Proactive Investors - Run By Investors For Investors

Genel Energy launches US$10mln share buyback

Bosses think the market is undervaluing the shares, so they are taking advantage of that by buying back up to US$10mln worth of shares
share certificate
The buyback will run from today (Tuesday) until Friday next week (5 July)

Iraqi Kurdistan-focused oiler Genel Energy PLC (LON:GENL) is to buy back up to US$10mln worth of its own shares over the next ten days as bosses scratch their heads over the current share price.

The £500mln company said it is using some of its cash to reduce its share capital, thus boosting the share price, which it believes “does not accurately reflect the value of the company’s assets”.

READ: Genel appoints Mike Adams to newly-created technical director role

“Genel has ongoing material cash generation from producing assets that more than funds our significant organic growth opportunities - with Sarta, Qara Dagh, Bina Bawi and Miran providing an attractive mix of near-term production and long-term growth potential,” read Tuesday’s statement.

“Organic growth from our existing portfolio has the potential to significantly increase production in coming years, and the ongoing cash generation led to the instigation of a material and sustainable dividend, as we look to provide investors with a compelling mix of growth and returns.”

Even after the buyback, Genel said it will have more than enough liquidity to further add to the strength of the portfolio, adding that it is “actively pursuing opportunities to do so”.

The plan is to re-purchase up to 27.92mln shares between today and Friday 5 July and hold those shares as treasury shares.

In a note to clients, analysts at City broker SPAngel said: “Can’t blame Genel for such action, share price has fallen over 20% in past couple months and seems efficient use of balance sheet.”

In afternoon trading, Genel shares were 5.4% higher at 186.60p.

 -- Adds analyst comment, share price --

View full GENL profile View Profile

Genel Energy PLC Timeline

Related Articles

Oil infrastructure
July 02 2019
The company controls 150,000 net acres, with over 230 (net to Point Loma) drilling opportunities in multi-zones.
China
April 18 2019
China asset GGZ will be spun off in 2020 as a dividend in specie
Gas facility
March 01 2019
Scott Kaintz took over as Curzon's chief executive in November

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use