Genel Energy, Columbus Energy Resources
Paul Kettle
Malcy's Blog
07:09, 11th October 2018

Genel Energy 

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……

Columbus Energy Resources 

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…….

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