October 10, 2018 / 6:30 AM / 7 months ago

Oil producer Genel Energy sees 2018 output above target

(Reuters) - Iraqi Kurdistan-focussed oil producer Genel Energy (GENL.L) expects 2018 output to be slightly above the prior target of 32,800 barrels of oil per day (bopd), as production ramps up at its cash generating Peshkabir field, it said on Wednesday.

Shares of the company rose 4.1 percent to 256.1 pence in early minutes of trade.

Genel, which has been operating in the Kurdistan Region of Iraq for over a decade, has benefited from strong output at the Peshkabir oilfield operated by Norwegian oil firm DNO ASA (DNO.OL) and 25 percent owned by Genel.

DNO said earlier this week that production at Peshkabir had ramped up to 50,000 bopd, meeting the year-end target ahead of schedule and below budget.

Genel, looking to wipe out its net debt by year-end, also said it became net cash positive with a cash pile of $281 million (213.6 million pounds) and net debt reduced to $16 million as of Sept. 30.

Founded in 2011 by former BP boss Tony Hayward and billionaire financier Nathaniel Rothschild, Genel has been having a good run, as Kurdistan regional government makes regular payments to the company. This has helped the company’s shares to more than double in value this year.

Its cash position was helped by the receipt of $32 million after the end of third quarter, related to July exports.

Net production for the third quarter averaged slightly lower than last year, at 33,650 bopd, as the company recovers from a slowdown in production at its Taq Taq field, once considered its flagship.

The field has now stabilised and its five-well programme, aimed at increasing production, is underway at the field, the company said.

Genel now expects 2018 capital expenditure to be towards the lower end of its prior guidance range of $95 million-$125 million, which was narrowed in August from $95 million-$145 million.

Reporting by Shariq Khan in Bengaluru; Editing by Amrutha Gayathri

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