Page 9 - MEOG Week 39

MEOG PERFORMANCE MEOG

IOCs receive payments from KRG

KURDISTAN LONDON-LISTED Genel Energy and Gulf production.
Keystone Petroleum (GKP) last week received Meanwhile, Genel also last week completed
payments for August oil sales in the Kurdistan the issuance of a new $300mn senior unsecured
region of northern Iraq from the authorities in bond with maturity in October 2025. “The new
Erbil. bond will have a fixed coupon of 9.25% per
On September 25, Genel announced that it annum,” it said.
had received net pay of $10mn from the Kurdis- The Taq Taq field was once the firm’s flagship
tan Regional Government (KRG), while a simi- asset, producing in excess of 100,000 bpd in
lar payment was made to GKP. 2015. However, following major reserves down-
Genel released a statement saying: “The grades, output has now fallen to just 11,260 bpd,
Taq Taq partners received a gross payment of with Genel holding a 44% working interest.
$4.7mn, with Genel’s net share of the payment Meanwhile, drilling work at Tawke has been
being $2.6mn. The Tawke partners received slowed by the ongoing coronavirus (COVID-
a gross payment of $33.8mn, with Genel’s net 19) pandemic coupled with uncertainty about
share being $8.2mn.” payments, but a slideshow noted “the ability to
In August, the company provided its first-half rapidly scale up as the external environment
operational update, which showed a $340mn improves”. Genel holds a 25% working inter-
operating loss, while the company generated est in Tawke, where gross production averaged
$6.5mn of free cash flow (FCF). 108,580 bpd during the first half, increasing to
In a presentation to analysts on August 6, 115,000 bpd following fast-tracked activity amid
CEO Bill Higgs praised the company’s “robust” improved oil price and payment stability.
business model, and said that Genel’s “low-cost In early September, GKP said that it was plan-
production and the capital flexibility within our ning to resume efforts to expand production
development programme have enabled us to from its Shaikan oilfield in the semi-autonomous
preserve the strength of our balance sheet even Kurdistan region.
while investing in growth.” As of August, Genel It announced that production from the field
was owed $121mn by the KRG in relation to past had risen during the first eight months by 25%
production and Higgs said that talks with Erbil compared to the same period of 2019. It noted
remained ongoing. that gross average output from the asset was
While the company already produces from 36,000 bpd up to the beginning of September,
multiple licences within Kurdistan, it has focused with the target average for the year set at 35,000-
on Sarta, which Genel anticipates bringing into 36,000 bpd.
production towards the end of the year. It also said that it has identified several pro-
Out of an anticipated second-half capital jects that could bring swift returns, specifying
expenditure (capex) of $45mn, around 50% is that a gross capital expenditure of $5mn could
earmarked to be spent on bringing Sarta into increase gross production by 5,000 bpd.™

Week 39 30•September•2020 www. NEWSBASE .com P9