16th Jan 2020 11:05
(Alliance News) - Genel Energy PLC on Thursday reported a "successful" 2019, with production from Kurdistan growing.
Gross output from Genel's wells was 135,900 barrels of oil per day, up 8% on the year prior. Of this, 36,250 barrels was net to Genel, in line with guidance.
This production includes both the Tawke and Taq Taq assets. Genel reported Tawke production last on Tuesday, said it rose 9.6% to 124,000 barrels per day in 2019.
On the financial front, Genel received USD317 million of proceeds for oil sales in 2019, 5.4% lower than in 2018.
This was affected by the non-payment by the Kurdistan government of USD54 million for August and September sales.
These were due to be paid in November and December, but only USD28 million has been paid so far, the amount due for August. Genel expects the remainder in the first quarter of 2020.
On Genel's other assets, none of which are producing, construction at the Sarta field is going well. Civil works at Qara Dagh are on track ahead of drilling, while Genel made "significant" progress on commercial terms for a development at Bina Bawi.
Looking to 2020, Genel expects total net production to be close to the fourth-quarter 2019 level of 35,410 barrels of oil per day. The exit rate will be 10% higher, however, with Sarta set to come online in the summer.
Capital expenditure is guided between USD160 million and USD200 million, and costs per barrel USD3, which Genel said is amongst the lowest in the industry.
"2019 was a successful year for Genel, and we continue to deliver on our promises. We increased our highly cash-generative production in line with guidance, paid a material dividend, grew our operating capabilities, and added new assets to the portfolio that will bear fruit in 2020," said Chief Executive Bill Higgs.
"Our ongoing cash generation, with confidence of regular payments and in the security of the Kurdistan Region of Iraq, means it is business as usual and our investment plans are moving forward at pace."
"This increasing investment in our growth assets is more than covered by expected free cash flow, and will see production diversify and increase as Sarta comes onstream in the summer, with enough remaining to underpin an increase in our already significant dividend," said Higgs.
Genel shares were 3.4% higher on Thursday morning in London at 188.66 pence each.
By George Collard; [email protected]
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