Genel Energy PLC (LON:GENL) has highlighted that it is positioned to grow in 2021, with a twelve-well drill campaign among the slated catalysts.
The company said it expects production to be slightly above the 2020 average though there is potential for a higher exit rate and stronger volumes in 2022 subject to results in the appraisal campaign at the Sarta field.
Sarta’s start-up was a key highlight of 2020 as it marked the company’s fourth producing operation.
"Executing our strategy in 2020 through delivering low-cost production, paying a material dividend, and retaining our financial strength in order to invest in growth has helped lay the foundations for year-on-year production increases in this year and the years ahead,” said Bill Higgs, Genel chief executive in a statement.
“Bringing Sarta to production in 2020 despite the challenges of COVID-19 now means that we are generating revenues from our fourth field as we rapidly move to further appraise its huge reserve potential.”
Higgs added: “The successful early refinancing provides us with the liquidity and financial certainty to continue prudently investing in growth while retaining a robust balance sheet and delivering returns to shareholders.
“We expect to drill 12 wells across the portfolio this year. These wells have the potential to add incremental low-cost and cash generative production at the Tawke PSC, add and convert contingent resources to reserves and add production at Sarta, and open up a new field at Qara Dagh.”
In 2020, the company produced an average of 31,980 barrels oil equivalent.
The 25%-owned Tawke field averaged 110,280 barrels of oil per day (bopd) – of which 56,320 bopd came from the Peshkabir operation, whilst 44%-owned Taq Taq yielded 9,670 bopd and new start-up Sarta flowed an average of 5,500 bopd since coming online November.
Genel noted the receipt of US$173mln in cash proceeds from oil sales in 2020, despite crude oil price volatility, and, reported free cash flow of US$5mln.
The average oil price for the year was US$47 per barrel, down from US$67 in the prior year.
Production costs remained low, at just US$2.80 per barrel, and, capital spending was marked at US$109mln. Some US$55mln was paid out in dividends in 2020, including US$14mln paid for 2019.
Genel ended the year with US$354mln, with US$10mln of net cash.