ShaMaran Petroleum (SNM) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw a significant operational recovery with combined gross daily oil production of 54,800 bopd, up 204% year-over-year, driven by local sales from both Atrush and Sarsang blocks after the ITP pipeline closure.

• Revenue rose to $22.6 million in Q2 2024, a 248% increase from Q2 2023, reflecting higher local sales and the restart of Atrush production.

• The company closed a major transaction in August 2024, increasing its working interest in the Atrush Block from 27.6% to 50%, enhancing reserves and future production potential.

Financial highlights

• Q2 2024 revenue was $22.6 million, up from $6.5 million in Q2 2023; gross margin on oil sales improved to $7.4 million from negative $4.2 million.

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

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

• Operating cash flow in Q2 2024 was $15.8 million, with free cash flow before debt service at $16.8 million.

• At June 30, 2024, cash stood at $38.7 million, with net debt at $179 million.

Outlook and guidance

• The company expects continued local sales until the ITP pipeline reopens, with production stability at Atrush and a drilling program at Sarsang aimed at increasing output by year-end.

• Sufficient cash is expected for the next 12 months, but prolonged ITP closure or lack of KRG receivable recovery could require additional liquidity.