ShaMaran holds non-operated interests in the Atrush (50%) and Sarsang (18%) PSCs in Kurdistan. On an LTM Q1 2026 basis the economics look strong — revenue $157M, EBIT margin 41.1%, adjusted NOPAT $65.7M, adjusted ROIC 17.4% against an 8% WACC, economic profit +$35.6M — helped by the ITP export restart in September 2025 and international pricing ($63.08/bbl realized in Q1, +88% YoY).
But the LTM is not a run-rate. Both blocks have been shut in since 2026-03-02 on Iran-war regional security, with explosions at Sarsang processing and storage facilities in March and April; blocks were still shut at the 2026-05-06 report date. The FY2025 auditor's report carries a material-uncertainty going-concern paragraph, and the interim KRG/Iraq pricing regime ($16/bbl cost compensation, extended to 2026-06-30) is transitional, not the full PSC entitlement.
At SEK 1.31 the market pays full value for the LTM: capitalizing $65.7M NOPAT at the 12% bond-coupon frame with zero growth, net of $107.2M net debt, lands almost exactly on the price. That leaves nothing for the scenario in which the shut-in persists, the $52.8M Overdue Receivables slip further, or the twice-extended 12% bond needs a third amendment. Downside-skewed; we step aside.
The record carries no reverse-DCF; the arithmetic from its own figures is stark. LTM adjusted NOPAT $65.7M capitalized at 12% (the company's own bond coupon — the honest frame for a going-concern single-region Kurdistan credit) with zero growth, less $107.2M net debt, gives ~$440M of equity ≈ SEK 1.31 per SDR at the record's implied ~8.6 FX — precisely the price. The market is already paying for the LTM as if it were repeatable; only at a generous 8% frame (~SEK 2.1) is there upside, and 8% is the wrong rate here.
Base SEK 1.00 (−24%): shut-in resolves slowly, run-rate NOPAT settles below the LTM under transitional pricing, valued at the 12% frame. Bull SEK 2.10 (+60%): restart plus full PSC entitlement and Overdue Receivables recovery re-rates the equity toward the 8% frame. Bear SEK 0.45: prolonged shut-in forces a bond amendment or dilutive raise. 24-month horizon.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~16.5%, limited by ROIC 17% ≈ WACC 8%) it cannot reach the current EV. No-growth value is $0/share (1% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | $2 | ≥17% | +60% | 25% | Restart + full PSC entitlement + receivables recovered |
| Base | $1 | ≥17% | -24% | 45% | Sub-LTM run-rate at the 12% frame; slow resolution |
| Bear | $0 | ≥17% | -66% | 30% | Prolonged shut-in; bond amendment or dilutive raise |
| Prob-weighted | $1 | — | -15% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 0 | 0 | 0 | 0 | 0 | 0 |
| 7.25% | 0 | 0 | 0 | 0 | 0 | 0 |
| 8.00% (base) | 0 | 0 | 0 | 0 | 0 | 0 |
| 8.75% | -0 | 0 | 0 | 0 | 0 | 0 |
| 9.50% | -0 | -0 | -0 | 0 | 0 | 0 |
Green = fair value above the current price of $1.31. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Interim agreements extended to 2026-06-30; IOCs expect full PSC-entitlement payment after independent reconciliation — the bull lever.
Both blocks shut since 2026-03-02 as a security precaution; a restart restores a 41%-EBIT-margin, ~$65M-NOPAT run-rate.
Q1 2026 realized $63.08/bbl, +88% YoY, as exports moved from local sales to the ITP at Kirkuk-blend OSP with no SOMO payment delays to date.
$52.8M Overdue Receivables (Oct 2022–Mar 2023) plus $43.3M 2025 ITP entitlement — collection is straight value to equity.
KRG settles income tax out of the government share of profit oil; LTM effective tax ~0.3% keeps NOPAT ≈ EBIT.
ShaMaran's LTM numbers describe a business that stopped running in March. With a going-concern qualification, both fields shut, a transitional pricing regime and a 12% bond, SEK 1.31 — full value for the LTM at the bond-coupon frame — offers no margin of safety. SELL, medium conviction; base target SEK 1.00 (−24%).
The bull path is real (restart, full PSC entitlement, receivables recovery → ~SEK 2.1) but it is an option, not a base case. Re-visit on a confirmed production restart plus completed PSC reconciliation — quality of the producing asset is not the issue; the claim on it is.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| FY2025 revenue $154.9M / EBIT $49.0M / net income $26.8M | 155 | Consolidated Statement of Comprehensive Income, p.27 (printed) 📄 p.29 | FY anchor for LTM flow items; no NCI so income for the year = attributable to parent. |
| Q1 2026 revenue $38.0M / EBIT $20.8M / net income $17.0M (Q1 2025: $35.9M / $5.2M / -$1.1M) | 38.031 | Condensed Interim Statement of Comprehensive Income, p.17 (printed) 📄 p.19 | Quarter added/subtracted for LTM: revenue 154.869 - 35.885 + 38.031 = 157.0; EBIT 48.958 - 5.242 + 20.782 = 64.5. |
| Q1 2026 balance sheet: equity $264.1M, borrowings $131.8M, accrued bond interest $14.0M, cash $36.5M | 264 | Condensed Interim Balance Sheet, p.18 (printed) 📄 p.20 | IC snapshot at 2026-03-31: equity ex-OCI + bond carrying + accrued interest + pension $0.4M - excess cash $33.4M = $376.9M. |
| Non-recurring costs $4.651M FY2025 / $3.217M Q1 2025 / $0 Q1 2026 | 1.434 | MD&A Non-IFRS Measures, Adjusted EBITDAX reconciliation (FY p.13; Q1 report p.9 printed) 📄 p.13 | LTM $1.4M of bond-amendment and redomiciliation project costs added back pre-tax — transaction-related, not operating. We do NOT add back the SBC component of the company's Adjusted EBITDAX. |
| KRG receivables: $52.8M Overdue Receivables (Oct 2022-Mar 2023) + $43.3M 2025 ITP entitlement; ECL provision $11.2M | 84.903 | Note 14 Accounts receivable, p.44 (printed) 📄 p.46 | Core counterparty risk: recovery timing of Overdue Receivables uncertain; $22.9M classified non-current. ECL movements kept in operating results (LTM net +$0.05M credit, immaterial). |
| 2029 Bond: $143.8M nominal, 12% coupon, maturity extended to July 2029, ACR covenant >= 1.25x | 144 | Note 17 Borrowings, p.45 (printed) 📄 p.47 | Carrying value $131.8M below nominal (modification accounting); IC uses carrying + accrued interest. Maturity extended twice (2025->2027->2029) — refinancing risk is the balance-sheet story. |
| Going concern: material uncertainty (Note 2b + auditor's report) | None | Note 2b Going concern, p.31 (printed); auditor's report p.24 (PDF) 📄 p.33 | ITP closure aftermath + production shut-in since 2026-03-02 lend significant doubt on ability to meet obligations; auditor's opinion carries a material-uncertainty paragraph. Caps any quality read on the 17% ROIC. |
| No impairment on Atrush/Sarsang CGUs in FY2025 | 0 | Note 13 Property, plant and equipment / Note 4d 📄 p.45 | CGU assessment: carrying amounts did not exceed recoverable amounts — no impairment or reversal in the LTM window; post_tax_addbacks = 0. |
| Q1 2026: production shut-in since March 2, 2026; Sarsang explosions Mar 5 and Apr 1; blocks still shut at MD&A date | None | MD&A Highlights + Subsequent Events, p.2 (PDF) 📄 p.2 | LTM economics reflect only ~1 month of shut-in; run-rate revenue/NOPAT are materially below LTM if the shut-in persists. Primary forward-looking risk. |
| LTM FCF before debt service $27.3M (FY 62.956 + Q1'26 2.168 - Q1'25 37.780) | 27.344 | MD&A Non-IFRS Measures, FCF reconciliation, p.9 (printed) 📄 p.11 | Company APM CFO+CFI; Q1 2026 fell to $2.2M on drilling/debottlenecking capex and receipt timing. |