Genel Energy Plc · LSE:GENL
Genel Energy — FY2018 Earnings Presentation
33 slides from Genel Energy's earnings presentation, Mar 20, 2019
Slide 1: 2018 results and outlook
2018 results and outlook 20 March 20
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 strategy
= DELIVERING ON OUR STRATEGY * Highly cash generative producing assets... KEY FIGURES - 33,700 bopd of net production in 2018, forecast to grow in 2019 2018 - Free cash flow of $164 million 33.700 bond ¢ with transformational development opportunities funded from free net needa cash flow... P - Sart
Slide 4: Leading position in the Kurdistan Region of Iraq
wae | FADING POSITION IN THE KURDISTAN REGION OF IRAQ * Balanced portfolio with positions throughout heartland hydrocarbon areas of the KRI - Highly cash generative production from the ‘ Tawke and Taq Taq PSCs ne GISTP, — Near-term production from Sarta with material upside - High-impact appraisal a
Slide 5: Rising production
ma RISING PRODUCTION PRODUCTION (NET) 40 35 22 24 20 30 23 22 22 22 0 ie} its) 0 ie} Tt + t st Tt te) Jan18 Feb 18 Mar 18 Apr 18 May18 Jun18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 mPeshkabir =TaqTaq mTawke * Success at Peshkabir led to increased production through 2018 * Drilling is actively progressing
Slide 6: Rising cash receipts in 2018
me RISING CASH RECEIPTS IN 2018 NET PAYMENTS RECEIVED FROM THE KURDISTAN REGIONAL GOVERNMENT 40 35 30 vt 25 ro) vt § re) 3s © = 20 vt c7 Le 15 tb 2 2 10 N 5 te) Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 mTawke PSC @RSA payment ™ Taq Taq * $335 million of cas
Slide 7: ae, ; _— | fa
ae, ; _— | fa
Slide 8: Robust balance sheet
=m ROBUST BALANCE SHEET NET CASH * Net cash continues to grow rapidly ($ million) - $37 million at 31 December 2018 100 - $81 million at end of February, following proceeds of $67 million in the first two months of 2019 50 ¢ Portfolio generates free cash flow even at an oil price below $40/bbl, and
Slide 9: Balanced capital allocation
mm BALANCED CAPITAL ALLOCATION EARN INVEST jue GROW RETURN (Gy Genel Energy LJ * Cash generative growth from producing assets - Cost recoverable capital investment, as cash generation from our producing assets provides the funds to deliver our strategy - Exceptional payback from incremental drilling
Slide 10: 2018 capital allocation - production
a 2018 CAPITAL ALLOCATION - PRODUCTION INDICATIVE PAYBACK FROM PRODUCING WELLS (NET) Peshkabir well 8 6 Tag Taq well Tawke well $ million === Breakeven (6) * Rapid payback and exceptional return on investment rewards spend on producing assets —Peshkabir: wells offer industry leading returns of c.$8
Slide 11: 2018 capital allocation - prioritise production
me 2018 CAPITAL ALLOCATION - PRIORITISE PRODUCTION * Producing assets - 2018 activity — Peshkabir — Five wells were drilled - Contributed c.$55 million of free cash flow - Tawke — Workover and completion of water handling upgrade - Recommencement of drilling at the end of the year to offset decline
Slide 12: 2019 capital allocation - organic growth
a 2019 CAPITAL ALLOCATION - ORGANIC GROWTH * Cash generative investment in producing assets CAPITAL EXPENDITURE ~ 20 wells to be drilled in 2019 milo * Investment in growth to be proportional to visibility on cash generation — Sarta: Accelerated and efficient plan to first oil and derisking of signi
Slide 13: Capital allocation - M&A growth
me CAPITAL ALLOCATION - M&A GROWTH * Opportunities carefully screened for the following: Sarta Qara Dagh - Short to mid-term cash generative production JV JV - Mitigation of downside risk JV JV - Significant upside potential JV J - Derisked entry price JV WA * Continue to assess opportunities that m
Slide 14: Growing financial capability
=m GROWING FINANCIAL CAPABILITY ¢ Planned capital allocation on existing LIQUIDITY GROWTH POTENTIAL FROM CURRENT DEVELOPMENTS portfolio offers significant cash generation ($ MILLION) potential 2,000 ¢ Base case expectations show build of 1800 significant financial capability increasing ‘ over the ne
Slide 15: Long-term production growth
Long-term production growth.
Slide 16: Liquidity supported by conservative production
me ||QUIDITY SUPPORTED BY CONSERVATIVE PRODUCTION * Base case production profile yields NET PRODUCTION - BASE CASE TO UPSIDE significant growth over the next five years} ““89PD) 90 — Conservative base case includes only reserves - Tawke, Peshkabir, Tag Taq, and Sarta phase 1A 6° ¢ Multi-asset growth
Slide 17: A more diverse producing portfolio
mam A MORE DIVERSE PRODUCING PORTFOLIO ¢ Priority was to diversify reliance on key 100% 80 wells in Tawke field ¢ In 2017, 80% of the wells producing over 70 2,000 bopd were at Tawke 75% 60 * By increasing the well stock (up 50%) and diversifying the big wells (45% from the 2 ic . . . ie 50 uv other
Slide 18: Reserve replacement - with more to come
mee RESERVE REPLACEMENT - WITH MORE TO COME * 2018 2P reserves replacement of c.140% with revisions and acquisitions ¢ Reserves to production of 11.5 years * Significant incremental oil opportunity in KRI contingent and prospective reserves: - Sarta Phase 1B+ - Tawke gas injection EOR project — Bina
Slide 19: Peshkabir - asset development
me PESHKABIR - ASSET DEVELOPMENT * Significant production from every well drilled in 2018 * P-9, drilled on the east of the field and brought on production in March 2019, has proven production potential across the structure, and drilling continues in 2019 — Two firm and two contingent wells in 2019
Slide 20: Tawke - asset development
me TAWKE - ASSET DEVELOPMENT * Oil production distributed along the Tawke field structure, dual porosity and permeability system with material contribution from matrix into the fracture network * 2019 drilling programme underway to stabilise production - 10-14 wells to be drilled in 2019, while deve
Slide 21: Taq Taq - growing production
= TAQ TAQ - GROWING PRODUCTION . f oil production is changing - central TAQ TAQ DAILY OIL AND WATER Source of oil production is changing - centra PRODUCTION (11.03.2019) - CRETACEOUS wells have higher water-cut consistent with central field depletion a DAILY OIL and WATER BUBBLE MAP ¢ Wells towards
Slide 22: Taq Taq - success on the flanks and control in the centre
me TAQ TAQ - SUCCESS ON THE FLANKS & CONTROL IN THE CENTRE * Initial depletion strategy was to drain the flanks by producing in the centre * Water coning and break through occurred as vertical movement of oil and water much faster than lateral movement * TT-29 was drilled off the northern flank and
Slide 23: Taq Taq - asset development
=a TAQ TAQ - ASSET DEVELOPMENT * Strategy: Northern SS Flank — Drill flank opportunities to deliver 2P reserves — Manage decline of primary depletion with infill drilling, production optimisation and water management ° Wells: Central Region — Five well programme targeting the flanks of the field, tw
Slide 24: Sarta - proven discovery
wa SARTA - PROVEN DISCOVERY * Genel has acquired 30% equity in the Sarta licence, Chevron retain 50%, and the Kurdistan Regional Government holds 20% * Low-risk entry into a field promising near-term production, with material growth potential * Development plan combines Genel's low-cost operating ca
Slide 25: Sarta - Phase 1A
me SARTA - PHASE 1A * Phase 1A of development will see these wells placed on production — Three wells in total, and the construction of a central processing facility with a 20,000 bopd capacity — First oil expected in 2020, oil initially to be trucked * Genel has booked an initial 10 MMbbls of net 2
Slide 26: Qara Dagh - appraisal opportunity
mm QARA DAGH - APPRAISAL OPPORTUNITY * Genel acquired 40% equity of the Qara Dagh appraisal licence and became the operator through a carry arrangement * Chevron have retained 40% of the equity, with the KRG holding the remaining 20% ¢ The QD-2 well is set to be drilled in Hi 2020 — The QD-1 well, c
Slide 27: Qara Dagh - drilling on structure
mm ()ARA DAGH - DRILLING ON STRUCTURE * The QD-1 well was sited based on an incorrect structural model * Subsequent work (2D reprocessing, new 2D acquisition, integration of QD-1/field data) - Top Shiranish came in 2.5 km deep to prognosis but still managed to test a sweet, light (42-47 API) oil fro
Slide 28: Bina Bawi - asset development plan
maa BINA BAWI - ASSET DEVELOPMENT PLAN * Strategy: — Rapid primary development of Jurassic oil to create momentum and cash flow, helping to fund the gas development — Staged development of Triassic gas as ‘trains’ of capacity of c.250-300 MMscfd raw gas — Create (debt and equity) midstream project t
Slide 29: Dagah Shebl discovery (Stanvac 1959)
• • Dagah Shebl discovery (Stanvac 1959) Jurassic oil (35API) to surface. - - - - • -
Slide 30: Slide 30
Slide 31: 2019 activity
me 2019 ACTIVITY * Disciplined capital expenditure rising as opportunity set increases Around 20 wells expected to be completed in 2019 on our producing assets Work to begin at Sarta Preparation for QD-2 well to get underway at Qara Dagh Continue to make disciplined expenditure on other assets TAWKE
Slide 32: Outlook
= OUTLOOK ¢ Average net production for 2019 expected to be close to Q4 2018 levels of 36,900 bopd, an increase of 10% year-on-year ¢ Capital expenditure net to Genel is forecast to be c.$150-170 million, including spend on Sarta and Qara Dagh * Genel expects to generate material free cash flow of ov
Slide 33: For further information please contact investor relations
Forfurther information please contact investor relations ~ Andrew Benbow, Head of Communications andrew.benbow@genelenergy.com