Genel Energy Plc · LSE:GENL
Genel Energy — FY2017 Earnings Presentation
32 slides from Genel Energy's earnings presentation, Mar 22, 2018
Slide 1: 2017 results and outlook
2017 results and outlook 22 March 2018
Slide 2: Disclaimer
ma DISCLAIMER These materials are being supplied to you by Genel Energy pic (the “Company") solely for your information and for use at this presentation and does not constitute a prospectus or offering memorandum or an offer in respect of any securities. All numbers and charts included in this prese
Slide 3: Delivering on our 2017 focus
me DELIVERING ON OUR 2017 FOCUS * Maximising the generation of free cash flow from our oil assets * Accelerating the recovery of the receivable for unpaid oil sales * Crystallising value from Bina Bawi and Miran (A) cenet Enefay FY 2017 RESULTS A
Slide 4: Increasing proceeds generation
ma INCREASING PROCEEDS GENERATION GENEL NET PAYMENTS RECEIVED FROM THE KURDISTAN REGIONAL GOVERNMENT IN 2017 [-o} = x] a cO é i Ke} Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 mTaq Taq = Tawke mRSA 35 30 nN N fo} ul 13 $ million Ga 10 ie} $263 million of cash
Slide 5: Significant increase in free cash flow
me SIGNIFICANT INCREASE IN FREE CASH FLOW * More than doubled free cash flow before interest to $142 million CASH FLOW ($ million) ¢ Disciplined capital allocation * Positive operational performance 250 - Robust production at Tawke 200 - Production at Peshkabir of 15,000 bopd gross at 150 end-2017 -
Slide 6: Without RSA Full year
• - 300 - 250 - 200 - - 150 100 • - 50 - 0 Without Full year RSA RSA
Slide 7: Material value creation opportunities
wae MATERIAL VALUE CREATION OPPORTUNITIES * Near-term cash-generative opportunities within the BALANCE SHEET BOOK VALUES portfolio ($ million) - Peshkabir production set to increase * Unlocking value in Bina Bawi and Miran - 37 MMbbls light oil at Bina Bawi - Gas upstream materially de-risked - Fina
Slide 8: Strong financial performance
Strong financial performance , 4) Genel Energy Qs
Slide 9: Financial summary
we FINANCIAL SUMMARY * Strong operating cash flow generation and disciplined application of capital ¢ Application of surplus liquidity to reduce debt by over 50% and extend maturity * Net debt reduced by nearly 50% to $135 million at end-2017 (end-2016: $241 million) Total debt 700 700 675 —_ 600 wv
Slide 10: Rising revenue generation
me RISING REVENUE GENERATION MONTHLY WORKING INTEREST PRODUCTION REVENUE GENERATION 30 mm Monthly entitlement revenue @mmml Monthly RSA revenue FY2017 Revenue $/bbI 25 — —— .FyY2016 Revenue $/bb! at FY2017 Brent FY2016 Revenue $/bbI & 20 2 uw so] < © 15 c 2 E 10 uw 5 Jan 17 Feb 17 Mar 17 Apr 17 May
Slide 11: Cost oil CBP waiver ORRI
• - - - - Cost oil • • CBP waiver - - ORRI • - - Pre-RSA
Slide 12: Producing asset cost recovered KRI future cost recovery Africa
• - - • - - Producing asset cost recovered KRI future cost recovery - Africa - - • - -
Slide 13: Proactive debt reduction and refinancing
* Debt reduction - $253 million of bonds repurchased in April - Cash cost of $217 million - Net $33 million benefit to IFRS net debt - Further debt reduction by $122 million for 103 call price in December - Total investment of $345 million reduced debt from $675 million to $300 million * New bond de
Slide 14: Financial outlook for 2018
we FINANCIAL OUTLOOK FOR 2018 * Financial priorities - Maintenance of a strong balance sheet and management of liquidity runway - Continued focus on capital allocation, with prioritisation of highest value investment in assets with ongoing or near-term cash generation - Continued focus on cost optim
Slide 15: Highly cash-generative oil production
Slide 16: Tawke PSC
me TAWKE PSC PRODUCTION (GROSS) (kbopd) 120 100 a ry co) a oa oa oO 80 60 40 20 ry) Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 mTawke m™Peshkabir 109 107 105 4 109 5 105 5 * Tawke PSC production averaged 109,050 bopd in 2017, of which Peshkabir contributed 3,
Slide 17: Tawke PSC production - growth at Peshkabir
we TAWKE PSC PRODUCTION - GROWTH AT PESHKABIR Six Peshkabir wells planned in 2018 Operator targeting production of 30,000 bopd by summer, with continuing ramp up in the second half of the year Peshkabir is ring-fenced within the Tawke PSC, enabling immediate cost recovery against PSC revenues Operat
Slide 18: Stabilisation of Taq Taq production
ma STABILISATION OF TAQ TAQ PRODUCTION PRODUCTION (GROSS) (kbopd) 35 30 25 20 KR N fo} 15 » # S 10 " 0 a = 5 te) Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 m Taq Taq * Taq Taq field production averaged 18,050 bopd in 2017 ¢ Production decline slowed during th
Slide 19: Taq Taq opportunities
m= TAQ TAQ OPPORTUNITIES * Drilling at Taq Tag has been focused on the crest of the field THICKNESS OF REMAINING GROSS ROCK VOLUME ABOVE FREE WATER LEVEL Remaining GRY °* TT-29w well Thickness general [m] — Showed oil water contact on the northern flank 145 metres deeper than predrill estimate ¢ Thi
Slide 20: 2018 activity
me 2018 ACTIVITY ¢ 13 wells to be drilled on producing assets in 2018 ¢ Focus on cost-effective, highly cash-generative, production uplift at Peshkabir 2P change Gross2P 2018 Activity (MMboe)? reserves (MMboe) Tawke (8%) 428.7 ¢ Field model rebuild * Reach FID on Enhance Oil Recovery project * Poten
Slide 21: Material opportunities in the portfolio
Slide 22: Bina Bawi and Miran resources
== BINA BAWI AND MIRAN RESOURCES REMAINING RAW GAS 2C - LIQUIDS (Tf)! (MMbbIs)# 15 200 = Bina Bawi remaining raw gas 180 ™ Miran Condensate ™ Miran Oil ‘ ant : Total liquids: =Miran remaining raw gas 160 ™ Bina Bawi Condensate ™ Bina Bawi Oil : 192 Mubble H (2018) H 10 WO enn nnnn nner nn nnnnncnt i
Slide 23: Gas - converting potential into value
mm GAS - CONVERTING POTENTIAL INTO VALUE NARROW UPSTREAM UNCERTAINTIES Building blocks to value creation - Gas lifting agreements signed - PSC amendments signed - CPRs updated Price - Conditions precedent extended Volume > ‘G30 OO TS 13% * Priorities for 2018: focused expenditure (+/- 30%) - Deliver
Slide 24: Bina Bawi oil
ma BINA BAWI OIL * CPR confirmed 2C oil resources of 37 MMbblis - Jurassic oil reservoir can be developed entirely separately to gas * Bina Bawi-3 well, 2013 - Flowed c.3,500 barrels a day - Light, 44 to 47> API oil ¢ Around 30 km from Taq Taq ) GenetEhergy FY 2017 RESULTS - 22 MARCH 2018 24
Slide 25: Dagah Shebl discovery
• - Dagah Shebl discovery (Stanvac 1959) Jurassic oil (35API) to surface. - - • • - - -
Slide 26: Morocco - cost-effective progression
== MOROCCO - COST-EFFECTIVE PROGRESSION * Materially de-risking the prospectivity of the Sidi Moussa licence (Genel 75% working interest) - Commitment to drill one well on the Sidi Moussa license replaced by an obligation to acquire and process a multi-azimuth 3D seismic survey - License extended by
Slide 27: Strategy and outlook
Slide 28: Strategy
me STRATEGY * Genel aims to become a leading independent E&P value creator through: - Maximising the value of our KRI assets Generating material free cash flow from our KRI oil assets, systematically progressing our world-class gas resources. - Maintaining a strong balance sheet Disciplined capital
Slide 29: Focus for 2018
ms FOCUS FOR 2018 ¢ Genel has a sustainable model for free cash flow generation, and a clear focus for 2018: —- Maximising the generation of free cash flow from our oil assets — Continuing disciplined capital allocation - Progressing material value- accretive portfolio opportunities - Bina Bawioil -
Slide 30: | ~ | ee
| ~ | ee
Slide 31: Simplified and robust balance sheet
* Successful debt reduction and extension together with the RSA has simplified the balance sheet - Remaining trade receivables balance all received in Q1 2018 - Restricted cash relates to fully accrued Morocco minimum work obligation — Producing assets supported by Q1 2018 independent reserves revie
Slide 32: RSA deal and accounting
ma RSA DEAL AND ACCOUNTING August 2017 the Company signed the RSA with KRG - Overdue receivable balance uplifted to fair value of RSA and reported as a gain in the income statement - Uplifted value of receivable written-off - Replaced by recognition of fair value of RSA as intangible assets (5-year