Somaliland: Genel Production Down 34% In 2017 But Strong End Brings Positive Year

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Somalilandsun- In Africa, Genel has now acquired 2D seismic data for the SL-10B/13 and Odewayne blocks, onshore Somaliland, and data processing has begun where the Anglo-Turkish company says it is targeting resources of over two billion barrels of oil.

LONDON (Alliance News) – Genel Energy PLC said on Thursday its average net production fell by 34% in 2017, though the company said a strong final quarter rounded off a “very positive” year.

Net total production to Genel for 2017 was 35,200 barrels of oil per day, down from 2016’s 53,300 barrels. Total production including partner shares in 2017 was 127,100bopd, versus 167,400bopd.

Of the net figure, 27,270bopd was from the Tawke field, with the remaining 7,940 from the Taq Taq field, both in Iraqi Kurdistan.

Taq Taq averaged 14,035bopd in the fourth quarter. To date in 2018, it has produced an average of 14,450bopd as production stabilises following well intervention work and production optimisation, which Genel said slowed the overall production decline at the field.

Going forward, Genel expects combined net production in Kurdistan to be close to fourth quarter levels, which for the combined fields was a net 32,760bopd.

Genel received USD263.0 million of cash proceeds during the year, up from the year before’s USD207.0 million. Of the recent year’s figure, USD72.0 million was booked in the last quarter with included USD19.0 million in override payments for the Tawke field. Since the year’s end, it has received USD19.0 million in oil payments.

Capital expenditure for the year reached USD95.0 million, in line with guidance, with around two-thirds of that spent on the two Kurdistan fields.

Capex for 2018 is guided between USD95.0 million and USD140.0 million, with activity levels depending on drilling results and progress on the Miran and Bina Bawi fields in Iraq, Genel said. Capex will be entirely funded from cash flow: Tawke and Taq Taq will cost between USD60.0 million and USD85.0 million; Miran and Bina Bawi USD25.0 million to USD40.0 million; and African exploration between USD10.0 million to USD15.0 million.

Genel said field development plans for Bina Bawi and Miran are expected to be finalised shortly. On Tuesday, the company agreed with the Kurdistan regional government a 12-month extension to the deadline for meeting conditions of gas lifting agreements for the fields, originally signed in February 2017.

In Africa, Genel has now acquired 2D seismic data for the SL-10B/13 and Odewayne blocks, onshore Somaliland, and data processing has begun.

Chief Executive Murat Ozgul commented: “A strong final quarter of 2017 completed a very positive year for Genel. During the quarter, the successful Peshkabir-3 well result tripled production at the field to around 15,000 bopd, a figure that is expected to grow in 2018, while at Taq Taq the TT-29w well was brought on production.

“The successful debt refinancing in late 2017, and the expectation of ongoing material free cash flow, provides us with a solid platform and financial flexibility to execute our growth plans during 2018 and beyond.”

Genel shares were down 2.3% on Thursday at 131.86 pence each.

By George Collard; georgecollard@alliancenews.com

Copyright 2018 Alliance News Limited. All Rights Reserved

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