ShaMaran Petroleum has reported that the Atrush Field continues to perform “exceptionally well“.
Average production for the month of November was 43,360 bopd. The CK-15 well is now online and wells currently are undergoing normal-course maintenance.
The Company reiterates its Atrush 2019 average daily production guidance of between 30,000 and 35,000 bopd and a target 2019 exit rate between 45,000 bopd and 50,000 bopd. The Company shares in this production, pursuant to a production sharing contract, with a working interest of 27.6%.
Since the beginning of the year, production has increased 56% and the Company has invested significantly in infrastructure to facilitate continued production growth.
The Atrush field is located 85 km northwest of Erbil and is one of the largest new oil developments in the Kurdistan Region of Iraq. The field was first discovered in 2011 and oil production started in July 2017. In its over two years of production the Atrush field has sold all its production to the Kurdistan Regional Government of Iraq at international market prices.
Gulf Keystone Petroleum (GKP) has provided an operational and corporate update.
Average gross production for the year up to 30 November 2019 of 32,127 barrels of oil per day (“bopd”).
November gross production averaged 40,582 bopd, with current production rates from the field at c.42,000 bopd.
GKP is therefore on track to meet its original gross production guidance for 2019 of 32,000-38,000 bopd.
The first well of the drilling campaign, SH-12 came onstream on 13 November. During commissioning, the well produced at rates up to 4,600 bopd, in line with expectations and is currently producing at c.4,000 bopd.
The second well in the drilling campaign, SH-9 is a crucial part of the long-term field gas management plan and is designed to assess the gas reinjection potential of the Jurassic formation. The well, which was spudded on 19 October, encountered a faulted section requiring the well to be side-tracked to the Jurassic reservoir target.
The SH-9 side-track necessitates a revision to the drilling schedule. Assuming a duration of one month for the side-track, the Company now expects to reach the 55,000 bopd gross production target at Shaikan in Q3 2020.
The planned maintenance and debottlenecking shutdown at PF-2 was completed safely during October.
The PF-1 export pipeline is complete. Full oil export operations are expected to commence in the next 24 hours marking the end of export by trucking from the Shaikan Field.
Operations at Shaikan remain safe and secure, with no Lost Time Incidents (“LTI”) recorded in over 500 days.
Cash balance of $206 million as at 9 December 2019.
With a robust cash position and the Company’s confidence in its delivery of the Shaikan project, a second share buyback programme for a further $25 million has been approved and an initial tranche of $15 million will be initiated today.
Jón Ferrier, CEO, commented:
“The Company has made significant progress on a number of fronts; with the successful addition of SH-12 to the PF-2 production inventory and drilling of the gas appraisal well SH-9 where operations continue. The imminent start of export through the PF-1 pipeline means all production from Shaikan will now be exported directly via pipeline, benefitting safety, reducing environmental impact and improving netbacks.
“We are pleased to confirm that we are on track to achieve our initial average production guidance for 2019, and whilst the need to side-track SH-9 has slightly impacted our timing guidance for delivering 55,000 bopd, we remain on course to achieve further significant production growth in 2020.
“We are also pleased to announce the launch of a second $25 million share buyback programme, which is in line with our focus on returning value to shareholders, whilst retaining the capital necessary to grow the business.“
ShaMaran Petroleum has reported that the Atrush oil field total production has exceeded 20,000,000 barrels.
ShaMaran President and Chief Executive Officer Dr. Adel Chaouch said:
“This cumulative production milestone demonstrates Atrush’s upward path to higher production and has been attained ahead of target. We look forward to further future production achievements and operational improvements in the Atrush block.”
The Company maintains its Atrush 2019 average daily production guidance of between 30,000 and 35,000 bopd with the prior week’s average production of 46,000 bopd which is within our target exit rate between 45,000 bopd and 50,000 bopd. The Company shares in this production, pursuant to a production sharing contract, with a working interest of 27.6%.
The Atrush field is located 85 km northwest of Erbil and is one of the largest new oil developments in the Kurdistan Region of Iraq. The field was first discovered in 2011 and oil production started in July 2017.
In its over two years of production the Atrush field has sold all its production to the Kurdistan Regional Government of Iraq at international market prices less a discount based on quality and transportation charges.
Genel Energy has announced its unaudited results for the six months ended 30 June 2019.
Bill Higgs (pictured), Chief Executive of Genel, said:
“These results demonstrate the continued success of our strategy -highly cash generative productionunderpins capital investment in growth opportunities that deliver rapid returns and enables a compelling cash return to shareholders through our dividend.
“Our production grew 17% in H1 2019, and pro forma free cash flow rose to $76 million. This cash generation, and our strong balance sheet, allows us to both increase investment in growing the business as well as returning cash to shareholders via dividends. Accordingly, we have today announced an interim dividend of $14 million.
“Disciplined capital allocation remains at the core of our business. The speed with which our investments pay back means that cash is quickly recycled to create most value for shareholders. The cash that our production generates funds worknow underway at Sarta and Qara Dagh, with plenty left over to both pay a dividend and seek new opportunities, as we progress Genel’s growth strategy.“
Results summary ($ million unless stated)
Production (bopd, working interest)
Depreciation and amortisation
Exploration (expense) / credit
Impairment of intangible assets
Operating profit / (loss)
Cash flow from operating activities
Free cash flow2
Pro forma free cash flow2
Net cash (debt)4
Basic EPS (¢ per share)
Underlying EPS (¢ per share)1
EBITDAX is operating profit / (loss) adjusted for the add back of depreciation and amortisation ($74.8 million) and exploration expense ($0.6 million). Underlying EPS is EBITDAX divided by the weighted average number of ordinary shares
Free cash flow is set out on page 7 and does not include $18.9 million, invoiced for Tawke production and due in June 2019 and received late on 9 July 2019, with the delay due to a change in the Operator’s banking arrangements. Pro forma free cash flow of $75.6 million includes this payment.
Cash reported at 30 June 2019 excludes $10 million of restricted cash and the $18.9 million noted above
Reported IFRS debt less cash
Working interest production averaged 37,400 bopd in H1 2019 (H1 2018: 32,100 bopd), an increase of 17% compared to H1 2018
8 wells completed in H1 2019, resulting in year-on-year production increases at both the Tawke and Taq Taq PSCs
Free cash generation of $57 million in H1 2019 (H1 2018: $70 million), which increases to $76 million when including the post period receipt of $19 million, with annual free cash flow yield of c.20% of current market capitalisation
Net cash of $56 million at 30 June 2019 (net debt of $64 million at 30 June 2018)
Following the receipt of all payments relating to April 2019, Genel had $390 million of cash as of 5 August 2019, a net cash position of $92 million
Addition of Sarta and Qara Dagh to the portfolio in January 2019 provides near-term production and material future growth potential
Maiden dividend distribution of 10¢ per share paid on 24 June 2019
Interim dividend of 5¢ per share confirmed
Genel retains an open mandate for a share buy-back programme of up to $10 million, and will continue to review purchasing opportunities
Net production guidance in 2019 maintained at close to Q4 2018 levels of 36,900 bopd, an increase of c.10% year-on-year
Drilling programme ongoing, with over 10 wells set to be completed by early 2020
Active discussions with the Kurdistan Regional Government (‘KRG’) regarding Bina Bawi are ongoing, focused on agreeing the detailed commercial terms for the integrated Phase 1 oil and gas development and approval of the associated field development plans
Work continuing at Sarta to prepare for production by the middle of 2020
QD-2 well location agreed at Qara Dagh, well pad civil engineering work set to begin
Farm-out process relating to Somaliland acreage to begin in late Q3 2019
Genel expects to generate material free cash flow in H2 2019, even while investment in growth increases
2019 capital expenditure is expected to be towards the top end of the $150-170 million guidance range
Searches for a new Chairman and Chief Operating Officer are progressing
The Company continues to actively pursue growth and is assessing opportunities to make value-accretive additions to the portfolio
A senior oil executive has predicted that Iraq could surpass Saudi Arabia as an oil producer.
Addressing delegates at CWC‘s Iraq Petroleum conference in London, Majid Jafar (pictured), CEO of Sharjah-based Crescent Petroleum, said:
“Iraq is hugely underexplored. We at Crescent know of 300 structures just in the Western Desert that have yet to be drilled, so I for one believe that Iraq has a lot of potential, and I wouldn’t be surprised if it becomes the largest producer in OPEC during my career.”
Crescent Petroleum has an interest in the Khor Mor field in the Kurdistan Region of Iraq, and has signed initial contracts to develop the oil fields of Gilabat-Qumar (in Diyala), Khashim Ahmer-Injana (in Diyala), and Khudher Al-Mai [Khider al-Mai] (in Basra and Muthana).