Genel Energy PLC (LON:GENL) chief executive Murat Özgül, in the company's annual financial results statement, highlighted that the Kurdistan based oil firm managed to generate material free cash flow during 2017.
Özgül said Genel was supported by “another year of consistent payments” from the Kurdistan Regional Government and the company’s disciplined capital allocation strategy.
Moreover, during the year, the group came to an agreement with the Iraqi region over the backlog of receivables, owed for past oil sales. The deal saw the company trade the dues in return for better terms applying to ongoing sales.
“Genel expects to generate sustainable and significant free cash flow going forward,” Özgül said.
“The strong financial performance of 2017, and the promise of more to come, facilitated the successful refinancing in December, which solidified a significant improvement in the balance sheet and provides a strong platform for growth.”
Genel reported US$228.9mln of revenue, derived from average production of 35,200 barrels of oil per day. Cash flow from operations amounted to US$221mln, up from US$131mln.
It made an operating profit of US$298mln and had US$228mln of earnings (EBITDAX), compared with a reported US$1.2bn operating loss and US$130mln of earnings in the preceding year.
The company ended the period with US$162mln of cash and had US$134mln of net debt.
Özgül added: “We will continue with our strategy of maximising free cash flow as we focus investment on our producing assets, specifically on the Tawke PSC, where the performance of Peshkabir remains highly encouraging.
“Prudent expenditure will also be made on the other assets within our portfolio that provide material value creation opportunities. We will continue to construct the building blocks for value creation from Bina Bawi and Miran, while cost-effectively progressing our exploration assets in Africa."