May 17, 2018 / 8:25 AM / 3 months ago

UPDATE 1-Genel Energy on track for Kurdish output growth, shares jump

(Adds detail, share price, analyst comment)

LONDON, May 17 (Reuters) - Genel Energy is on track to hit its oil output target in Kurdistan, it said on Thursday, adding that its cash reserves had risen by 28 percent from the end of last year.

The company’s cash pile increased to $208 million, helped by continuing payments from the Kurdish regional government and a focus on cost control. Its share price jumped almost 10 percent to as much as 2.81 pounds, its highest since 2015.

Genel reiterated its target for the Peshkabir oilfield operated by DNO in Kurdistan. It expects output to reach 30,000 barrels per day (bpd) “by the summer”, doubling output in the year to date.

“The first three of the six wells planned at Peshkabir have progressed on time and on budget,” Chairman Stephen Whyte said in a statement.

“The Peshkabir-4 well is set to begin testing imminently, Peshkabir-5 has reached target depth and will be testing shortly and Peshkabir-6 is drilling ahead.”

Its Taq Taq field’s current gross production is close to 13,000 bpd, compared with slightly more than 14,000 bpd in the second half of last year, but the company plans further drilling in the second half of this year.

At its Tawke field, Genel brought the Tawke-48 well on stream last month at more than 5,000 bpd, planning additional development wells this year.

Net debt fell to $89 million, down $46 million since the start of the year, Genel said.

“Today’s ... statement had a positive tone and talked encouragingly about the outlook for Peshkabir and Genel’s continued deleveraging,” RBC said in a note.

“Iraq’s recent elections appear to have had limited impact on the region and with leverage to current oil prices the stock should continue to perform well.” (Reporting By Shadia Nasralla Editing by David Goodman)

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