TIDMGENL
RNS Number : 7501C
Genel Energy PLC
20 October 2015
20 October 2015
Genel Energy plc
Trading and operations update
Genel Energy plc ("Genel" or "the Company") issues the following
trading and operations update. The information contained herein has
not been audited and may be subject to further review.
Murat Özgül, Chief Executive of Genel, said:
"The third quarter of 2015 has been a turning point for Genel.
September's payment for exports, coupled with local sales, has
stabilised the receivable owed to us by the Kurdistan Regional
Government. An October payment for Taq Taq and Tawke is set to be
received imminently. With total exports from the Kurdistan Region
of Iraq again hitting record levels, and pipeline uptime improving,
we have confidence in the KRG's commitment to make regular payments
for oil exports."
FINANCIALS
-- Revenue for Q3 2015 of $77 million, with total revenue for
the first nine months of 2015 of $276 million
-- In the third quarter of 2015, the Company received cash
proceeds of $45 million, which included domestic Kurdistan Region
of Iraq ("KRI") sales proceeds and the September 2015 export
payment of $24.5 million. The receipt of the September payment led
to cash balances increasing by $7 million in the period to $481
million at 30 September 2015
-- A further payment for Taq Taq and Tawke exports of $24.5 million is expected imminently
-- Q3 2015 local sales proceeds of $20.5 million reflect Genel's
ability to divert production into the local market at short notice
during periods of export pipeline downtime
-- Total cash proceeds from KRI domestic and export sales for
the first nine months of 2015 were $95 million
-- In Q3 2015, crude oil realisations averaged $37/bbl, a 52%
decrease on Q3 2014, due to the impact of lower global oil
prices
- Pipeline export realisations for Taq Taq and Tawke are
estimated by Genel at $40/bbl and $35/bbl respectively. These
figures assume a sales discount at Ceyhan relative to Brent,
quality differentials for Taq Taq and Tawke, pipeline tariffs,
handling fees, and contingencies. Taq Taq deliveries to the Bazian
refinery realised an estimated $40/bbl. Once export payments
normalise, Genel will seek to reconcile these estimates with the
Kurdistan Regional Government ("KRG")
- Taq Taq domestic market sales realised $42/bbl
- Tawke domestic market sales realised $28/bbl
KURDISTAN REGION OF IRAQ OIL PRODUCTION
-- Net working interest production and sales for Q3 2015
averaged 86,100 bopd, an increase of 23% on Q3 2014 oil
production
-- Production and sales by field for Q3 2015 were as follows:
(bopd) Export Domestic Refinery Total Total Genel
via pipeline sales sales sales production net production
-------- -------------- --------- --------- -------- ------------ ----------------
Taq
Taq 71,000 13,100 29,100 113,200 113,100 49,800
-------- -------------- --------- --------- -------- ------------ ----------------
Tawke 120,600 21,100 3,500 145,200 145,200 36,300
======== ============== ========= ========= ======== ============ ================
Total 191,600 34,200 32,600 258,400 258,300 86,100
Note: Difference between production and sales relates to
inventory movements at both fields
-- Production and sales by field for the first nine months of 2015 were as follows:
(bopd) Export Domestic Refinery Total Total Genel
via pipeline sales sales sales production net production
-------- -------------- --------- --------- -------- ------------ ----------------
Taq
Taq 77,700 15,200 30,700 123,600 123,300 54,300
-------- -------------- --------- --------- -------- ------------ ----------------
Tawke 109,700 20,400 3,800 133,900 134,600 33,600
======== ============== ========= ========= ======== ============ ================
Total 187,400 35,600 34,500 257,500 257,900 87,900
-- Flexibility in our activity programmes allowed for
expenditure at Taq Taq and Tawke to be tailored to reflect the
delay in export payments. As a result, Taq Taq and Tawke production
has declined from the peaks reached in Q2 2015. In October to date,
Taq Taq has produced at an average gross rate of 107,000 bopd and
Tawke 142,000 bopd
-- The Company's 2015 production guidance is accordingly revised
to 85-90,000 bopd (from 90-100,000 bopd) and 2015 revenue guidance
narrowed to $350-375 million (from $350-400 million) assuming a
Brent oil price of $50/bbl in Q4 2015
-- The receipt of predictable export payments in line with PSC
entitlements would allow Genel to deliver the investment required
to increase production
-- At Taq Taq, completion and commissioning of the second
central processing facility, which has planned capacity of 90,000
bopd, is on track for year-end 2015
-- Production from Taq Taq and Tawke is not constrained by pipeline capacity
KRI GAS OPERATIONS
-- On 22 September 2015, Genel completed the acquisition of
OMV's 36% operated stake in the Bina Bawi field. The consideration
comprised an upfront payment of $5 million. A contingent payment of
$70 million is payable once gas production exceeds agreed threshold
volumes from the Miran and Bina Bawi fields. A further contingent
payment of $75 million is payable two years after the date of the
second payment
-- Genel continues to make progress towards converting the
detailed term sheets on the proposed upstream production sharing
contract amendments and gas supply agreements into fully termed
documents. These are still expected to be signed before year-end
2015
-- ING Bank has been appointed to act as financial advisor on
the midstream debt financing, which is targeted to be in place by
the end of 2016, with a final investment decision to be taken
shortly thereafter
CAPEX AND BALANCE SHEET
-- Capital expenditure of $23 million was incurred in Q3 2015,
the majority of which was spent on the Taq Taq and Tawke
development programmes. Capital expenditure for the nine months
ending September 2015 totalled $116 million
-- 2015 capex guidance is revised to $150-175 million (from
$150-200 million), due to optimisation of KRI activity on the back
of delayed export payments
-- The net receivable with the Kurdistan Regional Government is
estimated at $409 million at 30 September 2015 (from $378 million
at 30 June 2015)
-- Net debt at 30 September 2015 stood at $211 million (from $216 million at 30 June 2015)
-- On the assumption that further export payments are broadly in
line with that received in September, the Company does not expect
further significant increases in the receivable in 2015
AFRICA EXPLORATION
-- Drilling on the CI-508 licence (Genel 24% working interest)
offshore Côte d'Ivoire is set to commence towards the end of 2015
on the Aigle prospect. The well, which is targeting significant oil
prospectivity in stacked Cretaceous reservoirs, will take
approximately 50 days to complete at an estimated future cost of
$10 million net to Genel, which will largely be payable in 2016
-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 7016 9573
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). The Company, with headquarters in London and
offices in Ankara and Erbil, is the largest independent oil
producer and the largest holder of reserves and resources in the
Kurdistan Region of Iraq and, through its Miran and Bina Bawi gas
fields, is set to be a cornerstone provider of 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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