Genel Energy (GENL) “continues to deliver on its focus”, reports chief executive Murat Özgül. In the first half of 2018, being a passenger to events also helped. Higher oil prices and a stellar performance from its 25 per cent interest in the DNO-operated Peshkabir field were the chief reasons why free cash flow jumped 28 per cent to $70.1m (£54.1m).
Thanks to a series of expectation-beating well results, the field now pumps around 35,000 barrels of oil per day (bopd), arresting gradual declines in the wider Tawke licence. Genel also used its interim numbers to flag “the potential for a material increase from current production levels”, and discussions with DNO to use excess gas from Peshkabir to boost recoveries from Tawke. The shares dutifully leapt 12 per cent.
Investors had other reasons to be cheerful. As Genel moves into a net cash position, options for the rest of the portfolio look more viable. In the second half of 2018, the group plans to expedite development of the 100 per cent-owned Bina Bawi field. The cost of reaching initial output of 5,000bopd is slight at just $20m, and could preface a rise in production to 10-15,000bopd within a year of works commencing.
On average, analysts expect full-year pre-tax profits of $133m and EPS of 47.9¢ this year, and $132m and 46.3¢ in 2019.
| GENEL ENERGY (GENL) | ||||
| ORD PRICE: | 298p | MARKET VALUE: | £ 831m | |
| TOUCH: | 298-299p | 12-MONTH HIGH: | 302p | LOW: 89p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 4 | |
| NET ASSET VALUE: | 600¢* | NET DEBT: | 4% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 87.1 | 23.5 | 8.4 | nil |
| 2018 | 161 | 59.3 | 21.3 | nil |
| % change | +85 | +152 | +154 | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| £1=$1.30. *Includes intangible assets of $1.26bn, or 453¢ a share. | ||||
