Genel Energy PLC on Tuesday said it has ‘continued optimising cash flows’ as production increases on the Tawke production sharing contract in Kurdistan.
Shares in Genel were up 5.4% at 83.40 pence in London on Tuesday afternoon.
Tawke, the company said, generated gross production of 84,210 barrels of oil per day during the third quarter, up from 79,780 bopd in the second. Working interest production rose to 21,050 from 19,950 bopd.
The oil from Tawke was sold domestically at on average $37 per barrel, slightly up on-quarter from $36.
Production for the year to date has increased slightly, Genel added, totalling 80,120 bopd compared with 78,050 barrels in its first half year.
Genel, a London-based oil & gas company with production assets in the Kurdistan region, said cash generation from Tawke ‘has again more than covered all spend’ during the third quarter. This resulted in year-to-date free cash flow of $20 million, compared with $60 million in out-flow the year before.
‘Since our half year results in August, we have continued optimising cash flows, evolving our capital structure and originating and maturing opportunities to acquire new assets that add reserves and diversify our cash generation geographically,’ commented Chief Executive Paul Weir. ‘We maintain our discipline on spend and focus on profitability and both delivering, and building on, the significant value upside that is already in the business.’
‘We have repurchased and cancelled $182 million of our own bonds, reducing our debt from $248 million to $66 million at the end of October,’ he added. ‘Our balance sheet position remains strong, with net cash at the end of October of $125 million, and cash of $191 million.’
Genel held net cash of $132 million as of September 30 and, looking ahead, expects to hold approximately $125 million at the end of this year.
The company also retains an overdue receivables balance of nominal $107 million owed by the Kurdistan Regional Government, and said discussions have occurred regarding mechanisms for recovery. Genel also expects by the end of the year to receive ‘substantial compensation’ from the KRG due to its arbitration counterclaim over the termination of the Miran and Bina Bawi PSCs.
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