Genel Energy expects significant 2013 results

Genel Energy said 2013 is set to be a significant year following encouraging results from its oil and gas operations in the first quarter.

The company's guidance for the year remains unchanged with production between 45,000 to 55,000 barrels of oil per day (bopd) and revenue between $300m to $400m, according to an interim statement released Monday.

In the first quarter, net working interest production averaged 37,000 bopd and revenues were in line with budget due to strong price realisations from domestic sales of around $70 per barrel.

However, New Year national holiday and maintenance work at Tawke had a negative impact on volumes. The oil field, in the Kurdistan Region of Iraq, averaged 18,000 bopd. Its gross production capacity is 100,000 bopd and Genel is targeting 200,000 bopd by the end of 2014 with further development drilling underway.

Taq Taq, located in the same region with a gross production capacity of 120,00 bopd, achieved an average 73,000 bopd. Genel is working to expand capacity at the well to 200,000 by 2014.

The group expects exports to rise to 15,000 to 20,000 bopd over the rest of the year.

A new oil discovery was made at the Chia Surkh field in the Kurdistan Region of Iraq which tested flow rates of up to 11,950. The Miran and Bina Bawi assets in the region also showed encouraging results.

Work programmes in Africa progressed with negotiations to secure a rig with 10 slots ongoing and drilling programme on schedule to begin in late 2013.

Cash balance at April 19th came to $0.9bn.

"Genel has started 2013 strongly with a significant oil discovery at Chia Surkh, very encouraging results so far from our Bina Bawi appraisal wells and good progress made across the board in our major development projects," said Chief Executive Tony Hayward.

"As political momentum continues to build and the construction of independent regional infrastructure moves forward rapidly, it is evident that 2013 is set to be a highly significant year for both Genel and the Kurdistan Region's oil and gas industry."

Shares climbed 0.93% to 815p at 08:58 Monday.

RD