Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Genel updates on Taq Taq reserves

Genel Energy expects to record a $1bn impairment charge on the value of its Taq Taq field for 2015 due to a reduction in recoverable reserves and the lower oil price, it said.
Genel updates on Taq Taq reserves
Genel shares fell in early deals....

Genel Energy (LON:GENL) expects to record a $1bn impairment charge on the value of its Taq Taq field for 2015 due to a reduction in recoverable reserves and the lower oil price, it said.

A new CPR on the field in the Kurdistan Region of Iraq puts  2P reserves (proved and probable) at 356 million barrels as at the end of 2015, compared to 683mln barrels in June, 2011.

Production declines at the field, where Genel has a 44% working interest, were seen in 2015.

As at December 31 last year, the Taq Taq field had produced 184 million barrels gross and therefore the remaining gross recoverable 2P reserves estimated is 172million barrels, Genel noted.

The firm currently expects that gross Taq Taq production will average around 80,000 bopd in 2016.

It will then decline to 65-75,000 bopd and 50-70,000 bopd in 2017 and 2018 respectively.

Investec said the  reserves update showed a "much larger than anticipated reserves reduction" but still repeated a 'buy' stance.
 
"Given the scale of the downgrade, we think this could undermine confidence in future company guidance. It may also impair Taq Taq’s asset status (is it big enough anymore to attract M&A interest?).
 
" Despite this, the valuation and cash flow impact is not proportionate to the downgrade, and we reiterate our Buy on a TP reduced to 205p (245p); value is still ultimately linked to recurring Kurdistan payments."

Genel shares fell 40% to 74p.

Giles_55af4ddca6481.jpg


Register here to be notified of future GENL Company articles
View full GENL profile

Genel Energy PLC Timeline

Related Articles

Onshore oil drilling
August 09 2016
It is the third development well to be drilled for Range in Trinidad this year.
windar_photonics_big_pic.png
May 09 2016
Windar Photonics is very much in demand. The share is up more than 40% in the past month, and new orders in China and North America are providing commercial tailwinds.
soundpic.png
August 26 2016
Work on TE-7 got underway on Thursday with aim of assessing the potential of block ahead of putting together a field development plan.

© Proactive Investors 2016

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.