Our key performance indicators

Genel measures its performance in line with our strategic objectives. Key Performance Indicators are the primary measures used to track our progress against our strategic aim of being a world-class creator of shareholder value through growing low-cost production in a socially responsible way.

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Definition

2P reserves are proven plus probable reserves.

Performance

Production of 11.6 MMbbls formed the material part of the fall in 2P reserves, with a small downward technical revision of reserves at Taq Taq being mitigated by a small upward revision of reserves at the Tawke licence. Sarta reserves stayed the same, minus production of 2 MMbbls, with appraisal results set to be be incorporated into our assessment of the reserves of Sarta at the appropriate time.

Relevance to strategy

Our strategy is to enhance the value of our existing 2P reserves through active reservoir management and cost-effective development. The Company also looks to replace 2P reserves through a combination of maturing contingent resource to commerciality, exploration for new sources of hydrocarbons, and M&A activity.

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Definition

The combined total distribution of the final and interim dividends announced in the calendar year.

Performance

The resilience of our business model was illustrated in 2020 through the retention of our material dividend even following the crash in the oil price. In 2021 the rise in the oil price boosted our cash generation, and management’s confidence in future prospects allowed us to fulfil our aim of paying a progressive dividend, and the interim payment increased 20% to 6¢ per share. Our robust financial position and continued positive outlook means the Board is happy to recommend a final dividend of 12¢ per share relating to 2021, an increase of 20%.

Relevance to strategy

Genel’s strategy aims to increase low-cost production, invest in growth, and retain sufficient liquidity to pay a material and sustainable dividend. Dividend distributions are therefore a signifier of the success of Genel’s overall strategy.

 

0bopd

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Definition

Production is measured in barrels of oil produced per day.

Performance

2021 net production averaged just short of 32,000 bopd, roughly in line with the prior year. This was the result of robust production at Peshkabir and the addition of Sarta production largely outweighing declines at the Tawke field, where limited drilling activity took place, and Taq Taq.

Relevance to strategy

Production from our fields provides Genel’s revenue generation, and is a key measure of our operational performance. Our oil production in the KRI is managed to ensure long-term value creation and maximise cash generation, with production maximised over the life of the field.

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Definition

Cash flow generated from operating activities, less net capital expenditure and interest payments.

Performance

Free cash flow (pre dividend payment) was boosted by an increase in the oil price, with Brent averaging $71/bbl in 2021, almost $30/bbl more than the $42/bbl in 2020. However, the increase in the oil price led to the KRG reverting to standard payments three months in arrears, and hence 10 entitlement payments were received in 2021. Receivable recovery payments of $35 million were received in 2021, and the resumption of Tawke override payments contributed a further $72 million. With a full year of payments and given the prevailing oil price, Genel expects free cash flow of over a quarter of a billion dollars.

Relevance to strategy

Production from operating activities forms Genel’s revenue generation. Net cash illustrates the success of monetisation of these activities, reflecting both money received and the minimisation of operating costs.

0Frequency

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Definition

Lost time incident frequency measures the number of lost time incidents per million work hours.

Performance

Following 14 million work hours since a lost time injury at Genel and TTOPCO operations, a member of the contractor drilling team regrettably sustained a foot injury during drilling operations at Sarta-5. Action has been taken to prevent a recurrence of such an incident, as we strive to repeat the performance of the previous six years of LTI free operations. Our focus on safety in 2021 led to 102 HSE management site visits being conducted, 59 emergency response drills taking place, 1,194 production safety observations being made, and 24,838 drilling safety observations submitted.

Relevance to strategy

The safety of our workforce remains of paramount importance. Genel is committed to running safe and reliable operations across our portfolio, aiming at zero fatalities and no lost time incidents.

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Definition

Loss of primary containment records any tier 1 unplanned or uncontrolled release of material from a piece of equipment (such as a pipe, vessel, or tank) used for containment of potentially harmful or hazardous substances and products.

Performance

There were zero tier 1 incidents of losses of primary containment in 2021, and it is now four years since our last incident.

Relevance to strategy

Part of our commitment to being a sustainable business is for the impact on the environment around our operations to be minimised. Asset integrity is a major priority for Genel and we plan and execute the operations of our business and our engagement of subcontractors so as to minimise risk and mitigate potential impact.