Genel Energy PLC: AGM Statement (812159)

 
 Genel Energy PLC (GENL) 
Genel Energy PLC: AGM Statement 
 
16-May-2019 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
16 May 2019 
 
           Genel Energy plc 
 
           AGM Statement 
 
Stephen Whyte, Chairman of Genel Energy plc ('Genel' or 'the Company'), will 
   give the following update on the business at the Company's Annual General 
Meeting, which is being held at 11.00am today at Taj Hotel, St James' Court, 
                      54 Buckingham Gate, London, SW1E 6AF: 
 
   "Genel had a very successful 2018, with free cash flow generation of $164 
                 million even while making significant investment in growth. 
 
      2019 has seen us continue this success. We are delivering year-on-year 
          production growth, we have made portfolio additions that perfectly 
      complement our existing asset base, and our cash position continues to 
                      strengthen. 
 
    Genel is participating in 20 wells this year, the most of any IOC in the 
Kurdistan Region of Iraq ('KRI'). Drilling on the Tawke and Peshkabir fields 
   is ongoing, with activity ramping up as we progress through 2019. Year to 
        date production from the Tawke PSC is currently c.126,800 bopd, with 
    Peshkabir driving impressive growth compared to the prior year's period. 
 
 The drilling programme at Taq Taq has now delivered three successful wells, 
and year to date production is currently c.13,300 bopd, an increase from the 
2018 average of 12,350 bopd. We are continuing to achieve successful results 
               from the flanks of the field, and are drilling ahead at pace. 
 
   Total Genel working interest production across all assets is 37,600 bopd, 
         running slightly ahead of our expected 10% increase in year-on-year 
                      production. 
 
Even as we invest to deliver this production increase we continue to improve 
   our cash position, generating almost $50 million in free cash flow in the 
     first four months of the year. We expect to keep up this impressive run 
       rate. Our current expectation is that we will generate well over $100 
  million in free cash flow over the course of 2019, prior to the payment of 
the dividend, even after increasing expenditure on our growth opportunities. 
 
  The results at Peshkabir show the significant success that can be obtained 
   from our low-cost, rapid return operations in the KRI. While investing to 
  increase production from 12,000 bopd to 55,000 bopd over the course of the 
   year, Genel still generated $50 million of free cash flow from the asset. 
       This level of return is hard to match anywhere else in the world, and 
   illustrates why we continue to look for further opportunities in the KRI. 
 
 Put simply, the KRI is a very good place in which to operate. Payments have 
       been made on a monthly basis for over three and a half years now, the 
  political situation continues to improve - with Baghdad having made budget 
     payments to the Kurdistan Regional Government for over a year - and the 
     low-cost of operations helping to set a breakeven oil price at an asset 
   level of $20/bbl. We are still looking to diversify the portfolio, but we 
   will not ignore further opportunities in the KRI - and indeed continue to 
 focus on these where our presence on the ground and regional expertise mean 
                     we can maximise their value potential for shareholders. 
 
 In that context, as you are probably aware by now, we were delighted to add 
     Sarta and Qara Dagh to the portfolio. They tick all of the boxes, as we 
 partner with Chevron on assets that offer a mixture of near-term production 
and long-term growth potential. Sarta is expected to enter production in the 
  middle of 2020, and we will develop the field utilising a similar strategy 
 to the one that was so successful (and cash-generative) at Peshkabir. While 
  we do not want to get ahead of ourselves there are hydrocarbons throughout 
  the structure in all of the typical KRI reservoirs, from the Tertiary down 
                      to the Triassic. 
 
   We are focused on building an even stronger business with material growth 
 potential, providing a clear and compelling investment case that offers the 
          opportunity for a significant increase in shareholder value. As we 
   prioritise that growth, we have also initiated a material and sustainable 
  dividend, providing investors with a compelling mix of growth and returns. 
 
 I am delighted that Bill Higgs is now sitting alongside me as CEO, and that 
                      Esa Ikaheimonen, our CFO, has also joined the Board. 
 
       On a personal level, the transition that I was keen to oversee is now 
  complete. As such I have decided that this will be my last AGM as Chairman 
   of Genel, and I will leave the Company for new challenges once a suitable 
    successor has been identified. When I joined the Board two years ago the 
   share price was under 80p, production was declining, Genel had unpaid oil 
              receivables of over $400 million and $142 million in net debt. 
 
    Genel's production and net cash position is now rising, the portfolio is 
  positioned to provide material organic growth, and Genel now has the right 
   team to deliver that growth. Management has a wealth of experience in the 
sector, experience that can also be utilised to make further value-accretive 
portfolio additions and optimise our growing cash pile to generate value for 
                      shareholders." 
 
       Genel will announce results for the six months ending 30 June 2019 on 
                      Tuesday 6 August 2019. 
 
           -ends- 
 
                      For further information, please contact: 
 
Genel Energy                          [phone] 
 
Andrew Benbow, Head of Communications 
 
Vigo Communications                   [phone] 
 
Patrick d'Ancona 
 
                      Notes to editors: 
 
       Genel Energy is an independent oil and gas exploration and production 
  company listed on the main market of the London Stock Exchange (LSE: GENL, 
    LEI: 549300IVCJDWC3LR8F94). The Company, with headquarters in London and 
offices in Ankara and Erbil, is one of the largest London-listed independent 
   oil producers, and is the largest holder of reserves and resources in the 
   Kurdistan Region of Iraq. Genel has highly cash-generative oil production 
    from the Taq Taq and Tawke licences, with material growth potential from 
other assets in the portfolio. Genel also continues to pursue further growth 
 opportunities. For further information, please refer to www.genelenergy.com 
                      [1]. 
 
ISIN:          JE00B55Q3P39 
Category Code: AGM 
TIDM:          GENL 
LEI Code:      549300IVCJDWC3LR8F94 
Sequence No.:  8656 
EQS News ID:   812159 
 
End of Announcement EQS News Service 
 
 
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=3ec46b352f38452116096dbbab51b09e&application_id=812159&site_id=vwd_london&application_name=news 
 

(END) Dow Jones Newswires

May 16, 2019 02:01 ET (06:01 GMT)