Genel Energy plc

Good morning and welcome to the Grinnell Energy PLC Investor Presentation. Throughout this recorded meeting, investors will be in listen-only mode. A question can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd like to hand you over to Paul Weir, CEO. Good morning, sir.

Good morning. Good morning, everybody. My name is Paul Weir, as you've just heard. I'm the CEO of Genel Energy, and I'm joined, as usual, by our CFO, Luke Clements. Welcome to our 2025 results presentation. We published our annual report and our full year results last week, and in my statement then we broadly reiterated the key messages and guidance provided in our January trading statement. Obviously, the big change since January is the security situation in the Middle East, which has resulted in our production effort being temporarily suspended on a precautionary basis since hostilities began almost four weeks ago. Understandably, the operator's priority since then has been the safety of its personnel. Steps have been taken, however, to maintain a state of readiness for a prompt restart, but the security situation in the region remains very dynamic and very uncertain. The focus of this presentation, then, is not to provide you with a Middle East security update, which wouldn't likely add to the understanding you've already had from mainstream media. Instead, we'll take you through the key elements of the performance of the company in the last year, the current position of the business, and the catalysts and priorities for 26. Luke and I will work through these slides. I think there's 10 or 11, mate. We'll work through those fairly briskly and then we'll be very happy to take any questions that you submit during the course of the presentation. We start with an overview of the business and this slide pulls together some key metrics to outline the building blocks we now have in place. We ended the year with a daily average working interest production rate of around 17,500 barrels per day, net two-fee reserves of 64 million barrels Debit DAX was $43 million. Our barrels are low cost with a low emissions rate, well industry average target rate for 2025, which was 17 kilos per barrel, and with world-class operating costs around $4 a barrel. Even in a year that included significant production disruption at Talke and continued domestic market pricing, the business has remained resilient, cash-generative and well-funded, and with the potential for very significant value uplift. The key building blocks for that significant value uplift are listed at the foot of this slide. The Talke PSC, our world-class production green cash flow even at domestic sales prices, a significant cash holding of more than $220 million at year end and about the same right now, ready for deployment, and a portfolio with significant organic upside potential from exports resuming, Talke drilling resuming, Oman appraisal and Somaliland drilling. all of which supports our ultimate objective of getting back to a regular dividend in time. Once we've established some geographical diversity, the further resilience that follows that diversification and repeatability. On to the next slide, please. This slide sets out our strategy and strategic objectives and the way that we think about them every day. The three familiar boxes on this slide represent our objectives in simple terms, and I've spoken about them many times before, so I won't dwell on them too much. Firstly, maintaining a strong balance sheet. Secondly, maximising cash generation from the assets we have, which means investment in Talkey and resuming exports from Kurdistan. And finally, adding some new sources of cash flow in a disciplined and value-accretive manner. That order matters, but we need to do a good job in all three of those areas if our eventual aim to return value directly to shareholders in a regular way. Let's move into the detail on the platform now. The world-class characteristics of Taukey are well known, but 2025 again demonstrated the resilience of the combination of the assets and its operator, DNO. If you look at the production graph on the right-hand side of the slide, you can see quite clearly the effect of the drone attacks in Q3 of last year. And thereafter, you can see just how quickly production was restored to a production rate at the turn of the year of around 80,000 miles a day. It's also worth noting that production in the months not impacted by the drone again was actually higher than the 2024 average, despite no new wells contributing to that production rate. Drilling restarted then in Q4 of 25. Our first taukey well was funded in December and immediately started delivering results. A second good well followed in the same month but the 2026 drilling campaign for which two more rigs have been immobilized to site has now been suspended given the security situation. So today we're in a position where both production operations and the drilling campaign are temporarily suspended and we remain on standby until such times as the operator determines that it's safe to re-establish a full presence at site and resume activity. We remain close to and very supportive of the operator on that. All that aside, when we talk about how it is a world-class asset, we mean it. 254 million miles of gross 2p reserves, very low operating costs, low emissions, long reserve life, and clear upside from drilling. Right, I'm going to pass you on to Luke now for the next couple of slides.

Thank you, Paul. Good morning. This slide provides the build-up of what we call production business net back. Production business net back is revenue, less production asset spends, that's both OPEX and CAPEX, less G&A. It tells us what funding our business is generating and making available for capital allocation outside of the Taukey PSC. And you can see that it has been double-digit millions for two years in a row now, having been negative in 2023 despite similar levels of revenue. So you can see that we've been working hard on our spend. So what was the income side of that double-digit production business net back made up of last year? Firstly, while Brent averaged $69 a barrel in 2025, our realised price sold was $32 a barrel, with all production sold domestically. If we were exporting, we'd expect that realised price to be close to rent. Secondly, working interest production averaged 17,500 barrels a day, lower year-on-year only because of the drone-related interruption in Q3 that Paul's just mentioned. And finally, EBITDAX is $43 million. You can see our underlying EBITDAX is back to more normal levels for domestic sales at around 35 million for the past three years now. This underlying number excludes movement on arbitration cost accruals which negatively impacted 24 and positively impacted 25. So the key point here is that the production business is now delivering consistent double digit net back even at domestic sales pricing. while still funding all production activity and investment on the Taukey licence and so building our balance sheet cash position and available funding. That is the product of Taukey resilience and the discipline we've applied to the business since 2022 in simplifying the portfolio, stopping non-value accretive spend, exiting licences and reducing cash G&A. Next slide please. This slide illustrates our balance sheet strength. We finished the year with $224 million of cash, net cash of $134 million and gross debt of $92 million. Our cash is about the same today as it was at the end of the year, so it's around $225 million. In April last year, we issued a new five-year bond maturing in 2030, replacing the bond that had been due to mature in October 2025. That issuance was oversubscribed and we continue to see good support and appetite for our bonds. That issuance has reduced funding risk around delivery on our strategic objectives. This remains a very under leveraged balance sheet with significant headroom to fund investment. That matters because the cash and capacity for further debt provide us with significant optionality. We can fund the appropriate town key programme, progress our organic growth assets and pursue value accretive acquisitions without being forced into decisions by capital structure pressure. Next slide, please. This slide shows our primary capital allocation options when we consider the best way to deliver shareholder value. Our first consideration is to maintain the strength of our balance sheet. Then the best place to invest our capital, providing near-instant significant returns, is the town key PSC. Then we think about how best to diversify our cash generation. All three building blocks have to be properly managed to establish a sustainable dividend. That means not every potential project will automatically be funded, and not every acquisition opportunity will be pursued. Every value creation opportunity has to compete with others within our strategic framework. The board reviews capital allocation on an ongoing basis and we take care to remain disciplined. I'll hand back to Paul now to talk about our acquisition strategy.