Genel Energy PLC: Audited results for the year ended 31 December 2024

18 March 2025

Genel Energy plc

Audited results for the year ended 31 December 2024

Genel Energy plc (‘Genel’ or ‘the Company’) announces its audited results for the year ended 31 December 2024.

Paul Weir, Chief Executive of Genel, said:

“In 2024, we demonstrated further progress on our journey of building towards delivering resilient, diversified cash flows. 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 to continue to cover our costs. We are delighted to have established a footprint in the Sultanate of Oman, through our award of an interest in Block 54. This is the first step on our roadmap to diversification.

For 2025, we remain focussed on three principal objectives: maintenance of a strong balance sheet; resilient cash generation from the core business; and the addition of new assets.

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 potential for further growth.

In the Kurdistan Region of Iraq (‘KRI’) we continue to work with our peers and the Regulator towards the restart of exports on the right terms to ensure our contracts are honoured and we are paid what we are due.”

Results summary ($ million unless stated)

1. EBITDAX is operating loss adjusted for the add back of depreciation and amortisation, exploration expense, net write-off/impairment of oil and gas assets and net ECL/reversal of ECL receivables
2. Free cash flow is reconciled on page 8
3. Reported cash less IFRS debt is reconciled on page 8

Highlights

• Working interest average production increased by 58% to 19,650 bopd (2023: 12,410 bopd)
• All production sold into the domestic market at average $35/bbl consistent with prior year (2023: $47/bbl, which included export sales prices in Q1)
• Free cash flow of $20 million, compared to free cash outflow of $71 million last year
  • Tawke free cash flow generation from domestic sales was over $70 million (2023: $28 million), benefiting from some offsetting and also positive working capital movements of around $30 million
  • Organisation cost reductions were offset by non-repeating costs on arbitration, closing out unprofitable licences at Taq Taq and Sarta, and finalising exit from Qara Dagh
• Closing net cash of $131 million, an increase from $120 million at the start of the year
  • Cash of $196 million (2023: $363 million), with bond debt reduced from $248 million at the start of the year to $66 million at year-end from buybacks and partial exercise of call option
  • $107 million (under KBT pricing and excluding interest) remains overdue from the Kurdistan Regional Government (‘KRG’) to the Genel subsidiary Genel Energy International Limited (‘GEIL’) for sales made in previous years. The Company owes the KRG around $50 million. We continue to work towards a plan for payment or settlement of amounts owed, and appropriate adjustment for price and interest
  • We were disappointed that in December 2024 the subsidiary, Genel Energy Miran Bina Bawi Limited (‘GEMBBL’), lost the arbitration case brought against it by the KRG regarding the Miran and Bina Bawi gas assets. As previously announced, the KRG is seeking a costs award of over $36 million against GEMBBL
• Last week, the Company announced its award of an interest in Block 54 in the Sultanate of Oman. This new country entry is an important first step towards strategic diversification of our business
• Average portfolio carbon intensity again expected to be under 14 kgCO2e/bbl, remaining below the current target for industry average
• Climate rating: maintained a CDP Climate score of B for a third consecutive year

OUTLOOK

• With domestic sales demand at similar levels to last year and year to date this year, the Company expects cash generation from the Tawke PSC to cover its organisational costs
• The Company continues to progress towards building a business with a strong balance sheet that delivers resilient, reliable, repeatable and diversified cash flows that supports a dividend programme. The Company objectives for the year on the path to building that business include:
  • acquisition of new assets in Oman and other targeted jurisdiction to add reserves and diversify our cash generation
  • restart of exports to access international pricing
  • recovery of net amounts owed by the KRG
  • further progress towards drilling Toosan-1
• The Company has engaged Pareto Securities AS as Manager and Bookrunner to arrange fixed income investor meetings. Subject to market conditions and acceptable terms, a new senior unsecured bond issue with a tenor of five years may follow

Enquiries:

Genel will host a live presentation via the Investor Meet Company platform on Wednesday 19 March at 10.00 a.m. GMT. The presentation is open to all investors. Questions can be submitted pre-event via your Investor Meet Company dashboard or at any time during the live presentation. Investors can sign up to Investor Meet Company for free and add to meet Genel Energy PLC via:

https://www.investormeetcompany.com/genel-energy-plc/register-investor. Investors who already follow Genel on the platform will automatically be invited.

This announcement includes inside information.

Disclaimer

This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil & gas exploration and production business. Whilst the Company believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Company’s control or within the Company’s control where, for example, the Company decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward looking statements.

CEO STATEMENT

We start 2025 leaner and more efficient, and with all the building blocks necessary to establish a bigger and more successful business. Genel has a strong balance sheet and our producing fields within the Tawke PSC form a world-class asset that delivers significant cash generation even when selling at heavily discounted domestic prices because of the suspension of exports. This is a situation that we continue to work on closely with our peers and host government to resolve. Genel has a compact but highly skilled and motivated workforce, dedicated to executing our growth strategy and pursuing value accretive acquisitions that will diversify our geographical footprint within reliable and predictable jurisdictions.

In 2024, we continued with the cost reduction exercise and business efficiency improvements that began in 2022. That process extended to continuing the divestment process for non-profitable assets. Taq Taq awaits only government approval before divestment is complete, and relinquishment of our other non-producing legacy assets in the Kurdistan Region of Iraq (‘KRI’) will also be completed soon.

Having delivered these improvements and trimmed our debt levels to improve the capital efficiency of the business, it’s time to move on to the next phase.

We are very clear on what needs to be done to deliver the appropriate Company growth and deliver the shareholder returns that are necessary for an emerging market exploration and production business. The period of consolidation and efficiency improvement in 2024 must now give way to profitable growth.

Genel is delighted to have taken the first step in its growth journey by signing an EPSA in the Sultanate of Oman with OQ Exploration & Production SAOG (‘OQEP’) as Operator, which will see us participate in the appraisal and development of Block 54. This will see Genel spend modestly over the next three years. The potential on the block is significant and while the eventual returns are not certain at this stage, we believe this move will lead to further exciting opportunities in the region. Oman is a jurisdiction that Genel has long considered as a very attractive place to do business and where we have been made very welcome by both our new partner and the regulator.

Back in the KRI, together with our operating partner DNO, we have helped establish a reliable and consistent domestic sales market, which generates very important cash for producers there, albeit at a heavily discounted price. Tawke production currently realises only around $35/bbl, which is well below relevant reference benchmark oil prices. With our peers in the KRI, we continue to work with our host Government and Federal Iraqi authorities to negotiate an arrangement that allows the resumption of international oil sales at international oil prices and that provides appropriate returns for those producing the oil. This has proved to be a sporadic process, but most recent indicators suggest a solution should soon be found; a solution that could double Genel revenue immediately upon implementation.

We have worked hard with DNO to ensure spend and delivery performance are optimised. The world-class field operating cost of only $4/bbl and consistent production delivery throughout 2024 are testament to the successful delivery performance of this asset.

We have put behind us the disappointment of the outcome of the arbitration on the KRG’s termination of the legacy Miran and Bina Bawi licences, where the London Court of International Arbitration ruled in favour of the KRG. 

We have a clear direction of travel and specific targets that we are pursuing to re-energise the business.

Outlook

The Company is focussed on delivering on three principal objectives:

Strong balance sheet

• We will retain an appropriate balance that provides protection against outlook downside scenarios and maintain debt at a level that is appropriate for the cash generation of the business

Resilient cash generation

• Realising the full potential of our existing portfolio which includes delivering performance from the Tawke licence, an asset with a long and profitable life ahead of it, and where many opportunities for further investment exist, if conditions permit.
• Continuing to work with our peers, the Kurdistan Regional Government (‘KRG’) and the Federal Government of Iraq (‘FGI’) to support the resumption of international oil sales from the KRI

Investment in new cash flows

• Acquiring the right new assets to re-energise our portfolio and deliver diversified, increased, and more resilient cash generation that will enable us to re-establish a regular long-term dividend for our shareholders
• We are also focused on establishing the right conditions to support drilling the Toosan-1 exploration well in Somaliland

OPERATING REVIEW

Reserves and resources development

Genel's proven plus probable (2P) net working interest reserves totalled 82 MMbbls (31 December 2023: 89 MMbbls) at the end of 2024.