Genel Energy's shares rise as a production decline at its flagship oil field is seen slowing

Courtney Goldsmith
Follow Courtney
BP CEO Hayward Visits Oil Spill Site
Tony Hayward officially announced his intention to retire from Genel in April (Source: Getty)

Shares in Genel Energy sustained a modest gain today after the company said declines at its flagship Taq Taq oil field have slowed.

Genel, which held its annual general meeting (AGM) today, has been hit by a series of senior departures in recent weeks, including co-founder Nat Rothschild and chief financial officer Ben Monaghan.

Tony Hayward, the former BP boss who co-founded the Kurdistan-focused oil group, will also retire as chair of Genel after the company's AGM.

Investors gave the oil firm a bloody nose at its AGM, with about 31 per cent voting against the directors' remuneration policy and annual report on remuneration. Genel said the board will take note of the voting and review accordingly.

Tolga Bilgin, a non-executive director at Genel, did not receive the required 50 per cent majority of votes in favour of reelection.

In a prepared statement ahead of the AGM, Hayward said production at the firm's Taq Taq field continued to fall in 2017, but the rate of decline has recently slowed. However, Hayward said: "It remains too early to extrapolate long-term conclusions from this trend."

The company's stock closed 3.15 per cent higher at 90p. Shares in Genel have fallen more than 92 per cent since their peak in 2014 due to reserve downgrades at Taq Taq, failed exploration campaigns in Africa, political unrest in Iraq and the decline in oil prices.

Hayward also noted the economic situation in the Kurdistan Region of Iraq is continuing to improve.

The firm will target further investment in Taq Taq, which produced an average of 17,000 barrels per day (bpd) in May.

Hayward highlighted the recent changes at board and management level, and he said the board composition is under review.

"However, the fundamentals of the business are sound, our strategic focus is clear and there are significant opportunities for value creation in the portfolio," Hayward said.

In March, the firm reported its 2016 losses widened in a "disappointing" year due to writedowns and lower production.

Related articles