5th Mar 2015 08:10
LONDON (Alliance News) - Genel Energy PLC Thursday reported a significant rise in revenue and production in 2014 and said its expects "significant further growth" in 2015, but the company swung to a pretax loss in 2014 on the back of significant depreciation charges and write offs.
The exploration and production company focused on Iraq also reported a strong cash balance and minimal debt, something it believes is a "significant strength", and said its revenue from the Kurdistan region in Iraq is predictable going forward.
Genel reported a substantial rise in revenue of USD519.7 million for the year ended December 31, from USD347.9 million a year earlier, driven by an increase in production.
Earnings before interest, tax, depreciation, amortization and exploration expenses totalled USD410.6 million, also a rise from USD274.8 million.
However, the company was hit by USD141 million in depreciation charges which was "broadly in line with production levels", alongside exploration costs of USD476.8 million which represent the write-off of expenditure relating to exploration wells drilled in Angola, Malta and the Sidi Moussa and Juby Maritime fields in Morocco. In addition, Genel wrote off the entire USD80.9 million value of the Dohuk gas asset in Iraq.
This led to the company swinging to a USD312.8 million pretax loss in 2014, from a USD186.5 million profit a year earlier.
Capital expenditure in 2014 totalled USD676.9 million, compared to USD563.6 million in 2013, after a significant rise in capital expenditure in Africa, partially offset by reduced spending on exploration.
At the end of the year, Genel reported a cash balance of USD489.1 million, with a net debt of USD2.3 million.
"At a time of a depressed oil price we remain focused on the importance of a robust balance sheet. Genel's financial flexibility is a significant strength," said Chief Executive Tony Hayward.
Net production in 2014 reached 69,000 barrels of oil equivalent per day, up 58% year-on-year, and the company said it is expecting "significant further growth in 2015".
In 2015, Genel is expecting to produce between 90,000 to 100,000 barrels of oil equivalent per day, to generate revenue between USD350 million to USD400 million based on a Brent oil price of USD50 a barrel.
"Given that this production is amongst the lowest-cost in the world, and domestic realisations strong, this provides a significant interim source of revenue until predictable export payments are in place. We expect to receive regular payments for exports as we move through 2015," said Hayward.
Genel shares were up 2.9% to 578.49 pence per share at the open Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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