Genel Energy PLC: Trading and operations update (1478067)

Genel Energy PLC (GENL) Genel Energy PLC: Trading and operations update 03-Nov-2022 / 07:00 GMT/BST Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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3 November 2022

Genel Energy plc

Trading and operations update

Genel Energy plc ('Genel' or 'the Company') issues the following trading and operations update in respect of the third quarter and first nine months of 2022.

Paul Weir, Chief Executive of Genel, said:

"I am pleased that we remain on track to generate around USD250 million of free cash flow this year, building towards a significant cash balance of over USD500 million by the end of the year. We are focused on putting this cash to work to purchase new assets, grow the business, and increase shareholder returns. It is business as usual on an operational level in Kurdistan, while we continue to work with the KRG on the challenges that the sector faces. Our existing predictable production business outlook supports our established dividend of USD50 million, and our committed dividend programme has paid USD178 million of cash to shareholders since its inception in 2019."

FINANCIAL

-- Margin of USD36/bbl in the first three quarters of 2022 (2021: USD24/bbl), with Brent averaging USD105/bbl(2021: USD71/bbl)

-- Capital expenditure of USD109 million, of which USD55 million was spent at Tawke, and USD38 million at Sarta

-- Free cash flow of USD175 million up to 30 September 2022? This does not include proceeds for June production, totalling USD59 million, received in October

-- In relation to the nominal USD120 million for unpaid sales made from November 2019 to February 2020, andthe suspended override from March 2020 to December 2020 that would have earned USD38 million, since January 2021:? Cash of USD117 million has been received ? Offsets of USD9 million have been made

-- Cash of USD447 million at 30 September 2022 (USD412 million at 30 June 2022)

-- Net cash under IFRS of USD181 million at 30 September 2022 (USD141 million at 30 June 2022)? Total debt of USD274 million at 30 September 2022 (USD280 million at 30 June 2022), following theopportunistic acquisition of USD6 million of bonds at a price that provided an attractive level of return

PRODUCTION BUSINESS

-- Net production of 30,350 bopd in the first nine months of 2022, and 30,200 bopd in Q3, in line withguidance

-- Tawke PSC (25% working interest)? Gross production averaged 107,300 bopd in the first nine months of 2022, and 108,500 bopd in Q3

-- Sarta (30% working interest and operator)? Gross production averaged 4,900 bopd in the first nine months of 2022, and 3,960 bopd in Q3 ? Production continues from existing well stock as we continue to work on the field to seek to optimiseproduction from various zones, ranging from the pilot production tests of the newly discovered Butmah andNajmah resources through to the initial stacked Mus & Adaiyah reservoir intervals ? Rigless testing at Sarta-6 is now underway, with the initial appraisal programme expected to becomplete by the end of year

-- Taq Taq PSC (44% working interest and joint operator)? Gross production averaged 4,660 bopd in the first nine months of 2022, and 4,280 bopd in Q3 ? Taq Taq continues to perform in line with expectations, with positive results from the recent wellintervention programme ? Drilling is set to resume with an infill production well expected to spud around the end of 2022

PRE-PRODUCTION BUSINESS

-- Somaliland? Following the successful farm-out in December 2021, preparation continues for the drilling of a wellon the highly prospective SL10B13 block (51% working interest and operator) ? The Toosan prospect contains stacked Mesozoic reservoir objectives, with multiple individualprospective resource estimates each ranging from 100 to 200 MMbbls ? The geotechnical survey will begin this month, supporting the plan for the construction of the wellpad. Environmental and social impact assessments will begin before the end of 2022, and tendering has commencedfor the rig and well services, ahead of a targeted spud date around the end of 2023/early 2024 ? Having undertaken a combination of water and food relief programmes earlier in the year, in reactionto the ongoing drought in Somaliland Genel is working with ANPPCAN to deliver a food relief programme toc.4,000 families

-- Morocco? A Petroleum Agreement and Association Contract is expected to be signed with ONHYM regarding theLagzira block (75% working interest and operator), with a farm-out programme now underway ? The Lagzira block is a large offshore licence, in water depths of 200-1,200 metres, with a provenpetroleum system following Genel's 2014 well which recovered oil from Upper and Middle Jurassic reservoirs ? Subsequent to this drilling, high quality 3D (broadband multi-azimuth) seismic was acquired in 2018,and new plays identified, with 18 prospects and leads, and material resource potential

-- Qara Dagh (40% working interest and operator)? We continue to evaluate the QD-2 well and its results, and a decision on licence next steps will betaken shortly. Should no further action be taken then the licence will expire in January 2023

ARBITRATION

-- The London-seated international arbitration regarding Genel's claim for substantial compensation from theKRG following the termination of the Miran and Bina Bawi PSCs is progressing. Written submissions have been made tothe tribunal and the trial has now been scheduled for February 2024

ESG

-- Zero lost time incidents in 2022, with three million hours worked since the last incident

-- Following the Annual General Meeting ('AGM') on 12 May 2022 the Company announced that resolutions 4 and16 had over 20% of votes cast against them. In accordance with Provision 4 of the UK Corporate Governance Code2018, the Company is required to provide an update on the views received from shareholders and actions taken inrespect of these resolutions? In light of the votes received against the resolutions, the Company has engaged with majorshareholders to understand their views. Noting that proxy agencies were all in favour of the above resolutions,and following discussions with shareholders, the Board considers the votes cast against the resolutions toprimarily reflect differing opinions held by the Company's major shareholders in relation to a number ofmatters. As a consequence, the Company does not believe it is necessary or appropriate to take any additionalaction

OUTLOOK AND GUIDANCE

-- Production guidance of 30-31,000 bopd reiterated for 2022

-- 2022 capital expenditure guidance of between USD150 million to USD170 million reiterated

-- Genel expects to end 2022 with over USD500 million of cash on the balance sheet

-- Genel continues to actively screen and work up opportunities to put our cash to work in order to extendthe line of sight on cash flows that support our dividend programme into the long-term

-- Appraisal at Sarta is ongoing, with results of the Sarta-6 well expected around the end of the year

-- Genel has an established and committed dividend programme, currently paying USD50 million per annum

-- We have recently taken opportunistic steps to buy back a limited number of bonds at a price that providesan attractive return on investment. We may make further opportunistic purchases so long as the capital need doesnot reduce our ability to successfully acquire assets that we are targeting

Genel will also host a live presentation on the Investor Meet Company platform today at 1000 GMT. The presentation is open to all existing and potential shareholders. Questions can be submitted at any time during the live presentation. Investors can sign up to Investor Meet Company for free and add to meet Genel Energy PLC via: https:// www.investormeetcompany.com/genel-energy-plc/register-investor

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For further information, please contact:

Genel Energy 
                                       [phone] 
Andrew Benbow, Head of Communications 
 
Vigo Consulting 
                                       [phone] 
Patrick d'Ancona 

This announcement includes inside information.

Notes to editors:

Genel Energy is a socially responsible oil producer listed on the main market of the London Stock Exchange (LSE: GENL, LEI: 549300IVCJDWC3LR8F94). The Company is one of the largest London-listed independent hydrocarbon producers, with an asset portfolio that positions us well for a future of fewer and better natural resources projects. Genel has low-cost and low-carbon production from the Sarta, Taq Taq, and Tawke licences in the Kurdistan Region of Iraq, providing financial resilience that allows investment in growth and the payment of a material and progressive dividend. Genel also continues to pursue further growth opportunities. For further information, please refer to www.genelenergy.com

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ISIN:          JE00B55Q3P39, NO0010894330 
Category Code: TST 
TIDM:          GENL 
LEI Code:      549300IVCJDWC3LR8F94 
Sequence No.:  198511 
EQS News ID:   1478067 
 
End of Announcement  EQS News Service 
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November 03, 2022 03:00 ET (07:00 GMT)