Genel Energy PLC (LSE:GENL, OTC:GEGYY) chief executive Paul Weir highlighted the oiler has "a material cash position", prioritised for investment in new assets, as the company awaits a positive outcome of talks between Iraq and Turkey over potential exports out of the Kurdistan region.
The company, in today’s interim results statement, noted that no oil sales took place since the closure of the Iraq-Turkey pipeline amidst a dispute in March.
Genel noted today that approval of the Iraqi budget in June, which factored in production from Kurdistan, was a positive and important step towards resumption of operations and highlighted that talks between the states were on the commercial and political arrangements that would enable the resumption of exports.
Diversification and new investment have been on the agenda for Genel for some time and have accelerated as priorities since the disruption in Kurdistan. Meanwhile, the company today confirmed the suspension of dividend payments at this time.
“As we await a positive outcome to discussions between Iraq and Türkiye, we retain a material cash position, prioritised for investment in new assets, and remain clear and determined on our direction of travel,” Weir said in a statement.
“We have accelerated the ongoing reshaping of our portfolio, organisation, and plans, and we continue to diligently review assets and businesses that can support delivery of the business that we have framed over the past 12 months.”
The Genel chief added: “We remain committed to building a business with predictable, repeatable, and diversified cash flows, which would ultimately support the re-establishment of a dividend programme.”
Genel said it has a "significant cash balance" of US$425 million and reported US$158 million of net cash at the end of June – and a debt position marked at US$273 million.
The company noted that it had ‘right sized’ its organisation and expenditure as a result of its reduced operation in Kurdistan. It currently expects capital expenditure for the full year to be US$70 million, down from US$100-125 million, and said that two-thirds of the budget was already spent.
It added that US$61 million had been paid to the company for oil sales during the first half and a further US$100 million was now overdue.