Genel Looks for Exploration Acreage in Africa
LONDON - Middle East and Africa-focused oil company Genel Energy PLC is looking to spend its $1 billion of cash acquiring stakes in high-potential exploration acreage, primarily in Africa, its chief financial officer said Thursday.
"Investors are looking for a return on assets rather than the rather miserly return we get from our $1 billion in the bank," Julian Metherell told Dow Jones Newswires in a phone interview.
He said the company sees significant opportunities in North Africa and broader Africa, adding: "Our competitive advantage in Kurdistan is not going to continue to the extent it has been, but I think we have successfully capitalized on that."
Mr. Metherell said: "We continue to be highly selective, very value driven, but yes, there is more capital to deploy for the right opportunity," adding, "We are very focused on material, high quality, world-class, exploration opportunities, primarily."
The CFO noted that the ownership of assets in Africa tends to be highly fragmented and there are some small companies sitting on attractive prospective acreage who don't know how they will find funding.
"Farming in is a very attractive route to access some material opportunities for us," he said, adding: "I think we are a net beneficiary of the misery we see in the financial markets."
Farming in is the process whereby a company joins another company or joint venture participating in a block or field. The company farming in is granted a working interest in the field or block in return for cash or carrying a portion of the other partners' costs through an exploration program.
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