Genel Losses Exceed $1bn

Genel Energy has announces its audited results for the year ended 31 December 2015, in which it declared its biggest-ever annual loss of $1.16 billion:

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Key figures

  • 2015 revenue of $344 million, down 34% due to the fall in the oil price more than offsetting higher production volumes
  • 2015 production of 84,900 bopd, an increase of 22% on 2014
  • Impairment expense of $1,038 million recognised in relation to the Taq Taq PSC
  • 2015 capital expenditure of $157 million, a reduction of 77% year-on-year
  • KRI cash proceeds of $148 million during 2015
  • Cash balances at 31 December 2015 stood at $455 million (2014: $489 million)

Outlook

  • Production and revenue guidance for 2016 is maintained at 60-70,000 bopd, and $200-275 million assuming a $45/bbl Brent oil price and at $160-220 million assuming a $35/bbl Brent oil price
  • KRI capital expenditure guidance for 2016 is unchanged at $80-120 million
  • The KRG Ministry of Natural Resources’ statement of 1 February 2016 commits to regular and predictable oil export payments, based on monthly production entitlement
  • Additional monthly payments, initially equivalent to five percent of the gross monthly netback revenue of fields and set to rise as the oil price rebounds, will be made towards the recovery of the receivable
  • Regarding the gas development, contract awards are expected in April 2016 for the midstream pre-FEED,  technical consultancy study package, and the upstream development plan

Murat Özgül (pictured), Chief Executive of Genel, said:

“We recognise and share the disappointment of the recent Taq Taq reserves update. Both Taq Taq and Tawke remain low-cost oil fields by any global benchmark. The fields are set to be significantly cash generative going forward, with a discretionary investment programme aiming to maximise the value of the remaining reserves.

“Our 264 million barrels of net 2P reserves comprise a robust oil business well positioned in the current oil price environment.

“The instigation of the new payment mechanism by the KRG Ministry of Natural Resources in February 2016 provided clarity over the timing and quantum of our monthly receipts for export payments, recognising our receivable and putting in place the process through which it will be recovered.

“We are now starting to make real progress in the development planning for our KRI gas business. It remains a unique opportunity underpinned by a government signed gas sales agreement.”

(Source: Genel Energy)

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