Genel Energy PLC · LSE:GENL
Genel Energy — FY2014 Earnings Presentation
23 slides from Genel Energy's earnings presentation, Mar 5, 2015
Slide 1: Full Year Results 2014, 5 March 2015
5 March 2015
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. All numbers and charts included in this presentation are from Company data unless specified otherwise. These materials may not be reproduced in any form, redist
Slide 3: Expectation and Delivery in 2014
Expectation Delivery 60-70,000 boepd production guidance (Jan-14) 2014 production of 69,400 boepd, 58% increase YoY $500-600 million revenue guidance (Jan-14) 2015 revenues of $520 million, 49% increase YoY Pipeline becomes operational in Mar-14, Establishment of KRI pipeline export route firs
Slide 4: KRI operations safe; KRG establishes independent oil export route
KRI operations remain safe and secure KRG establishes independent oil export route During 2014, more than 40 cargoes of KRI export crude were lifted from Ceyhan, establishing a track record of unimpeded sales Access to international market pricing/realisations Interim oil deal between KRG
Slide 5: KRI export pipeline and infrastructure map
Tank Farm = 9.5 mmbbls capacity Allocated to KRI = 2.5 mmbbls capacity 40” pipeline with 700,000 bopd capacity Tawke field, >250,000 bopd of pipeline capacity 375,000 bopd capacity pipeline to expand to 700,000 bopd by Q2 2015 Taq Taq 46” Pipeline with 1mm bopd of capacity Khurmala Dome Avana Dome B
Slide 6: Significant ramp up in Iraq pipeline exports in 2015
1000 800 600 kboepd 500 500 400 700 – 800 250 450 450 – 500 200 185 0 Average YE-14 End Q2-15E 2014 Q1-15E Pipeline exports Pipeline capacity SIGNIFICANT RAMP UP IN IRAQ PIPELINE EXPORTS IN 2015 Note: Liquids export volumes are indicative and include volumes from KRI and other Northern Iraq fields.
Slide 7: KRI pipeline delivers growing contribution to Iraq exports
Northern Iraq as % of Iraq 7% 14% 16% 16% 20% 22% exports 4.0 3.4 3.5 3.2 3.1 3.0 2.8 2.7 2.6 2.5 mboepd 2.0 2.8 2.8 2.5 2.4 2.3 1.5 2.5 1.0 0.5 0.7 0.7 0.5 0.5 0.5 0.2 0.0 Average YE-14 Jan-15 Feb-15 2015E 2015E 2014 Based on 2015 Based on average budget for southern 2014 southern Iraq Iraq exports
Slide 8: Taq Taq and Tawke field operations
Taq Taq Tawke Gross average production of 103,000 bopd in 2014 Gross average production of 91,000 bopd in 2014 YE 2014 surface processing capacity at 135,000 bopd, after Processing capacity to increase to 200,000 bopd in the early part installation of a temporary well site production facilit
Slide 9: Net production growth and 2015 guidance maintained at 90-100 kboepd
Net to Genel, production growth in 2014 > 50% YoY Mid-point of 2015 guidance reflects another 40% growth YoY Gross Taq Taq production (kbopd) Gross Tawke production (kbopd) 200 150 150 103 91 76 77 66 52 45 39 33 12 2010 2011 2012 2013 2014 Q2-15 wells 2010 2011 2012 2013 2014 Q2-15 wells and facili
Slide 10: Temporary domestic market sales channel
To cover transition to regular payments for exports, KRG has implemented a temporary domestic market sales channel Gross revenues from Taq Taq (ex Bazian) and Tawke domestic sales split 50:50 between contractor/KRG KRI domestic market demand of up to 250,000 bopd: KRG owned Erbil (Kalak) and
Slide 11: Landmark agreement with KRG for Bina Bawi and Miran commercial structure
Landmark agreement with KRG for new Bina Bawi and Miran commercial structure Miran and Bina Bawi developments to be combined Responsibilities of Genel will be drilling of the gas wells reservoir management installation of flowlines first stage condensate separation and development of
Slide 12: Turkish gas market and KRI gas opportunity
Turkish gas market High-growth 8% consumption CAGR over 2003-13, Europe flat in aggregate(1) Binding Gas Sales Agreement in 2013 KRI exports to Turkey in 2018 starting at 4 bcma, ramping up to 10 bcma in 2020 Diversification of supply slate 84% of Turkish gas consumption in 2013 via pi
Slide 13: Reserves and resources on completion of gas deal
Reserves and resources on completion of gas deal* Total KRI: 1,016 mmboe Unrisked Prospective Resources -772 mmboe (19%) Total Africa: 2,347 mmboe 3,363 mmboe Africa resources update following 2014 exploration campaign Miran: 754 mmboe Bina Bawi: 1,197 mmboe Contingent Resources +1,044 mmboe +
Slide 14: KRI and Africa activity plans
KRI Further activity to be shaped by oil price outlook/export payment evolution Peshkabir-2 likely in 2016 Africa Exited Malta Exiting Angola Stop and evaluate Morocco Ethiopia first well in 2016 Somaliland commence seismic operations early 2016 Continue to evaluate onshore activ
Slide 15: 2014 financial highlights
2014 revenue of $520 million, an increase of 49% on 2013 Function of production volumes (+58% year-on-year), higher realisations (+11%) 2015 guidance(1) of $350-400 million at a Brent price of $50/bbl 2014 EBITDAX of $411 million, an increase of 49% on 2013 Loss after tax of $314 million,
Slide 16: Income statement FY 2014 vs FY 2013
$ million FY 2014 FY 2013 YoY Significant production growth Increased volumes due to exports via KRI-Turkey pipeline, Average production (kbbl/d) 69 44 58% trucked exports and strong domestic demand Price realisations averaged $73/bbl (11% increase on 2013): Revenue 520 348 49% Taq Taq/Tawke
Slide 17: Cash flow bridge 2014
58% $235m trade receivable build increase since moving to accruals YoY and prepayments 1,200 $45m reflects amounts owed 415 280 by partners 1,000 $500m senior unsecured 335 bonds due 2019, priced at 7.5% in May 2014 800 232 721 700 $ million 500 28 600 65 $271m KRI development 342 $61m KRI explorati
Slide 18: 2014 capex and 2015 guidance
2014 capex of $677 million $677m $482 million on exploration $195 million on development 2015 guidance of $200-250 million Completion of CPF 2 and testing of Taq Taq- 23 and Taq Taq-24 Temporary processing facility and permanent camp facilities at Taq Taq Completion of export tie-in pi
Slide 19: Strong balance sheet remains key to strategy
Existing debt $500 million 7.5% senior unsecured bond with 2019 maturity Significant headroom on covenants Balance sheet can support further debt capacity at current oil prices At end-2014, net receivable in respect of unpaid KRI production stood at c.$230 million Some level of receivabl
Slide 20: Outlook: new era of KRG and GoI co-operation
New era of co-operation between the KRG and GoI characterised by interim oil deal 2015 Iraq budget passed, KRG budget allocation to recommence Expect further payments for exports during 2015 Export pipeline capacity not a constraint – 700,000 bopd from KRI to Ceyhan Expect KRI exports via
Slide 21: 2015 guidance summary
90-100,000 bopd production guidance $350-400 million revenue guidance (at $50/bbl Brent) Establishment of KRI pipeline export route and normalisation of payments Expect momentum to build in the KRI gas business Maintain robust balance sheet
Slide 22: Investment summary
Significant near-term production growth from Taq Taq and Tawke Low-cost structure and oil price breakevens at both fields Confident that KRI payments will normalise Domestic market provides security over near-term cash flows Miran and Bina Bawi generate material free cash flows in the medi
Slide 23: Investor Relations contact
Phil Corbett Head of Investor Relations +44 20 7659 5119 investor.relations@genelenergy.com www.genelenergy.com