Slide 1: 2015 results and outlook
2015 results apd outlook 3 March 2016
Slide 2: Disclaimer
These materials are being supplied to you by Genel Energy plc (the “Company”) solely for your information and for use at this presentation (the “Presentation”). For purposes of this notice, “Presentation” shall mean and include the document that follows, the oral briefing by the Company that accompa
Slide 3: Agenda
1. Opening remarks Tony Hayward (Chairman) 2. Introduction Murat Özgül (CEO) 3. KRI oil assets Murat Özgül (CEO) 4. Exploration and appraisal Murat Özgül (CEO) 5. KRI gas business Murat Özgül (CEO) 6. Financials Ben Monaghan (CFO) 7. Summary & Outlook Murat Özgül (CEO) 8. Q&A Panel
Slide 4: KRI oil exports and contractor export payments
800,000 750,000 Contractor export payments(1) 700,000 $75m $75m $75m $75m $56m 650,000 600,000 550,000 500,000 450,000 bopd 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 SOMO - Ceyhan KRG -
Slide 5: KRI oil and gas assets, KRI proceeds, lower oil price
Production of 84,900 bopd in 2015, a 22% increase on 2014 KRI oil and gas assets Consolidated control of gas assets, revised term sheets a key milestone in the commercialisation of a world-scale resource KRI oil export payments commenced in September 2015 KRI proceeds $74 million of export p
Slide 6: KRI oil assets – export payment, reserves and production
Monthly export payment now based on PSC entitlement Export payment evolution 5% of monthly netback field revenue to address recovery of receivable (MNR 1 Feb 2016 Announcement) Resumption of investment at Taq Taq and Tawke Combined field production costs less than $2/bbl Adjusting to lower o
Slide 7: Agenda
1. Opening remarks Tony Hayward (Chairman) 2. Introduction Murat Özgül (CEO) 3. KRI oil assets Murat Özgül (CEO) 4. Exploration and appraisal Murat Özgül (CEO) 5. KRI gas business Murat Özgül (CEO) 6. Financials Ben Monaghan (CFO) 7. Summary & Outlook Murat Özgül (CEO) 8. Q&A Panel
Slide 8: Taq Taq and Tawke 2015 sales by destination
Taq Taq – 2015 sales by destination (bopd) Tawke – 2015 sales by destination (bopd) 160,000 160,000 140,000 140,000 120,000 120,000 100,000 100,000 80,000 80,000 60,000 60,000 40,000 40,000 20,000 20,000 - - Q1 15 Q2 15 Q3 15 Q4 15 Q1 15 Q2 15 Q3 15 Q4 15 Local sales Bazian Pipeline exports Local sa
Slide 9: Taq Taq reserves revision versus McDaniel 2011 CPR
Principal change from McDaniel 2011 CPR is a revised estimate of fracture porosity in Cretaceous Shiranish reservoir Original Recoverable 2P Reserves McDaniel McDaniel Reservoir Change Comment 20111 20162 Pilaspi 17 7 (10) • More conservative recovery factor • Reduced fracture porosity results in
Slide 10: Taq Taq fracture map and side-track campaign
Lower well density on flanks of the structure Side-track campaign on flanks of structure Production concentrated on crest Side-track wells to target zones of high fracture porosity Water level rising faster at the crest compared to the flanks and potential unswept micro fractures in the Sh
Slide 11: Managing offtake and free water level
Irregular free water level rise Actions: Potential for unswept zones 1. Reduce rate of field offtake (implemented) 2. Manage offtake – less on crest more on flanks 3. Drill horizontal wells on flanks Shiranish Shiranish Qamchuqa Qamchuqa Kometan Kometan FWL FWL AQUIFER Unswept oil in Qamchuqa
Slide 12: Reservoir Saturation Tool results
Reservoir Saturation Tool Results Reservoir Saturation Tool Remaining Oil Saturation results confirm unswept oil in the Qamchuqa matrix Currently assessed as prospective resources of 20-40 mmbbls Depleted Plan being developed to Zone recover unswept oil
Slide 13: Taq Taq 2016 activity plan
Taq Taq Gross Production (bopd) Taq Taq activity plan will focus on c.80,000 three key areas 65-75,000 50-70,000 Development of fracture systems – side-tracks and horizontal wells Reservoir management for FWL control – production from flanks of structure by side-tracks and new horizontal wells
Slide 14: 2P and 2C reserves and resources 2014–2015
1,750 4% 1,516 1,500 21% 1,455 1,252 1,250 1,031 1,000 mmboe 750 (39)% 500 429 264 250 0 2014 2015 2014 2015 2014 2015 2P 2C 2P + 2C Taq Taq Tawke Miran Bina Bawi Chia Surkh Peshkabir Others
Slide 15: Agenda
1. Opening remarks Tony Hayward (Chairman) 2. Introduction Murat Özgül (CEO) 3. KRI oil assets Murat Özgül (CEO) 4. Exploration and appraisal Murat Özgül (CEO) 5. KRI gas business Murat Özgül (CEO) 6. Financials Ben Monaghan (CFO) 7. Summary & Outlook Murat Özgül (CEO) 8. Q&A Panel
Slide 16: Chia Surkh and Peshkabir exploration and appraisal wells
Chia Surkh-10 and Chia Surkh-11 (2013) Peshkabir-1 (2012) CS-10 and CS-11 encountered light oil and gas in Jeribe/Euphrates Drilled on flank of structure, based on sparse 2D data, 27-29 API oil Oligo-Miocene with flow rates between 7-12,000 bopd and 15-46 from Jurassic on test. mmcfd of gas
Slide 17: Agenda
1. Opening remarks Tony Hayward (Chairman) 2. Introduction Murat Özgül (CEO) 3. KRI oil assets Murat Özgül (CEO) 4. Exploration and appraisal Murat Özgül (CEO) 5. KRI gas business Murat Özgül (CEO) 6. Financials Ben Monaghan (CFO) 7. Summary & Outlook Murat Özgül (CEO) 8. Q&A Panel
Slide 18: Gas term sheets and Bina Bawi acquisition
Upstream and midstream term sheets signed Revised terms enhance original agreements and deliver alignment along the value chain Term sheets to be converted into binding documentation by Q2 2016 Acquired OMV’s stake in Bina Bawi Upfront payment of $5 million, contingent payments of $145 mil
Slide 19: Gas upstream, midstream and financing plan
Upstream Field Development Plan contract expected to be awarded in Q2 2016 Midstream Pre-FEED – expected to complete by end H1 2016 - Pre-FEED will focus on site selection and technical design for the gas processing facilities at Miran and Bina Bawi and provides detail on procurement which w
Slide 20: Agenda
1. Opening remarks Tony Hayward (Chairman) 2. Introduction Murat Özgül (CEO) 3. KRI oil assets Murat Özgül (CEO) 4. Exploration and appraisal Murat Özgül (CEO) 5. KRI gas business Murat Özgül (CEO) 6. Financials Ben Monaghan (CFO) 7. Summary & Outlook Murat Özgül (CEO) 8. Q&A Panel
Slide 21: 2015 financial highlights
Revenues of $344 million – a decrease of 34% on 2014 EBITDAX of $279 million KRI cash proceeds of $148 million Operating cash flow of $71 million Capex of $157 million – a 77% reduction on 2014 Net KRG receivable stabilised during H2 2015 to $423 million at year end End 2015 cash posit
Slide 22: Cash flow and net debt bridge 2015
700 Operating cash flow of $71m 74 36 $230m senior unsecured 18 bonds issued in Net debt of 600 23 March 2015 $239m 74 46 (less issue discount) 93 500 489 196 455 141 400 Taq Taq and Tawke $m Three payments received between local sales ($50 Payment of costs incurred Sept & Dec 2015 million received
Slide 23: Impairment and exploration expense
Taq Taq Impairment Exploration Assets Impairment of $1,038 million 2015 Impairment Total expense & Provisions Exploration US$m (cash) (non-cash) Expense New oil price assumption (c.50% of Ber Bahr - 67 67 impairment) Dohuk - 2 2 Cote D'Ivoire 11 24 35 - Short-term forward curve rising evenly Mor
Slide 24: 2015 income statement summary
$ million 2015 2014 Production growth driven by field capacity upgrades and availability of KRI-Turkey export pipeline Average production (bbl/d) 84,900 69,000 Revenue 344 520 Overall 2015 realisation $39/bbl (46% decrease on 2014): Production costs (36) (62) 2015 unit production cost of $1.17
Slide 25: February 2016 export payment mechanism
February 2016 payment mechanism for exports announced by Ministry of Natural Resources Monthly payment to Contractor calculated as a proportion of monthly field revenue as a proxy for entitlement Processed within 10 working days of the following month Field revenue calculated based on Platts
Slide 26: Capital expenditure 2015 and 2016 guidance
2015 capex of $157 million >75% reduction on 2014 Majority of 2015 spend on development at Taq Taq and Tawke 2016 capex guidance of $80-120 million unchanged $50-90 million on Taq Taq & Tawke Contingent activity will move into firm as monthly export payments continue – moving capex to up
Slide 27: 2016 guidance
Guidance Production 60-70,000 bopd Accrued revenue Brent oil price guidance Production costs $1.25 - 1.75/bbl $35/bbl $160 – 220 million $45/bbl $200 – 275 million G&A $1.00 – 1.25/bbl Revenue ranges reflect current production guidance and both firm and contingent work programmes in 2016 Capex $80 –
Slide 28: Balance sheet strength and business flexibility
Balance sheet strength Bond covenants – significant headroom at end-2015 $730 million bond due 2019 $455 million cash at end-2015 As at Covenant Significant covenant headroom 31 Dec 2015 Net debt/EBITDAX < 3.0 0.9x Equity ratio > 40% 74% Business flexibility Oil assets cash flow neutral
Slide 29: Agenda
1. Opening remarks Tony Hayward (Chairman) 2. Introduction Murat Özgül (CEO) 3. KRI oil assets Murat Özgül (CEO) 4. Exploration and appraisal Murat Özgül (CEO) 5. KRI gas business Murat Özgül (CEO) 6. Financials Ben Monaghan (CFO) 7. Summary & Outlook Murat Özgül (CEO) 8. Q&A Panel
Slide 30: Summary and outlook
Taq Taq reserves reset with program in place to produce 2P reserves and and gather additional information on reservoir parameters Genel still has a material low-cost cash flow generative oil business YE 2015 net 2P reserves of 264 mmbbls Move to monthly PSC entitlement based payment delivers
Slide 31: Agenda
1. Opening remarks Tony Hayward (Chairman) 2. Introduction Murat Özgül (CEO) 3. KRI oil assets Murat Özgül (CEO) 4. Exploration and appraisal Murat Özgül (CEO) 5. KRI gas business Murat Özgül (CEO) 6. Financials Ben Monaghan (CFO) 7. Summary & Outlook Murat Özgül (CEO) 8. Q&A Panel
Slide 32: Genel Energy plc
Genel Energy plc +44 20 7659 5100 est
Slide 33: McDaniel reserves 2011 vs 2015
McDaniel, 30 June 2011 McDaniel, 31 December 2015 Original Recoverable Reserves 1P 2P 3P Original Recoverable Reserves 1P 2P 3P Pilaspi 11 17 22 Pilaspi 4 7 11 Shiranish 220 460 792 Shiranish 128 237 470 Kometan 50 93 124 Kometan 66 66 67 Qamchuqa 75 113 139 Qamchuqa 46 46 52 Total Original Recovera