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Genel Shares Crash on Taq Taq Reserve Downgrade February 29, 2016 in Iraq Oil & Gas News By John Lee. Shares in Genel Energy fell by more than 40 percent on Monday after the firm announced a 75 percent reduction in proven and probable (2P) reserves for its Taq Taq field, in which it has a 44 percent working interest. According to a statement from the company: The results of this internal review and the McDaniel & Associates (‘McDaniel’) Competent Person’s Report (‘CPR’) on Taq Taq are now largely complete. The initial gross recoverable proven and probable (‘2P’) reserves (referred to in the industry as Estimated Ultimate Recovery, or EUR) estimated by McDaniel for Taq Taq are summarised in the table below: As of 31 December 2015, the Taq Taq field had produced 184 mmbbls gross. The remaining gross recoverable 2P reserves estimate as of 31 December 2015 is therefore: The vast majority of the original Taq Taq oil in place was reservoired within fractures in Cretaceous carbonate formations. The Cretaceous has three principal producing units – the Qamchuqa, Kometan and Shiranish – with the Shiranish being the shallowest interval. Genel’s internal Taq Taq review and the CPR process have focused on the fracture porosity within the Shiranish reservoir. Both processes have utilised recently acquired data to establish that the fracture porosity within the Shiranish is lower than estimated in the original McDaniel CPR dated 30 June 2011. The updated McDaniel CPR will be completed shortly. Genel currently anticipates that gross Taq Taq production will average c.80,000 bopd 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 Company’s production guidance of 60-70,000 bopd for 2016 is unchanged. Genel expects to record an impairment, subject to audit, of approximately $1 billion to the Taq Taq field carrying value in its 2015 accounts. The impairment includes the revised assumptions on recoverable reserves announced today and the impact of lower oil prices. (Sources: Genel Energy, Yahoo!)
