(File Photo).
LONDON: Genel Energy, one of the main oil producers in Iraqi Kurdistan, warned on Wednesday its full-year revenue would be at the lower end of its target because of weaker-than-expected production, sending its shares to a seven-month low.
Genel's main oil field, the Taq Taq asset with reserves of more than 170 million barrels, saw total production fall in the third quarter to 58,600 barrels per day (bpd), compared with 68,800 bpd in the first half of the year, as output from existing wells declined.
This forced Genel to warn 2016 revenue would hit the lower end of its $200 million to $230 million target, which it had already lowered in July from between $200 million and $275 million.
It also said 2016 production levels would come in at the bottom of its 53,000 to 60,000 barrels-per-day target range.
Genel shares were down 11 percent at 83 pence by 0732 GMT after falling as low as 76.25p, their lowest since March.
"We are disappointed to see the continued decline at Taq Taq and the delays in revenue from the KRG have not helped here," said Daniel Slater, research director at Arden Partners, who rates the stock "neutral" with a price target of 93p.
Genel's receivables from the Kurdistan Regional Government (KRG), which pays domestic oil producers for exports, rose to $437 million at the end of September, compared with $412 million at the end of June.
The KRG, which had been paying foreign producers in monthly installments for oil exports since September 2015, fell behind on payments this summer, raising concern among oil exporters.
"Despite the recent delay in payments, we remain optimistic that they will continue, facilitating further investment across our KRI assets," said Genel Chief Executive Murat Oezguel.
The oil producer plans to submit a plan next year to expand Taq Taq and it said it had opened a tender to procure a more powerful drilling rig to drill more wells around the field.
A spokesman said the extent of the field's expansion will depend on oil export payments.
