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KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2014
65
34.
CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
As at 30 June
As at 31 December
2014
2013
2013
2012
2011
Audited
Unaudited
Audited
Audited
Audited
USD 000’s USD 000’s USD 000’s USD 000’s USD 000’s
a)
Contingent liabilities -
letters of guarantee
-
2,674
1,628
2,423
16,466
b)
Capital commitments
(other than covered by
letters of guarantee)
106,970
136,700
116,400
114,200
84,952
Capital commitment includes committed exploration drilling and seismic expenditures as specified in the licence.
35.
SUBSEQUENT EVENTS
1)
Subsequent to the period ended 30 June 2014, the Group has issued USD 250 million aggregate principal amount
of its 9.5% Senior Guaranteed Notes due 2019 (the “Notes”). Interest on the Notes will be paid semi-annually in
arrears on 4 February and 4 August of each year, commencing on 4 February 2015. The Notes have been admitted
by the board of the Irish Stock Exchange for listing on the official list and trading on the Global Exchange
Market. Proceeds of the Notes have been used to repay in full amounts outstanding under the Reserve Based
Facilities and the Arab Bank Facility (see note 24). Remaining proceeds, after fees, will be used to partially fund
capital expenditure of the Group, particularly in respect of the Group’s assets in Iraq and for general corporate
purposes.
2)
Subsequent to the period ended 30 June 2014, a restructuring of the Group was undertaken in July 2014 to bring
KEC into the Group. After this restructuring, KEC along with another intermediary holding company called
Kuwait Energy International Limited (Jersey) hold the various Group assets, mainly through a number of BVI
based holding companies.
Following the restructuring, there are a number of ‘associated’ shareholders (holding approximately 26 per cent.
of KEC) still to transfer to ownership of the Company by the end of 2014. However, it is expected that these
shareholders will hold less than 5 per cent of KEC.
KEC is also a 9 per cent shareholder in the Company, however, it is intended to remove this cross-holding.
3)
On 16 July 2014, KEC Kuwait signed a farm out agreement to assign to EGPC a 10% working interest share in
the Block 9 exploration, development and production service contract in Iraq, with an effective date of 1 July
2013. This assignment is subject to final EGPC board approval and certain conditions precedent, including KEC
Kuwait providing a written waiver or other evidence of non-exercise of any preferential rights (including a right
of first refusal to acquire the working interest subject to this proposed farm out) by other parties to the service
contract and written approval of the assignment by the Iraqi government.