Genel Energy, the Iraq-focused oil giant led by ex-BP frontman Tony Hayward, announced that the a well in the Tawke Field, of which it owns a quarter, was successfully completed and tested by operator DNO International.
The Tawke-16 well, located in the Kurdistan Region, flowed at a cumulative rate in excess of 25,000 barrels per day of 26-27 API gravity oil. Based on initial results, Tawke-16 is likely to be the "most prolific" well drilled so far in the field, DNO said.
DNO owns a 55% stake in the field, the Kurdistan regional government owns a 20%, while Genel owns 25%.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
DNO expects to connect the well to the existing pipeline and processing facilities by the middle of April, "boosting the Tawke Field's deliverability," the statement said. DNO predicts that the Tawke Field will produce at a rate of 100,000 barrels per day by the end of the year.
Latest Videos FromMoneyWeek
"This is a very encouraging result. The successful completion of testing at Tawke-16 has further substantiated the quality of the Tawke field and the potential resource upside that we believe to exist," Hayward said.
"Genel Energy remains committed to increasing the size and the scale of our existing business in the Kurdistan Region and this result, along with the extensive exploration programme of 7 high impact wells over the next 18 months, is a good step to achieving that aim."
Shares were trading 1.99% higher at 742p by mid-afternoon on Wednesday.
Yesterday, Genel announced that it has generated $24m in revenue during the period from its incorporation (April 1st) to the end of 2011. It registered a loss before tax of $57.7m and a loss per share of 72.34 cents.
Net cash at December 31st stood at $1,912.9m, helped by its initial public offering which raised a whopping $2.1bn in June.
During the period, the net average production surged by 147% from 17,000 barrels of oil per day (bopd) in 2010 to 42,000 bopd. Meanwhile, the net 2P reserve (proven and probable reserves collectively) base increased by 60% from 257m barrels to 412m barrels.
"We believe we have established a solid platform from which to pursue our growth ambitions and as an Anglo-Turkish champion we are well placed to benefit from Turkey's growing influence in the region and further afield. With $1.9 billion of cash available to invest in new opportunities, we look forward to an exciting future," Hayward said alongside the results on Tuesday.
BC
