REG-Genel Energy PLC Genel Energy PLC: Audited results for the year ended 31 December 2024
18/03/2025 07:15
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Genel Energy PLC (GENL)
Genel Energy PLC: Audited results for the year ended 31 December 2024
18-March-2025 / 07:00 GMT/BST
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18 March 2025
Genel Energy plc
Audited results for the year ended 31 December 2024
Genel Energy plc (‘Genel’ or ‘the Company’) announces its audited results
for the year ended 31 December 2024.
Paul Weir, Chief Executive of Genel, said:
“In 2024, we demonstrated further progress on our journey of building
towards delivering resilient, diversified cash flows. Our shift from cash
outflow in 2023 to cash generation in 2024 has been important, and in 2025
we expect the cash generated by the Tawke PSC to continue to cover our
costs. We are delighted to have established a footprint in the Sultanate
of Oman, through our award of an interest in Block 54. This is the first
step on our roadmap to diversification.
For 2025, we remain focussed on three principal objectives: maintenance of
a strong balance sheet; resilient cash generation from the core business;
and the addition of new assets.
For new assets, we will seek both to increase that footprint in Oman, and
also acquire assets in other preferred jurisdictions that we have
identified as attractive to Genel, with a focus on adding production
assets that increase the cash generation and resilience of the business,
and provide potential for further growth.
In the Kurdistan Region of Iraq (‘KRI’) we continue to work with our peers
and the Regulator towards the restart of exports on the right terms to
ensure our contracts are honoured and we are paid what we are due.”
Results summary ($ million unless stated)
2024 2023
Average Brent oil price ($/bbl) 81 82
Average realised price per barrel 35 47
Production (bopd, working interest) 19,650 12,410
Revenue 74.7 78.4
Production costs (17.6) (18.0)
EBITDAX1 1.1 33.3
Operating loss (52.4) (10.3)
Cash flow from operations 66.9 55.1
Capital expenditure 25.7 68.0
Free cash flow2 19.6 (71.0)
Cash 195.6 363.4
Total debt 65.8 247.8
Net cash3 130.7 119.7
Basic LPS from continuing operations (¢ per share) (22.5) (6.1)
1. EBITDAX is operating loss adjusted for the add back of depreciation
and amortisation, exploration expense, net write-off/impairment of oil
and gas assets and net ECL/reversal of ECL receivables
2. Free cash flow is reconciled on page 8
3. Reported cash less IFRS debt is reconciled on page 8
Highlights
• Working interest average production increased by 58% to 19,650 bopd
(2023: 12,410 bopd)
• All production sold into the domestic market at average $35/bbl
consistent with prior year (2023: $47/bbl, which included export sales
prices in Q1)
• Free cash flow of $20 million, compared to free cash outflow of $71
million last year
◦ Tawke free cash flow generation from domestic sales was over $70
million (2023: $28 million), benefiting from some offsetting and
also positive working capital movements of around $30 million
◦ Organisation cost reductions were offset by non-repeating costs
on arbitration, closing out unprofitable licences at Taq Taq and
Sarta, and finalising exit from Qara Dagh
• Closing net cash of $131 million, an increase from $120 million at the
start of the year
◦ Cash of $196 million (2023: $363 million), with bond debt reduced
from $248 million at the start of the year to $66 million at
year-end from buybacks and partial exercise of call option
◦ $107 million (under KBT pricing and excluding interest) remains
overdue from the Kurdistan Regional Government (‘KRG’) to the
Genel subsidiary Genel Energy International Limited (‘GEIL’) for
sales made in previous years. The Company owes the KRG around $50
million. We continue to work towards a plan for payment or
settlement of amounts owed, and appropriate adjustment for price
and interest
◦ We were disappointed that in December 2024 the subsidiary, Genel
Energy Miran Bina Bawi Limited (‘GEMBBL’), lost the arbitration
case brought against it by the KRG regarding the Miran and Bina
Bawi gas assets. As previously announced, the KRG is seeking a
costs award of over $36 million against GEMBBL
• Last week, the Company announced its award of an interest in Block 54
in the Sultanate of Oman. This new country entry is an important first
step towards strategic diversification of our business
• Average portfolio carbon intensity again expected to be under 14
kgCO2e/bbl, remaining below the current target for industry average
• Climate rating: maintained a CDP Climate score of B for a third
consecutive year
OUTLOOK
• With domestic sales demand at similar levels to last year and year to
date this year, the Company expects cash generation from the Tawke PSC
to cover its organisational costs
• The Company continues to progress towards building a business with a
strong balance sheet that delivers resilient, reliable, repeatable and
diversified cash flows that supports a dividend programme. The Company
objectives for the year on the path to building that business include:
◦ acquisition of new assets in Oman and other targeted jurisdiction
to add reserves and diversify our cash generation
◦ restart of exports to access international pricing
◦ recovery of net amounts owed by the KRG
◦ further progress towards drilling Toosan-1
• The Company has engaged Pareto Securities AS as Manager and Bookrunner
to arrange fixed income investor meetings. Subject to market
conditions and acceptable terms, a new senior unsecured bond issue
with a tenor of five years may follow
Enquiries:
Genel Energy
+44 20 7659 5100
Luke Clements, CFO
Vigo Consulting
+44 20 7390 0230
Patrick d’Ancona
Genel will host a live presentation via the Investor Meet Company platform
on Wednesday 19 March at 10.00 a.m. GMT. The presentation is open to all
investors. Questions can be submitted pre-event via your Investor Meet
Company dashboard or at any time during the live presentation. Investors
can sign up to Investor Meet Company for free and add to meet Genel Energy
PLC via:
1 https://www.investormeetcompany.com/genel-energy-plc/register-investor.
Investors who already follow Genel on the platform will automatically be
invited.
This announcement includes inside information.
Disclaimer
This announcement 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 reflected herein to be reasonable in light of the
information available to them at this time, the actual outcome may be
materially different owing to factors beyond the Company’s control or
within the Company’s control where, for example, the Company decides on a
change of plan or strategy. Accordingly, no reliance may be placed on the
figures contained in such forward looking statements.
CEO STATEMENT
We start 2025 leaner and more efficient, and with all the building blocks
necessary to establish a bigger and more successful business. Genel has a
strong balance sheet and our producing fields within the Tawke PSC form a
world-class asset that delivers significant cash generation even when
selling at heavily discounted domestic prices because of the suspension of
exports. This is a situation that we continue to work on closely with our
peers and host government to resolve. Genel has a compact but highly
skilled and motivated workforce, dedicated to executing our growth
strategy and pursuing value accretive acquisitions that will diversify our
geographical footprint within reliable and predictable jurisdictions.
In 2024, we continued with the cost reduction exercise and business
efficiency improvements that began in 2022. That process extended to
continuing the divestment process for non-profitable assets. Taq Taq
awaits only government approval before divestment is complete, and
relinquishment of our other non-producing legacy assets in the Kurdistan
Region of Iraq (‘KRI’) will also be completed soon.
Having delivered these improvements and trimmed our debt levels to improve
the capital efficiency of the business, it’s time to move on to the next
phase.
We are very clear on what needs to be done to deliver the appropriate
Company growth and deliver the shareholder returns that are necessary for
an emerging market exploration and production business. The period of
consolidation and efficiency improvement in 2024 must now give way to
profitable growth.
Genel is delighted to have taken the first step in its growth journey by
signing an EPSA in the Sultanate of Oman with OQ Exploration & Production
SAOG (‘OQEP’) as Operator, which will see us participate in the appraisal
and development of Block 54. This will see Genel spend modestly over the
next three years. The potential on the block is significant and while the
eventual returns are not certain at this stage, we believe this move will
lead to further exciting opportunities in the region. Oman is a
jurisdiction that Genel has long considered as a very attractive place to
do business and where we have been made very welcome by both our new
partner and the regulator.
Back in the KRI, together with our operating partner DNO, we have helped
establish a reliable and consistent domestic sales market, which generates
very important cash for producers there, albeit at a heavily discounted
price. Tawke production currently realises only around $35/bbl, which is
well below relevant reference benchmark oil prices. With our peers in the
KRI, we continue to work with our host Government and Federal Iraqi
authorities to negotiate an arrangement that allows the resumption of
international oil sales at international oil prices and that provides
appropriate returns for those producing the oil. This has proved to be a
sporadic process, but most recent indicators suggest a solution should
soon be found; a solution that could double Genel revenue immediately upon
implementation.
We have worked hard with DNO to ensure spend and delivery performance are
optimised. The world-class field operating cost of only $4/bbl and
consistent production delivery throughout 2024 are testament to the
successful delivery performance of this asset.
We have put behind us the disappointment of the outcome of the arbitration
on the KRG’s termination of the legacy Miran and Bina Bawi licences, where
the London Court of International Arbitration ruled in favour of the KRG.
We have a clear direction of travel and specific targets that we are
pursuing to re-energise the business.
Outlook
The Company is focussed on delivering on three principal objectives:
Strong balance sheet
• We will retain an appropriate balance that provides protection against
outlook downside scenarios and maintain debt at a level that is
appropriate for the cash generation of the business
Resilient cash generation
• Realising the full potential of our existing portfolio which includes
delivering performance from the Tawke licence, an asset with a long
and profitable life ahead of it, and where many opportunities for
further investment exist, if conditions permit.
• Continuing to work with our peers, the Kurdistan Regional Government
(‘KRG’) and the Federal Government of Iraq (‘FGI’) to support the
resumption of international oil sales from the KRI
Investment in new cash flows
• Acquiring the right new assets to re-energise our portfolio and
deliver diversified, increased, and more resilient cash generation
that will enable us to re-establish a regular long-term dividend for
our shareholders
• We are also focused on establishing the right conditions to support
drilling the Toosan-1 exploration well in Somaliland
OPERATING REVIEW
Reserves and resources development
Genel's proven plus probable (2P) net working interest reserves totalled
82 MMbbls (31 December 2023: 89 MMbbls) at the end of 2024.
Remaining reserves Resources (MMboe)
(MMbbls)
Contingent Prospective
1P 2P 1C 2C Best
Gross Net Gross Net Gross Net Gross Net Gross Net
31 December 2023 245 63 338 89 13 3 39 10 4,580 2,964
Production (29) (7) (29) (7) - - - - - -
Acquisitions and - - - - - - - - - -
disposals
Extensions and - - - - - - - - - -
discoveries
New developments - - - - - - - - - -
Revision of previous - - - - - - - - 43 32
estimates
31 December 2024* 216 56 309 82 13 3 39 10 4,623 2,996
* Subject to final confirmation of Tawke PSC Reserves and Resources by the
Operator
Production
Working interest average production of 19,650 bopd for the year, increased
from 12,410 bopd in 2023.
All Genel production in 2024 came from the Tawke PSC and was sold into the
domestic market at average $35/bbl (2023: $47/bbl).
PRODUCING ASSETS
Tawke PSC (25% working interest)
Gross production from the Tawke licence averaged 78,615 bopd in 2024
(2023: 46,280 bopd), a significant improvement that demonstrates the
success in establishing consistent domestic market demand and the success
of the asset to meet that demand. In 2024, the Tawke PSC generated over
$70 million net cash flow for Genel, benefitting both from strong domestic
sales, positive working capital movements and offsetting.
Despite drilling no new wells this year, gross production from the Tawke
PSC has been maintained at consistent levels. This has been achieved by
careful and diligent subsurface and operations management. Three wells
that were drilled last year, but not completed due to the closure of the
pipeline, were brought onstream mid-year to meet demand from domestic
traders. Production performance was further supported by an active well
intervention programme.
In partnership with DNO, Genel continues to be part of the first
Associated Gas Injection (AGI) project in the Kurdistan Region of Iraq
(‘KRI’). Since its inception the project has saved approximately 2.3
million tonnes of CO2e from entering the atmosphere, with Tawke PSC carbon
emissions below the industry average.
Taq Taq (44% working interest, joint operator)
We divested our 44% working interest in the Taq Taq production sharing
contract to our joint venture partner. We have previously reported that
Taq Taq had been on care and maintenance since May 2023 because the asset
does not generate sufficient revenue at domestic sales prices to cover its
operating costs. Furthermore, accessing the 10.3mmbbls of remaining net 2P
reserves would require risking of further capital to drill new wells with
uncertain outcomes – investment that ranks low on the Company’s capital
allocation priorities. The terms of the exit leave the Company with
minimal residual financial obligations and potential liability exposures.
The transaction is subject to Kurdistan Regional Government approval.
PRE-PRODUCTION ASSETS
Somaliland - SL10B13 (51% working interest, Operator)
We continued to work with stakeholders towards the complete framework
required to support drilling the Toosan-1 exploration well. This included
optimisation of the well plan to reduce cost and maximise efficiency of
the well delivery process and consideration of the appropriate equity
level at which to be undertaking this activity. In the meantime, our
in-country team continued to work closely with our local communities.
Genel's Mobile Medical Clinic project in Somaliland, which provided vital
medical care for some of the poorest people in Africa, launched phase two
of the project in July, with a further 17,000 cases treated to take the
total cases treated to more than 35,000.
Somaliland – Odewayne (50% working interest, Operator)
We continued to work with our partners to characterise the prospectivity
of the block, with subsurface studies ongoing. We also continued to invest
in the local communities, and in February 2024 delivered educational
supplies to 1,000 primary and secondary school students across the block.
Morocco (Lagzira block - 75% working interest, Operator)
On the Lagzira block (75% working interest and operator), we are
continuing the farmout process, seeking partners to test the Banasa
Prospect, high graded, having been de-risked by 2024 seismic reprocessing.
FINANCIAL REVIEW
2024 financial priorities
The table below summarises our progress against the 2024 financial
priorities of the Company as set out in our 2023 results.
2024 financial priorities Progress
• Developed a consistent dependable
income stream through the domestic
sales market
• Reduced cost and divested Taq Taq PSC
Maintain business resilience and (subject to KRG approval)
balance sheet strength • Minimised cost of remediation on
Sarta and Qara Dagh PSCs
• Reduced debt by $182 million, with
associated decrease in interest cost
• Net cash of $131 million and cash of
$196 million at end of 2024
• Maintained competitive bond market
Ensure capital availability for pricing, indicating availability of
funding of key strategic debt capital when needed
objectives • Reduced cash levels through debt
reduction to improve capital
efficiency
• Continued reduction in organisation
to match needs of the business
Ensure appropriate capital • Deferred expenditure on non-cash
allocation generative projects
• Optimised processes and systems to
improve operational efficiency
Outlook and financial priorities for 2025
The key principles of our financial focus remain largely unchanged. We
have a resilient business model that is designed to mitigate the impact of
uncontrollable adverse events and maximise exposure to the upside.
Ultimately, we seek to build a business that generates resilient, diverse
and predictable cash flows that support resumption of distributions to
shareholders.
Maintain business resilience, balance sheet strength and capital
availability
A strong balance sheet protected by resilient cash generation is an
important component of our business model. It is particularly relevant at
the current time, with the lack of access to higher sales prices and
higher volumes that come from exports and the delayed receipt of amounts
owed to the Company. While the Iraq-Türkiye Pipeline (‘ITP’) remains
closed, we have protected the balance sheet and resilience of the business
by balancing the sources and uses of our cash flows. Actions taken to
reduce costs and restructure the organisation have set us up well, with
monthly organisation spend excluding the cash-generative Tawke PSC reduced
to under $3 million per month.
Domestic market sales since November 2023 have seen consistent and
reliable volumes and cash generation. The Tawke PSC is now well positioned
to continue to deliver stable and meaningful cash flows that will be
sufficient to cover our costs, and as a consequence we expect to retain
net cash similar to the year end 2024 balance of $131 million. Should the
pipeline open, then the subsequent establishment of regular payments would
materially boost our cash generation, with the receipt of our outstanding
receivable offering further significant upside.
Ensure appropriate capital allocation and deliver diversification of our
cash generation
Our capital allocation priorities remain maintenance of a strong balance
sheet, investment in the Tawke PSC and funding of the Company’s strategic
objectives in order to generate long-term value for shareholders.
The key priority within our strategic objectives is to add new assets to
our portfolio with a view to diversifying our cash generation. We have a
well-established process for evaluating opportunities combining rigorous
technical, operational and financial analysis and multiple scenarios
analysed and planned for to minimise the impact of downside risk and
maximise exposure to potential upside. We will retain our discipline and
ensure that any new assets offer the right characteristics and are located
in the right jurisdiction to support delivery on our strategy.
Financial results for the year
(all figures $ million) FY 2024 FY 2023
Brent average oil price ($/bbl) 81 82
Field level realised price per barrel ($/bbl) 35 47
Average price per working interest barrel ($/bbl) 10 20
Working interest production (bopd) 19,650 12,410
Cost oil 35.1 53.9
Profit oil 39.6 24.5
Revenue 74.7 78.4
Production costs (17.6) (18.0)
Production capex (23.0) (55.2)
Production business netback 34.1 5.2
Pre-production capex (2.7) (12.8)
G&A (excl. non-cash) (22.2) (25.0)
Net cash interest1 (7.0) (4.2)
Net expense from discontinued operations (10.2) (12.9)
Working capital and other 27.6 (21.3)
Free cash flow 19.6 (71.0)
Dividend paid - (33.5)
Purchases of own shares (2.4) (1.8)
Purchases of own bonds (185.0) (24.9)
Net change in cash (167.8) (131.2)
Opening cash 363.4 494.6
Cash 195.6 363.4
Debt reported under IFRS (64.9) (243.7)
Net cash 130.7 119.7
1 Net cash interest is bond interest payable less bank interest income
(see note 5)
Production of 19,650 bopd was significantly higher than last year (2023:
12,410 bopd) as a result of the establishment of consistent domestic
market demand for the full year. Domestic sales prices were broadly
consistent with 2023 at around $35/bbl, but 2023 benefited from export
sales in the first quarter meaning that overall average realised price was
down from $47/bbl. As a result, revenue is largely unchanged at $75
million compared to $78 million last year.
Production costs of $18 million were in line with the prior year (2023:
$18 million). Production capex has significantly reduced to $23 million
(2023: $55 million) as a result of significantly reduced activity after
the pipeline closure.
Pre-production capex of $3 million (2023: $13 million) were related to
Africa assets.
Cash general and administration costs were $22 million, lower than last
year (2023: $25 million) due to cost reductions.
Interest income of $16 million (2023: $21 million) and bond expense of $23
million (2023: $25 million) both decreased after bond buyback and partial
exercise of call option.
Income statement figures of Sarta and Taq Taq PSCs have been disclosed as
discontinued operations. Further details are provided in note 7 to the
financial statements.
EBITDAX and cash flow
(all figures $ million) FY 2024 FY 2023
EBITDAX 1.1 33.3
Interest received 15.8 20.6
Working capital 50.0 1.2
Operating cash flow 66.9 55.1
Producing asset cost recovered capex (21.7) (66.6)
Development capex - (22.2)
Exploration and appraisal capex (3.1) (9.7)
Interest and other (22.5) (27.6)
Free cash flow 19.6 (71.0)
EBITDAX of $1 million is lower than last year (2023: $33 million) as a
result of arbitration cost. EBITDAX is presented in order to illustrate
the cash operating profitability of the Company and excludes the impact of
costs attributable to exploration activity, which tend to be one-off in
nature, and the non-cash costs relating to depreciation, amortisation,
impairments, write-offs.
Free cash flow is presented in order to illustrate the free cash generated
for equity. Free cash flow was $20 million (2023: $71 million outflow)
with the increase from last year arising from higher proceeds being
received and lower capital expenditure.
Cash and debt
Cash of $196 million decreased from the start of the year (31 December
2023: $363 million) mainly as a result of $185 million bond buyback in the
year. The Company monitors its cash position, cash forecasts and liquidity
on a regular basis. The Company holds surplus cash in treasury bills, time
deposits or liquidity funds with a number of major financial institutions.
Suitability of banks is assessed using a combination of sovereign risk,
credit default swap pricing and credit rating.
The nominal value of bond debt was significantly reduced to $66 million
(2023: $248 million), which matures in October 2025 and has two financial
covenant maintenance tests:
Financial covenant Test YE 2024
Equity ratio (Total equity/Total assets) > 40% 60%
Minimum liquidity > $30 million $196 million
Net assets
Net assets at 31 December 2024 were $357 million (31 December 2023: $434
million) and consist primarily of oil and gas assets of $273 million (31
December 2023: $331 million), trade receivables of $85 million (31
December 2023: $93 million) and net cash of $131 million (31 December
2023: $120 million).
Going concern
The Directors have assessed that the Company’s forecast liquidity provides
adequate headroom over forecast expenditure for the 12 months following
the signing of the annual report for the year ended 31 December 2024 and
consequently that the Company is considered a going concern. Further
explanation is provided in note 1 to the financial statements.
The Company has net cash of $131 million at the balance sheet date.
Consolidated statement of comprehensive income
For the year ended 31 December 2024
Restated
2024 2023
Note $m $m
Revenue 2 74.7 78.4
Production costs 3 (17.6) (18.0)
Depreciation and amortisation of oil assets 3 (52.1) (37.0)
Gross profit 5.0 23.4
Exploration expense 3 (2.7) (0.1)
Arbitration cost 3 (32.2) -
Net write-off of intangible assets 3 - 1.2
Reversal of expected credit loss (‘ECL’)/(ECL) of 3 1.4 (7.6)
trade receivables
General and administrative costs 3 (23.9) (27.2)
Operating loss (52.4) (10.3)
Operating loss is comprised of:
EBITDAX 1.1 33.3
Depreciation and amortisation 3 (52.2) (37.1)
Exploration expense 3 (2.7) (0.1)
Net write-off of intangible assets 3 - 1.2
Reversal of ECL/(ECL) of trade receivables 3 1.4 (7.6)
Finance income 5 15.8 20.6
Bond interest expense 5 (18.2) (24.8)
Net other finance expense 5 (7.3) (2.4)
Loss before income tax (62.1) (16.9)
Income tax expense 6 (0.1) (0.2)
Loss and total comprehensive expense from continuing (62.2) (17.1)
operations
Loss from discontinued operations 7 (14.7) (44.2)
Loss and total comprehensive expense (76.9) (61.3)
Attributable to:
Owners of the parent (76.9) (61.3)
(76.9) (61.3)
Loss per ordinary share ¢ ¢
From continuing operations:
Basic 8 (22.5) (6.1)
Diluted 8 (22.5) (6.1)
From continuing and discontinued operations:
Basic 8 (27.8) (22.0)
Diluted 8 (27.8) (22.0)
Adjusted Basic LPS1 8 (27.6) (11.9)
1Adjusted basic LPS is loss and total comprehensive expense adjusted for
the add back of net impairment/write-off of oil and gas assets, net
ECL/reversal of ECL of receivables, and impairment loss on Taq Taq held
for sale asset divided by weighted average number of ordinary shares
Previous year’s figures have been restated for discontinued operation
disclosure in relation to Taq Taq PSC (see note 7).
Consolidated balance sheet
At 31 December 2024
2024 2023
Note $m $m
Assets
Non-current assets
Intangible assets 9 82.3 84.7
Property, plant and equipment 10,20 191.1 246.5
Trade and other receivables 11 60.9 66.5
334.3 397.7
Current assets
Trade and other receivables 11 27.2 34.0
Cash and cash equivalents 12 195.6 363.4
222.8 397.4
Assets in disposal groups classified as held for 7 41.8 -
sale
Total assets 598.9 795.1
Liabilities
Non-current liabilities
Trade and other payables 13,20 (0.2) (0.5)
Deferred income 14 - (8.2)
Provisions 15 (25.1) (45.2)
Interest bearing loans 16 - (243.7)
(25.3) (297.6)
Current liabilities
Trade and other payables 13,20 (109.6) (57.6)
Interest bearing loans 16 (64.9) -
Deferred income 14 - (6.0)
(174.5) (63.6)
Liabilities directly associated with assets in 7 (41.8) -
disposal groups classified as held for sale
Total liabilities (241.6) (361.2)
Net assets 357.3 433.9
Owners of the parent
Share capital 18 43.8 43.8
Share premium 3,863.9 3,863.9
Accumulated losses (3,550.4) (3,473.8)
Total equity 357.3 433.9
Consolidated statement of changes in equity
For the year ended 31 December 2024
Share Share Accumulated Total
capital premium losses equity
$m $m $m $m
Note
At 1 January 2023 43.8 3,897.4 (3,413.4) 527.8
Loss and total comprehensive - - (61.3) (61.3)
expense
Contributions by and
distributions to owners
Share-based payments 21 - - 2.7 2.7
Purchase of own shares for - - (1.8) (1.8)
employee share plan
Dividends provided for or 19 - (33.5) - (33.5)
paid1
At 31 December 2023 and 1 43.8 3,863.9 (3,473.8) 433.9
January 2024
Loss and total comprehensive - - (76.9) (76.9)
expense
Contributions by and
distributions to owners
Share-based payments 21 - - 2.7 2.7
Purchase of own shares for 18 - - (2.4) (2.4)
employee share plan
At 31 December 2024 43.8 3,863.9 (3,550.4) 357.3
1 The Companies (Jersey) Law 1991 does not define the expression
“dividend” but refers instead to “distributions”. Distributions may be
debited to any account or reserve of the Company (including share premium
account)
Consolidated cash flow statement
For the year ended 31 December 2024
Note 2024 2023
$m $m
Cash flows from operating activities
Loss for the year (76.9) (61.3)
Adjustments for:
Net finance expense 5,7 12.1 9.4
Taxation 6 0.1 0.2
Depreciation and amortisation 3,7 52.2 46.7
Exploration expense - 0.1
Reversal of accruals and provisions 3 (3.8) -
Net impairments, write-offs 3,7 0.8 28.1
Other non-cash items (royalty income and 1.9 0.8
share-based payment cost)
Changes in working capital:
Decrease in trade and other receivables 2.5 14.4
Increase / (decrease) in trade and other payables 62.3 (3.7)
Cash generated from operations 51.2 34.7
Interest received 5 15.8 20.6
Taxation paid (0.1) (0.2)
Net cash generated from operating activities 66.9 55.1
Cash flows from investing activities
Additions of intangible assets (3.1) (9.7)
Additions of property, plant and equipment (21.7) (88.8)
Net cash used in investing activities (24.8) (98.5)
Cash flows from financing activities
Dividends paid to the Company’s shareholders 19 - (33.5)
Purchase of own shares (2.4) (1.8)
Bond repayment 16 (185.0) (24.9)
Lease payments (0.7) (2.8)
Interest paid (21.8) (24.8)
Net cash used in financing activities (209.9) (87.8)
Net decrease in cash and cash equivalents (167.8) (131.2)
Cash and cash equivalents at 1 January 12 363.4 494.6
Cash and cash equivalents at 31 December 12 195.6 363.4
Notes to the consolidated financial statements
1. Summary of material accounting policies
Basis of preparation
Genel Energy Plc – registration number: 107897 (the Company), is a public
limited company incorporated and domiciled in Jersey with a listing on the
London Stock Exchange. The address of its registered office is 26 New
Street, St Helier, Jersey, JE2 3RA.
The consolidated financial statements of the Company have been prepared in
accordance with International Financial Reporting Standards as adopted by
the European Union and interpretations issued by the IFRS Interpretations
Committee (together ’IFRS’); are prepared under the historical cost
convention except as where stated; and comply with Company (Jersey) Law
1991. The material accounting policies are set out below and have been
applied consistently throughout the period.
The Company prepares its financial statements on a historical cost basis,
unless accounting standards require an alternate measurement basis. Where
there are assets and liabilities calculated on a different basis, this
fact is disclosed either in the relevant accounting policy or in the notes
to the financial statements.
Items included in the financial information of each of the Company's
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The
consolidated financial statements are presented in US dollars to the
nearest million ($ million) rounded to one decimal place, except where
otherwise indicated.
For explanation of the key judgements and estimates made by the Company in
applying the Company’s accounting policies, refer to significant
accounting judgements and estimates on pages 15 to 17.
Going concern
The Company regularly evaluates its financial position, cash flow
forecasts and its compliance with financial covenants by considering
multiple combinations of oil price, discount rates, production volumes,
payments, capital and operational spend scenarios.
The Company has reported cash of $196 million, with debt of $66 million
maturing in the second half of 2025 and significant headroom on both the
equity ratio and minimum liquidity financial covenants.
The International Chamber of Commerce in Paris ruling in favour of Iraq in
a long running arbitration case against Türkiye concerning the
Iraqi-Turkish pipeline agreement signed in 1973, resulted in exports
through the pipeline being suspended from 25 March 2023. As a result, the
Company is currently selling in the domestic market at lower prices and
lower volumes than are available from exports, with significantly reduced
cash generation.
The Directors have assessed that, even with continued suspension of
exports, the Company’s forecast liquidity provides adequate headroom over
its forecast expenditure for the 12 months following the signing of the
Annual Report for the period ended 31 December 2024 and consequently that
the Company is considered a going concern.
Consolidation
The consolidated financial statements consolidate the Company and its
subsidiaries. These accounting policies have been adopted by all
companies.
Subsidiaries
Subsidiaries are all entities over which the Company has control. The
Company controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to
the Company. They are deconsolidated from the date that control ceases.
Transactions, balances and unrealised gains on transactions between
companies are eliminated.
Joint arrangements and associates
Arrangements under which the Company has contractually agreed to share
control with another party, or parties, are joint ventures where the
parties have rights to the net assets of the arrangement, or joint
operations where the parties have rights to the assets and obligations for
the liabilities relating to the arrangement. Investments in entities over
which the Company has the right to exercise significant influence but has
neither control nor joint control are classified as associates and
accounted for under the equity method.
The Company recognises its assets, liabilities, income and expenses
relating to its interests in joint operations, including its share of
assets and income held jointly and liabilities and expenses incurred
jointly with other partners.
Significant accounting judgements and estimates
The preparation of the financial statements in accordance with IFRS
requires the Company to make judgements and estimates that affect the
reported results, assets and liabilities. Where judgements and estimates
are made, there is a risk that the actual outcome could differ from the
judgement or estimate made.
Significant judgements
There are no significant judgements that the Directors have made in the
process of applying the Group and Company’s accounting policies that
require additional disclosure not already provided under significant
estimates.
Significant estimates
The following are the critical estimates that the Directors have made in
the process of applying the Group and Company’s accounting policies and
that have the most significant effect on the amounts recognised in the
financial statements.
Estimation of hydrocarbon reserves and resources and associated production
profiles and costs
Estimates of hydrocarbon reserves and resources are inherently imprecise
and are subject to future revision. The Company’s estimation of the
quantum of oil and gas reserves and resources and the timing of its
production, cost and monetisation impact the Company’s financial
statements in a number of ways, including: testing recoverable values for
impairment; the calculation of depreciation, amortisation and assessing
the cost and likely timing of decommissioning activity and associated
costs. This estimation also impacts the assessment of going concern and
the viability statement.
Proved and probable reserves are estimates of the amount of hydrocarbons
that can be economically extracted from the Company’s assets. The Company
estimates its reserves using standard recognised evaluation techniques
which are based on Petroleum Resources Management System 2018. Assets
assessed as having proven and probable reserves are generally classified
as property, plant and equipment as development or producing assets and
depreciated using the units of production methodology. The Company
considers its best estimate for future production and quantity of oil
within an asset based on a combination of internal and external
evaluations and uses this as the basis of calculating depreciation and
amortisation of oil and gas assets and testing for impairment under IAS
36.
Hydrocarbons that are not assessed as reserves are considered to be
resources and the related assets are classified as exploration and
evaluation assets. These assets are expenditures incurred before technical
feasibility and commercial viability is demonstrable. Estimates of
resources for undeveloped or partially developed fields are subject to
greater uncertainty over their future life than estimates of reserves for
fields that are substantially developed and being depleted and are likely
to contain estimates and judgements with a wide range of possibilities.
These assets are considered for impairment under IFRS 6.
Once a field commences production, the amount of proved reserves will be
subject to future revision once additional information becomes available
through, for example, the drilling of additional wells or the observation
of long-term reservoir performance under producing conditions. As those
fields are further developed, new information may lead to revisions.
Assessment of reserves and resources are determined using estimates of oil
and gas in place, recovery factors and future commodity prices, the latter
having an impact on the total amount of recoverable reserves. Where the
Company has updated its estimated reserves and resources any required
disclosure of the impact on the financial statements is provided in the
following sections.
Estimation of oil and gas asset values (note 9 and 10)
Estimation of the asset value of oil and gas assets is calculated from a
number of inputs that require varying degrees of estimation. Principally
oil and gas assets are valued by estimating the future cash flows based on
a combination of reserves and resources, costs of appraisal, development
and production, production profile, climate-related risks, pipeline
reopening and future sales price and discounting those cash flows at an
appropriate discount rate.
Future costs of appraisal, development and production are estimated taking
into account the level of development required to produce those reserves
and are based on past costs, experience and data from similar assets in
the region, future petroleum prices and the planned development of the
asset. However, actual costs may be different from those estimated.
Discount rate is assessed by the Company using various inputs from market
data, external advisers and internal calculations. A post tax nominal
discount rate of 14% (2023: 14%) derived from the Company’s weighted
average cost of capital (WACC) is used when assessing the impairment
testing of the Company’s oil assets at year-end. Risking factors are also
used alongside the discount rate when the Company is assessing exploration
and appraisal assets.
Estimation of future oil price and netback price
The estimation of future oil price has a significant impact throughout the
financial statements, primarily in relation to the estimation of the
recoverable value of property, plant and equipment and intangible assets.
It is also relevant to the assessment of ECL, going concern and the
viability statement.
The Company’s estimate of average Brent oil price for future years is
based on a range of publicly available market estimates and is summarised
in the table below.
$/bbl 2024 2025 2026 2027 2028+
Actual / Estimate 80 75 75 75 75
HY2024 estimate 85 80 75 75 75
Prior year estimate 80 76 74 71 70
The netback price is used to value the Company’s revenue, trade
receivables and its forecast cash flows used for impairment testing and
viability. It is the aggregation of reference oil price average less
transportation costs, handling costs and quality adjustments.
Effective from 1 September 2022, sales have been priced by the MNR under a
new pricing formula based on the realised sales price for KRI blend crude
(‘KBT’) during the delivery month, rather than on dated Brent. The Company
has not agreed on this new pricing formula and continued to invoice on
Brent. The Company does not have direct visibility on the components of
the netback price realised for its oil because sales are managed by the
KRG, but the latest payments were based on the netback price provided by
the KRG. Therefore, the export revenue from 1 September 2022 was
recognised in accordance with IFRS15 using KBT pricing, resulting in the
recognition of $13 million less of revenue.
The export pipeline closure in March 2023 has resulted in volumes sold in
the domestic market starting in June 2023 on a cash and carry basis at
lower realised oil prices than previously achieved through export.
A sensitivity analysis of netback price on producing asset values has been
provided in note 10. Where relevant, for estimates of future domestic
sales price the Company uses $35/bbl.
The Company has also taken the change into account in its assessment of
impairment reversal and considered it appropriate not to reverse any
previous impairments.
Estimation of the recoverable value of trade receivables (note 11)
As of 31 December 2024, the Company is owed six months of payments for the
sales from October 2022 to March 2023. Management has compared the
carrying value of trade receivables with the present value of the
estimated future cash flows based on a number of collection scenarios. The
ECL is the weighted average of these scenarios and is recognised in the
income statement. The weighting is applied based on expected repayment
timing. The result of this assessment is an ECL provision of $11.7 million
(31 December 2023: $14.5 million). Sensitivities of the ECL has been
provided in note 11.
Decommissioning provision (note 15)
Decommissioning provisions are calculated from a number of inputs such as
costs to be incurred in removing production facilities and site
restoration at the end of the producing life of each field which is
considered as the mid-point of a range of cost estimation. These inputs
are based on the Company’s best estimate of the expenditure required to
settle the present obligation at the end of the period inflated at 2%
(2023: 2%) and discounted at 4% (2023: 4%). 10% increase in cost estimates
would increase the existing provision by c.$2 million and 1% increase in
discount rate would decrease the existing provision by c.$3 million, the
combined impact would be c.$1 million. The cash flows relating to the
decommissioning and abandonment provision are expected to occur in 2036.
Arbitration costs award (note 13)
A subsidiary of the Group, Genel Energy Miran Bina Bawi Limited
(‘GEMBBL’), is expecting to receive a costs award against it relating to
the arbitration claim made by the KRG. The KRG is claiming over $36
million of legal costs. GEMBBL has no way of knowing what costs award will
be made and, although it considers these costs to be disproportionate and
unreasonable and that the award should be significantly lower, has made a
provisional accrual of $36 million.
Other estimates
The following are the other estimates that the Directors have made in the
process of applying the Group and Company’s accounting policies and that
have effect on the amounts recognised in the financial statements.
Taxation
Under the terms of the KRI PSCs, corporate income tax due is paid on
behalf of the Company by the KRG from the KRG's own share of revenues,
resulting in no corporate income tax payment required or expected to be
made by the Company. It is not known at what rate tax is paid, but it is
estimated that the current tax rate would be between 15% and 40%. If this
was known it would result in a gross up of revenue with a corresponding
debit entry to taxation expense with no net impact on the income statement
or on cash. In addition, it would be necessary to assess whether any
deferred tax asset or liability was required to be recognised.
Accounting policies
The accounting policies adopted in preparation of these financial
statements are consistent with those used in preparation of the annual
financial statements for the year ended 31 December 2023.
Revenue
Revenue from contracts with customers is earned based on the entitlement
mechanism under the terms of the relevant PSC.
Under IFRS 15, entitlement revenue is recognised when the control of the
product is deemed to have passed to the customer, in exchange for the
consideration amount determined by the terms of the contract. For exports,
the control passes to the customer when the oil enters the export pipe.
For domestic sales, the control passes to the customer when the oil is
delivered to the trucks.
Entitlement has two components: cost oil, which is the mechanism by which
the Company recovers its costs incurred on an asset, and profit oil, which
is the mechanism through which profits are shared between the Company, its
partners and the KRG. Profit oil revenue is always reported net of any
capacity building payments that will become due.
The Company’s export oil sales made to the KRG are valued at a netback
price which is explained further in significant accounting estimates and
judgements. The Company’s domestic sales are valued at the price agreed
with the domestic buyers. All production in 2024 was sold into the
domestic market.
The Company is not able to measure the tax that has been paid on its
behalf and consequently has not been able to assess where revenue should
be reported gross of implied income tax paid.
Intangible assets
Exploration and evaluation assets
Oil and gas assets classified as exploration and evaluation assets are
explained under Oil and Gas assets below.
Tawke RSA
Intangible assets include the Receivable Settlement Agreement (‘RSA’)
effective from 1 August 2017, which was entered into in exchange for trade
receivables due from KRG for Taq Taq and Tawke past sales. The RSA was
recognised at cost and is amortised on a units of production basis in line
with the economic lives of the rights acquired.
Property, plant and equipment
Producing and Development assets
Oil and gas assets classified as producing and development assets are
explained under Oil and Gas assets below.
Oil and Gas assets
Costs incurred prior to obtaining legal rights to explore are expensed to
the statement of comprehensive income. Exploration, appraisal and
development expenditure is accounted for under the successful efforts
method. Under the successful efforts method only costs that relate
directly to the discovery and development of specific oil and gas reserves
are capitalised as exploration and evaluation assets within intangible
assets so long as the activity is assessed to be de-risking the asset and
the Company expects continued activity on the asset into the foreseeable
future. Costs of activity that do not identify oil and gas reserves are
expensed.
All licence acquisition costs, geological and geophysical costs,
inventories and other direct costs of exploration, evaluation and
development are capitalised as intangible assets or property, plant and
equipment according to their nature. Intangible assets comprise costs
relating to the exploration and evaluation of properties which the
Directors consider to be unevaluated until assessed as being 2P reserves
and commercially viable.
Once assessed as being 2P reserves they are tested for impairment and
transferred to property, plant and equipment as development assets. Where
properties are appraised to have no commercial value, the associated costs
are expensed as an impairment loss in the period in which the
determination is made. Development assets are classified under producing
assets following the commercial production commencement.
Development expenditure is accounted for in accordance with IAS 16 –
Property, plant and equipment. Producing assets are depreciated once they
are available for use and are depleted on a field-by-field basis using the
unit of production method. The sum of carrying value and the estimated
future development costs are divided by total barrels to provide a
$/barrel unit depreciation cost. Changes to depreciation rates as a result
of changes in forecast production and estimates of future development
expenditure are reflected prospectively.
The estimated useful lives of property, plant and equipment and their
residual values are reviewed on an annual basis and changes in useful
lives are accounted for prospectively. The gain or loss arising on the
disposal or retirement of an asset is determined as the difference between
the sales proceeds and the carrying amount of the asset and is recognised
in the statement of comprehensive income for the relevant period.
Where exploration licences are relinquished or exited for no consideration
or costs incurred are neither de-risking nor adding value to the asset,
the associated costs are expensed to the income statement.
Impairment testing of oil and gas assets is considered in the context of
each cash generating unit. A cash generating unit is generally a licence,
with the discounted value of the future cash flows of the CGU compared to
the book value of the relevant assets and liabilities.
Subsequent costs
The cost of replacing part of an item of property and equipment is
recognised in the carrying amount of the item if it is probable that the
future economic benefits embodied within the part will flow to the
Company, and its cost can be measured reliably. The net book value of the
replaced part is expensed. The costs of the day-to-day servicing and
maintenance of property, plant and equipment are recognised in the
statement of comprehensive income.
Assets and liabilities held for sale and discontinued operations
A part of the Company’s operations is classified as a discontinued
operation if the component has either been disposed of or is classified as
held for sale and represents a separate major line of business or
geographic area of operations, is part of a single coordinated plan to
dispose of a separate major line of business or geographic area of
operations, or is a subsidiary acquired exclusively with a view to resale.
The disposal group or asset classified as asset held for sale is measured
at the lower of its carrying amount and fair value less cost to sell.
Assets held for sale are presented under a separate line item within
current assets and liabilities directly associated with assets held for
sale are presented separately under current liabilities. Discontinued
operations are excluded from the net income/loss from continuing
operations and are presented as a single amount as gain/loss from
discontinued operations in the consolidated statement of comprehensive
income. When an operation is classified as a discontinued operation, the
comparative consolidated statement of comprehensive income is restated and
presented as if the operation had been classified as such from the start
of the comparative year.
Financial assets and liabilities
Classification
The Company assesses the classification of its financial assets on initial
recognition at amortised cost, fair value through other comprehensive
income or fair value through profit and loss. The Company assesses the
classification of its financial liabilities on initial recognition at
either fair value through profit and loss or amortised cost.
Recognition and measurement
Regular purchases and sales of financial assets are recognised at fair
value on the trade-date – the date on which the Company commits to
purchase or sell the asset. Trade and other receivables, trade and other
payables and borrowings are subsequently carried at amortised cost using
the effective interest method.
Trade and other receivables
Trade receivables are amounts due from crude oil sales, sales of gas or
services performed in the ordinary course of business. If payment is
expected within one year or less, trade receivables are classified as
current assets otherwise they are presented as non-current assets. Trade
receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less
provision for expected credit loss. The Company’s assessment of expected
credit loss model is explained below under financial assets.
Cash and cash equivalents
In the consolidated balance sheet and consolidated statement of cash
flows, cash and cash equivalents includes cash in hand, deposits held on
call with banks, other short-term highly liquid investments which are
assessed as cash and cash equivalents under IAS 7 and includes the
Company’s share of cash held in joint operations.
Interest-bearing borrowings
Borrowings are recognised initially at fair value, net of any discount in
issuance and transaction costs incurred. Borrowings are subsequently
carried at amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the statement
of comprehensive income over the period of the borrowings using the
effective interest method. When the Company buys back its bond, the
carrying amount of the liability is measured based on the repayment amount
by allocating the initial transaction cost and the difference is
recognised in the statement of comprehensive income.
Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan.
Borrowings are presented as long or short-term based on the maturity of
the respective borrowings in accordance with the loan or other agreement.
Borrowings with maturities of less than twelve months are classified as
short-term. Amounts are classified as long-term where maturity is greater
than twelve months. Where no objective evidence of maturity exists,
related amounts are classified as short-term.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised cost
using the effective interest method.
Offsetting
Financial assets and liabilities are offset and the net amount reported in
the balance sheet when there is a legally enforceable right to offset the
recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously.
Provisions
Provisions are recognised when the Company has a present obligation as a
result of a past event, and it is probable that the Company will be
required to settle that obligation. Provisions are measured at the
Company’s best estimate of the expenditure required to settle the
obligation at the balance sheet date and are discounted to present value
where the effect is material. The unwinding of any discount is recognised
as finance costs in the statement of comprehensive income.
Decommissioning
Provision is made for the cost of decommissioning assets at the time when
the obligation to decommission arises. Such provision represents the
estimated discounted liability for costs which are expected to be incurred
in removing production facilities and site restoration at the end of the
producing life of each field. A corresponding cost is capitalised to
property, plant and equipment and subsequently depreciated as part of the
capital costs of the production facilities. Any change in the present
value of the estimated expenditure attributable to changes in the
estimates of the cash flow or the current estimate of the discount rate
used are reflected as an adjustment to the provision and capitalised as
part of the cost of the assets.
Impairment
Exploration and evaluation assets
Spend on exploration and evaluation assets is capitalised in accordance
with IFRS 6. The carrying amounts of the Company’s exploration and
evaluation assets are reviewed at each reporting date to determine whether
there is any indication of impairment under IFRS 6. Impairment assessment
of exploration and evaluation assets is considered in the context of each
cash generating unit, which is generally represented by relevant the
licence.
Producing and Development assets
The carrying amounts of the Company’s producing and development assets are
reviewed at each reporting date to determine whether there is any
indication of impairment or reversal of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. The recoverable
amount of an asset or cash generating unit is the greater of its value in
use and its fair value less costs of disposal. For value in use, the
estimated future cash flows arising from the Company’s future plans for
the asset are discounted to their present value using a nominal post tax
discount rate that reflects market assessments of the time value of money
and the risks specific to the asset. For fair value less costs of
disposal, an estimation is made of the fair value of consideration that
would be received to sell an asset less associated selling costs (which
are assumed to be immaterial). Assets are grouped together into the
smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or groups
of assets (cash generating unit).
The estimated recoverable amount is then compared to the carrying value of
the asset. Where the estimated recoverable amount is materially lower than
the carrying value of the asset an impairment loss is recognised.
Non-financial assets that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
Property, plant and equipment and intangible assets
Impairment testing of oil and gas assets is explained above. When
impairment indicators exist for other non-financial assets, impairment
testing is performed based on the higher of value in use and fair value
less costs of disposal. The Company assets' recoverable amount is
determined by fair value less costs of disposal.
Financial assets
Impairment of financial assets is assessed under IFRS 9 with a
forward-looking expected credit loss (‘ECL’) model. The standard requires
the Company to book an allowance for ECL for its financial assets. The
Company has assessed its trade receivables as at 31 December 2024 for ECL.
Further explanation is provided in significant accounting judgements and
estimates.
Equity
Share capital
Amounts subscribed for share capital at nominal value. Ordinary shares are
classified as equity. When share capital recognised as equity is
repurchased, the amount of the consideration paid, which includes directly
attributable costs, is net of any tax effects and is recognised as a
deduction in equity. Repurchased shares are classified as treasury shares
and are presented as a deduction from total equity. When treasury shares
are subsequently sold or reissued, the amount received is recognised as an
increase in equity and the resulting surplus or deficit of the transaction
is transferred to/from retained earnings.
Share premium
Amounts subscribed for share capital in excess of nominal value.
Accumulated loss
Cumulative net losses recognised in the statement of comprehensive income
net of amounts recognised directly in equity.
Dividend
Liability to pay a dividend is recognised based on the declared timetable.
A corresponding amount is recognised directly in equity.
Employee benefits
Short-term benefits
Short-term employee benefit obligations are expensed to the statement of
comprehensive income as the related service is provided. A liability is
recognised for the amount expected to be paid under short-term cash bonus
or profit-sharing plans if the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Share-based payments
The Company operates equity-settled share-based compensation plans. The
expense required in accordance with IFRS 2 is recognised in the statement
of comprehensive income over the vesting period of the award and partially
capitalised as oil and gas assets in line with the hours incurred by the
employees. The expense is determined by reference to option pricing
models, principally Monte Carlo and adjusted Black-Scholes models.
At each balance sheet date, the Company revises its estimate of the number
of options that are expected to become exercisable. Any revision to the
original estimates is reflected in the statement of comprehensive income
with a corresponding adjustment to equity immediately to the extent it
relates to past service and the remainder over the rest of the vesting
period.
Finance income and finance costs
Finance income comprises interest income on cash invested, foreign
currency gains and the unwind of discount on any assets held at amortised
cost. Interest income is recognised as it accrues, using the effective
interest method.
Finance expense comprises interest expense on borrowings, foreign currency
losses and discount unwind on any liabilities held at amortised cost.
Borrowing costs directly attributable to the acquisition of a qualifying
asset as part of the cost of that asset are capitalised over the
respective assets.
Taxation
Under the terms of the KRI PSCs, the Company is not required to pay any
cash corporate income taxes as explained in significant accounting
judgements and estimates. Current tax expense is incurred on profits of
service companies.
Segmental reporting
IFRS 8 requires the Company to disclose information about its business
segments and the geographic areas in which it operates. It requires
identification of business segments on the basis of internal reports that
are regularly reviewed by the CEO, the chief operating decision maker, in
order to allocate resources to the segment and assess its performance.
Related parties
Parties are related if one party has the ability, directly or indirectly,
to control the other party or exercise significant influence over the
party in making financial or operational decisions. Parties are also
related if they are subject to common control. Transactions between
related parties are transfers of resources, services or obligations,
regardless of whether a price is charged and are disclosed separately
within the notes to the consolidated financial information.
New standards
The following new accounting standards, amendments to existing standards
and interpretations are effective on 1 January 2024: Amendments to IAS 7
Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures:
Supplier Finance Arrangements (issued on 25 May 2023), Amendments to IAS 1
Presentation of Financial Statements: Classification of Liabilities as
Current or Noncurrent (issued on 23 January 2020); Classification of
Liabilities as Current or Noncurrent - Deferral of Effective Date (issued
on 15 July 2020); and Non-current Liabilities with Covenants (issued on 31
October 2022), Amendments to IFRS 16 Leases: Lease Liability in a Sale and
Leaseback (issued on 22 September 2022). These standards did not have a
material impact on the Company’s results or financial statements
disclosures in the current reporting period.
The following new accounting standards, amendments to existing standards
and interpretations are effective on 1 January 2025 and have been endorsed
in 2024: Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates: Lack of Exchangeability (issued on 15 August 2023). The following
new accounting standards, amendments to existing standards and
interpretations have been issued but are not yet effective and/or have not
yet been endorsed by the EU: IFRS 19 Subsidiaries without Public
Accountability: Disclosures (issued on 9 May 2024), IFRS 18 Presentation
and Disclosure in Financial Statements (issued on 9 April 2024), Contracts
Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7
(issued on 18 December 2024), Annual Improvements Volume 11 (issued on 18
July 2024), Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 and IFRS 7) (issued on 30 May 2024).
Nothing has been early adopted, and these standards are not expected to
have a material impact on the Company’s results or financials statement
disclosures in the periods they become effective except for IFRS 18 which
will impact the presentation and disclosure in the financial statements.
2. Segmental information
The Company has two reportable business segments: Production and
Pre-production. Capital allocation decisions for the production segment
are considered in the context of the cash flows expected from the
production and sale of crude oil. The production segment is comprised of
the producing fields on the Tawke PSC (Tawke and Peshkabir fields) which
are located in the KRI and make export sales to the KRG and domestic sales
to the domestic buyers where one buyer contributed 70% of revenue, c.$50m
(2023: one buyer contributed 80%, c.$30m). The pre-production segment is
comprised of exploration activity, principally located in Somaliland and
Morocco. ‘Other’ includes corporate assets, liabilities and costs,
elimination of intercompany receivables and intercompany payables, which
are non-segment items.
For the year ended 31 December 2024
Total
Production Pre-production Other
$m $m $m $m
Revenue from contracts with 74.7 - - 74.7
customers (domestic)
Cost of sales (69.7) - - (69.7)
Gross profit 5.0 - - 5.0
Exploration expense - (2.7) - (2.7)
Arbitration fees - - (36.0) (36.0)
Reversal of accruals and - - 3.8 3.8
provisions
Reversal of ECL of trade 1.4 - - 1.4
receivables
General and administrative - - (23.9) (23.9)
costs
Operating profit / (loss) 6.4 (2.7) (56.1) (52.4)
Operating profit / (loss) is
comprised of
EBITDAX 57.1 - (56.0) 1.1
Depreciation and amortisation (52.1) - (0.1) (52.2)
Reversal of ECL of trade 1.4 - - 1.4
receivables
Exploration expense - (2.7) - (2.7)
Finance income - - 15.8 15.8
Bond interest expense - - (18.2) (18.2)
Net other finance expense (1.0) - (6.3) (7.3)
Profit / (Loss) before income 5.4 (2.7) (64.8) (62.1)
tax from continuing operations
Loss from discontinued (14.7) - - (14.7)
operations
Loss before income tax (9.3) (2.7) (64.8) (76.8)
Capital expenditure 23.0 2.7 - 25.7
Total assets 373.8 26.5 198.6 598.9
Total liabilities (117.6) (0.3) (123.7) (241.6)
Sarta and Taq Taq PSC figures have been disclosed as discontinued
operation (note 7).
Total assets and liabilities in the other segment are predominantly cash
and debt balances, and includes assets and liabilities relating to Sarta,
Qara Dagh, Miran and Bina Bawi PSCs which have been exited in prior years.
For the year ended 31 December 2023
Total
Production Pre-production Other
$m $m $m $m
Revenue from contracts with 40.2 - - 40.2
customers (export)
Revenue from contracts with 38.2 - - 38.2
customers (domestic)
Cost of sales (55.0) - - (55.0)
Gross profit 23.4 - - 23.4
Exploration expense - (0.1) - (0.1)
Reversal of decommissioning 1.2 - - 1.2
provision
Reversal of ECL of trade 4.2 - - 4.2
receivables
ECL of trade receivables (11.8) - - (11.8)
General and administrative - - (27.2) (27.2)
costs
Operating profit / (loss) 17.0 (0.1) (27.2) (10.3)
Operating profit / (loss) is
comprised of
EBITDAX 60.4 - (27.1) 33.3
Depreciation and amortisation (37.0) - (0.1) (37.1)
Exploration expense - (0.1) - (0.1)
Reversal of decommissioning 1.2 - - 1.2
provision
Reversal of ECL of receivables 4.2 - - 4.2
ECL of receivables (11.8) - - (11.8)
Finance income - - 20.6 20.6
Bond interest expense - - (24.8) (24.8)
Net other finance expense (0.7) (0.1) (1.6) (2.4)
Profit / (Loss) before income 16.3 (0.2) (33.0) (16.9)
tax from continuing operations
Loss from discontinued (44.2) - - (44.2)
operations
Loss before income tax (27.9) (0.2) (33.0) (61.1)
Capital expenditure 58.9 9.1 - 68.0
Total assets 412.1 26.8 356.2 795.1
Total liabilities (91.0) (12.0) (258.2) (361.2)
Sarta and Taq Taq PSC figures have been disclosed as discontinued
operation (note 7).
Total assets and liabilities in the other segment are predominantly cash
and debt balances.
3. Operating loss
2024 2023
$m $m
Production costs (17.6) (18.0)
Depreciation of oil and gas property, plant and (46.6) (32.7)
equipment (excl. RoU assets)
Amortisation of oil and gas intangible assets (5.5) (4.3)
Cost of sales (69.7) (55.0)
Exploration expense (2.7) (0.1)
Net reversal of accruals and provisions - 1.2
Net write-off of intangible assets - 1.2
Reversal of ECL of trade receivables (note 1,11) 1.4 4.2
ECL of trade receivables (note 1,11) - (11.8)
Net (ECL) / reversal of ECL of receivables 1.4 (7.6)
Arbitration fees (36.0) -
Reversal of accruals and provisions 3.8 -
Arbitration cost (32.2) -
Corporate cash costs (13.3) (12.4)
Other operating costs (8.6) (13.1)
Corporate share-based payment expense (1.9) (1.6)
Depreciation and amortisation of corporate assets (0.1) (0.1)
(excl. RoU assets)
General and administrative expenses (23.9) (27.2)
Auditor’s remuneration:
Audit of the Group’s consolidated financial statements (0.4) (0.3)
Audit of the Group’s subsidiaries pursuant to legislation (0.1) (0.1)
Total audit services (0.5) (0.4)
Interim review (0.1) (0.1)
Total audit related and non-audit services (0.6) (0.5)
All fees paid to the auditor were charged to operating loss in both years.
4. Staff costs and headcount
2024 2023
$m $m
Wages and salaries (17.4) (19.3)
Contractors (0.2) (13.8)
Social security costs (1.2) (1.9)
Share based payments (2.7) (3.7)
(21.5) (38.7)
2024 number 2023 number
Average headcount was:
Türkiye 31 38
KRI 3 23
UK 25 30
Somaliland 22 27
Contractors 6 84
87 202
5. Finance expense and income
2024 2023
$m $m
Bond interest (18.2) (24.8)
Loss on bond buybacks (note 16) (4.6) -
Other finance expense (non-cash) (2.7) (3.5)
Finance expense (25.5) (28.3)
Bank interest income 15.8 20.6
Gain on bond buyback - 1.1
Finance income 15.8 21.7
Net finance expense (9.7) (6.6)
Bond interest payable is the cash interest cost of the Company’s bond
debt. Other finance expense (non-cash) primarily relates to the discount
unwind on the bond and the asset retirement obligation provision.
6. Income tax expense
Current tax expense is incurred on profits of service companies. Under the
terms of the KRI PSCs, the Company is not required to pay any cash
corporate income taxes as explained in note 1.
7. Assets and liabilities held for sale and discontinued operations
On 24 December 2024, the Company entered into a sale agreement to dispose
its share of rights, benefits, liabilities and obligations in Taq Taq PSC
to its partner. The transaction is subject to Kurdistan Regional
Government approval. These operations, which are expected to be sold
within 12 months, have been classified as a disposal group held for sale
and presented separately in the consolidated balance sheet. An impairment
loss of $2.2 million has been recognised on the measurement of the
disposal group to fair value less cost to sell and is included in loss
from discontinued operations. The disposal constitutes a discontinued
operation as it represents the disposal of a separate major line of
business.
The major classes of assets and liabilities comprising the operations
classified as held for sale are as follows:
2024 2023
$m $m
Property, plant and equipment (note 1,10) 32.5 -
Trade receivables, net of ECL (note 11) 9.3 -
Assets classified as held for sale 41.8 -
Other payables and accruals 4.8 -
Deferred income (note 14) 15.8 -
Provisions (note 15) 21.2 -
Total liabilities associated with assets classified as held for 41.8 -
sale
Net assets of disposal group - -
The fair value of the net assets is categorised as level 3 non-recurring
fair value measurements as the transaction is based on unobservable inputs
from the special negotiation with the joint venture partner. The
transaction price has been used in determining the fair value of the net
assets.
Sarta PSC was terminated on 1 December 2023. The results of the
discontinued operations from Taq Taq and Sarta, which have been included
in the loss for the year, were as follows:
Restated
2024 2023
$m $m
Revenue - 9.2
Other revenue - 0.8
Production costs - (6.9)
Depreciation of oil and gas property, plant and equipment - (7.6)
Gross loss - (4.5)
Other operating costs (10.5) (23.6)
Impairment loss on Taq Taq held for sale asset (2.2) -
Write-off of Sarta PSC property, plant and equipment (note - (18.7)
1,10)
Reversal of provisions - 8.2
Reversal of ECL of trade receivables - 0.4
ECL of trade receivables - (2.7)
General and administrative costs 0.4 (0.5)
Operating loss (12.3) (41.4)
Other finance expense (non-cash) (2.4) (2.8)
Loss from discontinued operations (14.7) (44.2)
2024 2023
Cash flows from discontinued operations $m $m
Net cash used in operating activities (10.3) (31.0)
Net cash used in investing activities - (16.3)
Net cash used in financing activities - (2.3)
8. Loss per share
Basic
Basic loss per share is calculated by dividing the loss attributable to
owners of the parent by the weighted average number of shares in issue
during the year.
2024 2023
Loss from continuing operations ($m) (62.2) (17.1)
Loss from discontinued operations ($m) (14.7) (44.2)
Loss attributable to owners of the parent ($m) (76.9) (61.3)
Weighted average number of ordinary shares – 276,223,685 278,836,216
number 1
Basic loss per share – cents per share (from (22.5) (6.1)
continuing operations)
Basic loss per share – cents per share (from (5.3) (15.9)
discontinuing operations)
Basic loss per share – cents per share (27.8) (22.0)
1 Excluding shares held as treasury shares and by the Employee Benefit
Trust
Diluted
The Company purchases shares in the market to satisfy share plan
requirements so diluted earnings per share is adjusted for performance
shares, restricted shares, share options and deferred bonus plans not
included in the calculation of basic earnings per share. Because the
Company reported a loss for the year ended 31 December 2024 and 31
December 2023, the performance shares, restricted shares and share options
are anti-dilutive and therefore diluted LPS is the same as basic LPS:
2024 2023
Loss from continuing operations ($m) (62.2) (17.1)
Loss from discontinued operations ($m) (14.7) (44.2)
Loss attributable to owners of the parent ($m) (76.9) (61.3)
Weighted average number of ordinary shares – 276,223,685 278,836,216
number1
Adjustment for performance shares, restricted - -
shares, share options and deferred bonus plans
Weighted average number of ordinary shares and 276,223,685 278,836,216
potential ordinary shares
Diluted loss per share – cents per share (from (22.5) (6.1)
continuing operations)
Diluted loss per share – cents per share (from (5.3) (15.9)
discontinuing operations)
Diluted loss per share – cents per share (27.8) (22.0)
1 Excluding shares held as treasury shares and by the Employee Benefit
Trust
Adjusted Basic LPS
Adjusted basic LPS is loss and total comprehensive expense adjusted for
the add back of net impairment/write-off of oil and gas assets, net
ECL/reversal of ECL of receivables, and impairment loss on Taq Taq held
for sale asset divided by weighted average number of ordinary shares.
2024 2023
Loss attributable to owners of the parent ($m) (76.9) (61.3)
Add back of impairment loss on Taq Taq held for 2.2 -
sale asset
Add back of net impairment/write-off of oil and - 18.2
gas assets
Add back of net reversal of ECL/ECL of receivables (1.4) 9.9
Loss attributable to owners of the parent ($m) - (76.1) (33.2)
adjusted
Weighted average number of ordinary shares – 276,223,685 278,836,216
number 1
Adjusted basic LPS – cents per share (27.6) (11.9)
1 Excluding shares held as treasury shares and by the Employee Benefit
Trust
9. Intangible assets
Exploration and Other
evaluation assets Tawke Total
assets
RSA
$m $m $m $m
Cost
At 1 January 20231 12.9 128.5 7.5 148.9
Additions 9.1 - - 9.1
Other 0.8 - - 0.8
At 31 December 2023 and 1 January 22.8 128.5 7.5 158.8
2024
Additions 2.7 - - 2.7
Other 0.4 - - 0.4
At 31 December 2024 25.9 128.5 7.5 161.9
Accumulated amortisation and
impairment
At 1 January 20231 - (62.3) (7.5) (69.8)
Amortisation charge for the - (4.3) - (4.3)
period
At 31 December 2023 and 1 January - (66.6) (7.5) (74.1)
2024
Amortisation charge for the year - (5.5) - (5.5)
At 31 December 2024 - (72.1) (7.5) (79.6)
Net book value
At 1 January 2023 12.9 66.2 - 79.1
At 31 December 2023 22.8 61.9 - 84.7
At 31 December 2024 25.9 56.4 - 82.3
2024 2023
Book value $m $m
Somaliland PSC Exploration 25.9 22.8
Exploration and evaluation assets 25.9 22.8
Tawke capacity building payment waiver 56.4 61.9
Tawke RSA assets 56.4 61.9
1As of 1 January 2023, the cost and accumulated amortisation under the
Tawke RSA intangible asset were $425.1 million and $358.9 million
respectively. This has now been revised to reflect the removal of the
Tawke override royalty of $296.6 million from cost and accumulated
amortisation, following its expiry in 2022.
10. Property, plant and equipment
Other
Producing assets
assets Total
$m $m $m
Cost
At 1 January 2023 3,252.2 17.6 3,269.8
Additions 58.9 - 58.9
Right-of-use assets (note 20) - (0.3) (0.3)
Other1 2.1 - 2.1
At 31 December 2023 and 1 January 2024 3,313.2 17.3 3,330.5
Additions 23.0 0.6 23.6
Right-of-use assets (note 20) - 0.5 0.5
Other1 3.2 - 3.2
Reclassified as held for sale (note 7) (2,021.3) - (2,021.3)
At 31 December 2024 1,318.1 18.4 1,336.5
Accumulated depreciation and impairment
At 1 January 2023 (3,007.5) (14.2) (3,021.7)
Depreciation charge for the year (42.3) (1.3) (43.6)
Write-off (18.7) - (18.7)
At 31 December 2023 and 1 January 2024 (3,068.5) (15.5) (3,084.0)
Depreciation charge for the year (46.6) (1.4) (48.0)
Reclassified as held for sale (note 7) 1,986.6 - 1,986.6
At 31 December 2024 (1,128.5) (16.9) (1,145.4)
Net book value
At 1 January 2023 244.7 3.4 248.1
At 31 December 2023 244.7 1.8 246.5
At 31 December 2024 189.6 1.5 191.1
1 Other line includes non-cash asset retirement obligation provision and
share-based payment costs.
2024 2023
Book value $m $m
Tawke PSC Oil production 189.6 210.0
Taq Taq PSC Oil production - 34.7
Producing assets 189.6 244.7
The Company has disposed all its rights, benefits, liabilities and
obligations under Taq Taq PSC to its partner which has resulted in the Taq
Taq producing assets of $34.7 million being reclassified as held for sale
as at 31 December 2024. Further explanation is provided in note 7.
The sensitivities below provide an indicative impact on net asset value of
a change in netback price, discount rate or production, assuming no change
to any other inputs.
Tawke CGU
Sensitivities $m
Long term netback price +/- $5/bbl +/- 17
Discount rate +/- 1% +/- 10
Production +/- 10% +/- 34
Domestic sales for 1 more year - 13
11. Trade and other receivables
2024 2023
$m $m
Trade receivables – non-current 60.9 66.5
Trade receivables – current 24.1 26.4
Other receivables and prepayments 3.1 7.6
88.1 100.5
At 31 December 2024, the Company is owed six months of payments (31
December 2023: five months).
Period when sale
made
Overdue Overdue Total Reclassified as ECL Trade
2023 2022 nominal held for sale receivables
(note 7) provision
$m $m $m $m $m $m
31
December 49.3 58.1 107.4 (10.7) (11.7) 85.0
2024
31
December 49.3 58.1 107.4 - (14.5) 92.9
2023
2024 2023
Movement on trade receivables in the year
$m $m
Carrying value at 1 January 92.9 117.0
Revenue from contracts with customers 74.7 87.6
Cash for export sales - (61.2)
Cash for domestic sales (74.7) (41.0)
Reversal of previous year’s expected credit loss (note 1) 1.4 4.6
Expected credit loss for current year (note 1) - (14.5)
Reclassified as held for sale (note 7) (9.3) -
Capacity building payments - 0.2
Sarta processing fee payments - 0.2
Carrying value at 31 December 85.0 92.9
Recovery of the carrying value of the receivable
All trade receivables relate to export sales as the domestic sales are on
a cash and carry basis. As explained in note 1, the booked nominal
receivable value of $107.4 million has been recognised based on KBT due to
IFRS 15 requirements and it would be $13 million higher under Brent
pricing mechanism. The Company expects to recover the full value of
receivables owed from the KRG under Brent pricing mechanism, but the terms
of recovery are not determined yet. An explanation of the assumptions and
estimates in assessing the net present value of the deferred receivables
are provided in note 1.
Total
$m
Booked nominal balance to be recovered, net of amount reclassified 96.7
to held for sale
Estimated net present value of total cash flows 85.0
Sensitivities
As set out in note 1.2 the recoverability of the overdue trade receivables
is based on a number of different collection scenarios. We consider that
the ultimate resolution will include full consideration of all balances
between the two counterparties. A 1% increase / decrease in the discount
rate would result in a c.$0.7 million change in the ECL provision. Each
three-month delay in settlement would result in a c.$1 million increase in
the ECL provision. A combined three-month delay and a 1% increase in the
discount rate would result in a c.$1.7 million change in the ECL
provision. The discount rate applied is the discount rate considered to
represent the effective interest rate on this instrument.
12. Cash and cash equivalents
2024 2023
$m $m
Cash and cash equivalents 195.6 363.4
195.6 363.4
Cash is primarily invested with major international financial
institutions, in US Treasury bills or liquidity funds. $0.6 million (2023:
$0.6 million) of cash is restricted.
13. Trade and other payables
2024 2023
$m $m
Trade payables 20.0 23.0
Other payables 32.7 2.2
Accruals 57.1 32.9
109.8 58.1
Non-current 0.2 0.5
Current 109.6 57.6
109.8 58.1
Current payables are predominantly short-term in nature and there is
minimal difference between contractual cash flows related to the financial
liabilities and their carrying amount. For non-current payables,
liabilities are recognised at discounted fair value using the effective
interest rate. Lease liabilities are included in other payables, further
explanation is provided in note 20.
14. Deferred income
2024 2023
$m $m
Balance at 1 January 14.2 13.3
Interest (non-cash) 1.6 1.7
Royalty income (non-cash) - (0.8)
Reclassified as held for sale (note 7) (15.8) -
Balance at 31 December - 14.2
Non-current (within 1-2 years) - 8.2
Current - 6.0
- 14.2
Reclassification as held for sale is related to Taq Taq as explained in
note 7.
15. Provisions
2024 2023
$m $m
Balance at 1 January 45.2 52.2
Interest unwind 1.8 1.8
Additions 2.9 0.7
Reclassified as held for sale (note 7) (21.2) -
Reversals (3.6) (9.5)
Balance at 31 December 25.1 45.2
Provisions cover expected decommissioning, abandonment and exit costs
arising from the Company’s assets which are further explained in note 1.
Reclassification as held for sale is related to Taq Taq as a result of the
transfer of the obligations as explained in note 7 and reversals are
related to Miran and Bina Bawi (2023: Sarta and Qara Dagh as a result of
the termination and expiry of the PSCs respectively).
16. Interest bearing loans and net cash
Discount Repurchase Share Free 31 Dec
1 Jan 2024 unwind purchase cash 2024
of bond flow
$m $m $m $m $m $m
2025 Bond 9.25% (243.7) (1.6) 180.4 - - (64.9)
(current)
Cash 363.4 - (185.0) (2.4) 19.6 195.6
Net cash 119.7 (1.6) (4.6) (2.4) 19.6 130.7
At 31 December 2024, the fair value of the $66 million (2023: $248
million) of bonds held by third parties is $66 million (2023: $236.5
million).
In August 2024, the Company repurchased $107 million of its senior
unsecured bond at a price equal to 101.54% of the nominal amount.
In October 2024, the Company partially exercised its call option and
repaid $75 million of its senior unsecured bond at a price equal to
101.85% of the nominal amount.
The bonds maturing in 2025 have two financial covenant maintenance tests:
Financial covenant Test YE 2024 YE 2023
Equity ratio (Total equity/Total assets) > 40% 60% 55%
Minimum liquidity > $30m $195.6m $363.4m
1 Jan Discount Repurchase Share Dividend Free 31 Dec
2023 unwind purchase paid cash 2023
of bond flow
$m $m $m $m $m $m $m
2025 Bond
9.25% (266.6) (2.7) 25.6 - - - (243.7)
(non-current)
Cash 494.6 - (24.9) (1.8) (33.5) (71.0) 363.4
Net cash 228.0 (2.7) 0.7 (1.8) (33.5) (71.0) 119.7
17. Financial Risk Management
Credit risk
Credit risk arises from cash and cash equivalents, trade and other
receivables and other assets. The carrying amount of financial assets
represents the maximum credit exposure. The maximum credit exposure to
credit risk at 31 December was:
2024 2023
$m $m
Trade and other receivables 85.6 97.4
Cash and cash equivalents 195.6 363.4
281.2 460.8
All trade receivables are owed by the KRG. Cash is deposited with major
international financial institutions and the US treasury that are assessed
as appropriate based on, among other things, sovereign risk, CDS pricing
and credit rating.
Liquidity risk
The Company is committed to ensuring it has sufficient liquidity to meet
its payables as they fall due. At 31 December 2024, the Company had cash
and cash equivalents of $195.6 million (2023: $363.4 million).
Oil price risk
The Company’s export revenues are calculated from netback price and
domestic sales revenues are from a price established on an arms length
basis as further explained in note 1, and a $5/bbl change in average price
across domestic and export sales would result in a (loss) / profit before
tax change of circa $7 million.
Currency risk
Other than head office costs, substantially all of the Company’s
transactions are denominated and/or reported in US dollars. The exposure
to currency risk is therefore immaterial and accordingly no sensitivity
analysis has been presented.
Interest rate risk
The Company reported borrowings of $64.9 million (2023: $243.7 million) in
the form of a bond maturing in October 2025, with fixed coupon interest
payable of 9.25% on the nominal value of $66 million (2023: $248 million).
Although interest is fixed on existing debts, whenever the Company wishes
to borrow new debt or refinance existing debt, it will be exposed to
interest rate risk. A 1% increase in interest rate payable on a balance
similar to the existing debts of the Company would result in an additional
cost of circa $1 million per annum.
Capital management
The Company manages its capital to ensure that it remains sufficiently
funded to support its business strategy and maximise shareholder value.
The Company’s short-term funding needs are met principally from the cash
flows generated from its operations and available cash of $195.6 million
(2023: $363.4 million).
Financial instruments
All financial assets and liabilities are measured at amortised cost. Due
to their short-term nature except interest bearing loans and non-current
portion of trade receivables, the carrying value of these financial
instruments approximates their fair value. Their carrying values are as
follows:
Financial assets 2024 2023
$m $m
Trade and other receivables 85.6 97.4
Cash and cash equivalents 195.6 363.4
281.2 460.8
Financial liabilities
Trade and other payables 108.4 55.9
Interest bearing loans 64.9 243.7
173.3 299.6
18. Share capital
Total
Ordinary Shares
At 1 January 2023 – fully paid1 280,248,198
At 31 December 2023, 1 January 2024 and 31 December 2024 280,248,198
– fully paid1
1 Ordinary shares include 845,335 (2023: 845,335) treasury shares. Share
capital includes 4,067,720 (2023: 2,223,090) of trust shares. $2.4 million
was paid for the shares repurchased and classified as trust shares in the
year.
There have been no changes to the authorised share capital since it was
determined to be 10,000,000,000 ordinary shares of £0.10 per share.
19. Dividends
2024 2023
$m $m
Ordinary shares
Final dividend (2023: 12¢ per share) - 33.5
Total dividends provided for or paid - 33.5
Paid in cash - 33.5
Total dividends provided for or paid - 33.5
20. Right-of-use assets / Lease liabilities
The Company’s right-of-use assets are related to the offices and included
within property, plant and equipment.
Right-of-use assets
$m
Cost
At 1 January 2023 12.8
Disposals due to terminations (0.3)
At 31 December 2023 and 1 January 2024 12.5
Additions 0.5
At 31 December 2024 13.0
Accumulated depreciation
At 1 January 2023 (8.8)
Depreciation charge for the period (2.6)
At 31 December 2023 and 1 January 2024 (11.4)
Depreciation charge for the period (0.7)
At 31 December 2024 (12.1)
Net book value
At 1 January 2023 4.0
At 31 December 2023 1.1
At 31 December 2024 0.9
2024 2023
Book value $m $m
Offices 0.9 1.1
Right-of-use assets 0.9 1.1
The weighted average lessee’s incremental borrowing rate applied to the
lease liabilities. The lease terms vary from one to five years.
Lease liabilities 2024 2023
$m $m
At 1 January (1.1) (4.1)
Additions (0.5) -
Disposals due to terminations - 0.3
Payments of lease liabilities 0.7 2.8
Interest expense on lease liabilities - (0.1)
At 31 December (note 13) (0.9) (1.1)
Included within lease liabilities of $0.9 million (2023: $1.1 million) are
non-current lease liabilities of $0.2 million (2023: $0.5 million). The
identified leases have no significant impact on the Company`s financing,
bond covenants or dividend policy. The Company does not have any residual
value guarantees. The contractual maturities of the Company’s lease
liabilities are as follows:
Less than Between Between Total contractual Carrying
cash flow
1 year 1 - 2 years 2 - 5 years Amount
$m $m $m
$m $m
31 December (0.7) (0.2) - (0.9) (0.9)
2024
31 December (0.7) (0.3) (0.2) (1.2) (1.1)
2023
21. Share based payments
The Company has five share-based payment plans under which awards are
currently outstanding: performance share plan (2011), performance share
plan (2021), restricted share plan (2011), share option plan (2011), and
deferred bonus plan (2021). The main features of these share plans are set
out below.
Key features PSP (2011) PSP (2021) DBP (2021) RSP (2011) SOP (2011)
Either
Performance Performance Deferred Restricted
shares. The shares or bonus shares. The Market
intention is restricted shares. The intention value
to deliver shares. The intention is to options.
the full intention is is to deliver the Exercise
value of to deliver deliver the full value price is
vested the full full value of shares set equal
Form of shares at no value of of shares at no cost to the
awards cost to the vested at no cost to the average
participant shares at no to the participant share price
(as cost to the participant (as over a
conditional participant (as conditional period of
shares or (as conditional shares or up to 30
nil-cost conditional shares or nil-cost days to
options). shares or nil-cost options). grant.
nil-cost options).
options).
Performance
conditions Performance
will apply. conditions
Awards may or may
granted from not apply.
2017 are Awards Performance Performance Performance
measured granted with conditions conditions conditions
against performance may or may may or may may or may
relative and conditions not apply. not apply. not apply.
Performance absolute are measured For awards For awards For awards
conditions total against granted to granted to granted to
shareholder relative and date, there date, there date, there
return absolute TSR are no are no are no
(‘TSR’) measured performance performance performance
measured against a conditions. conditions. conditions.
against a group of
group of industry
industry peers over a
peers over a three-year
three-year period.
period.
For awards
subject to
performance
conditions,
they will
vest when
the
Awards will Remuneration
vest when Committee
the determines
Remuneration whether the
Committee performance Awards
determines conditions Awards typically Awards
Vesting whether the have been typically vest in typically
period performance met at the vest after tranches vest after
conditions end of the two years. over three three
have been performance years. years.
met at the period. For
end of the awards that
performance are not
period. subject to
performance
conditions,
awards
typically
vest in
tranches
over three
years.
Provision
Provision of of
additional additional
cash/shares cash/shares
to reflect to reflect
Provision of dividends dividends Provision Provision
additional over the over the of of
cash/shares vesting vesting additional additional
to reflect period and period and cash/shares cash/shares
Dividend dividends the period the period to reflect to reflect
equivalents over the where the where the dividends dividends
vesting options have options over the over the
period may vested and have vested vesting vesting
or may not have not yet and have period may period may
apply. been not yet or may not or may not
exercised been apply. apply.
(where exercised
applicable) (where
may or may applicable)
not apply. may or may
not apply.
In 2024, awards were made under the performance share plan only. The
numbers of outstanding shares as at 31 December 2024 are set out below:
Weighted
Share awards Share awards avg.
with without Share exercise
performance performance options price of
conditions conditions share
options
Outstanding at 1 January 8,052,865 927,960 51,265 858p
2023
Granted during the year 2,961,900 540,834 - -
Dividend equivalents 607,589 91,973 - -
Forfeited during the year (3,805,594) - - -
Lapsed during the year (191,374) (191,768) (26,443) 767p
Exercised during the year (64,085) (366,082) (6,370) 742p
Outstanding at 31 Dec 2023 7,561,301 1,002,917 18,452 1,046p
and 1 Jan 2024
Granted during the year 4,075,827 428,066 - -
Forfeited during the year (2,152,140) - - -
Lapsed during the year (1,467,593) (155,387) (18,452) 1,046p
Exercised during the year - (364,428) - -
Outstanding at 31 December 8,017,395 911,168 - -
2024
Fair value of awards granted during the year has been measured by use of
the Monte-Carlo pricing model. The model takes into account assumptions
regarding expected volatility, expected dividends and expected time to
exercise. Expected volatility was also analysed with the historical
volatility of FTSE-listed oil and gas producers over the three years prior
to the date of grant. The expected dividend assumption was set at 0%. The
risk-free interest rate incorporated into the model is based on the term
structure of UK Government zero coupon bonds. The inputs into the fair
value calculation for PSP awards granted in 2024 and fair values per share
using the model were as follows:
PSP (without PSP PSP (without PSP
condition) condition)
30/04/2024 10/09/2024
30/04/2024 10/09/2024
Share price at grant 85p 85p 74p 74p
date
Fair value on 85p 52p 74p 40p
measurement date
Expected life (years) 1-3 1-3 1-3 1-3
Expected dividends - - - -
Risk-free interest rate 4.45% 4.45% 3.70% 3.70%
Expected volatility 44.89% 44.89% 44.75% 44.75%
Share price at balance 66p 66p 66p 66p
sheet date
The weighted average fair value for PSP awards (without condition) granted
in 2024 is 85p and for PSP awards granted in 2024 is 51p.
The inputs into the fair value calculation for PSP awards granted in 2023
and fair values per share using the model were as follows:
PSP (without PSP PSP (without PSP
condition) condition)
06/04/2023 12/09/2023
06/04/2023 12/09/2023
Share price at grant 124p 124p 82p 82p
date
Fair value on 124p 80p 82p 43p
measurement date
Expected life (years) 1-3 1-3 1-3 1-3
Expected dividends - - - -
Risk-free interest rate 3.25% 3.25% 4.73% 4.73%
Expected volatility 47.21% 47.21% 42.21% 42.21%
Share price at balance 71p 71p 71p 71p
sheet date
The weighted average fair value for PSP awards (without condition) granted
in 2023 is 121p and for PSP awards granted in 2023 is 80p.
Total share-based payment charge for the year was $2.7 million (2023: $3.7
million).
22. Capital commitments
Under the terms of its production sharing contracts (‘PSC’s) and joint
operating agreements (‘JOA’s), the Company has certain commitments that
are generally defined by activity rather than spend. The Company’s capital
programme for the next few years is explained in the operating review and
is in excess of the activity required by its PSCs and JOAs.
23. Related parties
The Directors have identified related parties of the Company under IAS 24
as being: the shareholders; members of the Board; and members of the
executive committee, together with the families and companies, associates,
investments and associates controlled by or affiliated with each of them.
The compensation of key management personnel including the Directors of
the Company is as follows:
2024 2023
$m $m
Board remuneration 0.7 0.7
Key management emoluments and short-term benefits 4.0 4.1
Share-related awards 1.7 2.7
6.4 7.5
There have been no changes in related parties since last year and no
related party transactions that had a material effect on financial
position or performance in the year.
24. Events occurring after the reporting period
On 10 March 2025, Genel entered into Block 54 Exploration and Production
Sharing Agreement in the Sultanate of Oman for a 40% participating
interest, in partnering with OQ Exploration & Production SAOG (‘OQEP’),
who will hold a 60% participating interest and operatorship of the
licence.
25. Subsidiaries and joint arrangements
The Company holds 25% working interest in Tawke PSC which is operated by
DNO ASA.
For the period ended 31 December 2024 the principal subsidiaries of the
Company were the following:
Entity name Country of Ownership %
Incorporation (ordinary shares)
Barrus Petroleum Cote D'Ivoire Sarl1 Cote d'Ivoire 100
Barrus Petroleum Limited2 Isle of Man 100
Genel Energy Africa Exploration UK 100
Limited3
Genel Energy Finance 4 plc3 UK 100
Genel Energy Gas Company Limited4 Jersey 100
Genel Energy Holding Company Limited4 Jersey 100
Genel Energy International Limited5 Anguilla 100
Genel Energy Miran Bina Bawi Limited3 UK 100
Genel Energy Morocco Limited3 UK 100
Genel Energy No. 6 Limited3 UK 100
Genel Energy No. 7 Limited3 UK 100
Genel Energy No. 8 Limited3 UK 100
Genel Energy Petroleum Services UK 100
Limited3
Genel Energy Qara Dagh Limited3 UK 100
Genel Energy Sarta Limited3 UK 100
Genel Energy Somaliland Limited3 UK 100
Genel Energy UK Services Limited3 UK 100
Genel Energy Yӧnetim Hizmetleri A.Ş.6 Turkey 100
Taq Taq Drilling Company Limited7 BVI 55
Taq Taq Operating Company Limited7 BVI 55
1 Registered office is 7 Boulevard Latrille, Cocody, 25 B.P. 945 Abidjan
25, Cote d'Ivoire
2 Registered office is 6 Hope Street, Castletown, IM9 1AS, Isle of Man
3 Registered office is Fifth Floor, 36 Broadway, Victoria, London, SW1H
0BH, United Kingdom
4 Registered office is 26 New Street, St Helier, JE2 3RA, Jersey
5 Registered office is PO Box 1338, Maico Building, The Valley, Anguilla
6 Registered office is Vadi Istanbul 1 B Block, Ayazaga Mahallesi,
Azerbaycan Caddesi, No:3 Floor: 18, 34396, Sariyer, Istanbul, Turkey
7 Registered office is Kingston Chambers, P.O. Box 173, Road Town,
Tortola, VG1110, British Virgin Islands
26. Annual report
Copies of the 2024 annual report will be despatched to shareholders in
March 2025 and will also be available from the Company’s registered office
at 26 New Street, St Helier, Jersey, JE2 3RA and at the Company’s website
– 2 www.genelenergy.com.
27. Statutory financial statements
The financial information for the year ended 31 December 2024 contained in
this preliminary announcement has been audited and was approved by the
Board on 17 March 2025. The financial information in this statement does
not constitute the Company's statutory financial statements for the years
ended 31 December 2024 or 2023. The financial information for 2024 and
2023 is derived from the statutory financial statements for 2023, which
have been delivered to the Registrar of Companies, and 2024, which will be
delivered to the Registrar of Companies and issued to shareholders in
March 2025. The auditors have reported on the 2024 and 2023 financial
statements; their report was unqualified and did not include a reference
to any matters to which the auditors drew attention by way of emphasis
without qualifying their report. The statutory financial statements for
2024 are prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European Union. The accounting
policies (that comply with IFRS) used by Genel Energy plc are consistent
with those set out in the 2023 annual report.
══════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════
ISIN: JE00B55Q3P39, NO0010894330
Category Code: FR
TIDM: GENL
LEI Code: 549300IVCJDWC3LR8F94
OAM Categories: 1.1. Annual financial and audit reports
2.2. Inside information
Sequence No.: 379314
EQS News ID: 2101944
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
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