In 2018, Genel Energy (GENL) made good use of a higher oil price to offset a 4 per cent dip in average production to 33,700 barrels a day. In the process, the Iraqi Kurdistan oiler generated $299m (£227m) of operating cash flow, up 35 per cent year on year. Proven and probable reserves also increased, operating costs were kept in check, and the unrestricted cash pile surged to $334m.
As of February, that figure stands at $378m. But calculating the carrying value of the rest of the balance sheet remains a challenge, particularly when revisions are so consistently dramatic. Between 2015 and 2017, combined impairments came to a staggering $2.43bn, but appeared to be narrowing. Now, investors have been slapped with a $424m write-down on the value of the Miran gas project, which Genel now expects to be developed separately and only after the priority Bina Bawi field.
Confusingly, Miran’s carrying value has been left at $113m, with the “potential to generate significant shareholder value”, despite being placed on care and maintenance. Investors will hope for more stability from Chevron’s Sarta and Qara Dagh fields, in which Genel took a stake in January, and which has resulted in a revision to this year’s capital expenditure estimate, from $115m to between $150m and $170m.
Broker Numis, which assumes Brent crude will average $75 a barrel this year and $76 in 2020, forecasts adjusted earnings of 64.7¢ and 52.3¢ a share in 2019 and 2020, respectively.
| GENEL ENERGY (GENL) | ||||
| ORD PRICE: | 214p | MARKET VALUE: | £598m | |
| TOUCH: | 214-214.5p | 12-MONTH HIGH: | 302p | LOW: 151p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 477¢* | NET CASH: | $37m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 520 | -0.31 | -113 | nil |
| 2015 | 344 | -1.16 | -417 | nil |
| 2016 | 191 | -1.25 | -449 | nil |
| 2017 | 229 | 0.27 | 97.1 | nil |
| 2018 | 355 | -0.28 | -102 | nil |
| % change | +55 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=$1.32. *Includes intangible assets of $818m, or 293¢ a share. | ||||
