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(Sharecast News) - Genel Energy said in an update on Thursday that production from the Tawke licence in Kurdistan was temporarily halted during the first quarter as a safety measure following the launch of US-Israeli air strikes against Iran, reducing output and cash flow for the period.
The company said gross average production from Tawke up to the date of suspension was 79,900 barrels of oil per day, broadly in line with December's 80,700 barrels per day.
Gross production for the quarter to 31 March averaged 52,800 barrels per day, down from 77,270 barrels per day in the fourth quarter, while working interest production fell to 13,200 barrels per day from 19,320 barrels per day.
Genel cited a statement from operator DNO, which said it had started the year with strong production from the Tawke licence and had brought two newly drilled wells onstream early in the quarter, before temporarily halting production and drilling after the air strikes on 28 February.
DNO said limited field operations restarted on 9 April, including workovers of existing wells and the relaunch of an eight-well drilling campaign, in preparation for higher production rates from the Tawke and Peshkabir fields when security and market conditions improve.
Genel said the average sales price in the first quarter was $31 per barrel, compared with $32 per barrel in the fourth quarter.
Production business free cash flow after interest was a $2m inflow, down from a $5m inflow in the prior quarter, reflecting the absence of proceeds for the suspended production month in March.
Group free cash flow was a $2m outflow, unchanged from the fourth quarter.
At 31 March, Genel had cash of $222m, down from $224m at the end of 2025. Total debt was unchanged at $92m, leaving net cash of $131m, compared with $134m at year end.
The company said $88m remained overdue from the Kurdistan Regional Government under KBT pricing and excluding interest, although that amount had been reduced by around $40m of credit balances.
Genel said it was continuing to work towards a plan for payment or settlement of amounts owed, including appropriate adjustments for price and interest.
Separately, Genel said its subsidiary Genel Energy Miran Bina Bawi owed the KRG around $26m relating to an arbitration costs award.
An appeal against that award was unsuccessful in April, and there would be no further legal challenge.
In Oman, Genel said work was continuing to analyse data from the initial work programme on Block 54 and assess the location of further activity, including the acquisition of 3D seismic data and the drilling of two exploration wells over the next two years.
In Somaliland, the company said work was continuing towards drilling the Toosan-1 exploration well on the SL10B13 licence.
Genel said it continued to monitor developments at Tawke with the operator to assess when full production could safely resume.
Once restarted, it said Tawke free cash flow at production and price levels seen before the suspension was expected to continue covering organisational costs.
The company said it still expected to invest up to $20m in pre-production assets, including Block 54 in Oman and the Toosan-1 prospect in Somaliland, where drilling is planned for 2027.
Genel said its objectives for the year included acquiring new assets to diversify reserves, resources and cash generation, restarting exports of Tawke oil to access international pricing, pursuing net amounts owed by the KRG, executing activity on Block 54 safely and efficiently, and making further progress towards drilling Toosan-1.
At 1049 BST, shares in Genel Energy were down 3.01% at 51.4p.
Reporting by Josh White for Sharecast.com.
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