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Genel Energy (
LON:GENL) chief executive Murat Özgül said the third quarter of 2015 had been a ‘turning point’ for the oil and gas producer, whose main assets are in the Kurdistan region of Northern Iraq.
His comment follows the payment of the US$24.5mln Genel for oil exports in September.with another gross payment of $30 mln today from the Kurdistan Regional Government. Genel's share is US$16.5mln.
In June, Genel said its arrears were US$378mln, while producers in Kurdistan are understood to be owed over US$1bn by the regional government.
But Özgül said: “With total exports from the Kurdistan Region of Iraq again hitting record levels, and pipeline uptime improving, we have confidence in the KRG's commitment to make regular payments for oil exports."
The update came as part of a wider assessment of progress in the third quarter of the financial year – one in which it revised down its production guidance and ‘narrowed’ its revenue projection.
Genel, whose main oil assets are stakes in the Taq Taq and Tawke fields, said annual turnover would be in the range of US$350-375mln (from US$350-400mln), while output is likely to average 85-90,000 barrels per day (from 90-100,000 bopd).
Third quarter revenues were US$77mln, giving US$276mln for the nine months to date.
With US$481mln on the balance sheet, the company cash cashed up to withstand the worst of oil current malaise in the oil industry.
Exports using the new pipeline into Turkey mean the company is realising US$40 a barrel for crude from the Taq Taq field, while Tawke oil fetches US$35. Domestically, the fields achieve US$42 a barrel and US$28 respectively.
Although fairly tough generally for all producers, developers and explorers, Genel chief Özgül seemed buoyed by the company’s performance.
"The third quarter of 2015 has been a turning point for Genel,” he told investors.
“September's payment for exports, coupled with local sales, has stabilised the receivable owed to us by the Kurdistan Regional Government.”
Turning to exploration, Genel said drilling will get underway towards the end of this year on the CI-508 licence, offshore Côte d'Ivoire.
The company has a 24% working interest so will stump up around US$10mln for the exploration well which is targeting stacked Cretaceous reservoirs with “significant oil prospectivity”.
Shares eased 6% to 316p.