The impact of low prices was, however, partially offset by a rise in production. At 84,900 barrels of oil per day Genel’s output was up 22% from the prior year.
Regular payment arrangements with the Kurdistan Regional Government (KRG) were instilled during 2015, and as a result the company received some $148mln of cash proceeds during the year. Cash flow from operating activities in 2015 amounted to $71.2mln.
Earnings (EBITDAX) fell 31% to $279.4mln, from $410mln in 2014, and the oil company made a $1bn write-off against its stake in the Taq Taq oil field and reported a $1.1bn pre-tax loss.
Genel ended December 31 with $455mln of cash, and having cut the budget by 77% it expects capital expenditure will total $157mln in 2016.
It maintained production guidance of 60-70,000 barrels per day for 2016, and as a result it expects revenues in the range of $200mln to $275mln based on an average Brent oil price of $45mln for the year.
Should oil prices remain around $35 per barrel, however, revenue for the year is forecast between $160mln and $220mln.
Earlier this week, Genel announced a substantial downgrade to Taq Taq’s oil reserves as a result of production declines from the field. The news dealt a heavy blow to Genel’s share price in London.
Murat Özgül, Genel chief executive, in a statement today, said: “Both Taq Taq and Tawke remain low-cost oil fields by any global benchmark.
“The fields are set to be significantly cash generative going forward, with a discretionary investment programme aiming to maximise the value of the remaining reserves.”
Özgül added: “The instigation of the new payment mechanism by the KRG Ministry of Natural Resources in February 2016 provided clarity over the timing and quantum of our monthly receipts for export payments, recognising our receivable and putting in place the process through which it will be recovered.
“We are now starting to make real progress in the development planning for our KRI gas business. It remains a unique opportunity underpinned by a government signed gas sales agreement."