Genel Energy announced Monday that it expects to record an impairment charge of approximately $1 billion, following revised assumptions on recoverable reserves at the Taq Taq field in the Kurdistan Region of Iraq.
Last month, Genel revealed that it would review its Taq Taq reservoir model following production declines during 2015. The results of this internal review found that proven and probable (2P) reserves from the field dropped to 357 million barrels of oil, from an initial estimate of 683 million barrels. As of December 31, 2015, the Taq Taq field had produced 184 million barrels gross. As a result, the remaining gross recoverable 2P reserves estimate as of December 31, 2015 is 172 million barrels of oil.
Genel currently anticipates that gross Taq Taq production will average around 80,000 barrels of oil per day in 2016. Gross Taq Taq production is currently estimated at 65-75,000 bopd and 50-70,000 bopd in 2017 and 2018 respectively.
The impairment, subject to audit, of approximately $1 billion to Genel’s Taq Taq field carrying value includes the revised assumptions on recoverable reserves announced today and the impact of lower oil prices.
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