TIDMGENL
RNS Number : 0056U
Genel Energy PLC
19 October 2017
19 October 2017
Genel Energy plc
Trading and operations update
Genel Energy plc ('Genel' or 'the Company') issues the following
trading and operations update in respect of Q3 2017. The
information contained herein has not been audited and may be
subject to further review.
Murat Özgül, Chief Executive of Genel, said:
"During the quarter Genel executed a landmark settlement
agreement with the KRG over historical receivables, which we expect
to materially enhance our cash flows going forward. Ahead of those
payments commencing we continued to generate meaningful free cash
flow, resulting in a further 13% reduction in net debt during the
period.
Our operations in the Kurdistan Region of Iraq are progressing
as normal - exports are continuing from Taq Taq and Tawke, payments
are being received on time, and operations are proceeding at both
fields, with testing now underway on the TT-29w well."
Q3 2017 OPERATING PERFORMANCE
-- Q3 2017 net production averaged 33,810 bopd, with production
for the nine months ending September 2017 averaging 36,030 bopd
-- Production and sales by field during Q3 2017 were as follows:
(bopd) Export Domestic Refinery Total Total Genel
via sales sales sales production net production
pipeline
--------- ---------- --------- --------- -------- ------------ ----------------
Taq Taq 13,230 - 950 14,180 14,080 6,200
--------- ---------- --------- --------- -------- ------------ ----------------
Tawke
PSC 109,760 - 30 109,790 110,460 27,610
========= ========== ========= ========= ======== ============ ================
Total 122,990 - 980 123,970 124,540 33,810
Note: Difference between production and sales relates to
inventory movements at both fields
-- Tawke PSC (Genel 25% working interest)
o Tawke PSC production in Q3 averaged 110,460 bopd, including
long-term test production from the Peshkabir-2 well of 4,670
bopd.
o In 2017 to date, the Tawke partners have drilled ten wells,
including the Peshkabir-2 and 3 wells, four Cretaceous producers,
three Jeribe producers and a Jeribe water injector
o A further four development wells are planned on the Tawke PSC
by year-end 2017 - two Cretaceous producers, one Jeribe producer
and a Jeribe water disposal well
o Peshkabir-3 well operations are ongoing, with results expected
later in Q4. The Peshkabir early production facility remains on
track to be installed by the end of 2017
-- Taq Taq PSC (Genel 44% working interest)
o Taq Taq field production in Q3 averaged 14,080 bopd, and
production has averaged 13,570 bopd during October 2017 to date
o The TT-29w well, which is appraising the northern end of the
Taq Taq field, reached target depth of 3,100 metres in early
September 2017. A testing programme is now underway. Further
development of the Cretaceous reservoir has been deferred pending
results of the TT-29w testing programme
o The EDC-24 rig has moved to the TT-30 well location, with two
shallow horizontal wells set to be drilled in the Pilaspi reservoir
before the end of the year
FINANCIAL PERFORMANCE AND GUIDANCE
-- $191 million of total cash proceeds were received in the nine
months ending September 2017, of which $52 million was received in
Q3
o Post-period, payments have been received for July sales from
Tawke and Taq Taq and the first Tawke override payment under the
Receivable Settlement Agreement ('RSA') for August 2017, totalling
$22.6 million net to Genel
-- Positive free cash flow generation continued in the third
quarter, leading to a further reduction in net debt. Unrestricted
cash balances at 30 September 2017 stood at $268 million ($246
million at 30 June 2017). IFRS net debt at 30 September 2017 stood
at $138 million ($158 million at 30 June 2017), a reduction of 13%
in the quarter and 43% on the end 2016 figure of $241 million
-- The RSA, effective 1 August 2017, resulted in the Company
cancelling and waiving its rights to outstanding receivables,
principally in return for enhanced future cash flows from the Tawke
PSC
o The August 2017 Genel Tawke override invoice was submitted in
September, with $6.0 million being received on 16 October
o The September 2017 Genel Tawke override invoice, totalling
$6.4 million, was submitted in October with payment due in
November
o The elimination of Tawke CBP in the RSA is expected to
positively impact August and September 2017 net proceeds for Tawke
current sales by $5 million, with the corresponding cash flow
impact due in Q4 2017
-- Capital expenditure for Q3 2017 totalled $27 million, with
the majority of spend on the development programmes at Taq Taq and
Tawke. Capex for the nine months ending 30 September 2017 totalled
$68 million, including spend on the KRI gas assets and Somaliland
seismic acquisition
-- 2017 guidance remains unchanged:
o Capex:
- Tawke and Taq Taq net to Genel $60-75 million
- KRI gas business capex of $10-15 million
- Somaliland 2D seismic capex budget expected at c.$15 million
o Opex: $30-35 million
o G&A: income statement $20-25 million and cash cost $15-20
million
KRI GAS BUSINESS
-- During the period the Company continued its efforts to
maximise the value of its KRI gas assets, which included
negotiations with potential farm-in partners for the upstream
development of the Miran and Bina Bawi gas fields
-- The prospect of enhanced future cash flows under the RSA has
created an opportunity for further appraisal and development
activity at the Miran and Bina Bawi fields, which may include an
extended well test and 3D seismic on Bina Bawi, and early
development of the Miran oil resource. The Company believes this
activity, which has yet to be finalised and is dependent on a
number of factors including continuity of payments, can be
implemented while maintaining financial flexibility and a strong
balance sheet, and will deliver the best possible shareholder value
and backdrop for the farm-out process
-- The updated competent person's reports for Miran and Bina
Bawi are on track to complete by the end of 2017. During Q3, it was
announced that the KRG had negotiated Rosneft's participation in
the funding of the construction of the KRI natural gas pipeline
infrastructure
AFRICA EXPLORATION UPDATE
-- Onshore Somaliland, the acquisition of 2D seismic data on the
SL-10B/13 (Genel 75%, operator) and Odewayne (Genel 50%, operator)
blocks continues, with over 2,000 km obtained to date. Initial
results have offered sufficient encouragement for a number of high
graded areas to be targeted with infill 2D seismic acquisition.
Processing of the data, commencing Q4 2017 and continuing into
2018, will facilitate seismic interpretation and the associated
development of an inventory of drillable prospects
-- The Company is in the final stages of discussions with the
Moroccan government over the nature, scope and timing of the
activity related to the remaining exploration commitment on the
Sidi Moussa offshore licensed acreage
-ends-
For further information, please contact:
Genel Energy
Phil Corbett, Head of Investor
Relations
Andrew Benbow, Head of Public
Relations +44 20 7659 5100
Vigo Communications
Patrick d'Ancona +44 20 7830 9700
This announcement includes inside information.
Notes to editors:
Genel Energy is an independent oil and gas exploration and
production company listed on the main market of the London Stock
Exchange (LSE: GENL, LEI: 549300IVCJDWC3LR8F94). The Company, with
headquarters in London and offices in Ankara and Erbil, is one of
the largest London-listed independent oil producers, and is the
largest holder of reserves and resources in the Kurdistan Region of
Iraq. Through its Miran and Bina Bawi gas fields, the Company is
positioned to be a cornerstone provider of KRI gas to Turkey under
the KRI-Turkey Gas Sales Agreement. Genel also continues to pursue
further growth opportunities within the Middle East and Africa. For
further information, please refer to www.genelenergy.com.
Disclaimer
This announcement contains certain forward-looking statements
that are subject to the usual risk factors and uncertainties
associated with the oil & gas exploration and production
business. Whilst the Company believes the expectations reflected
herein to be reasonable in light of the information available to
them at this time, the actual outcome may be materially different
owing to factors beyond the Company's control or within the
Company's control where, for example, the Company decides on a
change of plan or strategy. Accordingly no reliance may be placed
on the figures contained in such forward looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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