Genel Energy PLC (LON:GENL) has told investors that net production from the Kurdistan region of northern Iraq averaged 32,140 barrels per day (bopd) over the first nine months of 2020, up 7% from the previous year.
Gross production from the 25%-owned Tawke field averaged 56,880 bopd in the third quarter, 14,220 barrels net, and, the neighbouring Peshkabir field yielded 56,860 barrels per day.
At the 44%-owed Taq Taq field, the average rate was 8,580 bopd, 3,780 net.
Genel noted US$142mln of cash proceeds from oil sales have been received from the Kurdish authorities during the first nine months of 2020.
Some US$145mln of due proceeds are outstanding, of which US$121mln is owed for production in the period between November 2019 and February 2020, and, some US$24mln of funds are suspended override payments.
The company reported US$341mln of cash as at the end of September 2020, with net cash stated at US$42mln – though these figures are prior to Genel’s successful refinancing in October.
That refinancing saw some US$300mln of senior unsecured bonds issued, with maturity in October 2025, carrying a 9.25% coupon per year. It also bought back US$233mln of previously issued bonds at a price of 107 to par, incurring a cost of US$16mln for redemption.
The company described its financial position and balance sheet as robust, highlighting that the refinancing has extended its liquidity runway and provided a basis for capital investment that is flexible and adaptable to the external environment.
For example, Genel noted that it is able to fund its participation in the rapid development of the Sarta field, subject to a well result in 2021.
“Genel continues to demonstrate its resilience and ability to move quickly to navigate changing external conditions. Production has remained robust, increasing quarter on quarter, and first oil at Sarta is also now imminent,” said Bill Higgs, Genel chief executive in a statement.
“Once production from these initial wells has stabilised we expect it to increase our production by over 10%, with potentially far more to come as we appraise what could be the largest field in the Kurdistan Region of Iraq.”
Higgs added: “Genel’s financial strength and disciplined capital allocation means it is well placed to pursue opportunities for value-accretive growth and provide returns to shareholders.”
The company noted that payments to oil producers continue to be made by the Kurdistan Regional Government (KRG), under a revised schedule over the past seven months, and talks with the KRG continue over a number of topics including the outstanding oil payments.