Genel Energy posts strong Trading Update

Genel Energy has issued the following trading and operations update in advance of the Company’s full-year 2018 results, which are scheduled for release on 20 March 2019. The information contained herein has not been audited and may be subject to further review.

Murat Özgül, Chief Executive of Genel, said:

2018 was a very positive year for Genel, which saw us generate material free cash flow and further transform the balance sheet. An expected year-on-year increase in production means we are set to continue this performance in 2019, with low-cost assets forecast to generate over $100 million in free cash flow even if the oil price averages $45/bbl.

“As we generate cash we will continue to invest in the business to maximise the value of our existing portfolio. We are also working hard to bring in new assets that are complementary to our cash generation story. We are focused on building a stronger company with sustainable and material cash flow and multiple growth opportunities from which to create significant shareholder value.

FINANCIAL PERFORMANCE

  • $335 million of cash proceeds were received in 2018 ($263 million in 2017), an increase of 27%, of which $98 million was received in Q4
  • Free cash flow totalled $164 million in 2018 ($99 million in 2017), an increase of 66%, representing a free cash flow yield of 27% on the year-end share price
  • Unrestricted cash balances at 31 December 2018 were $334 million ($162 million at 31 December 2017), with net cash at $37 million ($135 million net debt at 31 December 2017)
  • Capital expenditure for 2018 totalled $95 million, of which $70 million was cost recoverable spend on producing assets

2018 OPERATING PERFORMANCE AND 2019 ACTIVITY OUTLOOK

  • 2018 net production averaged 33,690 bopd, with Q4 averaging 36,920 bopd. Production and sales by asset during 2018 was as follows:

  • Tawke PSC (Genel 25% working interest)
    • Tawke PSC production averaged 113,020 bopd in 2018, with production from Peshkabir contributing 27,660 bopd to this figure
    • Production in Q4 2018 averaged 127,220 bopd, of which Peshkabir contributed 50,130 bopd
    • The Peshkabir-8 well completed in December 2018, and is currently producing just under 10,000 bopd. Results of the Peshkabir-9 well are expected shortly
    • While further production wells are set to be drilled in 2019, Peshkabir activity in 2019 will focus on field management facilities and the utilisation of associated gas to enhance oil recovery at the Tawke field

 

  • Taq Taq PSC (Genel 44% working interest and joint operator)
    • Taq Taq field production averaged 12,350 bopd in 2018
    • Production in Q4 2018 averaged 11,640 bopd
    • Drilling operations on the TT-32 well have now been completed, and test production is underway. The well is currently flowing at a rate of over 3,000 bopd, and still cleaning up, with further zones to be tested ahead of an expected stabilised production rate of c.2,000 bopd
    • The rig has now moved to drill the horizontal sidetrack TT-20z well, which will drill the Shiranish in the western flank of the field with an aim to increasing productivity
    • Three further wells are scheduled to be drilled in 2019, as Genel continues to target the flanks of the field with the aim of delivering a year-on-year production increase

 

  • Bina Bawi and Miran (Genel 100% and operator)
    • Field development plans for both Bina Bawi and Miran oil and gas are under discussion with the KRG, and may entail a phased development approach in order to reduce initial capital expenditure and achieve the earliest date for first gas. An extension to the conditions precedent is expected to be granted shortly
    • Genel is reviewing the value of the Miran PSC carried in the Company accounts, and will update this as part of the year-end results process

 

  • African exploration update
    • Onshore Somaliland, seismic processing has now completed on the SL-10-B/13 block (Genel 75% working interest, operator) and analysis and interpretation is underway. Initial indications confirm the Company view that the block has hydrocarbon potential. Genel continues to develop a prospect inventory and assess next steps ahead of a farm-out process and potentially spudding a well in 2020. On the Odewayne block further seismic processing is being considered in order to complete the Company’s understanding of the prospectivity of the block
    • On the Sidi Moussa block offshore Morocco (Genel 75% working interest, operator), the acquisition of a c.3,500 km2 multi-azimuth broadband 3D seismic survey completed in November. PSTM and PSDM processing will continue through 2019. Genel has no additional work commitments relating to the licence. A decision will be made on whether to drill a well, and the appropriate equity level, once processing has progressed sufficiently

2019 GUIDANCE

  • Genel expects to generate material free cash flow in 2019
    • Genel generates positive free cash flow at and above an oil price of $20/bbl
  • In light of the Company’s balance sheet strength and ongoing material cash generation, management is appraising the most effective model for balanced capital allocation in order to take advantage of growth opportunities, make value accretive additions to the portfolio, and pave the way to returning capital to shareholders at the appropriate time
  • Combined net production from the Tawke and Taq Taq PSCs during 2019 is expected to be close to Q4 2018 levels
  • Capital expenditure net to Genel is forecast to be c.$115 million, with the majority being cost-recoverable spend on current producing assets. Capex includes:
    • Tawke and Taq Taq net to Genel of c.$100 million
    • Bina Bawi and Miran maintenance capex of c.$10 million, with the potential for this figure to be updated should there be positive developments on Bina Bawi commercial discussions
    • African exploration cost of under $5 million, largely comprising processing costs relating to Moroccan seismic
  • Opex: c.$30 million
  • G&A: c.$20 million
  • The Company continues to actively pursue growth and appraise opportunities to make value-accretive additions to the portfolio

(Source: Genel Energy)

KTFA : NEWS UPDATE, 14 JAN

KTFA:Sheila1:  Welcome to Iraq Finance 2019Iraq is open for business and 2019 will be a decisive year for the country as its new government begins to kick-start huge infrastructure projects. This process promises to open up a vast range of financing opportunities.Significant investments are needed in to rebuild the badly damaged infrastructure of the country.Long-awaited structural and

Restored Republic via a GCR: Update as of Jan. 14 2019

Compiled 14 Jan. 12:01 am EST by Judy ByingtonBelow is a summary of information from the Internet. It would be up to the individual reader to do their own research and decide whether or not it was valid. A Special Thank You to Martha for her untiring research efforts in discerning the Truth and to Ken who uncovers unlimited intel on pedophiles to help us Save the Children.Patience is a Virtue.

RAYRAT TIDBIT, 14 JAN

Iraq TV is reporting to the citizens they are “not seeing an end in sight” regarding the differences in the chosen names for cabinet seats and that this is causing damage to their government. Iraqi TV is reporting “no time table” for the completion of the cabinet voting. [Really? Is this a smoke screen…Time Will Tell!]

KTFA CHAT, 14 JAN

KTFA

Ol_Lar » January 13th, 2018

The revaluation of the Iraqi dinar is ready to be implemented by the country’s Central Bank; however, the Parliamentary Economic and Investment Commission has decided to postpone the revaluation to 2019. 

The plan is to eliminate zeros from the value of the Iraqi currency, allowing the dinar to gain value on the global market.

With the anticipation of the

Jordan and Iraq plan to Increase Trade

By John Lee.

King Abdullah II of Jordan arrives in Baghdad today on an official visit to Iraq for talks with President Barham Salih, and Prime Minister Adil Abd Al Mahdi and senior officials, with a view to strengthening bilateral relations and regional development.

According to a report from The Arab Weekly, the two countries are planning a border industrial zone with a possible 50,000 jobs. It would also facilitate exports of tax-exempted Jordanian goods to the Iraqi market.

In recent weeks, the two countries have agreed a series of measures to increase cooperation between the two countries, including a plan to finalize the framework agreement for the Iraqi-Jordanian pipeline which will run from Basra through Haditha to Aqaba in the first quarter of 2019.

They have also agreed to upgrade the al-Karamah – Terbil Border Crossing.

(Sources: Govt of Iraq, The Arab Weekly)

KAPERONI TIDBIT, 13 JAN

Kaperoni :  So some are asking the significance of why the government needs to be offically formed for the IMF to engage with Iraq?  Usually on these types of agreements a legitimate government is needed for validating/confirm signatures.  [The normal cycle for Article IV consultations for countries under a program is 24 months. Thus Iraq is not due for an Article IV until the summer of 2019.]  

MILITIAMAN UPDATE, 13 JAN

KTFA:MilitiaMan:  If I may add that this being in print now, is actually something in of it self. ( see article below)  It gives out that an approach to the reality of the project is real and is taken seriously all over the world.They in one breathe say they are ready, yet they say they have postponed it to 2019.. lolWell we know it is 2019 now, we know they have technically a fully seated GOI,

RAYRAT TIDBIT, 13 JAN

Iraq TV is reporting to the citizens they are “not seeing an end in sight” regarding the differences in the chosen names for cabinet seats and that this is causing damage to their government. Iraqi TV is reporting “no time table” for the completion of the cabinet voting. [Really? Is this a smoke screen…Time Will Tell!]