Oil reserves at Genel, the London-listed producer chaired by former BP boss Tony Hayward, have been downgraded for the second time in weeks.

The company, which produces oil in Iraqi Kurdistan, said on Friday that it had 8 per cent less probable and proven reserves than previously thought after a review at its Tawke field.

Following the audit conducted by its Norwegian partner, DNO, Genel downgraded the level of so-called 2P reserves announced at its annual results last month to 241.9m barrels.

The company also said, however, that it would buy back at least $50m of its bonds, helping reassure investors who have seen the share price crash since Genel announced a major reserves reduction last month.

Genel’s shares were up 13.3 per cent at 90p on Friday morning, giving the company a market value of about £250m. They have plunged more than 93 per cent over the past two years as the company has struggled with the falling cost of oil and problems with securing payments from the Kurdistan Regional Government.

Last month, Genel’s shares fell 42 per cent in a day after there was only a third of the oil left in its Taq Taq well of what it previously thought, triggering a $1bn writedown.

DNO, which announced an operating loss for 2015 of $174m, was broadly flat at 7 NOK. Its 2P reserves have fallen by 20 per cent to 543m barrels from 2014, partly because of production during 2015 and partly because of Friday’s downgrade.

Bijan Mossavar-Rahmani, DNO’s executive chairman, said: “We have long taken a diligent, transparent and prudent tack with Tawke and are pleased it continues to rank first in reserves, production and exports among fields operated by international oil companies in Kurdistan.”

Analysts at Barclays Capital said: “Although we struggle to describe a reserve cut as good news, [this] reduction is far better than we believe many investors have feared following Genel’s more substantial downgrade at Taq Taq.”

Stephane Foucaud, an analyst at First Energy, said: “This is probably a relief to some investors who were expecting the worse following the Taq Taq disaster.”

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