Genel Energy Plc · LSE:GENL
Genel Energy — H1 2019 Earnings Presentation
28 slides from Genel Energy's earnings presentation, Aug 6, 2019
Slide 1: A cash generative business with material growth potential
‘Acash generative business with material growth. potential * “Nee
Slide 2: Strategy to deliver shareholder value
ma STRATEGY TO DELIVER SHAREHOLDER VALUE * Genel aims to be a world-class creator of shareholder value by: - Growing high-margin production through rapid development and a disciplined use of capital - Recycling capital into an expanding asset portfolio with the potential to deliver significant susta
Slide 3: Our strategy is producing results
= OUR STRATEGY IS PRODUCING RESULTS ¢ Production increased to 37,400 bopd (H1 2018: 32,100 bopd) * Pro forma free cash flow of $76 million - Capex of $72 million, more than doubling year-on-year as spending increases across the portfolio ¢ Addition of Sarta brings near-term production and long-term
Slide 4: Honing our business model to deliver further success
ma HONING OUR BUSINESS MODEL TO DELIVER FURTHER SUCCESS * Cash is central to all business and activity decisions - Optimise activity to achieve high margin returns - Mitigate downside risk through low capital intensity appraise / rant develop model and targeted capital allocation ° * The right peopl
Slide 5: Business model in action - successes to date
=m BUSINESS MODEL IN ACTION - SUCCESSES TO DATE * Transformational receivable settlement agreement negotiated in 2017 -— Speed of payback allows rapid reinvestment into the portfolio * Implementation of appraise/develop model with DNO at Peshkabir - Maximises returns and mitigates downside, helping
Slide 6: Cash generative production driving opportunity
me CASH GENERATIVE PRODUCTION DRIVING OPPORTUNITY Genel working interest production averaged 37,450 bopd in H1 2019 Production from the Tawke PSC averaged 126,650 bopd, an increase of 20% year-on-year - Performance driven by Peshkabir, averaging 54,950 bopd - Three wells of c.14 well 2019 Tawke fiel
Slide 7: Reinvestment - material growth potential
me REINVESTMENT - MATERIAL GROWTH POTENTIAL * Organic growth from existing portfolio provides the opportunity to double production - Sartais set to enter production in middle of 2020, and can grow significantly - Mus-Adaiyah resources alone is as big as Peshkabir - 500 MMbbls of resources illustrate
Slide 8: Active commercial discussions with KRG ongoing
* Active commercial discussions with KRG ongoing - KRG and Company are aligned on Phase 1 plan: - Integrated upstream/midstream development plan - 250-300 MMscfd raw gas processing capacity - Accelerated oil development, with a portion of revenues supporting financing of gas development * Project un
Slide 9: Financial strength
Financial strength
Slide 10: Cash generative production assets
me CASH GENERATIVE PRODUCTION ASSETS * Significant free cash flow generation ASSET LEVEL CASH GENERATION HI 2019 - H12019 asset level FCF $118 million: > $17/bbl (S MIELION) - H1 2019 free cash flow of $76 million is a 9% 200 increase on prior year period despite: - Average oil price $66/bbI vs $71/
Slide 11: Resilient business mitigates risk
ma RESILIENT BUSINESS MITIGATES RISK * Scale and profitability of Tawke PSC provides resilience CAPACITY FOR COST RECOVERY - All past costs recovered and significant unused cost oil capacity means that: 100% - Cash cost of spend is only the displaced profit oil: for 80% Genel, this is 15-25% of spen
Slide 12: Capital discipline - balanced allocation
me CAPITAL DISCIPLINE - BALANCED ALLOCATION * Investing in line with our strategy use OF Hi 2019 PROCEEDS ($ MILLION) * Majority of capital expenditure on production assets 200 - $49m spend is net FCF positive for FY2019 * FY2019 growth capital allocation decisions "0 - Sarta: to add to production i
Slide 13: Balance sheet strength
wae BALANCE SHEET STRENGTH . . cig ge . NET CASH ¢ Our capital allocation model has built financial ($ MILLION) strength 150 -— Company is FCF positive and resilient, builds liquidity 100 — Gross cash of $372 million and net cash of $75 million ° - Tawke, Tag Tag and Sarta plus cash have a balance s
Slide 14: Focused portfolio additions
ma FOCUSED PORTFOLIO ADDITIONS * Cash-generation drives our strategy * New business activity aims to ensure cash flow generation grows over long-term Sarta and Qara Dagh the first step - Sarta alone has the potential to replace all maturing production and cash flow * Focus is on discovered resources
Slide 15: ee _ =
ee _ =
Slide 16: Sarta and Qara Dagh - ideal strategic fit
me SARTA AND QARA AGH - IDEAL STRATEGIC FIT tar * Sarta and Qara Dagh perfectly match our M&A criteria — Short to mid-term cash generative production - offsets existing maturing fields — Mitigation of downside risk - through phased ‘appraise while we produce’ philosophy — Significant upside potentia
Slide 17: Sarta - technical overview
ae SARTA - TECHNICAL OVERVIEW Tm KRI Licenses lm Genel Energy Licenses ¢ Hydrocarbons discovered in all classic KRI reservoir intervals, Tertiary to Triassic — P50 gross unrisked resource estimate of c.500 MMbbIs — Unrisked gross mid case resources relating to the Jurassic Mus-Adaiyah reservoir only
Slide 18: Sarta - delivering Phase 1A
mm SARTA - DELIVERING PHASE 1A ¢ Construction work for Phase 1A development underway and on schedule ¢ Civil Engineering commenced in May in preparation to mobilise Facility & Flowline contractors to site * OILSERV to Build, Operate and Maintain a 20,000 bopd central processing facility through a le
Slide 19: Complete bridging engineering
Complete bridging engineering Complete priority civils work Execute LOM contract Initiate facility construction Initiate flowline construction 2A \ Contract workover rig —a [2 S-2 Well Workover : fi iy Commission facility T Le Facility start-up - first oil | j } te Sarta-3 well
Slide 20: Qara Dagh - technical overview
=m QARA DAGH - TECHNICAL OVERVIEW * Qara Dagh prospect first tested by vertical exploration well QD-1 in 2011 - drilled off structure — Reservoir was encountered much deeper than prognosed — Operational issues compromised flow potential — QD-1 well nonetheless tested sweet, light oil from fractured
Slide 21: Qara Dagh - delivering QD-2
QARA DAGH - DELIVERING QD-2 * QD-2 surface location selected - minimal access work required, well pad and camp * Baseline ESHIA completed, ESHIA Report ready to be submitted to MNR * Civil and Rig contracting ongoing (Aiewre Energy Half-year Results - 6 August 2019 f—/
Slide 22: Select well location
Ee Select well location [=a i Tender for Civil Contractor Contract rig Environmental permit approval Build pad, camp & water supply ; - | Contract rig services eh ee ee a _ Early Production e i = “Bete
Slide 23: Somaliland - maturing prospectivity and farming out
wm SOMALILAND - MATURING PROSPECTIVITY & FARMING OUT ray ¢ Seismic interpretation of new 2018 vintage 2D seismic data now completed, current focus on eastern Blocks SL10B13 — confirms the longstanding view that the block has significant hydrocarbon potential — Further strengthens the comparison with
Slide 24: Nour Deep prospect
• • - - - • • - - NW SE NOUR DEEP PROSPECT
Slide 25: CPF at Peshkabir
CPF at Peshkabir
Slide 26: Focus on ESG
me FOCUS ON ESG A SOCIALLY RESPONSIBLE CONTRIBUTOR TO THE GLOBAL ENERGY MIX * Zero lost time or loss of containment incidents in H1 2019 — Four years since any incident at Genel operations, TTOPCO certified 5* by British Safety Council * Reducing emissions - flares out at Peshkabir — Gas management
Slide 27: Outlook and growth catalysts
mm OUTLOOK AND 12 MONTH GROWTH CATALYSTS ¢ Material cash generation ongoing, even as expenditure increases on growth assets * Sarta production underway in middle of 2020 * Qara Dagh well set to spud in H1 2020 ¢ Potential agreement on Bina Bawi unlocks material value ¢ Farm-out process on Somaliland
Slide 28: For further information please contact investor relations
Forfurther information please contact investor relations" Andrew Benbow, Head of Communications andrew.benbow@genelenergy.com