By John Lee.

Genel Energy has announced that the Taq Taq partners have received a gross payment of $10.10 million from the Kurdistan Regional Government for oil sales during October 2017.

Genel’s net share of the payment is $5.55 million.

(Source: Genel Energy)

Genel Energy has announced the receipt of payments from the Kurdistan Regional Government (KRG) for oil sales during September 2017 from the Tawke and Taq Taq PSCs.

DNO ASA, as operator of the Tawke PSC, has announced the receipt of $54.32 million from the KRG as payment towards September 2017 crude oil deliveries to the export market from the Tawke licence. Genel’s net share of the payment is $13.58 million.

The Taq Taq field partners have received a gross payment of $9.70 million from the KRG for oil sales during September 2017. Genel’s net share of the payment is $5.33 million.

Genel has also received an override payment of $6.55 million from the KRG, representing 4.5% of Tawke gross field revenues for the month of October 2017, as per the terms of the Receivable Settlement Agreement.

Combined, Genel’s December 2017 net receipts total $25.46 million.

(Source: Genel Energy)

Genel Energy has announced an update on activity at the Taq Taq field (Genel 44% working interest).

The TT-29w well, which was drilled to appraise the northern flank of the Taq Taq field, has been completed as a producer after successfully encountering oil bearing Cretaceous reservoirs.

The well, which was drilled to a measured depth of 3,100 metres, encountered good quality oil bearing Cretaceous Shiranish and Kometan reservoirs. Six zones were subsequently tested over a 20 day period, with test rates of up to 6,400 bpd (40/64 inch choke) of 48° API oil delivered from individual zones.

Four of the five tests in the Shiranish produced dry oil, with one test tight. The Kometan reservoir test produced oil with a 40-50% water cut, confirming the oil water contact within the Kometan reservoir at this location in the field. TT-29w production has commenced from the Lower Shiranish reservoir at a rate of 3,200 bpd of dry oil on a restricted 24/64 inch choke, with the expectation that this rate will increase following an initial observation period.

The TT-29w well has proved a current oil water contact at this location on the northern flank of the field at a level at least 145 metres deeper than pre-drill estimates. Combined with the testing results, management is optimistic for the potential of the northern flank of the Taq Taq field.

However, it is too early to estimate what impact the well result will have on reserves, long-term production rates or future investment activity in the northern flank and the field as a whole.

In addition to the positive result from TT-29w, the TT-30 Pilaspi well was also successfully drilled as a producer in November and is currently producing around c.650 bopd. A further Pilaspi development well (TT-31) is planned before the end of 2017.

Gross production from the Taq Taq field is currently 15,100 bopd. Gross field production averaged 13,700 bopd in November 2017 and has averaged 18,300 bopd in 2017 to date.

(Source: Genel Energy)

Genel Energy has issued a trading and operations update for Q3 2017. The information has not been audited and may be subject to further review.

Murat Özgül (pictured), Chief Executive of Genel, said:

During the quarter Genel executed a landmark settlement agreement with the KRG over historical receivables, which we expect to materially enhance our cash flows going forward. Ahead of those payments commencing we continued to generate meaningful free cash flow, resulting in a further 13% reduction in net debt during the period.

“Our operations in the Kurdistan Region of Iraq are progressing as normal – exports are continuing from Taq Taq and Tawke, payments are being received on time, and operations are proceeding at both fields, with testing now underway on the TT-29w well.

Q3 2017 OPERATING PERFORMANCE

  • Q3 2017 net production averaged 33,810 bopd, with production for the nine months ending September 2017 averaging 36,030 bopd
  • Production and sales by field during Q3 2017 were as follows:

  • Tawke PSC (Genel 25% working interest)
    • Tawke PSC production in Q3 averaged 110,460 bopd, including long-term test production from the Peshkabir-2 well of 4,670 bopd.
    • In 2017 to date, the Tawke partners have drilled ten wells, including the Peshkabir-2 and 3 wells, four Cretaceous producers, three Jeribe producers and a Jeribe water injector
    • A further four development wells are planned on the Tawke PSC by year-end 2017 – two Cretaceous producers, one Jeribe producer and a Jeribe water disposal well
    • Peshkabir-3 well operations are ongoing, with results expected later in Q4. The Peshkabir early production facility remains on track to be installed by the end of 2017
  • Taq Taq PSC (Genel 44% working interest)
    • Taq Taq field production in Q3 averaged 14,080 bopd, and production has averaged 13,570 bopd during October 2017 to date
    • The TT-29w well, which is appraising the northern end of the Taq Taq field, reached target depth of 3,100 metres in early September 2017. A testing programme is now underway. Further development of the Cretaceous reservoir has been deferred pending results of the TT-29w testing programme
    • The EDC-24 rig has moved to the TT-30 well location, with two shallow horizontal wells set to be drilled in the Pilaspi reservoir before the end of the year

Genel Energy has announced that the Taq Taq field partners have received a gross payment of $10.39 million from the Kurdistan Regional Government for oil sales during July 2017.

Genel’s net share of the payment is $5.71 million.

Gross oil sales from the Taq Taq field in July 2017 averaged 14,873 bopd, including both exports and Bazian refinery deliveries.

DNO ASA, as operator of the Tawke field, has also announced that the Tawke field partners have received a payment of $39.50 million from the Kurdistan Regional Government as payment towards July 2017 crude oil deliveries to the export market from the Tawke licence. The funds will be shared pro-rata by DNO and Genel.

(Source: Genel Energy)

By John Lee.

Genel Energy has announced that the Taq Taq field partners have received a gross payment of $10.22 million from the Kurdistan Regional Government for oil sales during June 2017.

Genel’s net share of the payment is $5.62 million. Gross oil sales from the Taq Taq field (pictured) in June 2017 averaged 15,863 bopd, including both exports and Bazian refinery deliveries.

The company also notes the announcement from DNO ASA, as operator of the Tawke field, that the Tawke field partners have received a payment of $34.75 million from the Kurdistan Regional Government as payment towards June 2017 crude oil deliveries to the export market from the Tawke licence. The funds will be shared pro-rata by DNO and Genel.

(Source: Genel Energy)

By John Lee.

Shares in Norway’s DNO continued to rise on Friday, following yesterday’s announcement of a “landmark settlement of outstanding receivables ” with the Kurdistan Regional Government (KRG).

At market close on Friday, the shares had gained 13.8 percent on the day, and 35 percent since Thursday morning.

However, DNO’s partner in Iraqi Kurdistan, Genel Energy, was down 1 percent for the day.

The full text of the KRG’s statement on the agreement follows:

The Kurdistan Regional Government (Government) has reached definitive binding agreements on the settlement of all historical outstanding receivables owed to DNO ASA, the operator of Tawke Field (DNO), and Genel Energy plc, which has participating interests in both Taq Taq and Tawke.

The following are the highlights of the settlements:

  • DNO and Genel shall make no further claims on all historical outstanding Tawke license receivables from the Government;
  •  Genel has also agreed settlement of its claims for its share of historical outstanding Taq Taq license receivables from the Government;
  • The Government has exercised its audit rights and made provisions to its own satisfaction with respect to the Tawke license for the period up to the 31st July, 2017 and has no further claims on DNO or Genel;
  • The Government has exercised its audit rights and made provisions to its own its satisfaction with respect to Genel’s past entitlements in the Taq Taq license for the period up to the 31st July, 2017 and has no further claims on payments booked or received by Genel in this regard;
  •  The Government has also discharged DNO and Genel from certain payment obligations including production bonuses, license fees, capacity building payments (in the case of Genel) and funding of a water purification project (in the case of DNO); 
  • In consideration of these settlements, the government assignedits 20 percent Government Interest in Tawke to DNO, and has removed Genel’s obligation of 30% Capacity Building Bonus payments from the Tawke license;
  • In addition, DNO and Genel will receive 3% and 4.5% respectively of gross Tawke license revenues each month from the Government over a five-year period, effective as of 1 August, 2017.

With these adjustments, the Kurdistan Regional Government has no further obligations of past payments of receivable or Petroleum Costs to these two companies with respect to deliveries of oil to the Government. 

The Government is very pleased with the productive and cooperative approach taken by both DNO and Genel in these negotiations, and looks forward to working with them to maximise revenues and to optimise potential reserves of the Tawke and Taq Taq license areas. We believe that this initiative will convey a strong positive message to the investors that the Government is fully committed to a robust win-win partnership with all the International Oil Companies operating in Kurdistan.

DNO ASA and Genel Energy’s statements on the settlements can be found on their websites here:

DNO ASA’s statement

Genel Energy’s statement

(Source: Yahoo!)

Genel Energy has announced a definitive agreement with the Kurdistan Regional Government (KRG) relating to unpaid entitlements for past oil sales from the Taq Taq and Tawke fields. The company’s shares were trading up 7 percent on Thursday morning.

Cash flow is expected to be materially enhanced over the course of the agreement, delivering significant value creation for all stakeholders.

A Receivable Settlement Agreement (‘RSA’) has been signed between Genel and the KRG, with a Tawke Production Sharing Contract (‘PSC’) Amendment also being executed.

In return for cancelling and waiving its rights to outstanding receivables relating to unpaid entitlements for past oil sales, Genel will benefit from the following:

  • In addition to proceeds for current sales, Genel will receive 4.5% of Tawke gross field revenues for the five year period from 1 August 2017 to 31 July 2022 (‘the Genel Override’)
  • Genel’s capacity building payments (‘CBP’) on the profit share element of its Tawke entitlement will be eliminated over the entire life of the Tawke field
  • The KRG has agreed with all audit adjustments on the petroleum costs on the Tawke PSCs and on Genel’s share of petroleum costs in the Taq Taq PSC for the period up to 31 July 2017
  • Outstanding production bonuses and PSC liabilities on the Taq Taq and Tawke fields totalling c.$30 million net to Genel have been set off against the receivable and as a result are no longer payable

Under the previous mechanism for repaying the receivable, Genel received its pro-rata share of 5% of monthly field revenue from the Tawke field, which was liable for CBP. This mechanism will terminate effective 1 August 2017.

By John Lee.

Norway’s DNO has reported receipt of $40.66 million from the Kurdistan Regional Government (KRG) as payment towards April 2017 crude oil deliveries to the export market from the Tawke license.

The funds, to be shared pro-rata by DNO and partner Genel Energy, include $34.10 million towards monthly deliveries and $6.56 million towards recovery of outstanding receivables.

Additionally Genel Energy announced that the Taq Taq field partners have received a gross payment of $13.38 million from the KRG for oil sales during April 2017; Genel’s net share of the payment is $7.36 million.

The payment reflects full settlement of the invoiced amount for April 2017 oil sales, and incorporates $12.09 million towards contractor monthly entitlement and $1.29 million towards recovery of historical receivables.

Gross oil sales from the Taq Taq field in April 2017 averaged 18,151 bopd, including both exports and Bazian refinery deliveries.

(Sources: DNO, Genel Energy)