Genel Energy results highlight robust low-cost production business


Genel Energy results highlight robust low-cost production business

Genel Energy PLC (LON:GENL) chief executive Bill Higgs has highlighted the North Iraq-focused oil firm’s robust business model in its financial results for the six months ended June 30, 2020.

Net production averaged 32,100 barrels of oil per day (bopd), versus 37,400 bopd in the comparative period of 2019. It generated some US$88.4mln of revenue for the six months compared to US$194.3mln in the first half of last year.

Earnings (EDBITDAX) totalled US$65.1mln, from US$167.3mln in H1 2019. Genel reported a US$340mln operating loss, a US$32.2mln operating loss and a US$354.7mln net loss. Cash flow from operating activities amounted to US$85.5mln.

The company told investors that its low-cost production, flexible capital investment programme, and robust balance sheet makes it resilient to lower oil prices. It said it expects to retain a net cash position at the end of 2020 at the prevailing oil price, while still investing in key growth assets.

Talks continue over the recover of some US$121mln receivable due from the Kurdistan Regional Government.

“Genel’s robust business model, which is designed to provide resilience in a challenging environment, has demonstrated its value as the company negotiates the headwinds facing the sector in 2020,” Higgs said in the results statement

“Our low-cost production and the capital flexibility within our development programme have enabled us to preserve the strength of our balance sheet even while investing in growth.

“Given the lower oil price and overdue payments, the fact that we still expect to end 2020 in a net cash position – even after dividend distributions and making the investment to bring Sarta to production this year – is a testament to our resilience, and we have today confirmed an interim dividend of 5¢ per share,” he added.

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