Genel Energy Plc · LSE:GENL
Genel Energy — H1 2016 Earnings Presentation
26 slides from Genel Energy's earnings presentation, Jul 28, 2016
Slide 1: Half-Year Results 2016
Half-Year Results 2016 July 2016 dec
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: Agenda
1. Ensuring payment continuity and receivable recovery Murat Özgül (CEO) 2. Maximising the value of our KRI oil assets Paul Schofield (COO) 3. Crystallising value from our KRI gas business Murat Özgül (CEO) 4. Growing the resource base Paul Schofield (COO) 5. Financial flexibility Ben Monaghan (CFO)
Slide 4: Payment normalisation
Payment normalisation KRG made nine consecutive payments to IOCs for oil production up to the end of June 2016 Genel has received $193 million gross proceeds since payments restarted in September 2015 Short-term economic measures improving KRG economic situation In April 2016 the KRG repor
Slide 5: KRI exports and contractor export payments
Contractor export payments(2) $75m $75m $75m $75m $56m $36m $59m $70m $79m 650,000 600,000 KRI export pipeline shut in 550,000 between 17 February and 500,000 10 March 2016 450,000 400,000 bopd 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
Slide 6: Maximising the value of our KRI oil assets
1. Ensuring payment continuity and receivable recovery Murat Özgül (CEO) 2. Maximising the value of our KRI oil assets Paul Schofield (COO) 3. Crystallising value from our KRI gas business Murat Özgül (CEO) 4. Growing the resource base Paul Schofield (COO) 5. Financial flexibility Ben Monaghan (CFO)
Slide 7: Taq Taq and Tawke production
140,000 Pipeline downtime 120,000 100,000 80,000 60,000 40,000 20,000 - 01/16 02/16 03/16 04/16 05/16 06/16 Taq Taq Tawke
Slide 8: Taq Taq – distribution of oil production within the field
Taq Taq – distribution of oil production within the field 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Oil - cumulative Oil 2016 YTD Crest NE flank SW flank SE flank NW flank
Slide 9: Taq Taq work programme
Taq Taq work programme activity Potential impact increase the number of producing wells, More wells allows for more effective primarily on the flanks of the field management of the reservoir and oil water contact Increase the number of producing wells, primarily on the flanks of the field Appr
Slide 10: Taq Taq well programme
TT-24: horizontal development well in uppermost section of the Shiranish reservoir TT-27x: Shiranish development well TT-7z: appraisal well TT-16z: Shiranish horizontal development well TT-24 TT-27x TT-07z Shiranish TT-27 TT-07 Kometan Qamchuqa
Slide 11: Taq Taq and Tawke activity schedule
Activity July Aug Sep Oct Nov Dec TT-07 side-track (slanted) Taq Taq TT-16 side-track (horizontal) TT-20 side-track (TBC) T- T- Tawke workovers T-11 26 1A Tawke Jeribe wells T-32 WI T-34 P T-33 P Tawke Tawke cretaceous wells T-31 P Peshkabir-2
Slide 12: Crystallising value from our KRI gas business
1. Ensuring payment continuity and receivable recovery Murat Özgül (CEO) 2. Maximising the value of our KRI oil assets Paul Schofield (COO) 3. Crystallising value from our KRI gas business Murat Özgül (CEO) 4. Growing the resource base Paul Schofield (COO) 5. Financial flexibility Ben Monaghan (CFO)
Slide 13: KRI gas business progress
Progress on near-term deliverables Pre-FEED awarded to Fluor and Gas Development Plan to Baker Hughes RDS (both expected to complete by end-2016) Progress on definitive agreements Advanced more slowly than anticipated in the first half of the year Revised drafts recently received from the
Slide 14: Growing the resource base
1. Ensuring payment continuity and receivable recovery Murat Özgül (CEO) 2. Maximising the value of our KRI oil assets Paul Schofield (COO) 3. Crystallising value from our KRI gas business Murat Özgül (CEO) 4. Growing the resource base Paul Schofield (COO) 5. Financial flexibility Ben Monaghan (CFO)
Slide 15: Chia Surkh-12 and Peshkabir-2
Peshkabir-1 (2012) Chia Surkh-10 and Chia Surkh-11 (2013) Drilled on flank of structure, based on sparse 2D data, 27-29 API oil CS-10 and CS-11 encountered light oil and gas in Jeribe/Euphrates from Jurassic on test. Oligo-Miocene with flow rates between 7-12,000 bopd and 15-46 mmcfd of gas
Slide 16: Morocco Sidi Moussa and Somaliland
Well test shows reservoir Oil recovered was structurally isolated during drilling JURASSIC CARBONATES Odewayne Block Block SL-10B/13 Sample analysis indicates oil came from outboard source LOWER JURASSIC CLASTICS Morocco - Sidi Moussa (60% working interest) Somaliland - (Odewayne (Genel 50%, ope
Slide 17: Financial flexibility
1. Ensuring payment continuity and receivable recovery Murat Özgül (CEO) 2. Maximising the value of our KRI oil assets Paul Schofield (COO) 3. Crystallising value from our KRI gas business Murat Özgül (CEO) 4. Growing the resource base Paul Schofield (COO) 5. Financial flexibility Ben Monaghan (CFO)
Slide 18: H1 2016 income statement, cash flow and balance sheet
Income statement H1 2016 ($m) H1 2015 ($m) % change Revenue 91 199 (54%) EBITDAX 66 158 (58%) Profit/(loss) (4) 31 (113%) Cash flow statement H1 2016 ($m) H1 2015 ($m) % change Gross proceeds 119 50 138% Net cash from operating activities 80 - n/m Capex 31 93 (66%) Free cash flow 33 (193) 117% Balan
Slide 19: Cash movement in H1 2016
Restricted cash Operating cash flow of $80 million of $20 million 600 relating to 24 12 Morocco 17 95 exploration 5 5 commitments 32 15 500 27 455 462 35 426 400 Gross proceeds of $119m $ millions 300 200 Net debt of $237m, based on 100 $407m cash excluding Morocco commitment 0 Cash at 1 Export Dome
Slide 20: Revenue, proceeds and receivable
Revenue Accrued at $5/bbl and $12/bbl discounts to Brent for Taq Taq and Tawke respectively, based on Genel’s view of PSC entitlement and actual costs incurred Proceeds Monthly payments based on simple proxy formula agreed with the KRG Proceeds after Capacity Building Payments allocated to
Slide 21: Capital expenditure and FY 2016 guidance
FY 2016 ($ millions) H1 2015 H1 2016 guidance Taq Taq and Tawke 73 23 70 – 80 KRI gas business 10 9 ± 20 KRI/Africa E&A 10 2 ±5 Total 90 – 110
Slide 22: Cash, bond and net debt
Cash HY bond and net debt Monthly cash spend in 2016 forecast at less Bond buy-back successfully than $20 million(1) implemented in March 2016 Compares with average monthly post CBP $55.4 million of nominal value proceeds in H1 of $18 million repurchased at 63% plus accrued interest End pe
Slide 23: 2016 guidance
Guidance Production 53-60,000 bopd Revenue (based on $45/bbl Brent in 2016) $200-230 million Production costs $1.50-1.75/bbl G&A c.$25 million Capex $90-110 million
Slide 24: Summary & outlook
1. Ensuring payment continuity and receivable recovery Murat Özgül (CEO) 2. Maximising the value of our KRI oil assets Paul Schofield (COO) 3. Crystallising value from our KRI gas business Murat Özgül (CEO) 4. Growing the resource base Paul Schofield (COO) 5. Financial flexibility Ben Monaghan (CFO)
Slide 25: Summary and outlook
Nine consecutive payments received up to end June 2016 $193 million in gross proceeds to Genel between September 2015 and June 2016 Ongoing economic reforms and higher oil price have strengthened KRI economy Expect this to translate into accelerated receivable recovery when KRI economy in su
Slide 26: Q&A
1. Ensuring payment continuity and receivable recovery Murat Özgül (CEO) 2. Maximising the value of our KRI oil assets Paul Schofield (COO) 3. Crystallising value from our KRI gas business Murat Özgül (CEO) 4. Growing the resource base Paul Schofield (COO) 5. Financial strength and flexibility Ben M