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18 Jan 2013 07:00
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18 January 2013
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Genel Energy plc
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Trading and Operational Update
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Genel Energy plc ("Genel Energy" or the "Company") issues the following trading and operational update in advance of the Company's 2012 full year results, which are scheduled for release on 28 February 2013. Information contained within this release is un-audited and may be subject to further review.
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Commenting today, Tony Hayward, Chief Executive said:
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"2012 saw a strong production performance and a materially expanded exploration portfolio which will provide us with significant opportunities in 2013, both in the Kurdistan Region of Iraq and Africa. We expect revenues to be ahead of previous guidance and all development and exploration activities in Kurdistan to be funded from cash flow generated locally in line with our stated strategy. We are today exporting oil to Turkey in accordance with the authority granted to us by the Kurdistan Regional Government and as the largest independent operator in Kurdistan,Β are well placed to take advantage of regional opportunities for a broader export market as the political situation continues to develop."
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Production
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Genel Energy's average net working interest production for the full year 2012 was in line with guidance at 44,500 bopd (2011: 42,000 bopd). During the course of the year production from Genel Energy's two producing assets, Taq Taq and Tawke, has been sold into both domestic and export markets.
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In response to the uncertainty regarding the receipt of the second payment for historic exports owed from the Federal Government of Iraq, Genel Energy, along with other international operating companies, began reducing exports in mid-November and switched sales of production back into the domestic market realising prices through December above $70/bbl. Through the first two weeks of January, Taq Taq production has averaged 89,000 bopd gross and on 4 January hit a high of 109,000 bopd.Β
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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.
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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.
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Capital ExpenditureΒ
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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.
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Exploration - Kurdistan
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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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-ends-
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For further information, please contact:
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Genel Energy Julian Metherell, Chief Financial Officer Natalie Fortescue, Investor Relations | +44 20 7659 5100 |
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M: Communications Patrick d'Ancona Andrew Benbow | +44 20 7920 2330 |
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Notes to editors:
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Genel Energy is an independent oil and gas exploration and production company listed on the main market of the London Stock Exchange (LSE: GENL). The company, with headquarters in London and additional offices in Ankara and Erbil, is the largest independent oil producer and the largest holder of reserves in the Kurdistan Region of Iraq. For further information, please refer to www.genelenergy.com
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Disclaimer:
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This announcement contains operational and financial information in relation to the Full Year 2012 that is subject to final review and has not been audited. Furthermore it contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil & gas exploration and production business. Whilst the Company believes the expectations herein to be reasonable, the actual outcome may be materially different owing to factors either within or beyond the Company's control, and accordingly no reliance may be placed on the figures contained in such forward looking statements.
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