On 7 January 2013, Genel Energy received permission from the Kurdistan Regional Government to export crude oil from Taq Taq into Turkey by truck. This authority is consistent with the Iraqi Constitution of 2006, the Kurdistan oil and gas law of 2007 and the PSC governing operations at Taq Taq. Initial volumes are small but the Company expects these to grow to c20,000 bopd over the next six to eight weeks.
Total sales revenue for 2012 is expected to be c$330 million, which is ahead of previous guidance. This includes $132 million received on 3 December 2012 from the KRG, which represents part of the total amount owed to Genel Energy for unpaid historic export revenues. This receipt has been recognised as revenue in 2012 in accordance with the Company's accounting policy for export revenues, which are recognised only on receipt of cash.
Capital Expenditure
Capital expenditure for 2012 was in line with previous guidance at c$230 million, and was fully funded by cash generated from current operations in the Kurdistan Region. Based on current plans, capital expenditure for 2013 is forecast to be circa $400-$500 million. In line with the Company's stated strategy, Genel Energy will continue to fund development and exploration in the Kurdistan Region with cash from current operations. Capital expenditure in 2013 for the African portfolio is expected to be in the region of c$110 million which will be funded from the Company's existing cash resources of c$1 billion.
Exploration - Kurdistan
Genel Energy's current exploration programme in the Kurdistan Region comprises three high impact wells which will complete in the first half of 2013, targeting over 750 mmboe of gross unrisked resource. Tawke Deep and Chia Surkh 10 are currently drilling on schedule with results expected by the end of the first quarter. A third well (Taq Taq Deep) will spud in the next couple of months.
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