Oil exploration company Genel expects an expenditure of up to $25 million in Somaliland in 2023 as it set a timeline for its drilling of their exploration well.
The company said it is target a spud date in the next 12-18 months.
In a report on its trading operations, Paul Weir, the Chief Executive of Genel said the company continues to target a spud date in the next 12-18 months, acknowledging the challenges of operating in such a frontier area with limited existing infrastructure,”
Weir said the company starts 2023 with a strong balance sheet, a net cash balance of over $200 million, and a cash generative production business.
It its 2023 outlook and guidance, the company said it will spend up to US dollars 25 million in Somaliland as it progresses towards the spudding of the Toosan-1 well in this frontier basin.
“Our focus is now the preservation of capital for the addition of new resilient and cash-generative assets to our production portfolio, with free cash generation in 2023 funding both our dividend programme and progress towards the drilling of our exploration well in Somaliland,” said Weir on the company’s website.
Weir added: “As we work to centre our business around the delivery of our material, sustainable, and progressive dividend programme, our capital allocation decisions are targeted towards delivering the profitability and cash generation required to support that programme in the long-term.”
He said their will be material reduction in capital expenditure, with 2023 expenditure expected to be between $100 million and $125 million, with key asset spend including: Production business cost recoverable capital expenditure roughly flat at $90 million and Up to $25 million expenditure in Somaliland.
He said that Genel will continue to invest in the host communities in which it operate and aim to invest in those areas in which the company can make a material difference to society, with an increasing focus on Somaliland in 2023
He said reparation continues for the drilling of the Toosan-1 well on the highly prospective SL10B13 block (51% working interest and operator)
“The Toosan prospect contains stacked Mesozoic reservoir objectives, with multiple individual prospective resource estimates each ranging from 100 to 200 MMbbls.
The company stated that the geotechnical survey has now completed as it progress towards construction of the well pad. Environmental and social impact assessments are underway, and tendering has commenced for the rig and well services
