Genel Energy pledges to expand footprint, boost cash flows

(Sharecast News) - Genel Energy said on Tuesday that it would look to further boost its presence in the Middle East, after delivering free cash flow for the first time. Posting results for the year to 31 December, the London-listed firm said it had made further progress in 2024 towards securing "resilient, diversified cash flows".

Full-year production came in at 19,650 barrels of oil per day, up from 12,410 a year previously. Revenues eased to $74.7m, from $78.4m, after lower international oil prices and regional discounts meant the average realised price per barrel fell to $35 from $47.

The operating loss also widened significantly, to $52.4m from $10.3m.

But free cash flow came in at $19.6m, compared to cash outflows of $71m a year previously.

Paul Weir, chief executive, said: "Our shift from cash outflow in 2023 to cash generation in 2024 has been important, and in 2025 we expect the cash generated by the Tawke PSC (production sharing contract) to continue to cover our costs.

"For new assets, we will seek both to increase that footprint in Oman and also acquire assets in other preferred jurisdictions that we have identified as attractive to Genel, with a focus on adding production assets that increase the cash generation and resilience of the business, and provide further potential for further growth."

As well as interests in the Tawke and Taq Taq oil fields in the semi-autonomous Kurdistan Region of Iraq, Genel has exploration assets in Morocco and Somaliland. Earlier this month, it extended its presence into Oman, after agreeing to acquire a 40% participating interest in Block 54, an onshore exploration and production concession.

Genel said at the time it was "strategic diversification" into a jurisdiction with a "stable" regulatory environment.

Oil flows from KRI through the Iraq-Turkey Oil Pipeline were halted by Turkey in March 2023, after Ankara was ordered to pay Baghdad $1.5bn in damages for historic unauthorised exports. Genel remains in discussions with the governments of both Iraq and KRI about the resumption of exports at international prices.

As at 0900 GMT, shares in Genel were up 3% at 66p.