Genel trading statement

The headline from Genel’s trading statement this morning is perhaps the downward revision of the 2015 production guidance from 90-100mbopd to 85-90mbopd and revenue guidance narrowing at the bottom of the range (was $350-400m, now $350-375m) assuming $50/bbl crude.

Following GKP’s recent receipt of payments for production, Genel expect $24.5m in the short term, which we hope will be a further step towards reliable payments from the KRG for production. As with all KRG-focussed producers, Genel is restricting its investment until it sees returns from existing production, and the sooner that payments (and back payments) for production are received the more quickly Kurdistan will see further increases in capacity.

Importantly, the export volumes from Kurdistan continue to increase, with news yesterday (Bloomberg) that exports could be running at 656mbopd (from 564mbopd in September). Even with oil prices where they are, these kind of volumes give us hope that the KRG can afford to pay its contractors.

Elsewhere, the gas project is continuing with ING appointed as mid-stream debt adviser, Genel will be participating in the Aigle well (Cote D’Ivoire), and the completion of Taq Taq’s second central processing facility (90bopd) is on track for end-2015.