DJ Genel Energy PLC: Trading and operations update
Genel Energy PLC (GENL)
Genel Energy PLC: Trading and operations update
14-Nov-2023 / 07:00 GMT/BST
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14 November 2023
Genel Energy plc
Trading and operations update
Genel Energy plc ('Genel' or 'the Company') issues the following trading and operations update in respect of the third
quarter and first nine months of 2023.
Paul Weir, Chief Executive of Genel, said:
"Despite encouraging comments from senior politicians, the Iraq-Türkiye pipeline remains shut. Good progress has been
made in achieving consistency of domestic sales volumes, although pricing continues to be weak. We remain confident
that the pipeline exports will resume, and provide access again to international pricing.
We are on track to deliver the cost reductions that we forecast at our half-year results. Tawke is now cash generative
from local sales, and monthly spend across the business is set to reduce further once we have exited the Sarta licence
and completed Somaliland civil works. This year we have reduced debt by almost 10% at opportunistic prices while
retaining our significant cash balance, providing us with the financial strength to deliver on our objectives and
diversify through the addition of resilient income streams.
We will continue to reshape our portfolio and effectively balance minimising our spend and progressing our strategy,
and we continue to progress towards the Miran and Bina Bawi arbitration hearing currently scheduled for February next
year."
Q3 2023
-- Zero lost time incidents in 2023, with it being over two years and four million hours worked since the
last incident
-- USD11 million of cash proceeds received from local sales from the Tawke PSC in Q3
- Costs have been materially reduced at Tawke, with the asset profitable in the quarter
-- Capital expenditure of USD12 million in Q3
-- Cash of USD391 million at 30 September 2023 (USD425 million at 30 June 2023)
-- Net cash under IFRS of USD132 million at 30 September 2023 (USD158 million at 30 June 2023)
- Total debt of USD264 million at 30 September 2023 (USD273 million at 30 June 2023)
- Following completion of the bond buy-back tender earlier this month, and earlier purchases in the
market, Genel's total debt has been reduced by USD25 million in H2 2023, and now stands at USD248 million
-- USD110 million overdue from the Kurdistan Regional Government ('KRG') for past oil sales at the end of Q3
2023 OUTLOOK
-- Domestic sales from Tawke expected to increase in Q4
-- Genel expects capital expenditure to be c.USD70 million (compared to March 2023 guidance of USD100 to USD125
million), with USD60 million spent up to the end of Q3 2023
-- Activity in Q4 includes limited work ahead of exit of the Sarta PSC, civil work completion on the
Toosan-1 prospect in Somaliland, and continuing preparation for the Miran and Bina Bawi oil and gas arbitration
hearing, scheduled for February 2024
-- Genel will continue to review allocating capital towards the reduction of debt at opportunistic prices,
while not materially impacting the availability of capital for the addition of new cash-generative assets
UPDATE ON IRAQ-TÜRKIYE PIPELINE
-- The Iraq-Türkiye pipeline ('ITP') shut on 25 March 2023
-- While there continues to be positive language from the Federal Government of Iraq and Türkiye regarding
opening, Genel has received no guidance from the KRG regarding the status or timing of the pipeline reopening
-- The Association of the Petroleum Industry of Kurdistan ('APIKUR'), of which Genel is a member, met with
the Federal Government of Iraq's ('FGI') Ministry of Oil last week
- The members of APIKUR have committed to continuing to work with the FGI and the KRG to resume full
production and export through the ITP for the benefit of all stakeholders
OPERATIONS
Gross production Net production Gross production Net production
(bopd)
Q3 2023 Q3 2023 YTD 2023 YTD 2023
Tawke 25,980 6,500 39,710 9,930
Taq Taq 0 0 1,820 800
Sarta 0 0 1,060 320
Total 25,980 6,500 42,590 11,050
-- Tawke PSC (25% working interest)? Having begun in July, gross local sales from the Tawke licence in Q3 2023 totalled 13,300 bopd, withno export sales, and the balance of production delivered to the KRG as its entitlement - Production and sales continue to increase, with production in the fourth quarter so far averagingdouble the level of the third quarter, with the Peshkabir field having restarted production on 16 October - Local sales are currently more than covering costs at the licence
-- Sarta (30% working interest and operator)? Genel and its partner, Chevron, informed the Ministry of Natural Resources ('MNR') in Q2 2023 of itsintention to surrender the Sarta asset and thereby terminate the Sarta PSC, with the date of PSC termination 1December 2023, and limited remediation activity expected to be low-cost and completed in Q1 2024 - Genel's share of the limited amount of oil in storage at the field has been sold into the localmarket
-- Taq Taq PSC (44% working interest and joint operator)? There has been no production since 20 May 2023, following closure of the export pipeline
-- Somaliland? Civil work on the Toosan-1 well site continues on the SL10B13 block (51% working interest andoperator) and is on track for the planned work for this year to be completed within budget and on time - As previously stated the Company will assess timing of further investment based on the financialoutlook at the time
-- Morocco? The farm-out programme on the Lagzira block (75% working interest and operator) is ongoing
ARBITRATION
-- The London-seated international arbitration regarding Genel's claim for substantial compensation from theKRG following the termination of the Miran and Bina Bawi PSCs is progressing. The two-week hearing is currentlyscheduled for February 2024
-- The KRG's claim is that the KRG was entitled to terminate the Bina Bawi and Miran PSCs. Genel's claim isthat the KRG's termination of the PSCs was repudiatory and, as a consequence, is claiming substantial damages. TheKRG is not claiming any damages from Genel
Genel will also host a live presentation on the Investor Meet Company platform today at 1000 GMT. The presentation is open to all existing and potential shareholders. Questions can be submitted at any time during the live presentation. Investors can sign up to Investor Meet Company for free and add to meet Genel Energy PLC via: https:// www.investormeetcompany.com/genel-energy-plc/register-investor
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For further information, please contact:
Genel Energy
+44 20 7659 5100
Andrew Benbow, Head of Communications
Vigo Consulting
+44 20 7390 0230
Patrick d'Ancona
This announcement includes inside information.
Notes to editors:
Genel Energy is a socially responsible oil producer listed on the main market of the London Stock Exchange (LSE: GENL, LEI: 549300IVCJDWC3LR8F94), with an asset portfolio that positions us well for a future of fewer and better natural resources projects. Genel has low-cost and low-carbon production from the Kurdistan Region of Iraq, and continues to seek opportunities to add new resilient and cash-generative assets to its portfolio. For further information, please refer to www.genelenergy.com
----------------------------------------------------------------------------------------------------------------------- Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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ISIN: JE00B55Q3P39, NO0010894330 Category Code: TST TIDM: GENL LEI Code: 549300IVCJDWC3LR8F94 Sequence No.: 284577 EQS News ID: 1772249 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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(END) Dow Jones Newswires
November 14, 2023 02:00 ET (07:00 GMT)
