REG-Genel Energy PLC Genel Energy PLC: Trading and operations update

Genel EnergyAnnouncement

11/05/2023 07:15

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   Genel Energy PLC (GENL)
   Genel Energy PLC: Trading and operations update

   11-May-2023 / 07:00 GMT/BST

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   11 May 2023

    

                                Genel Energy plc

                                        

                         Trading and operations update

                                        

   Genel Energy plc ('Genel' or  'the Company') issues the following  trading
   and operations update relating to Q1  2023, ahead of the Company's  Annual
   General Meeting ('AGM'), which is being held today.

    

   Paul Weir, Chief Executive of Genel, said:

   “The prolonged closure of the  Iraq-Turkey pipeline is very  disappointing
   and, although there continues  to be speculation  regarding the timing  of
   resumption of exports, we cannot  predict with any certainty when  exports
   will recommence.  In  anticipation  of exports  resuming  we  are  seeking
   clarity on future arrangements  and a mechanism in  place for regular  and
   predictable payments going forward.

    

   Delays in  payments  and  the  suspension  of  exports  have  resulted  in
   significant cash generation  being deferred  and we are  scaling back  our
   planned activity accordingly. We continue to reduce costs so that the size
   and shape of the organisation matches the needs of the business.

    

   Our financial  position is  robust, and  we remain  focused on  using  our
   significant liquidity to add  new assets to the  portfolio that will  fund
   the long-term payment of our established dividend.”

    

   Q1 2023

     • Zero lost time incidents in 2023, with over four million hours  worked
       since the last incident
     • Net production of 26,000 bopd in Q1 2022 (30,520 bopd in Q1 2022)
     • Pending approval  at the  AGM today,  a dividend  distribution of  12¢
       (9.6588 pence) per share will be paid on 19 May 2023
     • $61 million of cash proceeds were received from the Kurdistan Regional
       Government (‘KRG’) in Q1 2023, relating to August and September 2022
     • Capital expenditure of $24  million in Q1 2023,  of which $21  million
       was cost recoverable spend at Tawke and Taq Taq

     • Cash of $496  million at 31  March 2023 ($495  million at 31  December
       2022)
     • Net cash under IFRS of $229 million at 31 March 2023 ($228 million  at
       31 December 2022)

          ◦ Total debt of $274 million at 31 March 2023 ($274 million at 31
            December 2022)

    

   2023 OUTLOOK AND GUIDANCE

     • Due to the closure  of the Iraq-Turkey Pipeline  on 25 March 2023  and
       resulting  impact  on  production,  Genel’s  production  guidance   of
       27-29,000 bopd is no  longer valid. New guidance  will be issued  once
       the pipeline reopens and investment plans are confirmed
     • Genel now  expects  capital  expenditure  to  be  below  $100  million
       (previous guidance $100-125 million)
     • Payments totalling $80 million are outstanding relating to  production
       from October 2022 to  January 2023, with $110  million of total  sales
       invoices submitted up to and including March 2023

    

   PRODUCTION BUSINESS

     • Tawke PSC (25% working interest)

          ◦ Gross production averaged 93,880 bopd in Q1 2023 (106,470 bopd in
            Q1 2022), due to planned well intervention operations temporarily
            constraining overall production
          ◦ Given the uncertain timing of export resumption and the delays in
            payments, spend at the Tawke licence has been scaled back, with
            the number of active rigs to drop from four at the start of 2023
            to none in H2 2023
          ◦ Five wells were completed and another three wells spudded in Q1
            2023, with Tawke licence drilling to end in May

     • Sarta (30% working interest and operator)

          ◦ Gross production averaged 3,160 bopd in Q1 2023 (5,590 bopd in Q1
            2022)
          ◦ As previously stated, Genel’s focus is on making ongoing
            production from Sarta profitable

     • Taq Taq PSC (44% working interest and joint operator)

          ◦ Gross production averaged 3,610 bopd in Q1 2023 (5,070 bopd in Q1
            2022)
          ◦ Taq Taq continues to produce into storage, with around one week
            of storage capacity remaining

    

   PRE-PRODUCTION BUSINESS

     • Somaliland

          ◦ Preparation continues for the drilling of the Toosan-1 well on
            the highly prospective SL10B13 block (51% working interest and
            operator)
          ◦ The Toosan prospect contains stacked Mesozoic reservoir
            objectives, with multiple individual prospective resource
            estimates each ranging from 100 to 200 MMbbls
          ◦ Civil work at the wellsite is set to get underway shortly, and
            the Environmental, Social and Health Impact Assessment is nearing
            completion
          ◦ Genel continues to target a spud date in H1 2024, acknowledging
            the challenges of operating in such a frontier area with limited
            existing infrastructure

     • Morocco

          ◦ The farm-out programme on the Lagzira block (75% working interest
            and operator) is ongoing

    

   ESG

     • Genel’s 2022 Sustainability  Report has been  issued today,  detailing
       our environmental performance and the  positive impact that we  strive
       to have on the communities in which we operate. Highlights include:

          ◦ Zero LTIs across all Genel operations with 3 million hours worked
            incident free
          ◦ Zero waste to landfill from operations at Sarta, with 91%
            recycled
          ◦ Solar panel and battery storage unit operational at Sarta
          ◦ Improvement in both CDP climate change and water security score

    

   ARBITRATION

     • The London-seated  international arbitration  regarding Genel’s  claim
       for substantial compensation from the KRG following the termination of
       the Miran  and  Bina  Bawi  PSCs is  progressing.  The  trial  remains
       scheduled for February 2024

    

                                     -ends-

    

   For further information, please contact:

    

   Genel Energy
                                         +44 20 7659 5100
   Andrew Benbow, Head of Communications
                                          
   Vigo Consulting
                                         +44 20 7390 0230
   Patrick d’Ancona 

    

   This announcement includes inside information.

    

   Notes to editors:

   Genel Energy is  a socially responsible  oil producer listed  on the  main
   market   of    the    London    Stock   Exchange    (LSE:    GENL,    LEI:
   549300IVCJDWC3LR8F94). The  Company is  one of  the largest  London-listed
   independent hydrocarbon producers, with an asset portfolio that  positions
   us well for a future of fewer and better natural resources projects. Genel
   has low-cost and low-carbon production from the Kurdistan Region of  Iraq,
   and a committed dividend programme that is material and sustainable. Genel
   continues to seek opportunities to  add new resilient and  cash-generative
   assets to its portfolio, with the goal of progressing its dividend in  the
   long-term. For further information, please refer to  1 www.genelenergy.com

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   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.

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   ISIN:          JE00B55Q3P39, NO0010894330
   Category Code: TST
   TIDM:          GENL
   LEI Code:      549300IVCJDWC3LR8F94
   Sequence No.:  242827
   EQS News ID:   1630011


    
   End of Announcement EQS News Service

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