran PSCs by Genel on 10 December 2021, there has been a required accounting write off of $403 million arising from derecognition of associated assets and liabilities. Genel has consequently taken steps to bring a claim for substantial compensation from the KRG at a private London seated international arbitration
  • Dividends paid in 2021 of 16¢ per share (2020: 15¢ per share), a total distribution of $44 million
  • Cash of $314 million at 31 December 2021, net cash of $44 million ($6 million at 31 December 2020)
  • Carbon intensity of 16 kgCO2e/bbl for scope 1 and 2 emissions in 2021, significantly below the global oil and gas industry average of 20 kgCO2e/boe

Outlook

  • Production guidance for 2022 maintained at around the same level as the 2021 average
    • Sarta-1D entered production on 8 March, at an initial rate of c.2,500 bopd
  • Genel expects free cash flow of over $250 million in 2022, pre dividend payments, at a Brent oil price of $90/bbl
    • An increase or decrease in Brent of $10/bbl impacts annual cash flow by c.$50 million
    • Cash flow in 2022 benefits from 10 Tawke override payments, with the last one set to be paid relating to July 2022 production
  • 2022 capital expenditure guidance maintained as between $140 million and $180 million
  • 2022 marks 20 years since Genel signed its first PSC in the KRI. We will be marking the year by increasing the scope of our social investments under the Genel20 banner, in line with UN Sustainable Development Goals
  • Due to Genel's robust financial position and confidence in the Company's future prospects, the Board is recommending a final dividend of 12¢ per share (2021: 10¢ per share), a distribution of $33.5 million. This would bring ordinary dividends declared for 2021 as part of our sustainable and progressive dividend programme to 18¢ per share (15¢ per share relating to 2020 financial year), a total distribution of $50 million
    • Should the current oil price strength persist, Genel will consider incremental returns of cash to shareholders in addition to our commitment to a material and progressive dividend

(Source: Genel Energy)

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