Genel Releases Full Year Results

Commenting today Tony Hayward (pictured), chief executive, said:

2013 was a transformational year for Genel Energy, with delivery on our strategy providing a material change in our business. We had success with all three exploration wells in the KRI and this, combined with positive appraisal results, increased proven, probable and contingent resources by 20% to 1.5 bnboe. Operational momentum was matched by political developments. The completion of the KRI oil pipeline has helped to create the platform for a 50% increase in production in 2014, with greater access to international pricing, while the signature of a gas sales agreement between the KRG and Turkish government provides the route to market for our very large KRI gas resource.

“In Africa we have begun a high-impact exploration programme targeting over 900 mmboe of prospective resource this year, with the first well underway in Morocco and a further three to follow in Malta and Morocco. Each well has the potential to make a material impact on our already significant reserve and resource base.

“The Company remains very well-funded with $700m of cash on the balance sheet, giving us significant financial firepower to invest in new upstream opportunities as and when they emerge.

The company also gave the following update on its interests in Iraqi Kurdistan:

KRI OIL ASSETS

Taq Taq (44% working interest, joint operator)

The Taq Taq field produced an average of 77,000 bopd in 2013, compared to 75,500 bopd in 2012. Trucked exports to international markets via Turkey commenced in January 2013 and steadily increased over the year, and on certain days in the second half of 2014 reached approximately 70,000 bopd. Over the course of the year exports averaged 20,000 bopd. The remainder of production was sold into the local market. Domestic market demand for Taq Taq crude remains robust. However, sales were impacted in the fourth quarter of 2013 by a fire at the tanker loading station. As a consequence the facility operated at a reduced rate through much of November and December. Full operating capability was restored towards the end of the year.

Processing capacity currently stands at 120,000 bopd, with a total wellhead production capacity in excess of 150,000 bopd. Upgrades to expand the tanker loading station were recently completed, raising capacity from 120,000 bopd to 150,000 bopd. The 2014 activity plan envisages the drilling of four further production wells, including a highly deviated well and the first horizontal well in the field. Construction of the second central processing facility is progressing and is targeted for completion in the fourth quarter of 2014, at which point processing capacity will increase to 200,000 bopd.

The Taq Taq Deep well, targeting Jurassic and Triassic intervals beneath the main producing Cretaceous oil reservoirs in the field, is drilling ahead. The well reached a depth of 4,600 metres in early February and has encountered around 300 metres of gas and condensate shows in the Jurassic. Unfortunately, mechanical difficulties necessitated pulling back to 4,100 metres and side-tracking to drill onto the deeper Triassic targets. The well is currently at 4,500 metres, and the forward plan is to drill to a maximum target depth of 5,400 metres. A testing programme is planned after drilling operations finish.

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