Genel Energy PLC’s low-cost production in Kurdistan helps deal with 2020 headwinds

What it does

 () is the largest holder of reserves and resources in the Kurdistan Region of Iraq, where it operates the Taq Taq and Tawke oil fields, in which it owns 44% and 25% stake respectively.

In the same region, it is also planning a drilling campaign at the Qara Dagh field where it envisages some 200mln barrels of crude, while the Sarta field, where it has partnered with US giant Chevron, is set to see a mid-2020 startup date.

It also has exploration acreage in Morocco, at the offshore Sidi Moussa licence, and Somaliland, where it recently bought out its partner East Africa Resource Group in the SL10B13 onshore block, estimated to hold around 200mln barrels of oil.

How it’s doing

Half-year results indicated net production averaged 32,100 barrels of oil per day (bopd), versus 37,400 bopd in the comparative period.

That generated some US$88.4mln of revenue for the six months compared to US$194.3mln in the first half of last year.

Genel reported a US$340mln operating loss, though cashflow from operating activities amounted to US$85.5mln and Genel paid an interim dividend of 5c per share.

What the boss says

“Our low-cost production and the capital flexibility within our development programme have enabled us to preserve the strength of our balance sheet even while investing in growth.

“Given the lower oil price and overdue payments, the fact that we still expect to end 2020 in a net cash position – even after dividend distributions and making the investment to bring Sarta to production this year – is a testament to our resilience, and we have today confirmed an interim dividend of 5¢ per share,”