Genel Energy PLC Taq Taq reserves update (6806A)
March 28 2017 - 2:01AM
UK Regulatory
TIDMGENL
RNS Number : 6806A
Genel Energy PLC
28 March 2017
28 March 2017
Genel Energy plc
Taq Taq reserves update
Genel Energy ('Genel' or 'the Company') issues the following
announcement in respect of its reserves position at the Taq Taq
field (Genel 44% working interest).
As previously stated, the Company commissioned an updated
Competent Person's Report ('CPR') for the Taq Taq field from
McDaniel and Associates ('McDaniel'). The CPR has been completed
and is available from the Company's website at
www.genelenergy.com/investor-relations/results-reports-presentations.
Gross 2P reserves for the Taq Taq field as of 28 February 2017
are estimated by McDaniel at 59 MMbbls, compared to 172 MMbbls at
31 December 2015. A reconciliation from the reserves reported in
the CPR released in April 2016 to the updated estimates in the CPR
published earlier today, is shown in the following table:
Gross oil reserves
(MMbbl) 1P 2P 3P
--------------------- ------- ------- --------
31 December 2015 60.0 171.8 416.4
Production (23.8) (23.8) (23.8)
Technical revisions (10.4) (89.0) (297.6)
--------------------- ------- ------- --------
28 February 2017 25.8 59.1 95.0
(Some totals may not add due to rounding)
Cumulative oil production from the Taq Taq field to 28 February
2017 is 207.9 MMbbls. Of this figure, 1.8 MMbbls has been produced
in 2017. The further reduction in reserve estimates for Taq Taq is
a consequence of a reassessment of the gross rock volume above the
oil water contact and fracture porosity in the undrained Cretaceous
Shiranish reservoir. This follows an analysis of reservoir
surveillance data and well performance in 2016 and the first two
months of 2017.
The McDaniel CPR states that there is still significant
uncertainty in Taq Taq oil reserves. In particular, reserves are
dependent on the Shiranish formation fracture porosity in the
un-swept portion of the reservoir, which remains very difficult to
estimate.
The Taq Taq field is currently producing c.19,000 bopd, compared
to c.36,000 bopd at the end of 2016. Recently, key producing wells
have exhibited high rates of decline as a result of water
breakthrough, exacerbating the decline rate across the field.
Given the ongoing uncertainties highlighted above, the previous
guidance for 2017 Taq Taq gross average production of 24-31,000
bopd is now removed. The Company currently intends to announce Taq
Taq field production on a monthly basis going forward.
As a result of the reserve downgrade announced today, Genel
expects to record an impairment, subject to audit, of $181 million
to the Taq Taq field carrying value in its 2016 accounts.
Further detail on the Taq Taq field and the near-term
development plan will be given in the Company's results for the
year ended 31 December 2016, which are to be announced on Thursday
30 March 2017.
-ends-
For further information, please contact:
Genel Energy
Phil Corbett, Head of Investor
Relations
Andrew Benbow, Head of Public
Relations +44 20 7659 5100
Vigo Communications
Patrick d'Ancona +44 20 7830 9700
This announcement includes inside information.
Notes to editors:
Genel Energy is an independent oil and gas exploration and
production company listed on the main market of the London Stock
Exchange (LSE: GENL). The Company, with headquarters in London and
offices in Ankara and Erbil, is one of the largest London-listed
independent oil producers, and is the largest holder of reserves
and resources in the Kurdistan Region of Iraq. Through its Miran
and Bina Bawi gas fields, the Company is set to be a cornerstone
provider of gas to Turkey under the KRI-Turkey Gas Sales Agreement.
Genel also continues to pursue further growth opportunities within
the Middle East and Africa. For further information, please refer
to www.genelenergy.com.
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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