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.

View full GENL profile View Profile

Genel Energy PLC Timeline

Related Articles

picture of gas pipes
September 12 2017
Dividends and paying them out underpin Diversfied Gas's strategy
September 21 2017
Bigoray's development could mark an absolute game- changer for the firm in terms of scale.
Point Loma Resources cashed up and looking to double production in Alberta
August 28 2017
Point Loma has over 160,000 net acres concentrated in west central Alberta

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2017

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.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use