Tawke Oilfield: First Quarterly Production Increase since 2015

Genel Energy notes that DNO ASA, as operator of the Tawke PSC (Genel 25% working interest), has today issued an update on licence activity.

Gross production at the Tawke licence averaged 106,900 bopd during the second quarter, of which Peshkabir contributed 62,300 bopd and Tawke 44,600 bopd, the latter representing the first quarterly production increase since 2015 at this legacy field as new wells are drilled, workovers conducted on existing ones and gas injection continued.

In the second quarter, four new production wells were brought onstream on the Tawke licence with three at Tawke and one at Peshkabir. Together with wells drilled in the first quarter, natural field decline has been arrested and reversed, including at Tawke, raising DNO's full-year projection to 107,000-109,000 bopd (previously 105,000 bopd).

Genel's production guidance for 2022 is unchanged, with net portfolio production currently expected to be between 30-31,000 bopd for the full-year.

(Source: Genel Energy)

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Genel Energy: Strong Results, but Shares Down

By John Lee.

Shares in Genel Energy were trading down around 5 percent on Tuesday morning, despite significant increases in revenue and profit announceed in its unaudited results for the six months ended 30 June 2022.

Paul Weir, Interim Chief Executive of Genel, said:

"Our cash generation in the first half of the year has been exceptionally strong - driven by our low-cost, high-margin oil production and disciplined capital allocation. We remain focused on the delivery of our long-established strategy of putting capital to work to grow our production and cash generation, while retaining our resilience and paying a material and progressive dividend.

We generated $129 million in free cash flow and are well on track to generate over a quarter of a billion dollars of free cash flow for the full year. This continues to build our balance sheet strength and optionality, providing us with the funds to add the right assets at the right price. Our cash flow this year benefits from the recovery of receivables and our override payments, and we are focused on replacing these by building a portfolio that supports the resilience, sustainability, and progression of our material dividend."

Results summary ($ million unless stated)

H1 2022 H1 2021 FY 2021
Average Brent oil price ($/bbl) 108 65 71
Production (bopd, working interest) 30,420  32,760 31,710
Revenue 245.6  151.5 334.9
EBITDAX1 212.3  123.1 275.1
  Depreciation and amortisation (84.4)  (81.8) (172.8)
  Impairment of oil and gas assets - - (403.2)
  Reversal of impairment of receivables 12.8 - 24.1
Operating profit / (loss) 140.7 41.3 (276.8)
Cash flow from operating activities 216.3 91.1 228.1
Capital expenditure 74.7 58.2 163.7
Free cash flow2 128.7 22.2 85.9
Cash 412.1 266.4 313.7
Total debt 280.0 280.0 280.0
Net cash / (debt)3 141.3 (2.2) 43.9
Basic EPS (¢ per share) 45.4 9.3 (111.4)
Dividends declared for the period (¢ per share) 6 6 18
  1. EBITDAX is operating profit / (loss) adjusted for the add back of depreciation and amortisation, impairment of property, plant and equipment, impairment of intangible assets and reversal of impairment of receivables
  2. Free cash flow is reconciled on page 8
  3. Reported cash less IFRS debt (page 8)

Summary

  • Material cash generation from low-cost and high-margin oil production:
    • Net production averaged 30,420 bopd in H1 2022 (H1 2021: 32,760 bopd)
    • Low production cost of $4.4/bbl and strength of oil price delivered a margin per barrel of $32/bbl (H1 2021: $20/bbl)
    • Free cash flow of $129 million (H1 2021: $22 million)
  • Financial strength provides options for capital allocation:
    • $75 million of capital expenditure in H1 2022, of which $41 million was spent at Taq Taq and Tawke, and $27 million on Sarta appraisal
    • Genel took on operatorship at Sarta on 1 January 2022, with Sarta-5 and Sarta-1D subsequently being completed
    • Cash of $412 million (31 December 2021: $314 million)
    • Net cash of $141 million (31 December 2021: net cash of $44 million)
  • A socially responsible contributor to the global energy mix:
    • Zero lost time injuries ('LTI') and zero tier one loss of primary containment events at Genel and TTOPCO operations
      • Two million work hours since the last LTI, as we seek to repeat the performance of six years without an LTI up to September 2021
    • As we mark 20 years of operations in the Kurdistan Region of Iraq ('KRI'), the Genel20 Scholars initiative has launched, with Genel funding the opportunity for 20 economically disadvantaged students to have a life-enhancing education at the American University of Kurdistan

Outlook

  • Production guidance for 2022 maintained as around the same level as 2021, currently tracking between 30-31,000 bopd for the full-year
  • 2022 capital expenditure guidance of between $140 million and $180 million tightened to $150 million to $170 million
  • Genel expects free cash flow of over $250 million in 2022, pre dividend payments
  • Appraisal at Sarta is ongoing, with results of the Sarta-6 well expected around the end of the year
  • The Company continues to actively pursue new business opportunities, focused on production and cash generation
  • The London seated international arbitration regarding Genel's claim for substantial compensation from the KRG following Genel's termination of the Miran and Bina Bawi PSCs is ongoing
  • Interim dividend retained at 6¢ per share:
    • Ex-dividend date: 15 September 2022
    • Record date: 16 September 2022
    • Payment date: 14 October 2022

Full results here.

(Source: Genel Energy)

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KRG files Civil suit against Baghdad Minister of Oil

By John Lee.

The Minister of Natural Resources of the Kurdistan Regional Government (KRG) has filed a civil suit against the Baghdad Minister of Oil, accusing him of sending emails and letters with the intention of intimidating international oil companies (IOCs) and interfering with the contractual rights of the IOCs and the KRG.

The KRG has also filed a criminal complaint against a Director General in the Baghdad Ministry of Oil for allegedly abusing his power and position by intimidating and harassing the IOCs working in the Kurdistan Region of Iraq.

This follows a series of summonses issued to the IOCs by a court in Baghdad, relating to their operations in Kurdistan Region.

Full statement from the KRG:

On 19 May 2022, a commercial court sitting in Al Karkh, Baghdad, acted at the request of the Minister of Oil in Baghdad and purported to issue summonses to international oil companies (IOCs) operating within the Kurdistan Region of Iraq. Those IOCs - which include Addax, DNO, Genel, Gulf Keystone, HKN, Shamaran, and WesternZagros - operate in the Kurdistan Region in accordance with the Kurdistan Region's Oil and Gas Law (No. 22 of 2007), which was issued by the Kurdistan Regional Government in accordance with its powers under the Constitution of Iraq.

These court summonses are the latest in a series of illegal actions taken by the Minister of Oil and his staff under the current caretaker government in Baghdad. These illegal actions are apparently based upon a ruling by a court in Baghdad that calls itself the "Federal Supreme Court". This so-called "Federal Supreme Court" issued a politically motivated decision on 15 February 2022, which purported to declare the 2007 Oil and Gas Law void.

No court in Baghdad has the authority to make such a declaration. On 28 February 2022, the President of the Kurdistan Region, together with the presidents of the legislative, executive, and judicial branches of the Kurdistan Regional Government, issued a statement rejecting the 15 February decision. On 4 June 2022, the Judicial Council, the highest judicial institution in the Kurdistan Region, issued a statement upholding the validity of the 2007 Oil and Gas Law. The Council noted that Article 92(2) of the Constitution of Iraq requires that the Iraqi Council of Representatives pass a law to establish an Iraqi Federal Supreme Court. No such law has ever been enacted. Iraq, therefore, does not have a constitutionally established Federal Supreme Court. The court that issued the 15 February 2022 opinion purporting to invalidate the 2007 Oil and Gas Law has no constitutional authority to do so. On the contrary, the issuance of the 2007 Oil and Gas Law was entirely authorised under the Constitution of Iraq. As such, legally, the Oil and Gas Law remains in full force.

On 2 June 2022, the Kurdistan Regional Government filed a criminal complaint against a Director General in the Baghdad Ministry of Oil for abusing his power and position by intimidating and harassing the IOCs working in the Kurdistan Region of Iraq. In the view of the Kurdistan Regional Government, emails and letters sent to the IOCs undertaking work in the Kurdistan Region by that Director General were sent with the intention of intimidating the IOCs and interfering with the contractual rights of the IOCs and the Kurdistan Regional Government. The contracts entered into between the IOCs and the Kurdistan Regional Government are entirely in accordance with the 2007 Oil and Gas Law.

On 5 June 2022, the Erbil Court of Investigation ruled that the lawsuits filed in the Al Karkh commercial court against the IOCs must be brought to the Erbil Court to be examined as evidence in this criminal complaint. The Erbil Court also ruled that any lawsuits in the Al Karkh court must be delayed for this purpose, and that named criminal defendants, including the Baghdad Minister of Oil, must attend the criminal hearing in Erbil on 22 June 2022. Iraqi law (Article 26 of Criminal Procedural Law No. 23 of the year 1979) requires that civil proceedings cannot take place while a related criminal investigation is underway. In addition, Article 38 of Civil Procedural Law No. 83 of the year 1969 states that any civil proceeding against the IOCs must take place in the Kurdistan Region, where the IOCs are registered and operate.

Furthermore, on 5 June 2022 the Minister of Natural Resources of the Kurdistan Regional Government filed a civil suit against the Baghdad Minister of Oil. In the view of the Kurdistan Regional Government, the Minister is liable under applicable civil law provisions for sending emails and letters with the intention of intimidating the IOCs and interfering with the contractual rights of the IOCs and the Kurdistan Regional Government.

(Source: KRG Ministry of Natural Resources)

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Genel Energy CEO Steps Down

Genel Energy has announced that after discussions with the Board following the recent AGM, at which Bill Higgs did not receive the required 50% majority of votes in favour of re-election as a Director, he has agreed to step down as CEO of the Company with immediate effect.

Dr Higgs will take up a role as Special Advisor to the Chairman until 1 September 2022, to support an orderly transition, after which he will remain as a consultant to the Company.

Paul Weir, COO, has been appointed as Interim CEO with immediate effect. A search for a suitable replacement is now ongoing and an announcement will be made in due course.

Paul joined Genel in January 2020, having worked for more than 30 years in upstream E&P with experience in the North Sea, South East Asia and Africa. Before joining Genel, Paul was Group Head of Operations and Safety at Tullow Oil, having previously spent 13 years at Talisman as VP Production and Exploration, and also worked in a variety of roles at Nippon Oil, Elf, Occidental, and Total.

David McManus, Chair, said:

"Bill worked tirelessly at Genel and oversaw a positive change in the strategic direction, operational capability, and culture of the Company. He steps down as CEO with Genel well positioned to utilise our robust balance sheet and material cash generation to fund growth and underpin our material and progressive dividend for the long-term.

"Paul has been a key contributor to the transition of Genel into an operator with interests in more producing assets than any other IOC in Kurdistan, and, given his longstanding operational experience with a range of world class companies, is perfectly placed to lead the team as it seeks to progress its next phase of growth."

(Source: Genel Energy)

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Genel Energy appoints new Chief Financial Officer

By John Lee.

Genel Energy has announced that Luke Clements (pictured) has been appointed Chief Financial Officer (CFO) with immediate effect.

Luke, who was previously Interim Chief Financial Officer, has been responsible for a broad range of financial, commercial, and treasury related activities at the Company.

Having joined the Company in 2011 to advise on the merger of Vallares Plc and Genel Enerji, he became Group Financial Controller in 2015. Prior to joining the Company, Luke spent seven years at KPMG, where he was head of department and advised multiple FTSE100 and FTSE350 companies across a range of sectors.

David McManus, Chair, said:

"Luke is the ideal person to continue delivering the financial platform that facilitates our strategy, a strategy he has been integral in building, as we seek to utilise our growing financial strength to add production and further bolster our progressive dividend.

"Genel's low-cost production generates significant cash flow, in turn supporting investment in growth and material shareholder returns, and we look forward to Luke playing a significant role as we continue to aim to create material value for shareholders."

(Source: Genel Energy)

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Genel Energy issues update on Trading and Ops

Genel Energy has issued the following trading and operations update ahead of the Company's Annual General Meeting ('AGM'), which is being held today:

Bill Higgs, Chief Executive of Genel, said:

"Our robust financial position continues to strengthen, supporting investment in our organic portfolio as well as our progressive dividend. Despite the result of Sarta-5, the well delivered useful data that we will incorporate together with the results of our next well, Sarta-6, into our forward plans for the field. As we look to add production and further bolster our progressive dividend and create value for stakeholders, we continue to review both organic and inorganic opportunities."

FINANCIAL PERFORMANCE

  • $95 million cash proceeds received in Q1 2022 from the Kurdistan Regional Government
  • Free cash flow of $43 million in Q1 2022
    • Margin of $30/bbl in Q1 2022 (2021: $24/bbl), with Brent averaging $102/bbl (2021: $71/bbl)
    • Capital expenditure of $35 million in Q1 2022, of which $19 million was spent at Tawke, and $12 million at Sarta
    • Of the $35 million total invoiced for December 2021 oil sales, $17 million was received in Q1 2022, with $18 million of invoices being received after period end
  • Cash of $356 million at 31 March 2022 ($314 million at 31 December 2021)
  • Net cash of $86 million at 31 March 2022 ($44 million at 31 December 2021)

PRODUCTION

  • Net production of 30,520 bopd in Q1 2022, in line with guidance
  • Zero lost time injuries or Tier 1 losses of primary containment in Q1 2022
  • Tawke PSC (25% working interest)
    • Gross production of 106,470 bopd in Q1 2022, 26,620 net to Genel, of which Peshkabir contributed 64,500 bopd and Tawke 41,970 bopd
    • A high level of activity was maintained at Tawke in Q1 2022, with five wells spud across the Tawke and Peshkabir fields, with a fourth drilling rig set to be added
    • The Peshkabir-Tawke gas project has captured 12 billion cubic feet of otherwise flared gas, equivalent to 766,000 tonnes of CO2 equivalent, since start up in mid-2020 through the first quarter of 2022. Phase 2 is a $25 million expansion underway at the Tawke field to capture breakthrough gas, set to start in the fourth quarter of 2022. The operator, DNO, is also debottlenecking the Peshkabir gas plant originally designed for 50,000 bopd to handle larger volumes of associated gas from higher field production, which is now averaging 65,000 bopd
  • Sarta (30% working interest and operator)
    • Gross production of 5,590 bopd in Q1, 1,670 bopd net to Genel
    • Sarta-1D was brought onto production on 8 March from the Mus and Upper Adaiyah reservoirs, the same zone on production at Sarta-2. On well test at Sarta-1D the Lower Adaiyah produced at low oil rates with a high water cut while oil was discovered in the Butmah, achieving flow rates of over 1500 bopd, but again with a high water cut. Since coming onstream, production from the Mus and Upper Adaiyah reservoirs at Sarta-1D has been choked back in order to manage pressure decline between the two adjacent take points of Sarta-1D and Sarta-2, and water cut at Sarta-1D
    • Total field production has averaged c.6,150 bopd in May, as we continue to work through a programme to optimise production from the three producing wells
    • Sarta-5 testing completed on 9 May and the well is now suspended. As previously stated, the presence of oil associated with both the primary and secondary Jurassic reservoir intervals, 12 km southeast of the Sarta pilot EPF, will be subject to further investigation and integration into the joint venture's understanding of the Sarta field and future planning
    • Test results from the Sarta-6 well, c.6 km to the west of the pilot EPF, are expected in Q3
  • Taq Taq PSC (44% working interest and joint operator)
    • Gross production of 5,070 bopd, 2,230 bopd net to Genel
    • As the margins at Taq Taq have increased, planning is underway for the resumption of drilling, with a well expected to spud around the end of 2022

PRE-PRODUCTION

  • Qara Dagh (40% working interest and operator)
    • The evaluation of the QD-2 well and its results is underway, with a decision on licence next steps to be taken later this year
  • Somaliland (51% working interest and operator)
    • Following the successful farm-out in December 2021, preparation is under way for the drilling of a well on the highly prospective SL10B13 block around the end of 2023
  • Morocco (75% working interest and operator)
    • Petroleum Agreement and Association Contract expected to be signed with ONHYM in Q2 2022, with a farm-out programme scheduled to begin later this year

ESG

  • Genel's 2021 Sustainability Report has been issued today, detailing our environmental performance and the positive impact that we strive to have on the communities in which we operate. 2021 highlights include:
    • 11 social investment and community projects funded and delivered in 2021
    • Zero waste to landfill from operations at Sarta, with 92% recycled
    • Renewable energy feasibility study progressing at Sarta
  • Genel is marking twenty years of operating in the KRI with its Genel20 programme, increasing the scope of our social activities, including a new education initiative set to be launched next week at an event in Dohuk

2022 OUTLOOK AND GUIDANCE

  • Guidance reiterated, with production for 2022 at around the same level as the 2021 average
  • The Board is recommending the approval of a final dividend of 12¢ per share (2021: 10¢ per share) at today's AGM, a distribution of $33.5 million, as we continue to fulfil our aim of paying a progressive dividend

(Source: Genel Energy)

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Shares in Genel Energy slump on Sarta Result

By John Lee.

Shares in Genel Energy were trading down 7 percent on Tuesday morning after the company announced disappointing results at the Sarta-5 appraisal well:

"Genel Energy plc ('Genel' or 'the Company') announces the following update on the Sarta PSC (30% working interest and operator).

"Testing of the Sarta-5 appraisal well has been completed. While oil was recovered to surface from a number of intervals, notably c.800 bbls of light oil from the Najmah formation, stable and sustained commercial flow of oil was not achieved from the primary reservoir objectives of the Mus and Adaiyah formations nor the secondary Lower Sargalu or Najmah formations. None of the intervals tested were able to support sustained flow of reservoir fluids, indicating that the reservoirs at this location are tight. This was identified as a critical pre-drill risk of this appraisal well.

"The presence of oil associated with both the primary and secondary Jurassic reservoir intervals, 12 km southeast of the Sarta pilot EPF, will now be subject to further investigation and integration into the joint venture's understanding of the Sarta field and future planning. The well will now be suspended according to KRI regulations.

"The Sarta appraisal programme continues at Sarta-6, c.6 km to the west of the pilot EPF, with test results expected in Q3."

(Source: Genel Energy)

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Nazli Williams steps down as Director of Genel Energy

By John Lee.

Genel Energy has announced that Nazli K. Williams has tendered her resignation as a Non-Executive Director of the company with effect from 13 April 2022.

David McManus, Chairman of Genel, said:

"Nazli has been a Director of Genel since the merger with Vallares in 2011. She has provided both valuable contributions and important continuity to Board considerations during her time on the Board.

"I thank her for her commitment to the company over the last decade and wish her the very best for her future endeavours."

(Source: Genel Energy)

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Genel Energy outlines Payments to Govts for 2021

By John Lee.

Genel Energy has just published details of its payments to governments for the year 2021:

Introduction and basis for preparation

This report sets out details of the payments made to governments by Genel Energy plc and its subsidiary undertakings ('Genel') for the year ended 31 December 2021 as required under the Disclosure and Transparency Rules of the UK Financial Conduct Authority (the 'DTRs') and in accordance with our interpretation of the Industry Guidance issued for the UK's Report on Payments to Governments Regulations 2014, as amended in December 2015 ('the Regulations'). The DTRs require companies in the UK and operating in the extractives sector to publically disclose payments made to governments in the countries where they undertake exploration, prospection, development and extraction of oil and natural gas deposits or other materials.

Governments

All of the payments made in relation to licences in the Kurdistan Region of Iraq ('KRI') have been made to the Ministry of Natural Resources of the Kurdistan Regional Government ('KRG').

Production entitlements

Production entitlements are the host government's share of production during the reporting period from projects operated by Genel. Production entitlements from projects that are not operated by Genel are not covered by this report. The figures reported have been produced on an entitlement basis rather than on a liftings basis. Production entitlements are paid in-kind and the monetary value disclosed is derived from management's calculation of revenue from the field.

Royalties

Royalties represent royalties paid in-kind to governments during the year for the extraction of oil. The terms of the Royalties are described within our Production Sharing Contracts and can vary from project to project. Royalties have been calculated on the same barrels of oil equivalent basis as production entitlements.

Materiality threshold

Total payments below £86,000 made to a government are excluded from this report as permitted under the Regulations.

Payments to governments - 2021

Country/Licence KRI Total (1) Taq Taq (2)
Production entitlement (bbls) 1,234,564.87 1,234,564.87
Royalties in kind (bbls) 216,930.95 216,930.95
Total (bbls) 1,451,495.82 1,451,495.82
Value of production entitlements ($ million) 78.52 78.52
Value of royalties ($ million) 13.74 13.74
Capacity building payments ($ million) (3) 1.25 1.25
Total ($ million) 93.51 93.51
  1. Under the lifting arrangements implemented by the KRG, the KRG takes title to crude at the wellhead and then transports it to Ceyhan in Turkey by pipeline. The crude is then sold by the KRG into the international market. All proceeds of sale are received by or on behalf of the KRG, out of which the KRG then makes payment for cost and profit oil in accordance with the PSC to Genel, in exchange for the crude delivered to the KRG. Under these arrangements, payments are in fact made by or on behalf of the KRG to Genel, rather than by Genel to the KRG. For the purposes of the reporting requirements under the Regulations however, we are required to characterise the value of the KRG's entitlement under the PSC (for which they receive payment directly from the market) as a payment made to the KRG. Therefore, estimated value in $millions is not paid to the KRG, and is calculated to meeting the reporting requirements under the regulations
  2. The amount reported for Taq Taq, is the gross payment made to the KRI by the operating company (TTOPCO), Genel's share of these payments is equal to 55% (with the exception of capacity building payments)
  3. Capacity building payments reported are payments made by Genel directly to the KRI in cash as required by the PSC.

(Source: Genel Energy)

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Genel Results: $400m Impairment, but Increased Divi

Genel Energy has announced its audited results for the year ended 31 December 2021.

Bill Higgs, Chief Executive of Genel, said:

"Our strategy and business model remain focused on cash generation. Prior to the invasion of Ukraine and the associated increase in the oil price, we were well positioned for our free cash flow to materially increase from $86 million in 2021 to around a quarter of a billion dollars this year. At the prevailing oil price, and given that there seems no quick resolution to the appalling events unfolding, this figure is expected to increase significantly.

"The forecast extent of our cash generation, from an existing position of financial strength, provides the potential to deliver significant growth and further returns to shareholders. Our priority is investment in production to maximise the value of our existing assets, and continuing to develop Sarta. Given the strong outlook and ongoing cash generation, we have increased our final dividend by 20%, continuing to fulfil our aim of paying a material and progressive dividend."

Results summary ($ million unless stated)

2021 2020
Average Brent oil price ($/bbl) 71 42
Production (bopd, working interest)  31,710  31,980
Revenue  334.9  159.7
EBITDAX1  275.1  114.6
  Depreciation and amortisation  (172.8)  (153.7)
  Exploration expense - (2.2)
  Impairment/write off of oil and gas assets (403.2) (286.3)
  Reversal of impairment / (impairment) of receivables 24.1 (36.9)
Operating loss (276.8) (364.5)
Cash flow from operating activities 228.1 129.4
Capital expenditure 163.7 109.7
Free cash flow2 85.9 (4.4)
Cash 313.7 354.5
Cash after settlement of bonds3 313.7 273.5
Total debt after settlement of bonds3 280.0 280.0
Net cash4 43.9 6.2
Basic LPS (¢ per share) (111.4) (152.0)
Underlying EPS / (LPS) (¢ per share)5 25.8 (34.2)
Dividends declared relating to financial year (¢ per share) 18 15
  1. EBITDAX is operating loss adjusted for the add back of depreciation and amortisation ($172.8 million), write-off of oil and gas assets ($403.2 million) and reversal of impairment on receivables ($24.1 million)
  2. Free cash flow is reconciled on page 12
  3. In December 2020, the Company gave notice to call the residual nominal $77.1 million of its 2022 bonds and thereby reduce its gross debt balance to $280.0 million. Under the terms of the bond settlement this took place on 8 January 2021 and reduced cash by $81.0 million
  4. Reported cash less IFRS debt (page 13)
  5. Underlying EPS / (LPS) is loss and total comprehensive income / (expense) adjusted for the add back of impairment / write-off of intangible assets, impairment of property, plant and equipment and reversal of impairment / (impairment) of receivables divided by weighted average number of ordinary shares

Highlights

  • Net production averaged 31,710 bopd in 2021 (2020: 31,980 bopd)
  • $281 million of cash proceeds were received from the KRG in 2021 (2020: $173 million)
  • Capital expenditure of $164 million (2020: $110 million), with c.$45 million spent at the Tawke PSC and c.$105 million at Sarta and Qara Dagh
  • Free cash flow of $86 million in 2021, pre dividend payments (2020: $4 million free cash outflow)
  • Following the termination of the Bina Bawi and Miran PSCs by Genel on 10 December 2021, there has been a required accounting write off of $403 million arising from derecognition of associated assets and liabilities. Genel has consequently taken steps to bring a claim for substantial compensation from the KRG at a private London seated international arbitration
  • Dividends paid in 2021 of 16¢ per share (2020: 15¢ per share), a total distribution of $44 million
  • Cash of $314 million at 31 December 2021, net cash of $44 million ($6 million at 31 December 2020)
  • Carbon intensity of 16 kgCO2e/bbl for scope 1 and 2 emissions in 2021, significantly below the global oil and gas industry average of 20 kgCO2e/boe

Outlook

  • Production guidance for 2022 maintained at around the same level as the 2021 average
    • Sarta-1D entered production on 8 March, at an initial rate of c.2,500 bopd
  • Genel expects free cash flow of over $250 million in 2022, pre dividend payments, at a Brent oil price of $90/bbl
    • An increase or decrease in Brent of $10/bbl impacts annual cash flow by c.$50 million
    • Cash flow in 2022 benefits from 10 Tawke override payments, with the last one set to be paid relating to July 2022 production
  • 2022 capital expenditure guidance maintained as between $140 million and $180 million
  • 2022 marks 20 years since Genel signed its first PSC in the KRI. We will be marking the year by increasing the scope of our social investments under the Genel20 banner, in line with UN Sustainable Development Goals
  • Due to Genel's robust financial position and confidence in the Company's future prospects, the Board is recommending a final dividend of 12¢ per share (2021: 10¢ per share), a distribution of $33.5 million. This would bring ordinary dividends declared for 2021 as part of our sustainable and progressive dividend programme to 18¢ per share (15¢ per share relating to 2020 financial year), a total distribution of $50 million
    • Should the current oil price strength persist, Genel will consider incremental returns of cash to shareholders in addition to our commitment to a material and progressive dividend

(Source: Genel Energy)

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