KUWAIT ENERGY PLC
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
For the six month period ended 30 June 2017
14
7.
PROPERTY PLANT AND EQUIPMENT
Other fixed assets include a carrying amount of US$ 6.4 million (31 December 2016: US$ 6.8 million) in respect of assets
held under finance leases.
The additions to oil and gas assets mainly relate to Siba and Block 9 in Iraq, and include US$ 8.5 million (31 December
2016: US$ 17.0 million) of finance costs on qualifying assets capitalised during the period and US$ 1.9 million (31
December 2016: US$ 2.4 million) of fair value loss on convertible loans capitalised.
In accordance with IAS 36
Impairment of assets
the Company has made an assessment for indicators of impairment and
has not identified any significant indicators. Based on this review, the Group believes no impairment is required at 30
June 2017. In 2016, due to the reduction in the oil price assumption used in estimating the future cash flows, the Group
recorded an impairment loss of US$ 94.3 million, including US$ 54.5 million on the Siba fields in Iraq, US$ 7.2 million and
US$ 32.6 million on the BEA and Abu Sennan fields in Egypt respectively, which has been recognised in the consolidated
income statement in 2016.
A request for arbitration was filed against the Group (pursuant to the ICC Rules of Arbitration) in 2016 under which the
claimant asserted that it has a right to an increased non-controlling share in one of the Group’s key oil and gas assets
(the “Disputed Interest”). The claimant has requested equitable relief in the form of a conveyance of the Disputed
Interest from the Group to the claimant or, alternatively, a cash amount on account of profits or damages. If the claimant
is successful in its claim, the Group could be required to pay damages in this amount or could be required to transfer the
Disputed Interest to the claimant. No amounts have been accrued regarding this claim as the Group believes that on the
basis of external legal advice its position will be vindicated by the arbitral tribunal following a full review of the facts and
evidence, and is firmly committed to vigorously defending the claim.
Oil and
gas assets
Other fixed
assets
Total
Cost
US$ 000’s
US$ 000’s
US$ 000’s
As at 1 January 2016
1,067,280
23,661
1,090,941
Additions
160,957
142
161,099
Disposal
-
(622)
(622)
Transfer from Intangible exploration and evaluation assets
1,485
-
1,485
Transfer to assets held for sale
(194,962)
(103)
(195,065)
As at 31 December 2016
1,034,760
23,078
1,057,838
Additions
56,154
22
56,176
Disposal
-
(47)
(47)
Transfer from Intangible exploration and evaluation assets
1,785
-
1,785
As at 30 June 2017
1,092,699
23,053
1,115,752
Accumulated Depreciation, depletion, amortisation and impairment
As at 1 January 2016
459,657
9,713
469,370
Charge for the year
60,257
2,137
62,394
Impairment
94,337
-
94,337
Disposal
-
(562)
(562)
Transfer to assets held for sale
(77,070)
-
(77,070)
As at 31 December 2016
537,181
11,288
548,469
Charge for the period
29,500
895
30,395
Disposal
-
(47)
(47)
As at 30 June 2017
566,681
12,136
578,817
Carrying amount
As at 30 June 2017
526,018
10,917
536,935
As at 31 December 2016
497,579
11,790
509,369