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Genel Energy PLC (GENL.L) - Capital Network - Good Time to Revisit the Equity Story

Genel Energy PLC (Genel) is a London-listed oil and gas production company with assets in the Kurdistan region of Northern Iraq (KRI), Somaliland and Morocco. Political instability in Iraq and the rise of ISIS created a particularly challenging stock market sentiment for companies active in the region, such as Genel Energy PLC, with concerns about security compounding those from irregular oil sales payments. More recently, sharp production declines and subsequent reserves downgrades at one of Genel Energy PLC’s main oil asset increased the pressure on the company already suffering from the collapse in the oil price. We believe that after recent reserves downgrades and with potential progress anticipated for the Miran/Bina Bawi gas development, it might be a good time to revisit the equity story, with a view on the mediumterm development of these assets.

 

Executive summary

We believe that Genel’s current share price of c115p represents a material discount to our estimate of the risked value of the company. In addition, we believe the possibility of progress on the development of the KRI gas assets represent real upside – as such we reckon that now could be a good time to revisit the equity story with a view on the medium-term development of these assets

Quick facts: Genel Energy PLC

Price: 142 GBX

LSE:GENL
Market: LSE
Market Cap: £394.29 m
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Financial results and forecasts
Growth drivers
Management
Market conditions
Milestones & inflection points

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