A trading and operations update from Genel this morning hot on the heels of yesterday’s excellent news from Peshkabir where production has ramped up to 50,000 b/d ahead of year end target and below budget. Today they add that production will be slightly above current guidance of 32,800 b/d with exit rate end of year production considerably higher than this figure.
This feeds through to the incredibly positive free cash flow number of $119m in the first 9 months against $70m in H1 and capex of $62m. With the post period end receipt of $32m relating to July exports the company is now in a net cash position.
Things are looking pretty good at Genel as they rapidly increase production and thus cash, with drilling on Taq Taq and Tawke fields providing potential for working interest production to grow. All these factors make me think that there is considerable upside for Genel from these levels and that’s before Bina Bawi oil or gas……
I have a great deal of time for Leo and Gordon but reading the CERP update today I was reminded that brevity is not one of their strong points. Trying to fish out the salient points of a long old statement made me wish that they had delivered two reports but I know that they do it with the best of intentions and there is much work still to be done.
What I picked out was that Q3 production was 735 b/d with a peak of 879 b/d and with the recent Steeldrum acquisition the 1/- b/d target for the year end is still on track. This makes them cash flow positive from operations and with a cash balance of $1.97m and further cost savings from downscaling of the London office again showing admirable discipline.
The fact that such a good management team has found so many skeletons is of no great surprise but it does delay the progress so clearly desired by messrs Koot and Stein. They talk about continuing to work on ‘new acquisition opportunities’ in Trinidad and South America and being ‘accretive to shareholders’ but for the time being this scaling up of the business looks some way off in the absence of a major injection of capital. Having said that, with the battles mainly behind them and a solid production base and lessons learned, buying the shares at below 4p and a market cap of only £25m does give scope to follow a pedigree team in an exciting post code…….
SP Angel daily look at commodities and miners, featuring: Galantas Gold (GAL LN) – Building up production at the Omagh mine SolGold* (SOLG LN) – Project and corporate update
Five financial stories, trending today in a 70 second podcast, including: MPs have voted to take control of Commons business for a day, in an unprecedented move to try to find a majority for any Brexit option. It means MPs will get a series of votes tomorrow to find out what kind of Brexit they will support, even though Theresa May has said there is no guarantee, she will abide by their decision.
On today's podcast: Live Company Group discuss progress including their new BRICKLIVE Show in Geneva. Bigblu Broadband cover the highlights from their final results released today. Rockfire Resources talks about the high grade copper from their Copper Dome Project in Central Queensland. Botswana Diamonds discuss their interim highlights.
Louis Coetzee, Chief Executive Officer of Kibo Energy (KIBO), addressed shareholders in a letter detailing progress the AIM listed energy company has been making in Sub-Saharan Africa and the UK. “Africa represents a rapidly growing market economy with an acute power deficit”
SP Angel daily look at commodities and miners, featuring: Bushveld Minerals (BMN LN) – Drill results at Brits vanadium project Chaarat Gold* (CGH LN) – Kapan site visit notes: focus on productivity to deliver sustainable cash generation MOD Resources (MOD LN) - Infill drilling at T3 project delivers increased reserves
Oil and gas investment company, Reabold Resources (RBD) shared with investors today that Rathlin Energy, operator of the PEDL 183 license onshore UK, has signed a rig contract for the drilling of the West Newton appraisal well. The well is expected to spud in April 2019.