Genel Energy (LON:GENL) management used its 2025 results presentation to reiterate its strategic priorities while addressing the biggest change since its January trading statement: a deterioration in regional security that has led to a temporary shutdown of operations in Kurdistan.
CEO Paul Weir said production has been “temporarily suspended on a precautionary basis” since hostilities began almost four weeks earlier, with the operator focused on personnel safety. He added that steps have been taken to maintain readiness for a prompt restart, though the security situation remains “very dynamic and very uncertain.”
2025 performance and key metrics
- Daily average working interest production of around 17,500 barrels per day
- Net 2P reserves of 64 million barrels
- Net cash of $134 million
- EBITDAX of $43 million
- Operating costs of around $4 per barrel
Weir said the company’s barrels are low cost and have a low emissions rate, which he said is “well below” an industry average target rate for 2025 of 17 kilograms per barrel. He argued that even with disruption at Tawke during the year and continued domestic market pricing, the business remained “resilient, cash generative, and well-funded.”
Alongside the reported net cash position, Weir also referenced a “significant cash holding of more than $220 million at year-end,” which he said was “about the same right now” and available for deployment.
Tawke: disruption, recovery, and pause in 2026 activity
Genel’s principal producing asset is the Tawke production sharing contract (PSC) in the Kurdistan Region of Iraq, operated by DNO. Weir said 2025 again demonstrated the resilience of Tawke and its operator, pointing to the impact of drone attacks in the third quarter and a swift recovery afterward.
According to Weir, production was restored to around 80,000 barrels per day by the turn of the year. He added that in the months not impacted by the drone event, production was higher than the 2024 average despite no new wells contributing.
Drilling restarted in the fourth quarter of 2025, with the first Tawke well spudded in December and delivering results, followed by a second production well in the same month. However, Weir said the 2026 drilling campaign—despite two more rigs being mobilized—has now been suspended due to the security situation. Both production operations and the drilling campaign are on standby until the operator deems it safe to resume full activity.
In describing Tawke as “world-class,” Weir cited 254 million barrels of gross 2P reserves, low operating costs, low emissions, long reserve life, and upside from drilling.
Netbacks, pricing, and balance sheet position
CFO Luke Clements walked through “production business netback,” which he defined as revenue less production asset spending (operating and capital expenditures) and less general and administrative costs. He said this metric indicates how much funding is generated for capital allocation outside the Tawke PSC.
Clements said production business netback has been “double-digit millions for two years in a row,” compared with being negative in 2023, attributing the improvement to spending discipline.
On the revenue side, Clements noted that while Brent averaged $69 per barrel in 2024, Genel’s realized sales price was $32 per barrel because all production was sold domestically. He said realized pricing would be expected to be closer to Brent if exports resumed. Working interest production averaged 17,500 barrels per day, which he said was lower year over year due to the third-quarter interruption.
He also distinguished between reported EBITDAX of $43 million and “underlying” EBITDAX, which he said has been around $35 million for the past three years for domestic sales, excluding movements in arbitration cost accruals that negatively affected 2024 and positively affected 2025.
On the balance sheet, Clements said Genel finished the year with $224 million of cash, $134 million of net cash, and $92 million of gross debt, and that cash remains around $225 million currently. He highlighted the company’s April 2025 issuance of a new five-year bond maturing in 2030, replacing a bond that had been due in October 2025, noting the transaction was oversubscribed and reduced funding risk.
Exports stance, restart expectations, and legal costs
During Q&A, management declined to provide broader security commentary, but addressed the expected pace of ramp-up when operations resume. Weir said the shutdown was precautionary and that the company had not been targeted or damaged during the conflict. He said equipment remains in place and functional and that the operator has maintained readiness.
“I’m confident that we can resume production levels pretty quickly within a week or two of giving ourselves the green light,” Weir said.
On exports, Clements referenced an investor question about a tripartite deal being extended to the end of June and whether Genel approached the Kurdistan Ministry of Natural Resources (MNR) to join it. Weir said the company has not approached the MNR to join, reiterating Genel’s position that it wants to see the deal’s conditions honored—particularly top-up payments intended to make participants whole under PSC terms—before committing. In the meantime, management said it would continue domestic sales.
Asked about payments to other operators, management said it was for others to comment on, while noting that top-up payments had not been paid yet to their understanding. Genel also confirmed it remains a member of APIKUR, though the group effectively split into two camps when some members participated in the arrangement and others did not.
On litigation-related costs, management said there was no update, but noted an appeal regarding the award of the other side’s costs is scheduled for court next month, and the company will wait for that outcome before engaging with authorities.
Growth priorities: acquisitions, Oman appraisal, and Somaliland progress
Weir said Genel’s strategy remains centered on three pillars: maintaining a strong balance sheet, maximizing cash generation (including investment in Tawke and resuming exports), and adding new sources of cash flow through disciplined, value-accretive opportunities.
On acquisitions, Weir said the company was “very active” during 2025—originating, developing, and bidding on opportunities—and that 2026 is “already shaping up” to be similarly active. However, he cautioned that suitable opportunities are limited and competition is strong, emphasizing that Genel will resist overpaying for short-term market reaction.
In Oman, Weir said Block 54’s initial work program achieved its objectives. The re-entry and testing of the legacy Batha West-1 discovery well was completed safely, ahead of time, and under budget. The company’s focus now is to use the data to reprocess existing seismic and acquire new 3D seismic before selecting locations for two commitment wells. Based on current planning, Genel expects those commitment wells to be drilled early in 2027.
In Q&A, Weir declined to estimate the per-well drilling cost because locations have not been finalized, but reiterated that Genel expects to spend around $50 million over a three-year period on the project, starting last year, and said work to date has been below budget.
In Somaliland, Weir described continued progress toward drilling the Toosan-1 well, which he said targets best estimate prospective resources of about 650 million barrels across multiple stacked objectives. He said civil engineering work is largely complete and most long-lead items are in inventory, but cautioned that operational, commercial, and geopolitical elements still need to align before committing to a timeline.
Management also highlighted community support efforts, including mother-child healthcare, educational facilities, conservation projects, and drought response. Weir said the company has recently distributed around 9 million liters of fresh water in the area of its SL10B/13 license.
Closing the call, Weir said the company’s objective remains to build resilient cash flows that can support a regular dividend over time, aided by portfolio diversification, progress on organic opportunities in Oman and Somaliland, and disciplined M&A.
About Genel Energy (LON:GENL)
Genel Energy is a socially responsible oil producer with a low-cost and low-carbon production asset in the Kurdistan Region of Iraq and exploration assets in Oman, Morocco and Somaliland and listed on the main market of the London Stock Exchange (LSE: GENL, LEI: 549300IVCJDWC3LR8F94). Genel’s strategy is designed to build a business with resilient and diversified cash flows that delivers sustainable value to shareholders, and with the aim of restarting the payment of a regular dividend.
