SA News • Wed, Jan. 21
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Genel Energy: The Best In Class Kurdistan-Focused Oil Producer
- Markets in the United States are five years into an incredible bull market. The S&P 500 has nearly tripled from the bottom. It is time to look elsewhere.
- Kurdistan oil producers are surrounded by fear because of the violence taking place in Northern Iraq. The could be an opportunity given the world class oil reserves these companies have.
- Genel Energy is at the top of the class of the independent Kurdistan field. Genel has significant production, cash flows and solid balance sheet. For contrarians with a long view, this is an opportunity.
Update: Genel Energy's Sell-Off Driven By ISIL Gains In Northern Iraq Creates A Significant Buying Opportunity
- Genel Energy announced on Friday that the company is withdrawing certain non-essential personnel from Iraqi Kurdistan in light of conflict escalations in Northern Iraq.
- Shares have sold off by 19.2% in the past week without a fundamental deterioration of the company's business, leaving an attractive entry point for long term investors.
- My prior article discussed the possibility for headline risk and volatility which is a part of operating in the region, especially considering recent events.
- The ISIL seizure of Mosul and the Peshmerga takeover of Kirkuk signify the continued factionalization of Iraq.
- This creates a unique opportunity for the Iraqi Kurds to gain greater autonomy from the Iraqi central government.
- Such autonomy will enable enhanced profits on the export of Kurdish oil which is currently sold on the domestic market for a 30-40% discount to international prices.
- Genel Energy remains well-capitalized and is poised to grow production and profitability significantly.
- The company is a strong partner of the Kurdistan Regional Government and should benefit tremendously from greater Kurdish autonomy in Iraq.
Wed, Jan. 21, 8:24 AM
- Genel Energy (OTCPK:GEGYF, OTC:GEGYY) says it plans to cut capital spending to $200M-$250M, 30% less than original guidance and ~70% below the $670M spent in 2014, and will take a non-cash charge of $480M related to exploration expenses in Malta, Angola and Morocco.
- Genel says it produced an average 69K boe/day in 2014 based on its stake in oil and gas fields in the Kurdistan region of Iraq and in Africa, and reaffirms plans to produce 90K-100K boe/day in 2015.
- Expects to report FY 2014 revenue at the lower end of its $500M-$600M guidance range, and lowers its 2015 revenue guidance to $350M-$400M from an earlier $500M-$600M.
Dec. 2, 2014, 8:28 AM
- Genel Energy (OTCPK:GEGYF) says it received part of the $24M it is due for its share of oil sales from two fields in Kurdistan, breaking an impasse on payments amid political wrangling between Kurdistan and Iraq over oil exports.
- Genel’s shares have suffered as officials in Kurdistan have been locked in a standoff with the central government in Baghdad over how Kurdistan can sell its oil, but today Genel is up more than 7% in London.
- Separately, Iraq reportedly has agreed on an oil export deal with Kurdistan, which could put an end to these sorts of impasses that have divided the country; the news appears to have snuffed out an overnight rally in crude prices.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, CRUD, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
Nov. 13, 2014, 8:27 AM
- Genel Energy (OTCPK:GEGYF) signs an agreement with the Kurdistan regional government on development plans for two natural gas fields, and agreed to terms with energy firm OMV (OTC:OMVJF) to acquire its stake in one of the fields.
- The Miran and Bina Bawi fields, with combined estimated resources of 11.4Y cf of gas, are valued by analysts at ~$2.6B and are expected to help the Kurdistan government meet a gas export deal it signed with Turkey last year.
- Genel will pay $150M for OMV's 36% stake in the Bina Bawi field and take over the operation.
Sep. 8, 2014, 9:53 AM
- Genel Energy (OTCPK:GEGYF) says it is returning staffing to normal levels in the border region of Kurdistan and Iraq thanks to improved security after attacks from Islamic militants.
- Genel, which removed some personnel from non-producing assets in August, says production was not affected and it had been pumping ~234K bbl/day of oil from area fields.
Aug. 15, 2014, 4:54 PM
- Oil production at Iraqi Kurdistan's top producing Taq Taq field is set to rise to as much as 140K bbl/day by the end of the month despite the advance of Islamist militants, according to the general manager of the operating company.
- While several western oil companies have evacuated personnel from the area, production has remained consistent at Taq Taq, operated by a joint venture of Genel Energy (OTCPK:GEGYF) and Sinopec's (NYSE:SNP) Addax Petroleum.
- Meanwhile, Kurdistan has delivered its third major cargo of crude oil out of a Turkish port and a fourth is sailing to Croatia.
Aug. 7, 2014, 10:58 AM
- Shares in Kurdistan-focused oil producers plunge as Islamic State militants extend their gains in northern Iraq.
- Shares in Gulf Keystone Petroleum (OTCPK:GUKYF -7%) fell as much as 13% to their lowest level since 2010; the company, which is producing oil from the Shaikan field in Kurdistan, says its operations remain "safe and secure" but has stepped up security at its facilities.
- Genel Energy (OTCPK:GEGYF -8.3%), headed by former BP boss Tony Hayward and one of the biggest independent oil producers in Kurdistan, also fell sharply; its operations at Taq Taq are more than 60 miles away from the fighting east of Mosul.
- Shares in Norway's DNO (OTCPK:DTNOF -9.1%), another Kurdistan-focused oil explorer, continue to fall and have lost ~20% of their value this month.
Aug. 4, 2014, 9:55 AM
- Shares tumble in explorers of oil in Iraq's Kurdistan region after Islamic militants seized two oilfields in the region.
- DNO International (OTCPK:DTNOF), which produces about two-thirds of its from the Kurdish region, posted its biggest drop in Oslo trading in more than six months; while Genel Energy (OTCPK:GEGYF -1.8%) and Gulf Keystone (OTCPK:GUKYF -3.3%) also are falling sharply.
- The recent progress made by ISIS in advancing toward Kurdish areas is creating fear among investors, says a Carnegie analyst.
Jul. 3, 2014, 9:02 AM
- Genel Energy (GEGYF) says production jumped in June to 84K bbl/day vs. a 63K bbl/day rate for all of H1, after Iraq’s Kurdistan region opened an export pipeline to Turkey.
- The pipeline, which bypasses the central Iraqi network, will allow Kurdistan to raise exports to 200K-250K bbl/day this month from 125K barrels early last month, with shipments possibly increasing to 400K bbl/day by the end of the year.
- Kurdistan, which plans a referendum on independence from Iraq, has largely remained calm as Islamist militants fight to the south and west; Genel says its operations remain safe and secure.
Jun. 12, 2014, 2:19 PM
- Shares in oil explorers focused on northern Iraq tumble amid spreading violence, yet some oil execs express a perverse optimism that the semi-autonomous Kurdish region could gain more bargaining power with the Baghdad government over oil rights and government revenues.
- Among oil majors, their Iraq holdings account for small portions of global output but development has been ongoing: BP has a 38% working interest in the Rumaila field in southern Iraq, Exxon (XOM) holds leases on ~900K acres and has development wells in the West Qurna field, Shell (RDS.A, RDS.B) owns 45% and is operator of the Majnoon field in the south, Occidental Petroleum (OXY) is among the developers of the 4B-barrel Zubair field, and Chevron (CVX) holds an 80% stake and is operator of the development-stage Qara Dagh block in Kurdistan region of Iraq.
- Among smaller producers, shares of Genel Energy (GEGYF) and Gulf Keystone (GUKYF) aren't showing big gains or losses, but DNO International (DTNOF) is ~5% lower.
May. 23, 2014, 12:46 PM
- The first cargo of crude oil to be exported by pipeline from Iraqi Kurdistan has left a Turkish port by ship, bound for another European destination.
- A tanker loaded with more than 1M barrels of crude oil departed last night from Ceyhan, "the first of many such sales," the Kurdistan Regional Government says.
- The move by the semi-autonomous region defies Baghdad's objections and may encourage other regional authorities to bypass the central government.
- Oil companies with a Kurdistan presence include global majors Exxon Mobil (XOM), Chevron (CVX), Marathon Oil (MRO), Hess (HES) and Total (TOT), as well as wildcatters such as Gulf Keystone (GUKYF) and Genel Energy (GEGYF).
May. 8, 2014, 4:24 AM
- As expected, Glencore Xstrata (GLCNF, GLNCY) has named former BP CEO Tony Hayward as Chairman following a year-long search for a successor to John Bond, who was ousted after the merger of Glencore and Xstrata.
- Hayward has been interim chairman of Glencore since last May; he left BP in the wake of the Deepwater Horizon oil spill in 2010.
- Hayward is CEO of London-listed Genel Energy (GEGYF), but could reportedly step down from the role after a period of transition. Genel declined to comment on the speculation.
- Glencore Xstrata's shares are +1% in London. (PR)
May. 7, 2014, 7:05 PM
- Former BP CEO Tony Hayward will be named chairman of Glencore Xstrata (GLCNF, GLNCY) following a year-long search to replace Sir John Bond, the Daily Telegraph reports.
- Hayward is likely to step down from his position as CEO of Genel Energy (GEGYF) within a year or two, the report says.
- Hayward, who was appointed interim chairman of Glencore last May, was CEO of BP from 2007-10 and left in the aftermath of the Deepwater Horizon oil spill.
Apr. 3, 2014, 8:43 AM
- Statoil (STO) agrees to farm down a 15% interest in pre-salt block 39 offshore Angola to a joint venture involving Genel Energy (GEGYF), the oil company headed by former BP chief executive Tony Hayward, for ~$222M.
- STO, which operates the block, will retain a 40% stake, Sonangol P&P holds 30% of the remaining interest, and Total (TOT) holds 15%.
- The Genel/White Rose Energy Ventures team also is acquiring from China Sonangol a 15% share of the STO-operated block 38 for ~$59M.
- The licenses in the Kwanza basin cover 14K km in water depths of 1,500-2,500 meters; drilling is expected to start in H2 of this year.
Mar. 6, 2014, 4:58 PM
- The governments in Baghdad and Iraqi Kurdistan are moving closer to an agreement over sharing oil revenues from exports, according to the CFO of Kurdistan-focused Genel Energy (GEGYF).
- An agreement would mark a breakthrough in a long-standing dispute between the two governments over control of the region's oil.
- Without a deal, Genel may struggle to increase exports this year beyond the 70K bbl/day peak transported via road trucks to Turkey's Mediterranean port of Ceyhan, where a new and controversial pipeline linking Kurdistan to Turkey terminates.
Jan. 9, 2014, 5:12 PM
- Iraqi Kurdistan has started commercial shipments of oil through a new crude export pipeline to Turkey in defiance of the federal government, and the region’s Ministry of Natural Resources says the first shipment of 2M barrels will be sold by the end of January.
- The first exports on the route started flowing earlier this month from the Tawke oil field operated by DNO International (DTNOF, DTNOY), with output from the Taq Taq field operated by Genel Energy (GEGYF) and other producing fields entering the pipeline soon.
- Gulf Keystone (GUKYF, GFKSY), which earlier said it had started exports of oil from its Shaikan oilfield in Kurdistan by truck to Turkey, plans to achieve output of 100K bbl/day in 2015.
- Monthly flows through the pipeline to the Turkish port of Ceyhan are set to rise to 4M barrels next month and 6M in March before reaching 10M-12M by year-end.
Oct. 31, 2013, 6:55 PM
- Iraqi Kurdistan plans to build a second new oil export pipeline to Turkey within the next two years as it ramps up output independently of Baghdad, its natural resources minister says.
- Kurdistan will track the volumes of its rising crude exports on the pipeline independently of the central government, Minister Ashti Hawrami says, adding that "nowhere in the world can 1M barrels per day remain stranded forever, so the oil export is a reality."
- The central government's anger hasn’t stopped Kurdistan from signing deals with producers including giants such as Exxon (XOM) and Chevron (CVX), as well as wildcatters like Genel Energy, the Turkish firm run by former BP chief Tony Hayward (GEGYF).
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