Genel Energy PLC (LSE:GENL, OTC:GEGYY) chief executive Paul Weir told investors that the oil producer continues to focus on optimising cash flows, evolving the capital structure and maturing opportunities to acquire new assets.
“We maintain our discipline on spend and focus on profitability and both delivering, and building on, the significant value upside that is already in the business,” Weir said in Genel’s third quarter update.
“The Tawke PSC continues to deliver consistent production into consistent domestic market demand to generate significant cash flow.
“That cash generation more than covers our cash out-flows in the period, which have further reduced as a result of non-repeating activity in the first half of the year coming to an end, decreasing activity on non-core licences as we move towards exit and reduction in net interest cost following the purchases of our bonds.
“Finally, the timing of the award from the London-seated Miran and Bina Bawi oil and gas assets arbitration is not certain, but is expected before the end of 2024.”
Financials
Genel noted that it reduced its debt from $248 million to $66 million by the end of October, bringing its net cash position to $125 million and total cash reserves to $191 million.
It said that the Tawke PSC was the main contributor to cash flow, with production levels sustaining domestic demand and an average sales price of $37 per barrel in the third quarter.
Gross production at the field was 84,210 barrels of oil per day, leading to a year-to-date free cash flow of $20 million.
The company is awaiting the decision of a London-seated arbitration process concerning the Miran and Bina Bawi oil and gas assets, expected before the end of 2024.
Meanwhile, ESG initiatives continue to advance, including a CO2 capture project at the Peshkabir field in partnership with DNO and expanded medical services in Somaliland.