Genel Energy plc ("Genel" or "the Company") issues the following trading and operations update. The information contained herein has not been audited and may be subject to further review.
Murat Özgül, Chief Executive of Genel, said:
"The third quarter of 2015 has been a turning point for Genel. September's payment for exports, coupled with local sales, has stabilised the receivable owed to us by the Kurdistan Regional Government. An October payment for Taq Taq and Tawke is set to be received imminently. 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."
· Revenue for Q3 2015 of $77 million, with total revenue for the first nine months of 2015 of $276 million.
· In the third quarter of 2015, the Company received cash proceeds of $45 million, which included domestic Kurdistan Region of Iraq ("KRI") sales proceeds and the September 2015 export payment of $24.5 million. The receipt of the September payment led to cash balances increasing by $7 million in the period to $481 million at 30 September 2015.
· A further payment for Taq Taq and Tawke exports of $24.5 million is expected imminently.
· Q3 2015 local sales proceeds of $20.5 million reflect Genel's ability to divert production into the local market at short notice during periods of export pipeline downtime.
· Total cash proceeds from KRI domestic and export sales for the first nine months of 2015 were $95 million.
· In Q3 2015, crude oil realisations averaged $37/bbl, a 52% decrease on Q3 2014, due to the impact of lower global oil prices.
- Pipeline export realisations for Taq Taq and Tawke are estimated by Genel at $40/bbl and $35/bbl respectively. These figures assume a sales discount at Ceyhan relative to Brent, quality differentials for Taq Taq and Tawke, pipeline tariffs, handling fees, and contingencies. Taq Taq deliveries to the Bazian refinery realised an estimated $40/bbl. Once export payments normalise, Genel will seek to reconcile these estimates with the Kurdistan Regional Government ("KRG").
- Taq Taq domestic market sales realised $42/bbl
- Tawke domestic market sales realised $28/bbl
KURDISTAN REGION OF IRAQ OIL PRODUCTION
· Net working interest production and sales for Q3 2015 averaged 86,100 bopd, an increase of 23% on Q3 2014 oil production.
· Flexibility in our activity programmes allowed for expenditure at Taq Taq and Tawke to be tailored to reflect the delay in export payments. As a result, Taq Taq and Tawke production has declined from the peaks reached in Q2 2015. In October to date, Taq Taq has produced at an average gross rate of 107,000 bopd and Tawke 142,000 bopd.
· The Company's 2015 production guidance is accordingly revised to 85-90,000 bopd (from 90-100,000 bopd) and 2015 revenue guidance narrowed to $350-375 million (from $350-400 million) assuming a Brent oil price of $50/bbl in Q4 2015.