Genel Energy has announced its audited results for the year ended 31 December 2025.
Paul Weir, Chief Executive of Genel, said:
'We have established an ever more resilient business with significant upside potential, and we are now well-placed to deliver value to our shareholders and build a business that generates resilient, diversified and predictable cash flows that will support the resumption of distributions to shareholders.
In 2025 we made good progress on a range of fronts: our business continued to generate double digit USD millions of production business free cash flow, and we reported bottom line positive free cash flow to improve our net cash position, with excellent progress being made on reorganising the business. We successfully exited three unprofitable licences in Kurdistan and two in Africa, without incurring any new exit payments or retaining potential liability exposures. We also refinanced our bond, de-risking funding for delivery on future strategic priorities. We continue to maintain a strong focus on rigorous capital allocation.
Since regional hostilities began two weeks ago, production has been temporarily halted from Tawke. A state of readiness has been maintained to allow a production restart as soon as it is safe to do so. At this moment, our guidance for 2026 remains unchanged from our January trading statement. Our key focus remains acquiring new assets to diversify our cash generation, and participating in exports from Kurdistan, whilst ensuring that we maintain the right balance between risk and reward. Operationally, our organic portfolio, where there remains significant unvalued potential, is well-positioned to deliver progress this year, with planned drilling at Tawke targeting additions to both production and reserves, a clear plan for de-risking Block 54 in Oman and tangible progress towards drilling the Toosan-1 well in Somaliland.'
Highlights
- Following the U.S.-Israeli air war on Iran that started on 28 February 2026, production and drilling operations on the Tawke licence were temporarily shut down. The Company continues to monitor developments closely to assess when it can safely and securely resume operations
- Tawke generated predictable production with consistent domestic sales demand, resulting in working interest production of 17,520 bopd (2024: 19,650 bopd), with all production sold domestically
- Domestic sales price averaged $32/bbl for the year (2024: $35/bbl), with all cash due for domestic sales received before the end of the year
- Production was temporarily stopped in July following the drone attacks on a number of Kurdistan oil operations, including Tawke, with gross production back to around 80,000 bopd by November
- Production business netback of $10 million (2024: $5 million) and free cash flow of $4 million (2024: $20 million). Closing net cash of $134 million (2024: $131 million)
- Cash of $224 million (2024: $196 million)
- Bond debt of $92 million due in 2030 (2024: $66 million)
- In late September, agreements were signed between the Federal Government of Iraq (‘FGI’), the Kurdistan Regional Government (the ‘KRG’) and a group of international oil companies to resume exports of crude oil produced in Kurdistan through the Iraq-Türkiye Pipeline. Genel chose not to participate at that point and continues to keep exports under review, with participating parties reporting that the process is working in line with expectation
- Balances with the KRG
- $88 million (under KBT pricing and excluding interest) remains overdue from the KRG, although this has been reduced by about $40 million credit balances. We continue to work towards a plan for payment or settlement of amounts owed, and appropriate adjustment for price and interest
- Not included in the $40 million, Genel Energy Miran Bina Bawi Limited, a subsidiary of the group, owes the KRG around $26 million relating to an arbitration legal fees charge, an appeal against which will be held in April in London
- Exits from the Sarta, Qara Dagh and Taq Taq licences finalised with no residual liability exposure. We have also exited the Lagzira licence in Morocco and the Odewayne licence in Somaliland, again with no residual liability exposure
- A socially responsible contributor to the global energy mix:
- Portfolio carbon intensity under 14.4 kgCO2e/bbl, remaining below the industry average target
- Climate disclosure: maintained a CDP Climate rating of B for a fourth consecutive year
- The Genel20 Scholarship programme has entered its fourth year, where Genel is providing university tuition funding for undergraduates from the Kurdistan Region of Iraq
- In Somaliland, Genel continued to engage with local communities through its social investments focused on healthcare in rural areas and supporting local education
OUTLOOK
- With Tawke domestic market sales expected to be consistent, and with production expected to benefit from new drilling in FY 2026, we expect production business netback to more than cover Genel’s costs, which include net interest payable
- Incremental to the production business, the Company expects to invest up to $20 million on its pre-production assets:
- On Block 54 in Oman, in line with the 3-year initial exploration phase work plan, which includes 3D seismic acquisition and drilling two wells, as we announced at the time of entering the licence in the first half of 2025
- SL10B13 in Somaliland, as we make progress towards drilling the Toosan-1 prospect in 2027
- The Company continues to progress towards building a business with a strong balance sheet that delivers resilient, reliable, repeatable and diversified cash flows that support a dividend programme. The Company’s objectives for the year on the path to building that business include:
- acquisition of new assets to diversify our reserves and resources and cash generation
- restart of exports of Tawke oil to access international pricing
- pursuit of net amounts owed by the KRG
- safe execution of activity on Block 54
- further progress towards drilling Toosan-1
Source: Genel Energy
