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Genel Energy Further Revises Oil Reserves in Iraqi Kurdistan, Only One Third of the Oil that Was Previously Confirmed is Actually Present

Operating losses for DNO in 2015 were $174US million.

Oil reserves for Genel Energy have been downgraded for the second time in the last few weeks after an audit by the company's Norwegian partner, DNO. Genel has downgraded their 2P reserves down to 241.9 million barrels in a statement by Tony Hayward, former BP boss. This number indicates there has been a further 8% less probable and proven possibility of reserves in Tawke oil field.  Genel has effectively reported a quadruple loss after a $1bn writedown which is a ‘High-risk gamble.' This concurrently occurred after Genel's shares fell 42% when they announced only one-third of oil reserves were left in Taq Taq oil field, from what they previously thought. In the effort to reassure investors, Genel will buy back $50US million bonds.

Despite these recent announcements, Genel's shares have increased 13.3% at 90p Friday morning--meaning the company is now valued at £250million. However, shares have taken a 93% plunge since the Kurdistan Regional Government has failed to make payments amidst the falling global price of oil. 

Operating losses for DNO in 2015 were $174US million. 2P reserves for the company fell by 20 per cent to 543m barrels from 2014, due to lower production during 2015 and Friday’s downgrade.

Bijan Mossavar-Rahmani, DNO’s executive chairman, said: “We have long taken a diligent, transparent and prudent tack with Tawke and are pleased it continues to rank first in reserves, production and exports among fields operated by international oil companies in Kurdistan.”
Analysts at Barclays Capital said: “Although we struggle to describe a reserve cut as good news, [this] reduction is far better than we believe many investors have feared following Genel’s more substantial downgrade at Taq Taq.”
Stephane Foucaud, an analyst at First Energy, said: “This is probably a relief to some investors who were expecting the worse following the Taq Taq disaster.”

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