Gas Sales and Purchase Agreement for Summail Field

RNS Number : 3474O

Genel Energy PLC

18 September 2013

 



18 September 2013

Genel Energy plc

Gas Sales and Purchase Agreement for Summail Field

Genel Energy plc ("Genel") is pleased to announce that, along with DNO International ASA ("DNO International"), it has signed a Gas Sales and Purchase Agreement with the Kurdistan Regional Government to supply gas from the Summail field in the Dohuk licence in the Kurdistan Region of Iraq.  The gas will partially displace diesel currently used to generate electricity in a 500 MW power plant in the city of Dohuk located 40 kilometres from the field.

Initial deliveries will be around 100 million cubic feet per day sold on a take-or-pay basis for the duration of the Production Sharing Contract or until deliveries reach one trillion cubic feet. The price of gas will range between $3 and $4 per thousand cubic feet over the life of the contract.

The Prime Minister of the Kurdistan Regional Government, Nechirvan Barzani, and the Minister of Natural Resources, Dr. Ashti Hawrami, were present at the signing ceremony held in Erbil today and are signatories to the contract.

The next step in the fast-track development of the field is re-entry and completion of the Summail-1 discovery well and the installation of a 24 inch pipeline to transport gas to what is slated to become the regional gas gathering and distribution network.  First gas from Summail-1 is planned in January 2014.  The second well, Summail-2, will spud in the fourth quarter and the Summail-3 well is scheduled for 2014.

Following the development of the Summail field, the focus will shift to the appraisal of the oil potential of the Dohuk license.

Genel Energy plc holds a 40 percent interest in the Dohuk licence. DNO International holds a 40 percent operated interest and the Kurdistan Regional Government the remaining 20 percent interest.

Tony Hayward, Chief Executive of Genel, said:

"The signing of the first domestic gas sales agreement in Kurdistan is a significant milestone in the development of the gas industry in the Kurdistan Region of Iraq, and the first step in Genel's gas monetisation strategy, an important value driver for the business going forward."

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For further information, please contact:

Genel Energy Julian Metherell, Chief Financial Officer Phil Corbett, Head of Investor Relations Andrew Benbow, Head of Public Relations

[phone]

Vigo Communications Patrick d'Ancona

[phone]

Notes to editors:

Genel Energy is an independent oil and gas exploration and production company listed on the main market of the London Stock Exchange (LSE: GENL). The company, with headquarters in London and additional offices in Ankara and Erbil, is the largest independent oil producer and the largest holder of reserves in the Kurdistan Region of Iraq and, through value-accretive acquisitions, is building a high impact exploration portfolio within the Middle East and Africa.  For further information, please refer to www.genelenergy.com

 

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