By Ron Bousso
LONDON (Reuters) – Iraqi Kurdistan-focused Genel Energy <GENL.L> is likely to significantly increase its oil production guidance next year, Chief Financial Officer Esa Ikaheimonen said on Tuesday.
The output boost is expected to come from 11 wells currently being drilled in three fields in the region, eight of which are expected to begin producing this year.
London-listed Genel reaffirmed its 2018 production guidance of 32,800 barrels of oil per day in its half-year results on Tuesday.
“We maintained that guidance… signalling that even with the existing level we would exceed guidance,” Ikaheimonen told Reuters.
“There is a good chance that we enter the new year with a significantly updated level of production,” he added.
Genel’s shares were up nearly 6 percent by 0738 GMT after gaining more than 150 percent since the start of the year due to higher oil prices and a stronger production outlook.
The company’s production averaged 32,100 bpd in the first half of the year, down 13 percent from a year earlier.
That was mostly as a result of declining production from Taq Taq, once considered its flagship oilfield.
Oil production and revenue for international producers operating in the Kurdistan Regional Government has been stable over the past year despite political turmoil following a controversial independence referendum in there last October.
The company’s core earnings rose sharply in the first six months of the year to $137.4 million on recovering oil prices.
Genel generated $70 million in cash flow and said it plans to wipe out its net debt by the end of the year.
Other than drilling in existing wells, Genel is also focusing on the development of new production in the Bina Bawe field.
The company is preparing to submit development plans to Kurdish authorities, Ikaheimonen said.
The Bina Bawe oilfield is expected to produce 15,000 bpd by 2020-2021, Ikaheimonen said.
(Reporting by Ron Bousso; editing by Jason Neely)