Genel Energy: IR against a backdrop of geopolitical instability
What’s the most challenging IR job in the world today? One of the toughest must be held by Phil Corbett of Genel Energy.
All the reserves and production operations of this London Stock Exchange-listed oil and gas exploration company are located in the Kurdistan region of Iraq.
Instability in Iraq, the rise of Isis and the Syrian civil war have scared off most investors. The company has also experienced operational issues: pipeline disruption by terrorists and adverse performance at one of its main assets. The result? Genel’s share price has fallen by more than 90 percent since 2014, underperforming both the oil price and the FTSE 350 oil and gas index.
Speaking at the IR Magazine Conference – UK & Ireland 2016, Corbett outlined the challenges facing the company and explained how it sought to retain the confidence of investors amid such a backdrop. Scroll down for video.
Some of its actions include:
• Maintaining a focus on key messages ‒ Genel has continued to emphasize on a regular basis its low-cost assets and low sensitivity to oil prices. The amount of money the firm received for oil sales in 2016 more than covered its capex, opex and debt servicing, which is not something most oil companies can say, said Corbett.
• Provide insights on regional news flow ‒ The company has tried to set itself up as a source of objective information within an environment where misleading stories are rampant. In one particularly bad incident, a sell-side analyst accidently put one of Genel’s sites inside the territory held by Isis.
• Proactively engage with analysts over forecasts ‒ Given that contracts between Genel and the Kurdistan government, which is its only customer, are public, there should be no mistakes in forecasting and the IR team moves quickly to correct any mistakes.
• Extra handholding ‒ Constant engagement over political instability has been key to keeping some investors on board and even increasing their positions. Genel has provided briefing calls for investors and analysts that could be considered ‘above and beyond best practice,’ said Corbett.
• Targeting investors that match the risk profile ‒ As a result, Genel has focused more on long-term emerging markets value funds rather than energy specialists as the former are more comfortable with higher-risk profiles.