As the U.S. draws down its combat presence in Iraq, a Vancouver-based company is increasing its footprint there.
ShaMaran Petroleum Corp. (TSX-V:SNM) announced a deal Monday to buy a one-third stake in General Explorations Partners Inc. to drill for oil in Iraq’s Kurdistan region.
General Exploration is a subsidiary of Denver oil player Aspect Energy International LLC, which signed a production-sharing contract with the Kurdistan Regional Government of Iraq in 2007 for the Atrush oil and gas block.
Now, ShaMaran has bought a 33.5% stake in General Exploration for a cash payment of $24.1 million, and 12.5 million shares of ShaMaran.
The company has also agreed to contribute the next $15.9 million in cash to fund General’s operations.
“We are very excited about our partnership with Aspect, and the opportunity to participate in one of the most exciting exploration blocks in the Kurdistan region of Iraq,” said Pradeep Kabra, ShaMaran’s president and CEO.
The company believes the Atrush block could contain between 1.9 billion and 7.4 billion barrels of oil.
Oil and gas veteran Keith Hill is chairman of ShaMaran, formerly Bayou Bend Petroleum Ltd., and the company is part of Vancouver’s Lundin Group (See “Into Iraq” – issue 1042; October 13 – 19, 2009).
ShaMaran’s shares were up 5.8% to $0.45 after the news was announced.