Genel Energy PLC (LSE:GENL, OTC:GEGYY) told investors that production for 2022 is expected to be around the same level as 2021, but, higher oil prices will boost financials.
It expects to generate some US$200mln of free cash flow in 2022, based on US$75 per barrel oil, and noted that for every US$10 that the crude price moves it would generate an additional US$50mln
Capital expenditure for the year is expected between US$140mln and US$180mln with programmes slated at the Tawke, Taq Taq and Sarta fields. Operating costs are set to remain below US$5 per barrel, retaining the company’s advantageous low-cost position, it noted.
“In 2021 we generated significant free cash flow of US$86mln, and in 2022 we are set to build on this as the strength of the oil price and our positive outlook means that free cash flow is expected to more than double,” said chief executive Bill Higgs.
“Our focus in 2022 is on growing the business and supporting our progressive dividend long-term.
“We aim to increase cash flow through the progression of our asset development plans and the addition of income streams. Our priority is the derisking and commercialisation of Sarta, while the successful farm-out on our Somaliland licence opens the way to drill an exploration well on this exciting opportunity.”
Ahead of the release of Genel’s financial results for the year, due on March 15, the company said that US$281mln of cash proceeds were received from the Kurdistan authorities during 2021, allowing US$86mln of free cash flow supported by improved oil prices (US$71 in 2021 vs US$42 in the prior year). It paid out US$45mln of dividend, paid at 16 cents per share.
Genel had US$314mln of cash at the end of the year, with net cash marked at US$44mln.
Story by ProactiveInvestors
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