At a Glance

• ShaMaran Petroleum Ltd. is expanding its strategic partnership with HKN Energy into Federal Iraq by acquiring a 25% shareholding in HKN Hamrin Ltd. for the Hamrin oil development and production contract (DPC).

• The Hamrin field currently produces around 20 thousand barrels of oil per day (Mbopd), with a joint target to scale production to approximately 60 Mbopd by 2028 and long-term gross reserves estimated between 500 million and 1 billion barrels.

• To fund growth capital expenditures, refinance its existing 2029 bond of roughly $144 million, and optimize capital structure, ShaMaran has mandated Pareto Securities AS to explore a new bond issuance of up to $200 million.

• In a major corporate consolidation, ShaMaran and Gulf Keystone Petroleum Ltd. have signed a merger and combination agreement to form an expanded growth platform across the Kurdistan Region of Iraq and Federal Iraq.

Independent oil and gas producer ShaMaran Petroleum has announced a major expansion of its regional footprint, scaling its cooperation with HKN Energy into Federal Iraq while simultaneously executing a corporate merger with Gulf Keystone Petroleum Ltd.

Strategic Expansion into the Hamrin Field

• Asset Integration: Building on their joint ventures across the Atrush and Sarsang oil fields in the Kurdistan Region, ShaMaran and HKN are extending their partnership to the Hamrin oil field in Federal Iraq, previously operated by the state-owned North Oil Company.

• Production Targets and Reserves: Management estimates remaining gross reserves and resources in the range of 500 million to one billion barrels. The partners aim to maximize recovery over the 25-year DPC term, scaling output from current levels above 20 Mbopd to approximately 60 Mbopd by 2028, with subsequent phases targeting further doubling of production at estimated incremental capital expenditures of $2-3 per barrel.

• Transaction Structure: ShaMaran's 25% stake in the Hamrin JV involves a $35 million carry of HKN's share of initial project costs alongside a $15 million deferred payment payable out of future cash flows once initial investments and the carry are recovered in full.

Financing and Corporate Merger

• Bond Refinancing: Backed by improved cash flows from existing assets, bolstered by a tri-party export agreement and anticipated future Hamrin cash flows, ShaMaran is pursuing a new bond issue of up to $200 million, managed by Pareto Securities AS, to refinance its outstanding 2029 notes and support Hamrin capital expenditures and general corporate purposes.

• Gulf Keystone Combination: In parallel, ShaMaran and Gulf Keystone announced a definitive merger and combination agreement designed to create a powerful unified platform for oil and gas exploration and production spanning both the Kurdistan Region and Federal Iraq.

ShaMaran Petroleum is an independent oil and gas company listed in Oslo on Euronext Growth and in Stockholm on Nasdaq First North under the ticker SNM, and forms part of the Lundin Group of Companies. Alongside its new Federal Iraqi footprint, the company indirectly holds a 50% working interest in the Atrush Block and an 18% working interest in the Sarsang Block in the Kurdistan Region of Iraq.

FYI

ShaMaran Petroleum is part of the Lundin Group of Companies and currently holds working interests in the Atrush and Sarsang blocks, alongside its newly established stake in the Federal Iraqi Hamrin development project.

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