Genel to take about $1bn impairment on Iraqi Kurdistan field
NEW YORK, February 29, 2016
Genel Energy said it expected to book about $1 billion in impairment to the 2015 value of its Taq Taq oilfield in Iraqi Kurdistan, citing reduced estimate for recoverable reserves there and falling oil prices.
Shares in the company lost nearly a fourth of their value in early morning trade in London.
Following a review, the oil producer said it estimated that Taq Taq had proven and probable reserves of 356 million barrels of oil (mmbls) as of December. 31, down from its earlier assumption of 683 million barrels in June 30, 2011.
By the end of last year, Taq Taq field had already produced 184 mmbbls gross.
The news comes after Genel said earlier this month that it would resume drilling work at Taq Taq in the coming weeks to ramp up production, despite a roughly 40 percent fall in oil prices over the past year to around $30 a barrel.
The move would have marked the first time in more than a year that Genel has drilled in the region to increase output from its fields after the Kurdistan Regional Government struggled to pay producers for oil exports.
Genel said it had found that fracture porosity within the Shiranish - one of the three principal producing units at Taq Taq - was lower than estimated in 2011.
Gross production at the field is expected to average about 80,000 barrels of oil per day (bopd) this year, the company said, sticking to its full-year guidance of 60,000-70,000 bopd.
Genel shares were down 21 percent at the top percentage losers on the London Stock Exchange. The stock touched a low of 94.67 pence earlier. --Reuters
