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Genel Energy PLC

Genel Energy is the largest holder of reserves and resources in the Kurdistan Region of Iraq, where we have been operating for over a decade, and one of the largest independent oil producers on the London Stock Exchange.

EPIC:	GENL
Market:	LSE:GENL
52-week High/Low:	302.00p / 151.20p
Sector:	Oil & Gas
Market Cap:	£526.80 m
Website:	www.genelenergy.com

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Genel Energy PLC Snapshot

Current statement

Genel’s strategic ambition is to become a world-class independent E&P creator of shareholder value.

We have high cash generative producing assets
... which more than fund material growth opportunities
... with sufficient excess liquidity to pay a material and sustainable dividend

Our strategic ambition is underpinned by our core strengths – a robust and cash-generative asset portfolio, technical and commercial expertise, and our ability to leverage regional relationships and manage risk in complex areas. With a strong Board and a management team with proven track records of executing strategies and delivering value, this provides a significant opportunity.

As we deliver on our strategy, we place robust corporate governance, excellence in HSE, and a keen awareness of our place in the community at the heart of everything that we do. We believe that the way we conduct ourselves with host governments and local people is crucial to our success, and we strive to deliver in a manner that protects the health and safety of our employees, minimises adverse environmental impact, and provides benefits to local communities.

Our success at value creation is judged as first-quartile performance in total shareholder returns amongst our peer group.

The key components of our strategy are below.

MAXIMISE THE VALUE OF OUR KRI ASSETS

Generating material free cash flow from our KRI oil assets, systematically progressing our world-class gas resources.

Oil production from the Tawke, Peshkabir and Taq Taq fields generates significant free cash flow, and we will continue to maximise this through efficient reservoir management and disciplined capital allocation. Sarta, Qara Dagh, Bina Bawi and Miran provide material upside opportunities, with an attractive mix of near-term production and long-term growth potential. As we continue our investment in the KRI as a committed partner, our asset potential and strong relationships with key regional stakeholders gives us a solid basis for increased value creation.

MAINTAIN A STRONG BALANCE SHEET

Disciplined capital allocation, maximising financial flexibility to execute our strategy.

A highly cash-generative portfolio, low leverage and disciplined and value driven capital allocation provides us with a robust financial base that is highly resilient to changes in the macro-economic environment. It also allows us the optionality to benefit from growth opportunities and make value-accretive additions to our portfolio. At the appropriate time, this paves the way to returning capital to shareholders.

A highly cash-generative portfolio, low leverage and disciplined and value driven capital allocation provides us with a robust financial base that is highly resilient to changes in the macro-economic environment. It also allows us the optionality to benefit from growth opportunities and make valueaccretive additions to our portfolio. As we have now moved into a net cash position, with free cash flow more than matching our investment in growth, it paves the way to returning capital to shareholders.

BUILD A PORTFOLIO OF HIGH-VALUE ASSETS

Developing a rich funnel of new opportunities, with prudent allocation of capital to the highest return projects.

Genel systematically seeks opportunities to leverage our strengths and capabilities, utilising our management team members’ track record in successful M&A execution. We aim to add assets that build on the strengths of the current portfolio, prioritising areas with low to moderate political risk while retaining a focus on significant cash generation. Sarta and Qara Dagh fulfilled these criteria in 2018.
We are governed by clear investment criteria and our commitment to value creative capital allocation, focused on assets that provide the highest returns and enhance the quality of our existing portfolio.

Current operations

Overview

Genel Energy is the largest holder of reserves and resources in the Kurdistan Region of Iraq, with oil production that forms a vital component of KRI exports.

Working interest production from Taq Taq and Tawke averaged 33,700 bopd in 2018, and is set to rise from this figure in 2019.

Our oil production in the KRI is managed to ensure long-term value creation, with production maximised over the life of the field and investment made at a level appropriate to the external environment.

KRI Production

KRI Development

Exploration & Appraisal Assets

Geographical Spread

UK, Turkey and Jersey.

Management

Stephen Whyte
Chairman
Appointed: 24 April 2017

Committee memberships: Chairman of the Nomination Committee, and member of the HSSE and Reserves Committee.

Key skills and experience: Stephen Whyte has almost 30 years of experience in the oil and gas industry. A significant part of his career has been spent at Royal Dutch Shell, where he held a variety of technical and commercial roles, and he also spent six years with UK Independent Clyde Petroleum, as Exploration Leader and then Commercial Director. Having left Royal Dutch Shell in 2011, Stephen became SVP, Europe and Central Asia, Commercial, for BG Group. Latterly he was Head of Exploration and Production at Galp Energia, Portugal’s largest listed company, where he also served on the Board. Between July 2016 and January 2018 Stephen was the Non-Executive Chairman of Sound Energy plc.

Current external appointments: Stephen is a Non-Executive Director of Echo Energy plc, and an Independent Non-Executive Director of KazMunaiGas.

Bill Higgs
Chief Executive Officer
Appointed: 08 April 2019.

Key skills and experience: Bill has nearly 30 years of global exploration, development and operations experience.

Current external appointments: Director of San Leon Energy plc

Previous relevant experience: Between August 2014 and July 2017 was a director of Ophir Energy plc.

Esa Ikaheimonen
Chief Financial Officer
Appointed: As an Executive Director 08 April 2019.

Key skills and experience: Over 25 years of oil and gas industry experience, most recently as CFO of publicly listed offshore drilling companies Transocean and Seadrill. Prior to that, he had a c.20 year career at Royal Dutch Shell.

Previous relevant experience: Between February 2016 and August 2018 was a director of Vantage Drilling International, was Chairman of Transocean Partners plc from April 2014 to June 2015, and non-executive director of Ahlstrom plc from April 2011 to April 2015.

George Rose
Senior Independent Non-Executive Director
Appointed: 2 June 2011.

Committee memberships: Chairman of the Audit Committee, and member of the Remuneration and Nomination Committee.

Key skills and experience: George brings with him recent and relevant financial experience. Until March 2011 George served as the Group Financial Director and member of the Board of BAE Systems plc a position he held for 13 years. George is also a Fellow of the Chartered Institute of Management Accountants and has a wealth of experience in governance to draw on from his former appointment as Non-Executive Chairman of the Audit Committee of Laing O’Rourke plc amongst other appointments.

Current external appointments: George is the Senior Independent Non-Executive Director of Experian plc and on 16 February 2016 George was appointed as a Non-Executive Director of EXPO 2020 LLC.

Previous relevant experience: George retired from the Board of National Grid plc in July 2013, where he served as a Non-Executive Director and was Chairman of the Audit Committee. Other past Non-Executive Directorships include Orange plc and Saab AB. He was previously a member of the UK’s Financial Reporting Review Panel and the Industrial Development Advisory Board. George’s earlier career consisted of several financial management positions in the automotive sector, at Ford Motor Company, Leyland Vehicles Ltd and the Rover Group.

Nazli K Williams
Non-Executive Director
Appointed: 21 November 2011.

Key skills and experience: Nazli has experience in managing and leading large corporations. Between 2004 and August 2014 Nazli worked at Digiturk, a leading satellite broadcasting network. She was Chief Content Officer between 2007 and August 2014, with primary responsibility for overseeing all content acquisitions, production and creative services (including on-air promotion and print TV guides) and overall content strategy.

Previous relevant experience: Until 2013 Nazli was also a board member of Turkcell lletisim Hizmetleri A.S a leading GSM operator in Turkey. Turkcell’s shares trade on the Istanbul (IMKB) and New York Stock Exchanges (NYSE).

Tim Bushell
Independent Non-Executive Director
Appointed: 11 September 2017.

Committee memberships: Chairman of the HSSE and Reserves Committees and, member of the Nomination Committee.

Key skills and experience: Tim Bushell is a qualified geologist with over 35 years’ experience working in the oil and gas sector. He has worked at British Gas, Ultramar, LASMO, and Paladin Resources. Most recently Tim spent a decade as Chief Executive Officer at Falkland Oil and Gas Limited, and was co-founder of Core Energy AS.

Current external appointments: Tim is a Non-Executive Director at Wentworth Resources, Petro Matad, Rockhopper Exploration.

Martin Gudgeon
Independent Non-Executive Director
Appointed: 11 September 2017.

Committee memberships: Chairman of the Remuneration Committee and, member of the Audit Committee.

Key skills and experience: Martin Gudgeon has significant financial and corporate experience, and is a Partner at PJT Partners. Prior to joining PJT Partners he worked at Blackstone for eight years, serving as a Senior Managing Director, and was the Chief Executive at Close Brothers Corporate Finance. Before that, he was at Hill Samuel, including two years on secondment to Macquarie Bank in Sydney, Australia.

Current external appointments: None.