Report on payments to governments

Genel Energy PLC (GENL) Report on payments to governments 12-Apr-2018 / 09:00 GMT/BST Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. Report on payments to governments for the year 2017 Introduction and basis for preparation This report sets out details of the payments made to governments by Genel Energy plc and its subsidiary undertakings ("Genel") for the year ended 31 December 2017 as required under the Disclosure and Transparency Rules of the UK Financial Conduct Authority (the 'DTRs') and in accordance with our interpretation of the Industry Guidance issued for the UK's Report on Payments to Governments Regulations 2014, as amended in December 2015 ('the Regulations'). The DTRs require companies in the UK and operating in the extractives sector to publically disclose payments made to governments in the countries where they undertake exploration, prospection, development and extraction of oil and natural gas deposits or other materials. This report is available to download at www.genelenergy.com/investor-relations/results-reports-presentations. Governments All of the payments made in relation to licences in the Kurdistan Region of Iraq ('KRI') have been made to the Ministry of Natural Resources of the Kurdistan Regional Government ('KRG').  Production entitlements Production entitlements are the host government's share of production during the reporting period from projects operated by Genel.  Production entitlements from projects that are not operated by Genel are not covered by this report. The figures reported have been produced on an entitlement basis rather than on a liftings basis.  Production entitlements are paid in-kind and the monetary value disclosed is derived from management's calculation of revenue from the field. Royalties Royalties represent royalties paid in-kind to governments during the year for the extraction of oil. The terms of the Royalties are described within our Production Sharing Contracts and can vary from project to project.  Royalties have been calculated on the same barrels of oil equivalent basis as production entitlements.                                    Materiality threshold Total payments below £86,000 made to a government are excluded from this report as permitted under the Regulations.   payments to governments - 2017     Country/Licence KRI Total (1) Taq Taq (2) Tawke       Production entitlement (bbls) 3,371,984.14 3,371,984.14 - Royalties in kind (bbls) 658,849.17 658,849.17 - Total (bbls) 4,030,833.31 4,030,833.31 -     Value of production entitlements ($million) 166.07 166.07 - Value of royalties ($million)   32.36 32.36 - Production bonus ($million) (3)   25.88 16.50 9.38 Capacity building payments ($million) (4) 0.59 0.59   Total ($million) 224.90 215.52 9.38             (1)     Under the lifting arrangements implemented by the KRG, the KRG takes title to crude at the wellhead and then transports it to Ceyhan in Turkey by pipeline.  The crude is then sold by the KRG into the international market.  All proceeds of sale are received by or on behalf of the KRG, out of which the KRG then makes payment for cost and profit oil in accordance with the PSC to Genel, in exchange for the crude delivered to the KRG. Under these arrangements, payments are in fact made by or on behalf of the KRG to Genel, rather than by Genel to the KRG. For the purposes of the reporting requirements under the Regulations however, we are required to characterise the value of the KRG's entitlement under the PSC (for which they receive payment directly from the market) as a payment made to the KRG. Therefore, estimated value in $millions is not paid to the KRG, and is calculated to meeting the reporting requirements under the regulations. (2)     The amount reported for Taq Taq, is the gross payment made to the KRI by the operating company (TTOPCO), Genel's share of these payments is equal to 55% (with the exception of capacity building payments). (3)     Payment for the cumulative production bonuses reported above were waived by the KRG under the Receive Settlement Agreement ('RSA') entered into by the Company and KRG in August 2017. (4)     Capacity building payments reported are payments made by Genel directly to the KRI in cash as required by the PSC. The payment reported above excludes the value of any capacity building payments waived by the KRG under the RSA, please refer to note 1 to the financial statements in our 2017 annual report for further information on the RSA.           Â

ISIN:	JE00B55Q3P39
Category Code:	MSCL
TIDM:	GENL
LEI Code:	549300IVCJDWC3LR8F94
Sequence No.:	5396

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End of Announcement	EQS News Service

673865  12-Apr-2018