• The Company completed in April 2010 the acquisition of 291.4 km of 2D seismic data in the Pulkhana Block. The seismic campaign was completed on schedule and within budget. Processing and interpretation of the data has commenced and will be carried out over the next few months in preparation for drilling.

• Seismic acquisition of 200 km of 2D seismic data in Block K42 commenced in early May, with seismic acquisition in the Arbat block scheduled to begin thereafter.

• Procurement activity is underway for the first well in the Pulkhana Block, with spud date planned for the fourth quarter of this year.

• Cash balance of the Company was $62.6 million as at March 31, 2010.

• Mr. Pradeep Kabra was nominated as a director of the Company in April 2010.

Operations in Kurdistan

The Group has working interests in each of the Pulkhana Block, the Arbat Block and Block K42 petroleum properties, all located in Kurdistan. These petroleum properties lie within the northern extension of the Zagros Folded Belt which is estimated to contain up to 45 billion of Iraq's 115 billion barrels of known reserves. The Kirkuk field lies within this fold belt trend and is one of the world's largest, containing reserves of over 20 billion barrels of oil. The area is underexplored and is currently undergoing a major exploration and development campaign by over 30 mid to large size international oil companies.

Pulkhana Block

The Company completed in April 2010 the acquisition of 291.4 km of two dimensional seismic data. The seismic campaign was completed on schedule and within budget. Processing and interpretation of the seismic data has commenced and will be carried out over the next few months in preparation for drilling a well on this Block. Procurement activity has commenced for the well, which has a spud date planned for the fourth quarter of this year.

ShaMaran plans to drill 3 wells in the first exploration phase of three years in order to confirm the size and economic viability of the development of the Pulkhana field. The Company will then have the option to continue on to a further two year exploration phase and, if development is warranted, a development period of up to 20 years.

The Company is the operator of the project with a 60% undivided interest in the petroleum operations. Petoil retains a 20% interest and the KRG holds the remaining 20%. The Company is required to pay 100% of the minimum financial commitment in respect of the first exploration phase, following which the Company will pay 75% of the forward costs. Fiscal terms under the PSC include a 10% royalty and a variable profit split based on a profitability factor to the KRG. The Company has the right to recover costs using up to 40% of the produced oil and 50% of the produced gas.

The Pulkhana Block is an appraisal/development project of a field which was discovered in 1956 and flowed over 2900 barrels of oil per day from a well which entered two fractured carbonate reservoirs.

Arbat Block

Under the terms of the Arbat PSC, the Company is obliged to acquire 350 km of 2D seismic data and drill 2 wells in the first exploration phase of three years. The seismic campaign is scheduled to commence in June 2010.

The Arbat Block (formerly Block G) is located adjacent to the Miran Block of Heritage Oil Plc. This 973 square km exploration block is part of the same structural trend that contains the Miran West discovery, and includes five surface anticlines identified by recent field work.

The Company is the operator of the project and holds a 60% undivided interest in the petroleum operations, the KRG holds a 20% interest and the remaining 20% is a third party interest which the KRG has the option to assign to a third party or parties. The Company is required to pay 100% of the minimum financial commitment in respect of the first exploration sub period or until such time as the KRG's reserved 20% interest has been sold, following which the Company will pay 75% of the forward costs and receive a reimbursement for 25% of the costs incurred to that date. Fiscal terms under the PSC include a 10% royalty and a variable profit split based on a profitability factor to the KRG. The Company has the right to recover costs using up to 45% of the produced oil and 53% of the produced gas.

Block K42

A campaign to acquire 200 km of two dimensional seismic data on this Block commenced at the end of April 2010. The campaign is expected to be completed in June of this year.

Block K42 is located immediately north of the Pulkhana Block and is on trend with the Jambur field situated to the north west of the Block. It is an exploration block with no seismic or surface mapped prospects. Recent field work indicates the possibility of two leads in the Block.

The Company is a party to the K42 Option Agreement between the KRG and Oil Search (Iraq) Limited ("OSIL"), which allows an option to the Company and OSIL to enter into with the KRG a PSC, the terms of which have been agreed in principal, relating to the exploration and development of petroleum resources in the Block K42 contract area located in Kurdistan.

In accordance with the Block K42 PSC, OSIL is the operator and, collectively with the Company, represent the "Contractor". This K42 Option Agreement requires the Contractor to conduct certain seismic services, including the acquisition of 200 kilometers of seismic surveying, within the option period of 18 months commencing October 1, 2009. The option to enter into a PSC may be exercised by providing written notice to the KRG. The Contractor is to pay 100% of all the costs incurred during the option period, 25% of which are to be paid by the Company.

Upon exercise of the option, the Company would acquire not less than an undivided 20% interest in the petroleum operations in respect of the Block K42 contract area, with OSIL holding a 60% interest and the KRG holding the remaining 20%. If either the Company or OSIL elect not to exercise its option in respect of the Contract the other party has the option of acquiring the exiting party's rights and obligations.

Operating

The sale of substantially all of the Company's oil and gas properties located in the United States in the Gulf of Mexico was completed in the second quarter of 2009.

Agreements for three separate petroleum properties located in Kurdistan were signed on August 28, 2009, whereby the Company will pursue petroleum exploration and development operations governed by production sharing contracts ("PSCs") signed with the KRG. Entry into the PSCs was approved by the Company's shareholders and the TSX Venture Exchange on October 16, 2009.

The Company is currently in the pre-production stages of its exploration and development campaign corresponding to the three petroleum properties located in Kurdistan. At the date of this MD&A, the Company was in the process of acquiring 2D seismic data in the Pulkhana Block petroleum property.

Financial

The issuance of 140 million common shares of the Company generated net proceeds of Cdn $99,696,000 during the month of October, 2009.

The Company completed in October 2009 all of its Capacity Building and Signature Support payments due to the KRG as required under its Production Sharing Contracts (PSC).

Cash balance of the Company was $63.5 million as at December 31, 2009.

Corporate

Changes to executive management of the Company were effected in December 2009 in order to strengthen core operations and retain individuals with the relevant depth of oil and gas experience required to conduct oil and gas operations in Kurdistan. Refer to the discussion in this MD&A under "Changes in Directors and Officers".

Petroleum Property Acquisitions in Kurdistan

During the year 2009 the Company acquired working interests in each of the Pulkhana Block, the Arbat Block and Block K42 petroleum properties, all located in south eastern Kurdistan.

These petroleum properties lie within the northern extension of the Zagros Folded Belt which is estimated to contain up to 45 billion of Iraq's 115 billion barrels of known reserves. The Kirkuk field lies within this fold belt trend and is one of the world's largest, containing reserves of over 20 billion barrels of oil. The area is underexplored and is currently undergoing a major exploration and development campaign by over 30 mid to large size international oil companies. Iraqi- Kurdistan is one of few regions in the prolific Middle East oil province where international operators have access to production sharing contracts which allow them to share the upside potential with host governments.

Pulkhana Block

The Pulkhana block was one of the original four PSCs awarded in 2003. It was acquired by Petoil Petroleum and Petroleum Products International Exploration and Production Inc ("Petoil"), a Turkish company, and ratified by the Iraq Federal government prior to the Oil and Gas Law Of The Kurdistan Region - Iraq, which was passed in 2007. It is an appraisal/development project of a field which was discovered in 1956 and flowed over 2900 barrels of oil per day from a well which entered two fractured carbonate reservoirs.

The Company is currently in the process of acquiring 250 km of two dimensional seismic data, and plans to drill 3 appraisal wells in the first 3 year exploration sub-period in order to confirm the size and economic viability of the development of the Pulkhana field. The Company will then have the option to continue on to a further two year exploration sub-period and, if development is warranted, a development period of up to 20 years.

The Company is the operator of the project with a 60% undivided interest in the petroleum operations. Petoil retains a 20% interest and the KRG holds the remaining 20%. The Company is required to pay 100% of the minimum financial commitment in respect of the first exploration subperiod, following which the Company will pay 75% of the forward costs. Fiscal terms under the PSC include a 10% royalty and a variable profit split based on a profitability factor to the KRG. The Company has the right to recover costs using up to 40% of the produced oil and 50% of the produced gas.

Capacity building bonuses (social responsibility) of $42.5 million were paid to the KRG on October 23, 2009 and 65 million common shares of ShaMaran are pending to be issued to the KRG, as part of the Company's cost of acquisition and social responsibility to the Kurdistan Region. In addition, the Company paid $15 million on October 23, 2009 to Petoil under the terms of a participation agreement, and is required to carry their costs in respect of the first exploration sub-period.

Arbat Block

The Arbat Block (formerly Block G) is located adjacent to the Miran Block of Heritage and Block 9 recently signed by Talisman Energy Corp. This 973 sq. km exploration block is part of the same structural trend that contains the Miran West discovery of Heritage Oil Plc, and includes five surface anticlines identified by recent field work.

Under the terms of the Arbat PSC, which was also originally approved as part of the Pulkhana approval, the Company is obliged to acquire 350 km of 2D seismic data and drill 2 wells in the first 3 year exploration sub-period.

The Company is the operator of the project and holds a 60% undivided interest in the petroleum operations, the KRG holds a 20% interest and the remaining 20% is a third party interest which the KRG has the option to assign to a third party or parties . The Company is required to pay 100% of the minimum financial commitment in respect of the first exploration sub period or until such time as the KRG's reserved 20% interest has been sold, following which the Company will pay 75% of the forward costs and receive a reimbursement for 25% of the costs incurred to that date. Fiscal terms under the PSC include a 10% royalty and a variable profit split based on a profitability factor to the KRG. The Company has the right to recover costs using up to 45% of the produced oil and 53% of the produced gas.

Capacity building bonuses of $20 million were paid to the KRG on October 23, 2009 and 35 million common shares of ShaMaran are pending to be issued to the KRG.

Block K42

Block K42 is located immediately north of the Pulkhana Block and is on trend with the Jambur field situated to the north west of the Block. It is an exploration block with no seismic or surface mapped prospects. Recent field work indicates the possibility of two buried folds in the Block.

The Company is a party to the K42 Option Agreement between the KRG and Oil Search (Iraq) Limited ("OSIL"), which allows an option to the Company and OSIL to enter into with the KRG a PSC, the terms of which have been agreed in principal, relating to the exploration and development of petroleum resources in the Block K42 contract area located in Kurdistan.

In accordance with the Block K42 PSC, OSIL is the operator and, collectively with the Company, represent the "Contractor". This K42 Option Agreement requires the Contractor to conduct certain seismic services, including the acquisition of 200 kilometers of seismic surveying, within the option period of 18 months commencing October 1, 2009. The option to enter into a PSC may be exercised by providing written notice to the KRG. The Contractor is to pay 100% of all the costs incurred during the option period, 25% of which are to be paid by the Company.

Upon exercise of the option, the Company would acquire not less than an undivided 20% interest in the petroleum operations in respect of the Block K42 contract area, with OSIL holding a 60% interest and the KRG holding the remaining 20%. If either the Company or OSIL elect not to exercise its option in respect of the Contract the other party has the option of acquiring the exiting party's rights and obligations.

Capacity building bonuses of $5 million were paid to the KRG on October 23, 2009. Should the option to enter into a PSC with the KRG be exercised, an additional $20 million is to be paid by the Company to the KRG at that time.

• During the quarter, the Company announced the acquisition of three large oil and gas projects in Kurdistan, Iraq transitioning itself to a Kurdistan focused oil development and exploration vehicle. To reflect this new direction, the Company changed its name from Bayou Bend Petroleum Ltd. to ShaMaran Petroleum Corp.   ShaMaran is an ancient Kurdish deity representing wisdom and the guardian of secrets.
• Iraqi-Kurdistan lies within the northern extension of the Zagros Folded Belt and is estimated to contain up to 45 billion of Iraq’s 115 billion barrels of reserves.  The Kirkuk field lies within this Fold Belt trend and is one of the world’s largest, containing reserves of over 20 billion barrels of oil.  The area is highly underexplored and is currently undergoing a major exploration and development campaign by over 30 mid to large size international oil companies.  Iraqi-Kurdistan is one of few regions in the prolific Middle East oil province where international operators have access to production sharing contracts which allow them to share the upside potential with host governments.
• The Company’s initial three projects in the region are the Pulkhana development/appraisal block and the Arbat and K42 exploration blocks. These projects are nearby and on trend with recent discoveries made by Genel Energi/Addax Petroleum (Taq Taq field), Heritage Oil Plc (Miran field) and others.
• The Pulkhana block is an appraisal/development project of a field which was discovered in 1959 and flowed over 2900 barrels of oil per day from one well which entered two fractured carbonate reservoirs.  The Company is the operator of the project with a 60% working interest. Petoil (a Turkish company) has a 20% interest and the KRG holds the remaining 20%.      A 250 km 2D seismic program is planned with an appraisal drilling program to follow. 
• The Arbat project is a large exploration block (1,000 square kilometers) with several identified leads.  Surface anticlines and sub-thrust traps are two major play types known on the block. The Company holds a 60% working interest in the block and operatorship with the remaining 40% held by the Kurdistan Regional Government (“KRG”).  Initially, a 350 kilometer 2D seismic is planned followed by an exploration drilling program.  
• Block K42 is an exploration block with currently no seismic or surface mapped prospects and represents a low entry cost seismic option.  It is on trend with the major 1.1 billion barrel Jambur oil and gas field.  The Block is currently operated by Oil Search (Iraq) holding a 60% interest with Shamaran holding the remaining 40%.
• The Company completed a CDN$105 million private placement financing through the issuance of 140 million subscription receipts at a price of $0.75.   Each Subscription Receipt was exchangeable into one common share of the Company without further payment upon shareholder approval, which was received on October 16, 2009

• The Company has added to its management team the following:
• Pradeep Kabra,  Chief Operating Officer
• Over 22 years experience in the oil industry including senior operational and international new venture management positions at Addax Petroleum, Lundin Oil and International Petroleum. Prior to his joining ShaMaran, Mr. Kabra was working as the General Manager Kurdistan in Addax Petroleum and was involved in the development of the Taq Taq field. He was also the director of Taq Taq Operating Company Limited, the operator of the Taq Taq / Kewa Chirmila PSC in Kurdistan.
• John Ashbridge, Vice President Exploration
• Over 20 years experience in oil and gas exploration, development and production having started his career with BP Exploration followed by senior technical positions with Occidental and Elf Aquitaine (now Total). Since joining the Lundin Group in 2005, he has led efforts to build new business opportunities in the North Sea, Africa and the Middle East, notably resulting in the addition of Africa Oil Corporation to the Group. For the last three years, Mr. Ashbridge has been developing opportunities and establishing contacts for the Lundin Group to invest in Iraqi and other Middle Eastern countries.
• Ian Gibbs, Chief Financial Officer
• Ian Gibbs is a Canadian Chartered Accountant and a graduate of the University of Calgary where he obtained a bachelor of commerce degree. Ian Gibbs has held a variety of prominent positions within the Lundin Group of Companies; most recently as CFO of Tanganyika Oil where he played a pivotal role in the recent $2 billion sale of the company to Sinopec International Petroleum. Prior to Tanganyika Oil, Mr. Gibbs was CFO of Valkyries Petroleum which was the subject of an $800 million takeover.
• J. Cameron Bailey, Director
• Mr. Bailey is a Chartered Financial Analyst and holds a Bachelor of Commerce degree from the University of Calgary. He has worked in the energy investment business, specifically investment banking for the past 19 years. He is the founder of, and has organized, the initial public offerings for a number of oil and gas exploration, production and oilfield services companies.
• Alexandre Schneiter, Director
• Mr. Schneiter has worked within the Lundin Group of Companies since 1993 and is currently Executive Vice President and Chief Operating Officer of Lundin Petroleum AB. As COO, he leads an experienced team of oil and gas professionals who are responsible for Lundin Petroleum's worldwide exploration and production operations. Over the years, Mr. Schneiter has been instrumental in the discovery of several major oil fields for the Lundin Group, including, among others, in Libya, Sudan and Malaysia.

• In summary, the Board of Directors and Senior Management are:
• Keith Hill, Chairman and President and Director
• John Ashbridge, VP Exploration
• Pradeep Kabra, Chief Operating Officer
• Ian Gibbs, Chief Financial Officer
• Cameron Bailey, Director
• Gary Guidry, Director
• Alexandre Schneiter, Director
• Brian Edgar, Director

Looking Forward

Kurdistan is an emerging major oil region.  Reserve estimates for the region are very high yet it remains under-developed and under-explored.  There is enormous opportunity in Kurdistan and a significant work program is planned over the next several months including seismic and drilling preparation.