Posted on

Genel Energy gives update on Taq Taq Field

Genel Energy has announced an update on activity at the Taq Taq Field (Genel 44% working interest).

Testing of the TT-32 well has now completed. The well flowed oil from three separate zones, with a maximum individual zone flow rate of c.5,500 bopd with a 36/64″ choke.

The free water level was encountered at 1458 metres, which was 29 metres deeper than the pre-drill estimate and only 57 metres above the original field-wide FWL. The oil column at the TT-32 well location is 169 metres. TT-32 has further demonstrated the remaining potential on the flanks of Taq Taq Field.

The well has now entered production at an initial rate of 3,100 bopd with a 24/64″ choke, ahead of previous expectations. With the inclusion of this production, gross production from the Taq Taq Field is currently c.13,750 bopd.

The horizontal sidetrack well TT-20z spud on 11 January. This well is targeting production from the Shiranish Formation on the western flank of the field, and drilling operations are expected to complete in mid-February.

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.

(Source: Genel Energy)

Posted on

Genel shares Rise on Chevron Iraq Partnership

Shares in Genel Energy were trading up 6 percent on Monday afternoon after the company announced that it has reached agreement to acquire stakes in the Chevron-operated Sarta and Qara Dagh blocks (pictured), in the Kurdistan Region of Iraq.

Genel will acquire 30% equity in the Sarta licence by paying a 50% share of ongoing field development costs until a specific production target is reached, together with a success fee payable on achievement of a production milestone. Chevron will retain a 50% interest in the Sarta licence and the Kurdistan Regional Government will hold the remaining 20%. Genel’s estimate of its total spend up to end-2020 is c.$60 million.

Drilling began on the first appraisal well, Sarta-3, in Q4 2017. The well was successfully completed and tested during the second quarter of 2018. Both that and the Sarta-2 well individually tested at rates of c.7,500 bopd. The first phase of development is expected to see these wells placed on production.

Genel will acquire 40% equity of the Qara Dagh appraisal licence and become the operator through a carry arrangement. Chevron will retain 40% of the equity, with the KRG holding the remaining 20%. The Qara Dagh-2 well is set to be drilled in 2020. The Qara Dagh-1 well, completed in 2011, tested oil in two zones from the Shiranish formation.

Closing is subject to approval from the Kurdistan Regional Government.

Murat Özgül, Chief Executive of Genel, said:

“We are delighted to have been chosen as a partner to Chevron. The agreement provides access to a phased development opportunity with significant growth potential at Sarta, and an exciting appraisal opportunity at Qara Dagh. The additions to our portfolio are an important step in our diversification strategy, offering a further opportunity for near-term production and cash-generation.”

(Sources: Genel Energy, Yahoo!)

Posted on

GKP to Increase Production; Shares Rise

Shares in Gulf Keystone Petroleum (GKP) closed 4.3 percent higher on Wednesday after the company provided an operational and corporate update.

Operational

  • Production operations, underpinned by strong performance of the Shaikan Jurassic reservoir, continue in line with expectations. Average gross production of 31,563 barrels of oil per day (“bopd”) was achieved in 2018, at the upper end of the 27,000 – 32,000 bopd guidance.
  • The plant debottlenecking programme required to expand gross production capacity to 55,000 bopd from PF-1 and PF-2 remains on schedule for completion towards the end of 2019.
  • GKP has signed an agreement with Independent Oil Tools to use ‘Rig 1’ during the Company’s workover programme to replace tubing on SH-1 and SH-3 wells and install downhole pumps (“ESPs”) on three other existing wells. The rig has been mobilised and is currently performing a workover on the SH-1 well to install larger bore tubing to increase productivity.
  • GKP has also signed an agreement with the rig operator, DQE, to use ‘Rig 40’ for its upcoming drilling campaign, due to start in March 2019, with the first four wells (needed for the 55,000 bopd target) expected to be completed in Q1 2020.
  • Since July 2018, all production from PF-2 has been exported via the Atrush export pipeline which connects to the main Kurdish export pipeline. Additional pumps along with a temporary unloading facility have now been installed at PF-2 which allows the majority of production from PF-1 to be trucked to PF-2 and exported via pipeline. Today, only ca.3,000 bopd are exported by truck via Fishkhabour which lowers HSSE exposure.
  • Further progress has been made, including delivery of all 16″ pipeline to the field, on the installation by KAR Group of the pipeline also connecting PF-1 to the Atrush export pipeline. This remains on schedule to be brought into service mid-2019, at which point the residual trucking of crude oil will be eliminated.
  • GKP and its partner MOL have agreed on a staged investment programme to increase gross production up to 110,000 bopd by 2024. The revised Field Development Plan was submitted for approval to the Ministry of Natural Resources in October 2018. The current expansion to 55,000 bopd is already underway.

Corporate

  • GKP has continued to receive regular oil payments from the Kurdistan Regional Government, with cash receipts of $225 million net to GKP during 2018.
  • Cash balance of $294 million as at 15 January 2019. The Company remains fully funded to complete the expansion to 55,000 bopd.
  • Gross capital expenditure guidance for the total 55,000 bopd project phase remains unchanged at $200 million to $230 million.
  • Of the 2018 approved gross budget of $91 million, ca.$40 million has been transferred to early 2019 which was primarily driven by delays in delivery of drilling and well completion equipment.

Outlook

  • Given the active 2019 investment programme, particularly in new wells and workovers, the Company anticipates improved production levels this year and expects gross average production guidance to be in the range of 32,000 – 38,000 bopd.
  • The above guidance takes account the latest drilling and project schedules, but also the temporary plant shut-downs required in 2019 for the tie-in of new facilities and wells being offline while workovers are taking place.
  • 55,000 bopd production target moved to early 2020 due to delays in the delivery of equipment, affecting the start date of the drilling campaign, originally January, now March 2019.
  • The Company intends to host a Capital Markets Day in the first quarter of 2019. Further details will be announced at a later date.

Commenting, Jón Ferrier, CEO, said:

“Having successfully laid the foundations for our expansion plans in 2018, we are very pleased to have now initiated our new investment programme at Shaikan.

“We continue to make considerable operational headway as we look to safely increase production to 55,000 bopd, in line with our strategy. 2019 is set to be another important year for Gulf Keystone and we look forward to keeping our stakeholders updated on our ongoing progress.”

(Source: GKP)

Posted on

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)

Posted on

US gives $2.5m for Syrian Refugees in Iraq

The World Health Organization (WHO) extends its gratitude to the U.S. Department of State Bureau of Population, Refugees, and Migration (BPRM) for the generous contribution of US$ 2.5 million to increase the health security and resilience of Syrian refugees living in Iraq.

In 2018, Iraq continued to host Syrian refugees. It is estimated that about 250,000 Syrian refugees are currently residing in the three governorates of the Kurdistan Region of Iraq (KRI) namely Erbil, Dahuk, and Sulaymaniyah, the majority of which (64%) lives with the hosting communities.

“There is an urgent need to support the local health authorities in KRI to ensure that Syrian refugees here have access to proper health services,” said Dr. Adham R. Ismail, Acting WHO Representative in Iraq. “Providing comprehensive primary, secondary, referral, and outbreak prevention and response services in the three refugee governorates is a WHO priority for the coming phase; it will indirectly improve the resilience of the refugees and host communities against potential public health emergencies,” he added.

Syrian refugees in Iraq have been given free access to primary health care services whether through camp-based primary health care centers ((PHCC) for refugees living in camps or public health facilities specified for those living with the host communities.

These services have been provided by the directorates of health of Erbil, Dohuk, and Suleimaniya in collaboration with WHO and health partners. However, the mass internal displacement of over 3.3 million Iraqis in 2014 had stretched the capacity of the national health authorities and humanitarian partners to continue meeting the needs of refugees and respond to the inflated demand for health care intervention.

As of 2018, WHO has been active in filling the gaps in essential medicines and medical supplies and equipment, improving referral services, and supporting surveillance and water quality monitoring activities in the refugee camp and non-camp settings. According to the 2017 national health reports, the said DOHs have provided a total of 264,611 consultations to Syrian refugees residing in KRG of Iraq.

The contribution of US$ 2.5 million from the U.S. BPRM will support the provision of comprehensive primary health care and referral services for around 300,000 Syrian refugees and host communities in KRI. It will also support the healthcare services for the disabled and mentally ill patients in the three mentioned governorates through a comprehensive training program for the national professionals working in the mental health area.

The contribution will also cover the procurement and distribution of essential medicines, and medical supplies and equipment to selected health facilities serving the refugees in target governorates.

(Source: UN)

Posted on

Dana Gas Increases Production in Iraq

Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, announces that as a result of the ramp up of production from its debottlenecking project in the Kurdistan region of Iraq, its group production reached 70,000 barrels of oil per day (boepd) on the 19 November and has since been sustained above that level.

The Company’s principal operations are in the Kurdistan Region of Iraq (KRI) and Egypt, where the drilling of the Balsam-8 well has also led to a sharp increase in overall production. Current group production, in excess of 70,000 boepd, represents a significant increase compared to the Company’s 9M 2018 average of 62,250 boepd.

Dr Patrick Allman-Ward, CEO, Dana Gas, said:

“Production in excess of 70,000 barrels oil equivalent per day is a great achievement for Dana Gas. At the start of the year, we planned a drilling programme in Egypt and a debottlenecking project in the KRI that would significantly increase production. We have successfully delivered both projects. The increase in production will help offset the lower realised hydrocarbon prices that have impacted the oil industry in the last quarter and support growth in our revenue and net profit figures for the full year 2018 and beyond.

“We remain excited about the long-term future of our world-class assets in the KRI. Further investment is underway to double current production to 900 MMscf/d over the coming three years, together with an increase in condensate to 36,000 bpd and LPG to 1200 MTpd.”

In the fourth quarter 2018, Dana Gas Egypt completed the drilling of the Balsam-8 well and tied it in to the network. The well was completed ahead of schedule and under budget, adding over 5,000 boepd to the Company’s output.

In the KRI, the Company announced a 30% increase in production capacity at the Khor Mor field (pictured), which it jointly operates on behalf of Pearl Petroleum. The expansion of the gas processing plant consisted of a series of plant additions and modifications to de-bottleneck throughput, raising output capacity from 305 MMscf/d of natural gas to 400 MMscf/d, with over 15,000 barrels per day of condensate. This is expected to add up to $50 million annually to the top line without incurring any additional operational costs.

The Company recently posted a strong set of quarterly financial results. 9M 2018 revenue increased 6% to $351 million (AED1,287 mm) from $330 million (AED1,210 mm) over the same period last year and 9M 2018 net profit was $41 million (AED149 mm) versus a net loss of $6 million (AED22 mm) in 9M 2017, excluding one-off items.

(Source: Dana Gas)

Posted on

30% Gas Production Increase at Khor Mor Field

Dana Gas and Crescent Petroleum Announce 30% Gas Production Increase in Kurdistan Region

Dana Gas, the Middle East’s leading publicly-listed regional natural gas company, and its partner Crescent Petroleum, have announced achievement of a 30% increase in production capacity at the Khor Mor field in the Kurdistan Region of Iraq, which the companies jointly operate on behalf of Pearl Petroleum.

This increase delivers much-needed gas supply to fuel power plants in the region, and marked a major milestone as the companies commemorate 10 years of continuous production in the region in a special ceremony with the Kurdistan Regional Government in Erbil.

The expansion at the Khor Mor gas processing plant consisted of a series of plant additions and modifications to de-bottleneck throughput, raising output capacity from 305 MMscfd of natural gas to 400 MMscfd, with over 15,000 barrels per day of condensate.

The Plant, which began operating in 2008, supplies natural gas from the Khor Mor field by pipeline to power plants in the towns of Chemchemal and Erbil, and will soon supply a new plant in Bazian. The Khor Mor Plant also produces LPG and NGL, which are sold and trucked to the local markets.

Under a Gas Sales agreement signed in January 2018 with the KRG Ministry of Natural Resources, Pearl Petroleum will sell the additional quantities of gas to supply the power stations with affordable, environmentally favourable fuel, and further enhance electricity supplies.

The plant expansion comes online as Pearl celebrates a decade of production in the KRI. At a ceremony in Erbil attended by Kurdish Regional Government Prime Minister Nechirvan Barzani, Minister of Natural Resources Dr. Ashti Hawrami, and other senior officials, Board Members and senior executives from the companies commemorated the partnership between the companies and the KRG in delivering progress and improved services to the people of the region over the past decade.

Total investment in the Kurdistan Gas Project to date exceeds $1.4 billion with total cumulative production over 250 million barrels of oil equivalent (boe), which has resulted in over $20 billion of fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole. Further investment is underway to expand production to 900mmscfd per over the coming 3 years, together with associated liquids.

Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:

“This production increase marks an important milestone as we also commemorate ten years of continuous production, and the beginning of a new chapter of expansion in operations and production which will see a further investment of over $600 million over the coming few years and a more than doubling of production again.

“The gas we have produced has led to significant fuel savings and social and economic value for the economy, and we hope to grow this in the years to come from the significant resources of these world class fields, for the benefit of the Kurdistan Region and all of Iraq.”

Dr. Patrick Allman-Ward, CEO of Dana Gas, added:

“Despite many challenges over the past ten years we are proud to have maintained our production levels and operations and now with the settlement of all past receivables last summer and continuous payments since then, we look forward to significantly growing production to meet the growing demand for gas and electricity in the Kurdistan Region and Iraq as a whole.”

In August 2017, Pearl Petroleum reached a full and final settlement with the KRG of the arbitration between them, including receiving $1 billion in cash from the KRG for past receivables and committing to expand their investment and operations in the region.

These expansion plans include a multi-well drilling program now underway in both the Khor Mor & Chemchemal fields, as well as installation of additional gas processing and liquids extraction facilities.

Operation full-time staff numbers are over 600 with over 80% local staff, and training programmes to increase this figure further. In addition, the companies has contributed to local communities with support for local power generation, education and healthcare facilities, as well as support programmes for internally displaced people in Iraqi.

The Kurdistan Gas Project was established in 2007 as Dana Gas and Crescent Petroleum entered into agreement with the Kurdistan Regional Government (KRG) for exclusive rights to appraise, develop, produce, market, and sell petroleum from the Khor Mor and Chemchemal fields in the Kurdistan Region of Iraq (KRI).

Production from the newly built plant in Khor Mor began 15 months later, in October 2008, an industry record. In 2009, Pearl Petroleum was formed as a consortium with Dana Gas and Crescent Petroleum as shareholders, and with OMV, MOL, and RWE joining the consortium subsequently with a 10% share each.

(Source: Dana Gas)

Posted on

ShaMaran acquires Larger Stake in Atrush

ShaMaran Petroleum Corporation refers to the agreement announced on June 4, 2018 whereby the Company’s wholly owned subsidiary, General Exploration Partners, Inc. (“GEP”), agreed in a sale and purchase agreement (the “SPA”) with Marathon Oil KDV B.V. (“MOKDV”) ,a wholly owned subsidiary of Marathon Oil Corporation (“Marathon”), to acquire from MOKDV a further 15% working interest in the Atrush Block Production Sharing Contract in the Kurdistan Region of Iraq (“the Acquisition”).

The underlying agreements governing the development and operation of the Atrush block require that both the Minister of Natural Resources of the Kurdistan Governmental Authority (“MNR”) as well as TAQA Atrush BV (“TAQA”), the other owner of a participating interest in, and the operator of, the Atrush block, consent to the assignment of the participating interest from MOKDV to GEP. At the time, the MNR gave assurance of providing its consent to the assignment, however, TAQA unreasonably refused to provide its consent to the Acquisition.

As a result of TAQA’s unreasonable refusal to provide consent, Marathon re-issued an offer to acquire MOKDV, a corporate transaction which does not require TAQA consent, with the result being that the Company is now engaged in a new bidding process for the Marathon interest in the Atrush block. There is no assurance that any offer by the Company or GEP, if submitted, will result in the acquisition of the increased interest in the Atrush block.

In the meantime, the Company is reviewing all available options.

(Source: ShaMaran)

Posted on

SOMO Restarts Export of Kirkuk Oil via Turkey

By John Lee.

Baghdad has reached an agreement with Kurdish authorities to resume exports from the Kirkuk oilfields, via the Turkish port of Ceyhan (pictured).

In a statement on Friday, the Ministry of Oil said between 50,000 and 100,000 barrels per day would be exported through the pipeline on behalf of the Baghdad-controlled State Oil Marketing Organization (SOMO).

S&P Global Platts says SOMO has not exported any crude oil from Ceyhan since June 2017.

(Sources: Ministry of Oil, S&P Global Platts)

Posted on

Will new Iraqi Govt Resolve Baghdad-KRG Issues?

By Nahwi Saeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

President Barham Salih on Oct. 27 announced that he has developed a proposal for resolving the dispute over Kirkuk between Baghdad and Erbil.

Without going into detail, he said his plan focuses on the ethnic and religious components in determining its fate, ignoring the interests of outside players in discussions about the city’s future.

The recent agreement by Kurds, Sunnis and Shiites on the formation of a national government — with Salih as president, Adel Abdul Mahdi as prime minister and Mohammed Halbousi as parliament speaker — raised hopes among many Iraqis that the outstanding issues between Baghdad and Erbil might be resolved, but will the new leadership be able to deliver?