Genel Energy PLC (LON:GENL) provided the antidote to some rather lacklustre trading from the UK oil industry’s two super-majors as it weighed in with a “robust” third-quarter update that has set the scene for higher dividend payments going into 2020.
“We continue to deliver on our strategy,” said chief executive Bill Higgs.
“Robust production is generating material free cash flow, which we are recycling into low-risk and quick returning projects.”
Operationally, the Kurdistan, Northern Iraq-focused oiler was bang on target as it lifted production 12% year on year to average 36,530 barrels of crude per day in the first nine months. It maintained output guidance for the full-year.
Genel has generated US$413mln so far in 2019 and had net cash of US$115mln as at September 30.
Given its strong financial position, the group said it “continues to actively pursue growth and is assessing opportunities to make value-accretive additions to the portfolio”.
It also re-affirmed it will pay an interim dividend of 5 cents a share to those investors on the register on December 13 and pledged to increase the payout going forward.
Rapid payback from our low break-even assets gives us resilience and significant flexibility in regard to future capital allocation,” said CEO Higgs.
“The sustainability of our cash-generation provides opportunities to deliver material shareholder value through investing in growth and increasing returns to shareholders.”