Full Year Results
5 March 2015
Genel Energy plc
Audited results for the year ended 31st December 2014
Genel Energy plc, the London listed exploration and production company and largest independent oil producer in the Kurdistan Region of Iraq, announces its audited results for the year ended 31st December 2014.
|(Loss) / profit before tax ($million)||(312.8)||186.5|
|Cash flow from operating activities ($million)||116.0||311.3|
|Free cash flow2 ($million)||(560.9)||(252.6)|
|EPS (cents per share)||(112.97)||66.24|
|Production (kbopd, working interest)||69.4||44.0|
1. EBITDAX is profit before interest, tax, depreciation, amortisation and exploration expense
2. Free cash flow is cash flow from operating activities less capital expenditure
- 2014 revenue of $520 million, an increase of 49% on 2013
- 2014 EBITDAX of $411 million, an increase of 49% on 2013
- 2014 production of 69,000 boepd, an increase of 58% year-on-year with significant further growth expected in 2015
- Iraq budget passed into law in February 2015, enabling financial implementation of interim oil deal between the Kurdistan Regional Government ("KRG") and Government of Iraq
- Cash balances at 31 December 2014 stood at c.$490 million, with Genel highly focused on balance sheet strength to enable future investment and growth in the KRI
- To provide cash directly to contractors during the transition to regular payments for exports, the KRG has implemented a temporary domestic market sales channel under which contractors receive 50% of domestic sales proceeds:
- This has run successfully for Taq Taq through February 2015
- Taq Taq domestic price of $40-45/bbl equates to a Brent price of $50/bbl less transportation tariffs, reflecting strong demand for lighter barrels within the Kurdistan Region of Iraq ("KRI") domestic market
- Domestic market prices will be revised monthly in line with movements in international benchmarks
- Revenue and production guidance for 2015 maintained at 90-100,000 boepd and $350-400 million at a Brent price of $50/bbl
- On completion of gas deal, total working interest reserves and unrisked resources set to increase significantly
Tony Hayward, Chief Executive of Genel, said:
"2014 was a year of significant growth for Genel. Operational progress and the completion of the KRI-Turkey pipeline helped to drive production up 58%, which in turn led to an increase in both revenue and EBITDAX of almost 50%. Growth is set to continue in 2015, with production forecast to rise by a further 40%.
At a time of a depressed oil price we remain focused on the importance of a robust balance sheet. Genel's financial flexibility is a significant strength, and allows us to target spending on growth at our producing assets in the KRI, as we wait for the economic situation in Iraq to improve sufficiently to facilitate regular export payments.
In the first quarter of 2015 we have stepped up the domestic monetisation of our KRI production. Given that this production is amongst the lowest-cost in the world, and domestic realisations strong, this provides a significant interim source of revenue until predictable export payments are in place. We expect to receive regular payments for exports as we move through 2015."
Julian Metherell, Chief Financial OfficerPhil Corbett, Head of Investor RelationsAndrew Benbow, Head of Public Relations
|+44 20 7659 5100|
|+44 20 7016 9573|
There will be a conference call for analysts and investors today at 0900 GMT, with an associated presentation available on the Company's website, www.genelenergy.com. The call will be recorded and made available on the website shortly after it finishes.
This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil & gas exploration and production business. Whilst the Company believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy. Accordingly no reliance may be placed on the figures contained in such forward looking statements.
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