Genel Energy cuts Taq Taq reserves by half

LONDON, February 29, 2016 – Genel Energy released a statement on Monday on its reserves position at Taq Taq, saying that the gross recoverable proven and probable reserves estimate at the field was revised down from 683 million barrels in 2011 to 356 million barrels as of December 31, 2015.

The announcement comes ahead of an internal review and Competent Person’s Report, both of which are nearing completion. The remaining gross recoverable 2P reserves estimate for the Taq Taq field is 172 million barrels. The company expects to produce 80,000 bopd on average from the field in 2016. From 2017 onwards, output is expected to go into decline and reach between 50,000 bopd and 70,000 bopd by 2018. Genel Energy said it anticipates an impairment of about USD 1 billion.

The Monday statement was followed by the biggest drop in share prices since the stock was first traded in June 2011. Down by almost 25 percent, the company was trading at some 95.75 pence in the early hours of the day, Bloomberg reported.

“We’re clearly disappointed by the magnitude of the revision today in our reserves,” chief financial officer Ben Monaghan said in a phone interview with the news agency.

Earlier in February, Genel Energy said it would resume drilling operations in Taq Taq, investing as much as USD 120 million in 2016.

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