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KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2014
40
15.
ACQUISITION OF SUBSIDIARY
On the 31 January 2013 the Group completed the acquisition of 100% of Jannah Hunt Oil Company (Hunt) by
acquiring its shares, a company with oil and gas assets in Yemen. The acquisition of Hunt added a 15% participating
interest in the producing Block 5 licence. The transaction had an effective date of 1 October 2012 but completed on 31
January 2013 and this is therefore the acquisition date. The transaction is accounted for in 2013 as a business
combination in accordance with IFRS 3, ‘Business Combinations’.
Fair value on acquisition
USD 000’s
Non-current assets
Property, plant and equipment
129,922
Current assets and current liabilities
Inventories
8,098
Trade and other receivables
175
Cash and cash equivalents
961
Trade and other payables
(4,466)
Non-current liabilities
Future decommissioning provision
(965)
Purchase consideration paid in cash
133,725*
* Of which approximately USD 30 million was paid in 2012.
The total purchase consideration equals the aggregate of the fair value of the identifiable assets and liabilities of
Jannah Hunt Oil Company and therefore no goodwill has been recorded on acquisition. The fair value is arrived at by
Level 3 fair value measurements. During the interim financial statement period for the six months ended 30 June 2013,
the valuation exercise to determine the fair value of assets and liabilities was not concluded and hence the amounts
reported were preliminary.
Transaction costs of USD 996 thousand in respect of the acquisition were recognised in the 2013 consolidated income
statement.
From the date of acquisition to 31 December 2013, Jannah Hunt Oil Company contributed USD 54.9 million to Group
revenues and a profit of USD 4.6 million to the profit of the Group. If the acquisition had been completed on the first
day of 2013, Group revenues and loss for the period would have been USD 267.1 million and USD 281.0 million
respectively.
There were no acquisitions representing business combinations in 2014, 2012 and 2011.