LONDON - Genel Energy PLC (LSE:GENL) has provided a trading and operations update ahead of its full-year 2024 results, which are expected to be released on March 18, 2025. The company reported a significant increase in production and an improvement in its financial position, despite ongoing challenges with its operations in the Kurdistan Region of Iraq.
Genel's working interest average production rose to 19,650 barrels of oil per day (bopd) in 2024, up from 12,410 bopd in the previous year. The company's production was sold exclusively in the domestic market at an average price of $35 per barrel, consistent with 2023 pricing. The year concluded with a free cash flow of $19 million, a substantial turnaround from the $71 million cash outflow experienced in the prior year.
The balance sheet as of December 31, 2024, showed a reduction in total debt from $248 million at the beginning of the year to $66 million. Genel's cash position was reported at $195 million, with net cash increasing to $131 million from $120 million at the start of the year.
Genel also addressed the arbitration loss by its subsidiary, Genel Energy Miran Bina Bawi Limited, against the Kurdistan Regional Government (KRG), with no appeal pursued after the arbitration award. The company is now engaged in the process of challenging the KRG's claim for arbitration costs, which amounts to approximately $36 million.
The update included information about the Tawke PSC, where fourth-quarter gross production was 74,140 bopd, sold domestically at an average of $34 per barrel. The company is in discussions with the regulator regarding the work program for 2025.
In terms of exploration activities, Genel continues to work towards drilling the Toosan-1 exploration well in Somaliland and is seeking partners for the Banasa Prospect in Morocco after seismic reprocessing in 2024.
Genel confirmed the terms for divestment of the Taq Taq PSC, which is now pending KRG approval, as part of its strategy to divest or relinquish unprofitable assets.
The company's environmental, social, and governance (ESG) efforts were highlighted, including its participation in the first Associated Gas Injection project in the Kurdistan Region of Iraq and the Mobile Medical (TASE:PMCN) Clinic project in Somaliland.
Looking ahead, Genel expects its cash generation to cover organizational costs in 2025, with domestic sales demand anticipated to continue at similar levels to 2024. The company's objectives for the year include acquiring new assets, restarting exports, recovering receivables, and progressing towards drilling Toosan-1 and the farm-out of Lagzira.
This update is based on a press release statement and has not yet been audited. Genel will host a live presentation for investors on February 4, 2025.
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