Market Report: Hayward’s Genel gushing as it finally strikes its Kurdish oil exports cashComments Off on Market Report: Hayward’s Genel gushing as it finally strikes its Kurdish oil exports cash
Oil producers in the Kurdish region of Iraq have up until now struggled to be paid for exports, with no formal process in place and squabbles between Kurdish and Iraqi regulators over who should take what cut.
But two oil companies in the area, Hayward’s Genel Energy and Gulf Keystone Petroleum, are finally reaping rewards. Gulf Keystone revealed after markets closed yesterday that it has been given $15 million (£9.6 million) by the Kurdish Regional Government.
Today Genel, created by former BP boss Hayward after being forced out over the Deepwater Horizon spill, told investors it has been paid $24 million for exports to Turkey.
There is still a backlog in payments but Genel, 41.5p better at 679.75p, and Gulf Keystone, up 4p at 69.25p, said the transactions represent a crucial step towards regular payments. Afren, which also has operations in the area, jumped 4.08p to 49.74p.
It came as Jefferies started coverage of Genel with a buy recommendation, saying is finally on track to meet production targets despite Isis disruption in the area. This would make it the “highest-producing UK-listed independent explorer and producer”.
The Kurdish operators were riding a wave of a wider recovery in the energy and commodity sectors, with traders seeing value after recent steep falls. Oil and gas added 21.27 points to the Footsie. Mining giant BHP Billiton climbed 44p to 1528.25p as Citi added it to its European Focus List and removed Rio Tinto, up 45p at 3001.25p. The bank thinks BHP’s upcoming spin-off of assets will pave the way for further cost cutting. The FTSE 100 rose 77.07 to 6733.44. Goldman Sachs sent Tate & Lyle sliding 11p to 596.25p as the bank warned investors are underestimating the impact of falling sucralose prices.
Trade exhibition and conference organiser ITE Group tumbled 7.25p to 144.75p after warning Russian sanctions and the weakening rouble means the outlook for the year ahead is bleak.
Online gaming company bwin.party rose 3p to 106.05p amid continued murmurs that the gambling software specialist Playtech could be interested in buying it.