Genel Energy (LSE:GENL) has confirmed that drilling activity has resumed and oil production has restarted at the Tawke and Peshkabir fields in the Kurdistan Region of Iraq, marking a return to operations following the recent shutdown.
The DNO-operated Tawke field resumed production on 28 June, followed by Peshkabir on 11 July. DNO expects output across the Tawke licence to stabilise at approximately the levels achieved before the shutdown, provided there is no further deterioration in the regional security environment.
The restart restores an important source of production and cash generation for Genel, which holds an interest in the Tawke production sharing contract.
DNO and Genel Target Export Market Access
DNO is currently selling its entitlement oil from the licence at prices in the mid-to-upper $30s per barrel. However, the operator is seeking either direct access to export markets or pricing linked to international export benchmarks, which could materially improve the economics of production.
Genel is pursuing the same objective for its share of Tawke production. The company estimates that securing export access would more than double the free cash flow generated from the asset, highlighting the financial significance of restoring broader market access.
The difference between current domestic pricing and potential export-linked pricing means progress on market access could become a major catalyst for cash generation from the licence.
Security and Export Uncertainty Remain Key Risks
While the restart at Tawke and Peshkabir provides operational momentum, Genel’s near-term outlook remains closely tied to security conditions, payment reliability and developments surrounding oil exports from the Kurdistan Region.
The company’s wider financial performance has been characterised by volatile profitability, declining revenue and a sharp reduction in free cash flow during 2025. These pressures are partly offset by a comparatively supported balance sheet and available liquidity.
Technical indicators are more constructive, with Genel shares trading above major moving averages. However, signs that the stock may be overbought could increase the risk of shorter-term volatility.
The proposed Capricorn transaction provides additional strategic upside and has contributed to a more supportive longer-term outlook. Nevertheless, execution of the deal, regional security and uncertainty surrounding exports and payments remain important risks.
More About Genel Energy
Genel Energy is an upstream oil producer listed on the main market of the London Stock Exchange. Its portfolio includes interests in producing oil assets in the Kurdistan Region of Iraq.
The company’s key production exposure includes the Tawke and Peshkabir fields, where Genel receives entitlement oil through its participation in production sharing contracts. Cash generation from these assets is influenced by production levels, realised oil prices, payment arrangements and access to domestic and international markets.
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