Iraq News Now

LONDON,— Genel Energy, the oil company focused on Iraqi Kurdistan, has announced its intention to start paying its first dividend despite falling to an annual loss for 2018 following a write down in the value of one of its gasfields.

The company, which was co-founded and once led by the former BP chief executive Tony Hayward, said a “robust cash flow outlook” and confidence in its future prospects underpinned its decision to start a dividend programme in respect of the 2019 financial year.

It intends to pay a minimum dividend of $40m a year starting in 2020 “with the intention for this to grow”.

Free cash flow totalled $164m in 2018, up from $99m in 2017.

The positive news on the dividend policy came despite Genel posting a pre-tax loss of $283.4m for 2018, down from a profit of $272m a year earlier following a $424m impairment of its Miran gas field. Revenues rose to $355.1m from $228.9m a year earlier.

The company said it intended to focus on trying to develop another gasfield in Iraqi Kurdistan first, called Bina Bawi, and had therefore decided to book an impairment against Miran given there was no visibility on when this second gas asset might be brought into production.

The announcement of a dividend policy is a significant moment for Genel whose founders had intended to build it into a FTSE 100 oil company but experienced a bumpy few years in the middle of the decade.

The company had a stock market valuation of £3bn in 2014 but struggled against a litany of problems, not least two reductions in its estimates of how much oil could be recovered from its key oilfield in Kurdistan, Taq Taq.

It now has a market capitalisation of around £628m.

Mr Hayward and one of the company’s other co-founders, the financier Nat Rothschild, both departed Genel in 2017.

By Nathalie Thomas
Copyright © 2019, respective author or news agency, ft.com

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