Good morning, everyone. My name is Paul Weir. I'm Chief Operating Officer and Interim CEO for Genel Energy. Welcome to our 2022 half year results presentation. I'm joined this morning by Luke Clements, our Chief Financial Officer, and Mike Adams, our Technical Director. We're going to run through a short presentation, and then we'll give you the opportunity to ask any questions you may have. Before starting, I'll draw your attention to our normal disclaimer. On to the first slide. I'm sure that most of you are well aware of who we are, where we do business, our strategy, and what we're striving to achieve. As we start this presentation, it does no harm perhaps to remind you that we aim to be a world-class creator of shareholder value and to make a positive impact on the communities where we operate.
Many of you will have seen versions of this slide before. It's one of our favorites. You may have noticed subtle but significant changes to the boxes at the bottom of this slide. As you're about to see, at year-end, Genel expects to be potentially sitting on a very significant amount of cash, and we want to make it clear how we want to put that money to work. Those three boxes tell the story. It's really quite simple. Our existing business is generating material cash flow this year, and we will still be very cash generative thereafter. We want to put the cash that we generate to work to build further resilience and a diversified long-term cash generating business. That resilient long-term cash generation will support a material and progressive dividend program, itself sustainable in the longer term.
This strategy is underpinned by our business model that focuses on financial discipline, risk management, and sustainability. We believe this will place us well to face up to the challenges that the sector may face in future, and our team is working very hard towards that end. We can see on the next slide that this year, indeed, our cash generation is very good, with almost $130 million delivered so far in 2022. Our expectation is that this will double by year-end. Added to our year-end 2021 cash, that will give us around half a billion dollars to put to use. This cash has come from our reliable production base. Our average rate this year has been more than 30,000 barrels per day, driven primarily by continued strong performance at Tawke and Peshkabir. This is the bedrock of our business.
Data continues to be another very important focus. Sarta pilot production is making money and the appraisal program continues. It's fair to say that results so far have not quite been what we'd hoped for, but we still have the results of Sarta 6 well to look forward to, and we have work in other wells planned in the second half of the year. There is still plenty going on at Sarta, and Mike will tell you more about that later on. We paid a 20% higher final dividend for 2021 earlier in the year and have maintained the interim dividend at $0.06 a share. That's a yield of around 10%. We should mention as well that our cash generation has been helped by regular payments.
We have received all payments due, and in fact, we have seen much prompter payment recently, with payment lag reduced by about 10 days in recent months. This is a welcome trend and demonstrates that the system continues to work well despite some of the more recent political tension. Finally in this slide, I'd like to comment on media reports some of you will have seen following a recent Iraq Federal Supreme Court ruling. In February, the Federal Supreme Court handed down a majority judgment purporting to deem the oil and gas law regulating the oil industry in Kurdistan unconstitutional. Now, the first thing to say is that our PSCs are held with the Kurdistan Regional Government are on a very sound footing and our production continues unaffected by this issue.
Furthermore, the KRG has been very vocal in response to this FSC ruling, describing it as political and the ruling is unjust, unconstitutional, and in violation of the rights and constitutional authority of the Kurdistan Region. The KRG has also stated that it will take all constitutional, legal, and judicial measures to protect and preserve all contracts made in the oil and gas sector. We would also draw your attention to a joint press conference in Baghdad last week where a senior KRG representative said that Baghdad had agreed at talks with Prime Minister Barzani that the region's oil policy can continue until an oil and gas law is passed by the federal parliament. Those of you who have followed Iraq's political situation will know already that legal action and political issues are often intertwined.
As of right now, while we carefully monitor and analyze the legal situation, we are standing back to allow the political machine to find a solution. While that happens, we continue to produce oil, business as usual. In a similar vein, I should point out that the arbitration process in relation to the Miran and Bina Bawi PSCs is now underway. This is a process that we see as quite separate from the day-to-day running of the business. Ring-fenced from our operations in KRI, we are focused on ensuring that this does not impact our relationship with the KRG. Both parties have been following a business as usual approach to this issue also. In summary, strong production continues, the oil is being sold, and cash is being paid.
In the next slide, a few quick words on where we are concentrating our efforts in the second half of the year. Our PSC payments are currently benefiting from ongoing override and receivable recovery payments. Since these are both expected to end in the second half of the year, we are very heavily focused on replacing these cash flows and delivering long-term growth, putting our strong balance sheet to work to create shareholder value. Our organic portfolio alone will not be sufficient to serve the need for longer-term cash generation. We continue to look hard and carefully for new assets, the right asset at the right price.
We know exactly what we need to do and what we need to do to get there. With that, I'm gonna hand over to Luke now to provide more details on our capital allocation and how we are focused on growth.
Thank you, Paul. The high oil price this period, combined with the override, mean our barrels produced this year are very high margin. At $32 a barrel, it's a 50% increase on last year, and that increases to $40 per barrel when you add on the benefit of Deferred Receivables recovery. This means that although our production has declined a little from the comparative period last year, cash generation has significantly increased to $129 million. With oil price currently around the same place as it has been in the first half, we can expect a similar result, same again in the second half. That takes about $250 million of free cash flow for the full year.
Overall, you can see from the chart that the override and Deferred Receivables in combination generate about half of the cash generation per barrel of our production business. We are, and always have been, very focused on replacing these override cash flows with a view to growing a production business that, one, provides a robust funding mechanism for growing the underlying value of the business and, two, sustains and then grows our dividend story long into the future. On to slide seven, please. We were focused on growing underlying value and our dividend story. What do we look like today? Our extant business is not where we want it. Our 2P reserves do not currently deliver the long-term story and long-term dividend support that we want. They do provide a very robust foundation on which we can build.
Firstly, our Tawke-dominated production business is resilient and predictable and makes our materially sustainable dividend of $50 million per annum rock solid in the medium term. This dividend commenced in 2019, maintained through 2020 when oil price went down to $18 a barrel when others dropped or reduced, and was raised in 2021. The dividend has proven to be consistent and resilient, and you can expect that going forward. Secondly, in addition to our rock-solid dividend, we have a rock-solid balance sheet. We are very focused on improving our outlook. We plan to do that by putting our capital to work. The first place that we invest is our production, which is funded by asset cash flows. Next is our organic resource portfolio.
In the first half, we invested in Sarta appraisal, and we'll do more in the second half, when we also will take a decision on Qara Dagh and continue our work on Somaliland. Mike will talk about all of these in his section. What we do know is that the size, timing and risk mix of Sarta, Qara Dagh, and Somaliland is not enough to fulfill our objectives. The chart on the right shows our year-end cash balance is expected to be over half a billion dollars. This provides us with significant opportunity to put this cash to work and move towards those objectives as I set out by adding new assets at the right price. Absolutely key in that statement of intent to add new assets is that they must be at the right price.
When we get the portfolio moving in the right direction, we will then look at getting the right capital structure around it and see what impact that progress has on our outlook and consequently our dividend story and how it next progresses. Onto the next slide, please. I've talked about adding new assets. The idea of this slide is a reminder of how we think about our business model and to paint a picture of how we'd like our portfolio to look in the future. Effectively, a portfolio that offers cost-effective exposure to building our production portfolio that supports growing our dividend over time. Resilience and financial discipline are words that we've used for a long time, and they're as appropriate at a time of +$100 oil as they were when it was $50. Resilience doesn't simply mean low cost.
It also means smart development and investment decisions, minimizing the quantum and length of time that capital is at risk, and ensuring the reward is at least commensurate to that risk. We have cash generative and high-margin barrels with robust 2P reserves. We want to expand those reserves, though, and we want to build organic resources that give a clear line of sight on reserves replacement and long-term cash generation. To give a little more detail on what we're looking to allocate that capital on, over to Mike.
Thanks, Luke, and good morning, everyone. Let me start by drawing attention to the word focus in the title of this slide because focus in the context of our new business strategy is our watch word. We focus on opportunities that meet our strict criteria, which I'll come back to. Crucially, speaking to the reason I personally hold responsibility for new business in our organization, they have to start with a robust technical story, bottom up from the rocks and the reservoir fluids to be monetized. We continue, and please do pick up on the word continue, to actively pursue new business opportunities that tick our boxes. Current or near-term production, offering new revenue streams and generating returns in short order. Assets that are profitable in the good times and resilient in downside scenarios.
Assets that embody our ESG credentials by having maximum positive impact on local people and economies while having minimum impact on the environment by keeping our emissions as low as practically possible. These are the asset qualities that are important to us, qualities that reflect our business model and our values in equal measure, much less so whether operated or non-operated, onshore or offshore, and geography is relatively subordinate in our mission. The capital discipline that underpins our extant business equally applies to new business. We will not overpay in order to take a shortcut. We will add the right assets at the right price. It is the cash flows from these right assets in combination with our cash generative existing business which will allow us to continue to deliver shareholder value out into the future through our material and progressive dividend and growth of our NAV. Slide 10, please.
Okay, having made reference there to our existing business, let me update you on the appraisal and pre-production elements of our portfolio. Spanning, as you know, the Middle East to the Horn of Africa, and then its Atlantic margin. Starting with Sarta then. 20 months now into the life of this field and closing in on four million barrels produced to date. The pilot production project continues to inform the approach we take to delivering continued short-term profits while shaping our longer-term view in combination with the ongoing appraisal program. The P and the A of our PADD philosophy. In the first half of 2022, three main themes have dominated our thinking and subsequent actions at the pilot project. Managing the initial Mus and the Adaiyah reservoirs. Starting the journey to diversification of that production stream to elsewhere in the resources stack.
Wrapping the two together, moving ahead with plans to optimize production performance. We have sought to carefully manage the Mus and the Adaiyah reservoirs against the backdrop of their continued pressure decline and increasing water cut, while optimizing production from our existing take points at Sarta-1D, 2, and 3. Helped greatly by that successful low-cost conversion of the vintage Sarta- 4 well into a now fully operational water disposal well, protecting our production. The next step has been to diversify our production to add incremental barrels through two ongoing pilot production tests of the Najmah reservoir at Sarta-2 and the Butmah reservoir at Sarta-1D, above and below the Mus-Adaiyah respectively, and representing independent pools of oil. Both of these have proved successful to date. The Najmah producing in line with initial expectations.
70,000 barrels of incremental production since late June introduction, and the Butmah, which you recall represented newly discovered resource with the S1D well, 50,000 barrels since early July. Next steps, taking both of these themes one step further, is to re-complete the Sarta-3 well later in the year to enable access to the Najmah and potential upside in the Garagu, while in turn returning Sarta-2 to Mus and Upper Adaiyah production with a boost of an ESP installation to maximize future production from this interval. This balancing act of production optimization from the three-well pilot resulted in a gross production average of around 5,400 barrels per day for the first half of the year. Slide, please. Let's move on now to the bigger picture beyond the three-well pilot axis and into the world of Sarta appraisal.
Which as you know is effectively bookended by two potentially high-impact appraisal wells, Sarta-5 and Sarta-6. The first of those two wells to be drilled and tested, Sarta-5, was something of a disappointment, having intersected poor reservoir quality, i.e., poorly developed connected fracture networks at this particular location, some 12 km from the existing producers. That said, light oil was successfully flowed to surface from the Najmah, which combined with multiple oil shows while drilling the remainder of the objective, suggests that a contingent resource base associated with this portion of the block remains intact, with running room remaining to further appraise for conversion to additional reserves. All eyes now are on the Sarta-6 well. Six kilometers west of the EPF, targeting the down dip extent of the Sarta field, having reached its target depth and now in process of being completed ahead of testing late in Q4.
This later than previously advertised testing window simply reflects a change in strategy to a more cost-efficient, rigless model. Reservoir connectivity and deliverability remain the key to success. In success, we will be able to capitalize and more importantly monetize immediately by first testing, then producing through a dedicated flow line to the EPF. Finally, on Sarta, a few words on our work towards emissions reduction. While the quantum of longer-term production remains to be seen, and hence the most appropriate gas management strategy moved from pre-FEED. We have recently installed solar panels and battery storage at the Sarta-1D well site in order to displace some diesel dependence. Staying geographical for a moment. There is nothing further to report at this stage on Qara Dagh. We are in an initial one-year extension to the license.
The integration of what we learned from the suspended QD-2 well into our understanding of the structure, and what is essentially the yet to be tested prospectivity remains ongoing towards informing the decision on next steps on the license for ourselves and our partner, Chevron, later in the year. Next slide, please. Okay, moving on now to Africa and specifically Somaliland. This first half of the year, post our successful introduction of CPC as a partner, has been dominated by the initial stages of well planning towards a historic first exploration well in Somaliland for over 30 years towards the end of 2023. The joint venture took little time to agree on the most appropriate initial prospect to be tested and a well location associated with that, which has allowed civil surveying work to be undertaken in the field.
The Toosan Prospect targets stacked Mesozoic reservoir objectives, some of which are proven in the analogous Yemeni basins, with individual prospective resource estimates ranging from 100 to 200 million barrels. I've said many times this talk before, if we make a discovery here, it would be a basin-opening discovery. A basin fully licensed to us as a joint venture, where the proximity of the rapidly developing Berbera deepwater port and the Gulf of Aden shipping lane offers us natural advantages for monetization. In keeping with the reference I made under new business to positively impacting the local communities and economies of the places we work, Somaliland is just such a place where we can make significant positive impact on the society we are guests in. Continuation of our rich heritage in this regard in the Kurdistan Region of Iraq. Back to you, Paul, for a few words in that regard.
Thank you, Mike. Somaliland, of course, is a great example of a location in which we could make a huge difference to the local community. It would be simply great to develop an industry and a supply chain there where so few opportunities currently exist. In the meantime, we'll step up our social activities. As we've seen from Kurdistan, it's through operations that we can really make a difference. We're marking 20 years of operations in Kurdistan this year with our Genel 20 project. While the 250 social projects we've already undertaken since we started in KRI have been targeted to meet community needs, and we're hugely proud of them, the true benefit of natural resource development can be seen in the revenues and employment generated by Genel's activities there.
Over $20 billion has been generated for the KRG from Tawke and Taq Taq alone, and in total, around 30,000 jobs supported by our operations. While making a positive difference, we also obviously focus on minimizing any downside. Safety is always a prime consideration, of course, and we aim to repeat our enviable recent record of five years of activity without an LTI. We're also aiming to reduce emissions. Mike mentioned the solar power project at Sarta, leading to a reduction of diesel usage at Sarta- 1D site. That's actually only one of several such projects that our engineering team is considering for application in the field in Kurdistan. Okay, final slide. I'm going to round up now with the outlook slide so that we can leave time for questions. This, I think, sums up where we are. Our business is generating a material amount of cash.
Our aim is to utilize that cash to establish a business that will deliver long-term and progressive returns. That's the focus of this team, and we are confident of delivering for our shareholders. Now I think I'm gonna hand back to the operator to run the Q&A session. Thank you very much.
Thank you. As a reminder, if you would like to ask a question on today's call, please press star one on your telephone keypad. Please ensure your line is unmuted locally and you will be advised when to ask your question. That was star one on your telephone keypad. Our first question comes in from the line of David Round calling from Stifel. Please go ahead.
Thanks, morning, guys. I'm gonna start with Sarta. Just interested in your thinking. Obviously, we've got a new management team in place. I'm wondering if there is any deviation in the thinking around putting future capital into Sarta, you know, whether that is new wells or water handling or something else. Just wondering how you're thinking about the outlook on that field specifically. We've obviously also got the Sarta-6 well coming up. Obviously note that was chosen before the recent Sarta wells. I mean, should we still be optimistic around that? Well, hopefully you can understand where I'm coming from. You know, why would that outcome maybe be different to what we've seen so far on the appraisal program?
Just separately on M&A, it's obviously quite a competitive market out there right now. We've got a lot of cash-rich companies. I look at what your focus is. A lot of companies are looking for the same type of deals. Really wondering what Genel's edge is here and why we should have some confidence that you guys can get a deal done.
Thanks, thanks for those, David. I think we'll perhaps address those in reverse order, if you don't mind. Let me say just a couple of introductory words from a strategy perspective on M&A, and then I'll hand over to Mike to talk in a little bit more detail about what is going on there and the resources that he's got to employ there. Then Mike can follow up with the Sarta questions. In terms of M&A, you said yourself, David, we are cash rich. We're in a good position. We're confident that we can fund a deal, and we're confident that we can close a deal once the right deal comes our way. I would also just remind you of our sort of strategic frame around M&A.
We have three criteria that we try to follow. We're looking for high margins, we're looking for low carbon, and we're looking to do work and create an operation in an environment where we can actually make a difference to the local population. That's the frame that we set ourselves, and it gives us a great deal of focus. It allows Mike's team to focus. Beyond that, I'll hand over to Mike. He might want to talk about the proficiency and the resource level that we've got as part of our team.
Yeah. Thanks, Paul. Yeah, just to kind of use a bit of a bolt on to that then, David, I think, you know, we are active, and we have been active for some time on new business, including making bids. Clearly, the high oil price environment brings its own challenges in this respect, so deals tend to be fully valued, which makes downside protection more difficult. As you know, that's very much a key focus for us as a business and as a philosophy. Of course, sellers hold on to assets they would otherwise divest, and in some cases, quite frustratingly, mid-process, they hold on to assets. What I'd say is we don't let that diminish our appetite.
We have a designated team, including me, don't be afraid. We continue to search for the right deals at the right price. Again, I can't reiterate enough deals that cut it from a bottom-up and a technical perspective. Those right deals very often mean, for us, identifying opportunities through one of our favorite lenses, which is discontinuities. Looking for discontinuities that we can leverage through our agility and nimbleness as a company.
The sort of stuff, Mike, there is other.
Yeah. Sarta, David. In terms of outlook, I guess just dealing with the kind of very high-level question, you know, some management team changes, but absolutely the same focus on appropriate capital allocation at Sarta. Which for Sarta appropriate means, you know, once the pilot and notably the appraisal results have dictated what money, you know, what money should be spent on. This again is to the downside protection piece. We don't spend money unless we think we can support that. In terms of outlook and new wells, it's essentially the question I guess is a proxy for production forecasts, if you like.
Can only really answer those questions on new wells and production forecasts through the lens of Sarta-6 or Sarta's success or failure, or at least for 2023. I'd say for year-end 2022, I wouldn't. I'd say don't expect anything greater than that half-year average in the statement today of 5,400, given the fact that S-6 results aren't expected until near year-end. As I've described, we continue to very much balance reservoir management with production optimization with an eye on the longer-term well-being of the field. For 2023, let's see what the Sarta-6 result brings at the end of the year, what it tells us about the scale of full field development.
In success, there is potential to exit the year and then to 2023 at a higher rate than that. Of course pave the way for at least, let's say at least one appraisal/development well in 2023 and the associated production addition that might have. In failure, it's probably fair to say that we're looking at a more modest development than we had originally envisaged for the Mus and the Adaiyah reservoirs. There really is a lot to play for here elsewhere in that contingent resources stack. Again, let's not get ahead of ourselves as we continue to pilot some of those other reservoirs.
The last part of the question, David, which was around Sarta, effectively around Sarta-5 and Sarta-6 and read across, I think, if I wrote that down right. The issue with Sarta-5 was less one of presence of oil, and it was more one of reservoir deliverability. Reservoir quality and deliverability. The rocks were tight. A poorly developed connected fracture network at that particular location, meaning that a contingent resource base associated with that portion of the block likely does remain intact. The S-5 well having failed to convert some of those resources to reserves, which further I would say is yet unplanned, but further appraisal work in that area might yet succeed in. There's really no read across the Sarta-6.
Those two wells are around 20 km apart, hence our reference to them being the bookends of our appraisal program. The real thing they have in common is the same reservoir targets, clearly, with the same key to success. Reservoir connectivity and deliverability being the watch words for these rather niche fracture-dominated KRI reservoirs. In terms of that appraisal program, we're really at half-time, having you know, yet to test Sarta-6. We're at half-time, and I would say we've got everything to play for in the second half.
Great. That's really helpful. Thank you, guys.
The next question comes in from the line of James Thompson, calling from JP Morgan. Please go ahead.
Sorry. Morning, guys. Thank you very much for the presentation. I guess I want to pick up on the M&A side of things, if I may. I mean, it's kind of interesting that you guys talk around the 2P reserve base sort of not being sufficient for the long-term story. Obviously the cash balances is growing pretty rapidly. I guess in the context of those two things, I was just wondering whether, you know, you could provide us any more color in terms of, you know, your thinking about scale in terms of what it is you might be looking for, you know, on the kind of acquisition side of things.
It'd be interesting to get a feel, should we say, for, you know, how you're thinking about using kind of equity cash versus the ability to put some leverage on any kind of acquisition that you might be targeting. And then, you know, in terms of that 2P reserves piece, you know, or that production piece, you know, what is it? What is the kind of ambition? What is the sort of scale that you have in mind? Can you put any color behind those two pieces? That would be helpful.
Thanks for the question, James. It's difficult to quantify in terms of scale. Clearly, we are looking strategically at something significant. We're looking at something that's really going to move the needle. We're less inclined to. To get on the hamster wheel of a series of very small progressive acquisitions that in themselves won't move the needle. We're obviously keen to do something around our reserves to production ratio and to extend that quite significantly. We're looking for something sizable, I think. Right at this moment, we are prepared to consider all currencies. We do have a lot of cash, but we are happy to present to our board scenarios where other currencies might be considered as well. Mike, anything you wanna add to that?
No, I'd just say, you know, to the cash point, which I think somebody had picked up on already this morning. Clearly, cash is king, and new business is a good way of putting our balance sheet to work, and absolutely, that's what we're looking to do. As Paul says, you know, that can be a bigger deal or it can be a series of smaller deals that you bolt together, which is clearly a little bit harder work. But I'd say we're yeah. That's one respect that we're not fussy how we get to the, you know, once we've identified the right opportunities, you know, we're not overly hung up on how we get there, just the fact that we do get there.
James, just to add the obvious in terms of what's the shape of the consideration? It kinda depends on the opportunity. If it's some assets lend themselves more to debt than others. Some risk profiles look a bit better than with cash. Some sellers who are looking to exit the sector want cash, not equity. It kinda depends. We're open-minded on it. And again, on the scale point, maybe not quite the answer, but the way to think about it is the override generates a lot of cash for us this year and has done over the last few years. That's what we're trying to replace.
That probably gives you an idea on whether it's one, two, three, or four pieces that put together start replacing that and growing our cash generation outlook will depend on the opportunities that we identify as we go through a pretty diligent screening and engagement process.
Okay. That's helpful. Just in terms of the sort of political backdrop in the KRI, I mean, obviously you kinda mentioned upfront in the prepared remarks. You know, is there any risk here to operations at all? You know, what are you kinda concerned about, worried about in terms of how the discussion is evolving between Erbil and Baghdad, and how that's developed over the last couple of months?
We're not worried, is the short answer. We are in very close dialogue with our host government and our regulator. By that, I mean KRG, of course. We keep an open line of communication with them around developments. We're not worried. We don't anticipate a cessation of production as a result of the ongoing tension between Baghdad and Kurdistan. Of course, while we are only made aware of a fraction of the dialogue that's taking place between those two entities, our general view is that as the formation of a new government draws closer, we will see the pressure being brought to bear upon the IOCs diminish. I think we're already starting to see signs of that, and we're gonna hope that that's a trend that continues. We're not particularly worried about it, James.
Okay. Brilliant. Thanks, guys. I'll hand over there.
Thank you. Just as a reminder before we move to the next question, that if you would like to ask a question on today's call, please press star one on your telephone keypad. The next question comes in from the line of Teodor Nilsen calling from SB1 Markets. Please go ahead.
Good morning, and thanks for taking my questions. I have two questions. First on looking into 2023 and production levels. Of course, I know it's early days and it depends on startup performance. But is it too conservative to assume that production will be flat in 2023 compared to 2022, just as a working assumption? Second question on Somaliland. Looks like a pretty exciting opportunity there. Could you just briefly discuss in the success scenario there, what will be the potential exit route for that oil? Also did the development consider in terms of dollar per barrel or access to a number of million dollars? Thanks.
Thanks for the question, Teodor. I'll hand over to Mike to answer that one.
Yeah. You were asking a question about Somaliland, Teodor.
Yes, the second question, just potential exit routes and also the potential developments, of course, in the scenario of a discovery.
Yeah. Sorry, I missed the first part of that. Thanks. Yeah. Good morning. Somaliland, in terms of development philosophy there, the development philosophy, if we were to make a discovery, would be very similar to our philosophy in the KRI. We're looking to get oil onto early production, extended well test production as quickly as we could. Of course, despite the natural advantages that Somaliland does have of proximity to the Gulf of Aden, which I referenced, and of course the deep water port, that doesn't mean that those export facilities or a refinery, for example, are in country right now.
It means that we can't be, you know, as quick off the mark with that early monetization there, as we would be able to, as we have been able to be in Kurdistan. The principle would be very much a similar one of trucking oil as early as possible, piloting production there so that we can start to see the nature of an accumulation if we're successful, size of the prize, et cetera. Gather dynamic data. I think it has all the raw materials of being able to monetize relatively quickly, but we should bear in mind that, you know, Somaliland has some way to go still in terms of developing as a geography.
Is there anything you wanna see on 2023 production levels, Mike?
I mean, I think that's not a bad starting point to be conservative. Would probably be my comment on that from a production perspective. Teodor , clearly there are some catalysts and levers. You made reference to Sarta. Clearly the result of the Sarta-6 well is going to have some impact in terms of that. I referenced what a Sarta success at the end of the year would mean a higher exit rate from the year. Then also would lead to at least one appraisal/development well in 2023. Which of course would, you know, come with production adds there as well.
I think from a Tawke perspective, Paul, is there anything that you'd add on that?
The point I would make on Tawke is that we haven't yet begun speaking to the operator about next year's work plan and budget, but what we can say is that there's been an awful lot of activity in 2022. We've currently got four rigs working on that license. Soon to be five rigs working on that license. As of the end of June, we've drilled 10 of the 20 wells that we plan to drill. We know that the operator plans to keep a very high activity level going forward into 2023, and we are very supportive of that. As I say, we haven't engaged with the operator on the work plan and budget for next year, and it would be for them to publicize that once that's been agreed.
Yeah. I would say, just to add to that for Tawke, if you're going to take current year as a proxy for next year, if you like, then as Paul said, the level of activity at Tawke right now is one that really does support a strong second half to the year from the Tawke and Peshkabir fields.
Okay, thank you.
That was the final question in the queue, so I shall hand the call back across to yourself, Paul, for any concluding remarks.
Well, thank you very much, ladies and gentlemen. I hope the presentation and the Q&A session has given everything that you'd hoped for this morning. I'd like to thank you for your time, for making time for our team to present current situation to you. We look forward to talking to you all again very soon.