Britain’s Genel Energy expects free cash flow to more than double in 2022

News wire — Britain’s Genel Energy on Tuesday forecast its free cash flow to more than double in 2022, helped by an increase in global oil prices, even as the Iraqi Kurdistan-focussed oil producer expects output at the same level as last year.

The firm has been embroiled in a tiff with Iraq’s Kurdistan Regional Government (KRG), and last month started an arbitration against them in London over claims related to two terminated contracts for shared gas projects in the region.

Genel, which has been operating in the region for more than 20 years and has four fields there, has benefited from the oil price recovery following a slump during the early stages of the pandemic when supplies were in excess.

The company said it expects free cash flow of up to $200 million, before any dividend payments, at Brent oil prices of $75 per barrel, sending shares up 2.1% to 145 pence by 0835 GMT.

Genel, which reported a net average production of 31,710 barrels of oil per day in 2021, warned that an increase or decrease of $10 per barrel in Brent prices would hit its annual cash flow by $50 million.

Frantic oil buying, driven by supply outages and signs the Omicron coronavirus variant would not be as disruptive to fuel demand as previously feared, has pushed some crude grades to multi-year highs, suggesting the rally in Brent futures could be sustained for a while longer, traders have said.