On Thursday, Genel Energy (LSE:GENL) released an update regarding the Taq Taq field, located in the Kurdistan Region of Iraq. The firm, which holds a 44pc working interest in the field, said testing of the TT-20z well has now completed. The well has been put onto production at an initial flow rate of 2,000 barrels of oil per day (bopd), but Genel expects this figure will rise. The additional production increases output from Taq Taq to 15,500 bopd, and Genel believes the well is ‘further proof’ of the continued potential of the flanks of the field.
The success with TT-20z horizontal sidetrack well follows the addition of another Taq Taq well onto production earlier this year. The TT-32 well was entered into production at an initial flow rate of 3,100 bopd in February and the firm is planning to drill a further three wells on the flanks of the field.
As part of its guidance for 2019, Genel is expected to spend $100m on developing Taq Taq and the larger Tawke field. The company’s operating expenditure for 2019 is forecast to be around $30m, which puts it in the enviable position of being able to generate positive free cash flow at oil prices of $20/bbl and above.
The firm has gone from strength to strength over the past couple of years and has been adding to its asset base in the Kurdistan Region of Iraq. Earlier this year Genel announced the acquisition of stakes in the Chevron operated Sarta and Qara Dagh blocks. Genel will acquire 30pc of the Sarta license, which includes the Sarta-2 and Sarta-3 wells. Both wells have been tested at rates of around 7,500bopd and will be put on production. Meanwhile, it will take on operatorship and a 40pc at Qara Dagh. It plans is to drill the Qara Dagh-2 well at the appraisal licence sometime next year.
With TT-20z now producing, the rig has since moved to drill the TT-33 well on the southern flank of Taq Taq. The well was spudded on 25 March and is expected to be completed in the second half of June.