Genel Energy Shares Bounce following Results

Genel Energy Shares Bounce following Results
March 30, 2017 in Iraq Oil & Gas News
By John Lee.

Shares in Genel Energy have bounced 7 percent from their recent lows this morning following the announcement of the company’s full-year results (below), and bond buy-back offer.

Highlights

The KRG’s February 2016 commitment to pay contractor export payments and address outstanding receivables led to a significant increase in cash proceeds during 2016
$207 million cash proceeds were received in 2016 (2015: $148 million), with Genel generating $59 million in free cash flow (2015: $179 million outflow)
$67 million in cash proceeds received in 2017 to date, representing full settlement of invoices for 2016 production
2016 net production averaged 53,300 bopd (2015: 84,900), at the lower end of revised guidance
Strong liquidity position at the end of 2016, with unrestricted cash balances of $407 million ($455 million at end-2015)
Outlook

Signature of amended PSCs and Gas Lifting Agreement in February 2017, with a focus now on concluding negotiations with potential partners
Continued engagement with the KRG over accelerating the recovery of outstanding receivables
Tawke 2017 production expected to average around year to date production levels of 111,000 bopd, in line with the Operator’s guidance
Peshkabir-2 Cretaceous discovery in early 2017 – accelerated appraisal and early production planning
2017 capex guidance for Taq Taq and Tawke reiterated at $50-75 million. KRI gas business and Africa exploration expenditure also reiterated at c.$50 million
Bond buy-back announced today (see separate press release)
Murat Özgül (pictured), Chief Executive of Genel, said:

“While 2016 was a challenging year at Taq Taq, Tawke continues to produce at a stable level, and regular payments for our oil production in the Kurdistan Region of Iraq helped generate free cash flow in the year. The improved financial position of the Kurdistan Regional Government bodes well for a continuation of these payments.

“The signing of definitive agreements in February 2017 allows us to focus on concluding negotiations with potential partners, helping unlock the significant value in our gas assets. We move into 2017 with clear priorities: maximising the value of our oil assets, accelerating the recovery of the receivable, and building on the increased momentum in the development of our gas assets.“

The full results can be read here.