Genel Trading Update: “Operations Secure”

By John Lee.

Genel Energy has issued the following trading update and preview ahead of a capital markets day presentation for analysts and investors in London commencing at 14:00 GMT.

The presentation materials will be published at 12:00 GMT on www.genelenergy.com with the event broadcast live on the website, and available for download shortly afterwards.

Highlights

  • Genel and the Ministry of Natural Resources (“MNR”) of the Kurdistan Regional Government (“KRG”) have signed an agreement governing the development of the Miran and Bina Bawi gas fields, materially de-risking the gas business and unlocking significant value
  • A total of c.23 million barrels of KRI pipeline crude have been exported from Ceyhan in 30 liftings, with a three month track record of predictable sales seeing 24 of these tankers sold and five en route to customers
  • The KRG has given a firm commitment to paying contractors in full, with an initial payment to be made in November 2014 and further payments to follow on a regular basis. A normalised payment mechanism is expected in Q1 2015 as increasing pipeline exports deliver budget equilibrium for the KRG
  • 2014 production and revenue guidance is unchanged at 60,000-70,000 boepd and revenue of $500-600 million
  • 2015 production guidance is set at 90,000-100,000 boepd and revenue guidance at $500-600 million, based on a Brent price of $80/bbl
  • Genel’s operations in the Kurdistan Region of Iraq (“KRI”) remain safe and secure

Production and Revenue

  • Net working interest production for the nine months ending September 2014 averaged 66,000 boepd, an increase of 47% on the nine months ending September 2013
  • Net working interest production for the third quarter of 2014 averaged 72,000 boepd, an increase of 36% on Q3 2013
  • In the third quarter of 2014, exports via truck and pipeline comprised 56% of sales, with the remaining volumes being monetised in the domestic market
  • In October, Taq Taq  set a record for gross daily production of 126,000 bopd and in November set a record for gross daily liftings of 136,000 bopd
  • Domestic sales realisations for Q3 2014 were $66/bbl for Taq Taq and $55/bbl for Tawke
  • 2014 production and revenue guidance unchanged at 60,000-70,000 boepd and revenue of $500-600 million
  • 2015 production guidance set at 90,000-100,000 boepd and revenue guidance at $500-600 million, based on an oil price of $80/bbl
  • A combination of low development and operating costs and Production Sharing Contract (“PSC”) structure creates a robust and resilient KRI business with low oil price sensitivity
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