Genel Energy, the oil and gas giant led by former-BP frontman Tony Hayward, has reported a profit for the six months ended June 30th, as a result of revenue that was enitrely derived from domestic sales.
Revenues for the period were £123.1m, leading to pre-tax profits of $22.3m. To be kept in mind, no cash has been received from the Iraqi government for export sales made in the period.
Comparisons with the same period of the prior year are largely irrelevant as the company was incorporated in April 2011 and only acquired its first trading business in November.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Oil sales were at an average price of $55-50 per barrel. Sales revenue guidance for 2012 remains at around $250-$300m.
Cost of sales, which include the costs for export production for which no revenue has been recognised, amounted to $86.5m. This is comprised of depletion and depreciation charges of $67.6m and production costs of $18.9m.
Other operating costs amounted to $18.8m for the period and include start-up or non-recurring costs of some $5.0m relating to the establishment of the group and prior year listing costs.
Capital expenditure in the period amounted to $77.0m, including $30.6m on oil and gas assets and $45.5m on exploration and evaluation assets. No capital expenditure was incurred in the same period for the prior year.
Total cash outflow for the period to June 30th was $83.2m, consisting of a cash inflow from operations of $82.4m and outflows in respect of capital expenditure of $77.0m and acquisition of businesses and license interests of $88.6m.
At June 30th, net cash was $1,829.7m.
Chief Executive Tony Hayward said: "Genel has had a successful year to date, with strong operational progress across our business, further acquisitions in the Kurdistan Region and early steps taken to develop a high impact African exploration portfolio.
"We continue to build production capacity at both Taq Taq and Tawke and we are pleased that the construction of the pipeline infrastructure in the Kurdistan Region, which will allow us to more efficiently access the export market, has begun.
"We continue to add proven reserves as our two producing fields are further appraised and our high impact Kurdistan exploration programme is progressing to plan with considerable activity planned through the second half and into 2013."
Genel reaches farm-out agreement with Mediterranean Oil and Gas
Genel also announced today that it has entered into a conditional farm-out agreement with Mediterranean Oil and Gas (MOG) over MOG's wholly-owned Area 4 asset, Offshore Malta. Under the agreement, Genel will acquire 75% of MOG's interest, which covers blocks 4, 5, 6 and 7, for $10m cash on completion of the transaction.
In addition, Genel agreed to farm in for 60 per cent of the licence interests to explore and produce oil and gas in the Sidi Moussa Offshore Block, offshore Morocco.
Furthermore, the company also announced that after receiving formal approval for the acquisition of an additional 26% interest in the Miran Block in the Kurdistan Region of Iraq, the sale has closed. As a result it now holds a 51% interest in the block.
The share price rose 2.45% to 711.50p by the afternoon.
NR
