March 20, 2019 / 7:49 AM / 3 months ago

CORRECTED-UPDATE 2-Genel posts 2018 loss after $424 mln writedown of Miran field

(Corrects to show that shares have risen not fallen in the last 12 months, paragraph 6)

By Sangameswaran S

March 20 (Reuters) - Iraqi Kurdistan-focused oil producer Genel Energy Plc posted a $424 million writedown on its Miran oil and gas field on Wednesday, pushing it into a full-year loss, and said it was now focusing on developing its Bina Bawi field.

Genel, which has been working to develop the two gas-rich fields backed by a gas sales agreement between Turkey and Kurdistan’s regional government, said it planned to start paying a dividend from 2020.

The company is the largest holder of reserves and resources in Iraq’s Kurdistan region. It was founded in 2011 by former BP Plc boss Tony Hayward and billionaire financier Nathaniel Rothschild, both of whom have since left the company.

Genel had already submitted a field development plan for Miran, but said on Wednesday it had decided to write down the asset after reviewing its carrying value.

Including the non-cash charge, the company swung to an operating loss of $254.6 million in the year ended Dec. 31 from a profit of $298 million a year before.

Genel shares, which have risen 41 percent in the last 12 months, were down 6 percent at 211.5 pence at 1121 GMT.

Any further investment in Bina Bawi would be subject to a commercial agreement with the government, the company said.

Genel plans to develop the oil and gas field in phases “rather than the big-bang, very large-scale investment”, Chief Financial Officer Esa Ikaheimonen said. He added that Miran would become a secondary priority.

He also said talks with the government were “as challenging as it gets”.

According to Genel’s website, developing light oil production at Bina Bawi could help it to fund the development of gas resources.

Full-year production fell to 33,700 barrels of oil per day (bopd) in 2018 from 35,200 bopd a year earlier, Genel said, citing natural declines in its flagship Tawke field.

It expects 2019 production to be up about 10 percent to 36,900 bopd and said it would pay $40 million per annum in dividend starting 2020.

Genel expects to generate free cash flow of over $100 million in 2019, and Ikaheimonen said the company expects to have cash of about $500 million in 2020. (Reporting by Sangameswaran S in Bengaluru; Editing by Bernard Orr and Anil D’Silva)

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