LONDON (Reuters) - Genel Energy (L:GENL) has put all exploration work on hold for this year to rein in costs, the London-listed oil producer said on Monday, as it is awaits nearly $400 million in oil sales payments from the Kurdistan Regional Government (KRG).
Genel's decision to stop exploring this year and other cost savings mean a $50 million reduction in the company's capital expenditure programme to $150-200 million, it said in a trading update.
The company made several unsuccessful exploration attempts last year and wrote off nearly $500 million in relation to poor drilling results in Malta, Angola and Morocco.
Genel's main revenue stream via its operations in Iraqi Kurdistan has been restricted as the KRG is struggling to find funds to pay oil companies for crude.
Genel said it was owed around $378 million by the KRG on June 30, up from around $230 million at the end of 2014.
"Over 600,000 bopd of exports are now flowing to (the Turkish oil-exporting port of) Ceyhan and, as distribution of the resulting revenues stabilises, the KRG is moving towards a financial position from which to make export payments to contractors," said Tony Hayward, who was promoted to chairman of Genel from chief executive on Sunday after the resignation of Rodney Chase.
Genel's president of Turkey and Kurdistan Region of Iraq, Murat Ozgul, has been appointed chief executive.
Genel, which is scheduled to report its half-year results on August 6, said revenue for the period is estimated at $200 million, maintaining the company's full-year revenue guidance of $350-400 million.