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Genel Energy (LSE:GENL) was on the move today continuing its great run of late. At close of play it was up to 628p up 21.5p today. It would seem that the M&A talk just won’t go away and a rising oil price certainly helps.
As I highlighted on www.longovershort.com last week, Genel has world class assets, a world class management team and a very robust balance sheet. Taq Taq and Tawke are incredible assets of which both still have production increases to go, currently producing 142,000 bopd and 147,000 bopd (gross) respectively they will both have refining capabilities/export capabilities of 200,000 bopd by year end.
These assets are not the only reason I’m bullish on Genel. Its the gas assets that really excite me, Bina Bawi and Miran are going to be huge. They will form ‘the anchor’ of the KRG’s gas exports to Turkey with a potential capacity of 700 bcf a year, there is a lot of scope to export vast amounts of gas. Field Development plans should be done soon so watch this space.
There will be some consolidation in Kurdistan at some point, when regular payments for exported crude are received by the companies in the region it will give confidence and encourage larger companies to invest in Kurdistan. There are rumours that this is very close to happening and the share price will be vastly above its current level even on one large payment. My best guess is that Exxon or Chevron will be looking at Genel.
Its an interesting region to keep an eye on, although its high risk it has some very high reward attached to it. Genel is perfectly positioned, its in a strong upward trend at the moment backed by a pick up in volume, I think at the very least this will continue to rise even without a takeover.
For a more in depth piece on Genel click here and check out www.longovershort.com for more research and investment ideas in the Oil & Gas sector.
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