Genel Energy PLC (GENL) Genel Energy PLC: Trading and operations
update 03-Nov-2022 / 07:00 GMT/BST Dissemination of a Regulatory
Announcement that contains inside information in accordance with
the Market Abuse Regulation (MAR), transmitted by EQS Group. The
issuer is solely responsible for the content of this
announcement.
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3 November 2022
Genel Energy plc
Trading and operations update
Genel Energy plc ('Genel' or 'the Company') issues the following
trading and operations update in respect of the third quarter and
first nine months of 2022.
Paul Weir, Chief Executive of Genel, said:
"I am pleased that we remain on track to generate around USD250
million of free cash flow this year, building towards a significant
cash balance of over USD500 million by the end of the year. We are
focused on putting this cash to work to purchase new assets, grow
the business, and increase shareholder returns. It is business as
usual on an operational level in Kurdistan, while we continue to
work with the KRG on the challenges that the sector faces. Our
existing predictable production business outlook supports our
established dividend of USD50 million, and our committed dividend
programme has paid USD178 million of cash to shareholders since its
inception in 2019."
FINANCIAL
-- Margin of USD36/bbl in the first three quarters of 2022
(2021: USD24/bbl), with Brent averaging USD105/bbl(2021:
USD71/bbl)
-- Capital expenditure of USD109 million, of which USD55 million
was spent at Tawke, and USD38 million at Sarta
-- Free cash flow of USD175 million up to 30 September 2022?
This does not include proceeds for June production, totalling USD59
million, received in October
-- In relation to the nominal USD120 million for unpaid sales
made from November 2019 to February 2020, andthe suspended override
from March 2020 to December 2020 that would have earned USD38
million, since January 2021:? Cash of USD117 million has been
received ? Offsets of USD9 million have been made
-- Cash of USD447 million at 30 September 2022 (USD412 million
at 30 June 2022)
-- Net cash under IFRS of USD181 million at 30 September 2022
(USD141 million at 30 June 2022)? Total debt of USD274 million at
30 September 2022 (USD280 million at 30 June 2022), following
theopportunistic acquisition of USD6 million of bonds at a price
that provided an attractive level of return
PRODUCTION BUSINESS
-- Net production of 30,350 bopd in the first nine months of
2022, and 30,200 bopd in Q3, in line withguidance
-- Tawke PSC (25% working interest)? Gross production averaged
107,300 bopd in the first nine months of 2022, and 108,500 bopd in
Q3
-- Sarta (30% working interest and operator)? Gross production
averaged 4,900 bopd in the first nine months of 2022, and 3,960
bopd in Q3 ? Production continues from existing well stock as we
continue to work on the field to seek to optimiseproduction from
various zones, ranging from the pilot production tests of the newly
discovered Butmah andNajmah resources through to the initial
stacked Mus & Adaiyah reservoir intervals ? Rigless testing at
Sarta-6 is now underway, with the initial appraisal programme
expected to becomplete by the end of year
-- Taq Taq PSC (44% working interest and joint operator)? Gross
production averaged 4,660 bopd in the first nine months of 2022,
and 4,280 bopd in Q3 ? Taq Taq continues to perform in line with
expectations, with positive results from the recent
wellintervention programme ? Drilling is set to resume with an
infill production well expected to spud around the end of 2022
PRE-PRODUCTION BUSINESS
-- Somaliland? Following the successful farm-out in December
2021, preparation continues for the drilling of a wellon the highly
prospective SL10B13 block (51% working interest and operator) ? The
Toosan prospect contains stacked Mesozoic reservoir objectives,
with multiple individualprospective resource estimates each ranging
from 100 to 200 MMbbls ? The geotechnical survey will begin this
month, supporting the plan for the construction of the wellpad.
Environmental and social impact assessments will begin before the
end of 2022, and tendering has commencedfor the rig and well
services, ahead of a targeted spud date around the end of
2023/early 2024 ? Having undertaken a combination of water and food
relief programmes earlier in the year, in reactionto the ongoing
drought in Somaliland Genel is working with ANPPCAN to deliver a
food relief programme toc.4,000 families
-- Morocco? A Petroleum Agreement and Association Contract is
expected to be signed with ONHYM regarding theLagzira block (75%
working interest and operator), with a farm-out programme now
underway ? The Lagzira block is a large offshore licence, in water
depths of 200-1,200 metres, with a provenpetroleum system following
Genel's 2014 well which recovered oil from Upper and Middle
Jurassic reservoirs ? Subsequent to this drilling, high quality 3D
(broadband multi-azimuth) seismic was acquired in 2018,and new
plays identified, with 18 prospects and leads, and material
resource potential
-- Qara Dagh (40% working interest and operator)? We continue to
evaluate the QD-2 well and its results, and a decision on licence
next steps will betaken shortly. Should no further action be taken
then the licence will expire in January 2023
ARBITRATION
-- The London-seated international arbitration regarding Genel's
claim for substantial compensation from theKRG following the
termination of the Miran and Bina Bawi PSCs is progressing. Written
submissions have been made tothe tribunal and the trial has now
been scheduled for February 2024
ESG
-- Zero lost time incidents in 2022, with three million hours
worked since the last incident
-- Following the Annual General Meeting ('AGM') on 12 May 2022
the Company announced that resolutions 4 and16 had over 20% of
votes cast against them. In accordance with Provision 4 of the UK
Corporate Governance Code2018, the Company is required to provide
an update on the views received from shareholders and actions taken
inrespect of these resolutions? In light of the votes received
against the resolutions, the Company has engaged with
majorshareholders to understand their views. Noting that proxy
agencies were all in favour of the above resolutions,and following
discussions with shareholders, the Board considers the votes cast
against the resolutions toprimarily reflect differing opinions held
by the Company's major shareholders in relation to a number
ofmatters. As a consequence, the Company does not believe it is
necessary or appropriate to take any additionalaction
OUTLOOK AND GUIDANCE
-- Production guidance of 30-31,000 bopd reiterated for 2022
-- 2022 capital expenditure guidance of between USD150 million
to USD170 million reiterated
-- Genel expects to end 2022 with over USD500 million of cash on
the balance sheet
-- Genel continues to actively screen and work up opportunities
to put our cash to work in order to extendthe line of sight on cash
flows that support our dividend programme into the long-term
-- Appraisal at Sarta is ongoing, with results of the Sarta-6
well expected around the end of the year
-- Genel has an established and committed dividend programme,
currently paying USD50 million per annum
-- We have recently taken opportunistic steps to buy back a
limited number of bonds at a price that providesan attractive
return on investment. We may make further opportunistic purchases
so long as the capital need doesnot reduce our ability to
successfully acquire assets that we are targeting
Genel will also host a live presentation on the Investor Meet
Company platform today at 1000 GMT. The presentation is open to all
existing and potential shareholders. Questions can be submitted at
any time during the live presentation. Investors can sign up to
Investor Meet Company for free and add to meet Genel Energy PLC
via: https://
www.investormeetcompany.com/genel-energy-plc/register-investor
-ends-
For further information, please contact:
Genel Energy
+44 20 7659 5100
Andrew Benbow, Head of Communications
Vigo Consulting
+44 20 7390 0230
Patrick d'Ancona
This announcement includes inside information.
Notes to editors:
Genel Energy is a socially responsible oil producer listed on
the main market of the London Stock Exchange (LSE: GENL, LEI:
549300IVCJDWC3LR8F94). The Company is one of the largest
London-listed independent hydrocarbon producers, with an asset
portfolio that positions us well for a future of fewer and better
natural resources projects. Genel has low-cost and low-carbon
production from the Sarta, Taq Taq, and Tawke licences in the
Kurdistan Region of Iraq, providing financial resilience that
allows investment in growth and the payment of a material and
progressive dividend. Genel also continues to pursue further growth
opportunities. For further information, please refer to
www.genelenergy.com
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ISIN: JE00B55Q3P39, NO0010894330
Category Code: TST
TIDM: GENL
LEI Code: 549300IVCJDWC3LR8F94
Sequence No.: 198511
EQS News ID: 1478067
End of Announcement EQS News Service
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