TotalEnergies has completed the sale of an 18% stake in the Sarsang field to ShaMaran, completing its exit from the Iraqi region of Kurdistan.
ShaMaran Petroleum bought the Sarsang stake for $155 million, under a deal announced in July. A contingent payment of $15mn may come due in future, based on production and oil prices. The deal is effective as of January 1, 2021.
Sarsang contributed 3,500 barrels per day of oil to Total in 2021. The French company now holds a 22.5% stake in the Halfaya field.
HKN operates Sarsang with a 62% stake, while Kurdistan owns a 20% stake.
“This is a momentous day for ShaMaran”, said the company president and CEO Adel Chaouch. The deal transforms the company “from being a single asset company into one owning a portfolio of stakes in three world class producing oil fields (Atrush, Swara Tika and East Swara Tika) in Kurdistan with improved oil qualities and complementary production horizons”.
Chaouch said the deal would likely see ShaMaran’s production to more than double. “We also expect our reserves to also more than double and the company will update the market on this sizeable reserve acquisition in due course.”
ShaMaran said it would also tidy up its bond structure. It plans to merge its two outstanding bonds into one $300mn issue, maturing in 2025. The company has been buying back its bonds over the third quarter of this year, which means it will own more than 10% of its new 2025 bonds.
It also plans to retire immediately a $20mn convertible issued to Total as part of the purchase price, ShaMaran said. This is 11 months ahead of schedule.
ShaMaran received $14.41mn for its production in May, the most recent month for which it has been paid.
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