Slide 1: Full Year Results 2016 - 30 March 2017
30 March 2017
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 and does not constitute a prospectus or offering memorandum or an offer in respect of any securities. All numbers and charts included in this presentation are fr
Slide 3: Agenda
1. 2016 Review and KRI update Murat Özgül (CEO) 2. KRI gas business Murat Özgül (CEO) 3. Operating review Paul Schofield (COO) 4. Financial review Ben Monaghan (CFO) 5. Outlook and Q&A Murat Özgül (CEO)/Panel
Slide 4: 2016 review and KRI update
KRI gas business momentum Signature of amended Production Sharing Contracts and Gas Lifting Agreements in February 2017 Focus now on concluding negotiations with potential upstream partners KRI oil business Tawke year-end 2016 2P reserves unchanged after adjusting for 2016 production Taw
Slide 5: KRI exports and payments to KRG
Over $1.1 billion paid out to main fields(2) since September 2015 650,000 700 KRI export Good uptime in the KRI export NOC volumes N.Iraq exports rebound on return pipeline shut in pipeline, although exports offline, exports of Bai Hassan & NOC volumes 600,000 between 17 impacted by loss of NOC furt
Slide 6: Agenda: KRI gas business
1. 2016 Review and KRI update Murat Özgül (CEO) 2. KRI gas business Murat Özgül (CEO) 3. Operating review Paul Schofield (COO) 4. Financial review Ben Monaghan (CFO) 5. Outlook and Q&A Murat Özgül (CEO)/Panel
Slide 7: Amended PSCs and Gas Lifting Agreements
Amended and Restated PSCs signed in February 2017 Incorporate the commercial terms as announced in the term sheets signed in 2015 Interests in Miran and Bina Bawi increased to 100% No royalty on raw gas production, 100% cost recovery ceiling on raw gas Gas Lifting Agreements Again incorp
Slide 8: Gas Development Plan and upstream capex
Gas Development Plan Completed by Baker Hughes RDS in early 2017 Confirms Miran and Bina Bawi can deliver the Annual Contract Quantity (‘ACQ’) over the initial two year production build-up and subsequent ten year plateau period (as per Gas Lifting Agreements signed in February 2017) KRI gas up
Slide 9: Midstream pre-FEED
Midstream pre-FEED Pre-FEED: preferred sites for Miran and Bina Bawi gas processing Fluor established concept definition for Miran and Bina Bawi surface facilities, which includes: Main components of gas treatment facilities Identification of potential sites for the processing facilities at
Slide 10: KRI gas timeline
2017 Upstream farm-out/partnership Updated CPRs for Miran and Bina Bawi Tender and engineering studies Commence Bina Bawi ESIA(1), 3D seismic, Extended Well Test 2018+ Miran oil development Midstream gas processing facilities FEED ESIA EPC tender Project financing for gas pro
Slide 11: Agenda: Operating review
1. 2016 Review and KRI update Murat Özgül (CEO) 2. KRI gas business Murat Özgül (CEO) 3. Operating review Paul Schofield (COO) 4. Financial review Ben Monaghan (CFO) 5. Outlook and Q&A Murat Özgül (CEO)/Panel
Slide 12: Reserves and resource development
Reserves and resource development Net Genel 2P reserves of 161 MMbbls at end-2016 represents a 25% downgrade on end-2015 levels 2C resources practically unchanged KRI oil assets Tawke production and Expected Ultimate Recovery stable Peshkabir Cretaceous discovery – accelerated appraisal
Slide 13: 2P reserves reduced to 161 MMbbls at end-2016
2P reserves progression (MMbbls) 2C resources progression (MMboe) 250 1,600 1,400 200 1,200 150 1,000 800 100 600 400 50 200 0 0 End-2015 End-2016 End-2015 (restated) End-2016 Tawke Taq Taq Peshkabir Jurassic Miran Oil Bina Bawi Miran (inc oil) Chia Surkh Peshkabir Tawke 2P reserves reduced from 2
Slide 14: Tawke – EUR and production stable
Tawke – top Cretaceous map EUR and production stable 2016 activity campaign helped to offset natural declines Four oil production wells drilled in H2 2016 – added >10,000 bopd of initial production for investment of $11 million (gross) Year-to-date 2017 production has averaged 111,000 bopd,
Slide 15: Tawke licence map
Tawke licence map Peshkabir located in the Tawke Concession approximately 20 km west of the Tawke field Peshkabir-1 (2011) tested oil with a high water cut from the Jurassic Following acquisition of 3D seismic the well was found to have been drilled off the main structure Peshkabir-2 (2016)
Slide 16: Peshkabir-2 Cretaceous discovery
Cretaceous Top Cretaceous Depth Structure Focus for appraisal Flowed 3,800 bopd of 28° API oil from a 170 metre interval in the southern flank of the Peshkabir structure Data supports Cretaceous oil interval in Discovery under P-2 P-1 2.5 KM evaluation excess of 300 metres Operator is consid
Slide 17: Taq Taq field data
Year-to-date 2017 production has averaged 28,000 bopd, current production of 19,000 bopd Taq Taq field data 31 Dec 15 30 June 16 31 Dec 16 Current The natural well declines seen in 2016 have Cumulative oil (MMstb) 184 197 206 208 been exacerbated by recent sharp falls in key producers Oil produc
Slide 18: Taq Taq key assumptions and TT-29z
TT-29z trajectory is projected Shiranish Kometan Qamchuqa FWL location on flanks of the field will determine remaining GRV – currently estimated at 4.3-8.3 Bm3 (low-high) Key assumptions in assessing remaining potential at the field Gross rock volume Fracture porosity Fracture recovery facto
Slide 19: Somaliland exploration campaign
SOMALILAND EXPLORATION CAMPAIGN Depth to Basement from High Resolution Airborne Gravity & Magnetics Survey Odewayne Block Block SL-10B/13 Somaliland 2 licences, 41,000km2 Depth seep locations • SL-10B/13 (Operator, 75% working interest) High vintage 2D lines • Odewayne (Operator, 50% working interes
Slide 20: Somaliland work programme timeline
2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Mobilisation, community engagement and line clearance Seismic acquisition and processing Commenced Seismic acquisition March 2017 Seismic delivery and processing (PSTM) Seismic interpretation Prospect inventory development Prospect inventory Well planning and mobili
Slide 21: 2017 drilling and activity programme
Firm Contingent 2017 Rig Q1 Q2 Q3 Q4 + T-21N 2,000HP T-35 Cretaceous Cretaceous Tawke T-28N T-22 T-36 1,500HP T-13 Cretaceous Cret. Cretaceous Cretaceous 1 x Jeribe water injector Sindy Workovers (7 x ESP replacement) Jeribe 2 x Jeribe producers Peshkabir-2 on production Peshkabir 2,000HP Peshkabir-
Slide 22: Agenda: Financial review
1. 2016 Review and KRI update Murat Özgül (CEO) 2. KRI gas business Murat Özgül (CEO) 3. Operating review Paul Schofield (COO) 4. Financial review Ben Monaghan (CFO) 5. Outlook and Q&A Murat Özgül (CEO)/Panel
Slide 23: Financial review highlights
Cash flow positive as payment regularity improved Flexible capital expenditure profile Accounting impairments to reflect updated outlook Strong liquidity with bond buy-back announced today
Slide 24: Cash flow and free cash flow 2016
Free cash flow of $59 million 700 54 25 650 35 153 17 600 12 61 550 2 52 500 455 35 450 1 427 400 $ million 350 300 Restricted cash of $21 million Restricted cash of $20 million Unrestricted cash of $434 million Unrestricted cash of $407 million 250 Net debt of $239 million Net debt of $241 million
Slide 25: Capex 2016 and 2017 outlook
90 2016 capex – below original guidance 80 Tawke capex managed during the year to reflect timing of export payments 70 Phasing/changes to TT programme Miran and Bina Bawi capex lower than 60 anticipated due to deferral of activity into 2017 and beyond 50 $ million 2017 capex outlook 40 T
Slide 26: 2016 impairments and principal assumptions
2016 impairments – Brent oil price assumption ($/bbl) Principal assumptions 80 Oil price 75 70 Tawke and Taq Taq 2P production 65 profiles 60 55 Discount rate 15% (oil and gas assets), 50 from 12.5% in 2015 45 40 Receivable repayments at a flat 5% of (1) 2017 2018 2019 2020 2021 field prod
Slide 27: Existing debt and bond buy-back
Existing debt As at Covenant 31 Dec 2016 $675 million bond with two years to May 2019 maturity Net debt/EBITDAX < 3.0x 1.8x $407 million of unrestricted cash at year-end 2016 Equity ratio > 40% 60% IFRS net debt $241 million at year-end 2016 Unrestricted Liquidity(1) > $75m $407m Buy-back
Slide 28: 2017 guidance
2017 GUIDANCE • Expect YTD production levels as an average for the year (in line with recent Tawke production operator guidance) Production costs • $30-35 million • $50-75 million Taq Taq and Tawke Capex • $10 million KRI gas business • $10 million Somaliland 2D seismic Exploration commitment • c.$3
Slide 29: Agenda: Outlook and Q&A
1. 2016 Review and KRI update Murat Özgül (CEO) 2. KRI gas business Murat Özgül (CEO) 3. Operating review Paul Schofield (COO) 4. Financial review Ben Monaghan (CFO) 5. Outlook and Q&A Murat Özgül (CEO)/Panel
Slide 30: Outlook
KRI gas business momentum Expect further progress on introducing partner(s) in 2017 KRI oil business Maintain Tawke production in 2017 at year to date levels Peshkabir appraisal and early production Focus on maximising Taq Taq recovery, with an overall aim of generating positive cash flo
Slide 31: Appendix - Genel Energy KRI Licences
APPENDIX - GENEL ENERGY KRI LICENCES