Genel Energy PLC (LON:GENL) has highlighted its resilient business model and robust financial position in a trading and operations update ahead of Thursday's annual general meeting (AGM).
The Kurdistan-focused oil producer noted that it has received US$98mln of cash proceeds in the first four months of 2020, and, as at the end of April, it had US$404mln of cash on account – with net cash stated at US$106mln on April 30, 2020.
The group said it spent some US$45mln of capex in the four-month period, though forward expenditure was cut significant as the coronavirus (COVID-19) pandemic took hold.
Genel confirmed it is paying US$27.8mln of dividends, at 10 US cents per share, to shareholders on its register on May 29.
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The group said production in the first quarter of 2020 was marked at an average of 34,170 barrels of oil per day (bopd), in line with guidance set in January following decisions to reduce investments according to external conditions.
Genel noted that its operating costs are expected to be US$3 per barrel, and that producing asset cashflow breakeven is maintained when crude is priced below US$30 per barrel (including capex necessities and payment mechanisms).
"Despite the impact of COVID-19 creating a challenging environment for our industry, Genel's resilient business model and robust financial position, with over $100 million in net cash and an asset cashflow breakeven of $30/bbl, leaves us well placed to withstand the consequences of the pandemic as we continue to deliver our strategy,” Bill Higgs, Genel chief executive said in the statement.
“We have cut our cloth appropriately against this backdrop and halved our capital expenditure for 2020, protecting our balance sheet while still progressing Sarta, and positioning us to take advantage of growth opportunities as the landscape improves," he added.
Genel noted that payments from the Kurdistan Regional Government (KRG) are ongoing, under the updated payment mechanism. In April, the company received payments for crude sales that took place in March.
The company also highlighted that it continues to actively pursue growth and is analysing opportunities to make value-accretive additions to the portfolio that are consistent with Genel's strategy.
Genel’s AGM takes place today but due to social distancing measures shareholders are not able to attend in person.