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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
26
14.
PROPERTY PLANT AND EQUIPMENT
*Other fixed assets includes item such as building, fixtures and fittings, motor vehicles and office equipment. Its carrying
amount includes an amount of USD 7.5 million (2014: USD nil) in respect of assets held under finance lease (note 24).
Additions
The additions to oil and gas assets mainly relates to Iraq Siba and Block 9, and include USD 16.5 million (2014: USD 7.3
million) of finance costs on qualifying assets capitalised during the year (see note 9) and USD 1.7 million (USD 3.8 million)
of fair value loss on convertible loans capitalised. It also includes an increase in estimated decommissioning cost of USD
0.1 million (2014: USD 9.4 million).
Acquisition of asset
During 2015, the Group completed the acquisition of an additional 25% working interest effective 15 January 2015 in the
BEA in Egypt from Gharib Oil Fields (‘Gharib’) for a purchase consideration of USD 21
.4 million. The purchase was
accounted for as an asset acquisition rather than a business combination. The net cash outflow arising on the acquisition
was USD 3.9 million. The remaining consideration was settled by offsetting receivables otherwise due from Gharib. Oil
and gas assets with a gross cost of USD 22.2 million were acquired, however the net oil and gas assets addition from the
transaction was USD 16.8 million as USD 5.4 million had been capitalised in prior periods under the terms of a carry
arrangement with Gharib.
Farm-out and disposal
During September 2015, the Group completed the farm-out of a 10% participating interest in the Iraq Block 9 exploration,
development and production service contract to EGPC, resulting in a profit of USD 33.9 million. The Group now has a
60% working interest share in Block 9.
During the year, the Group disposed of its interest in Yemen Block 43. Following the disposal, the related costs of
USD 24.9 million and accumulated depletion of USD 24.9 million have been removed with no income statement impact.
Oil and
gas assets
Other fixed
assets*
Total
Cost
USD 000’s
USD 000’s
USD 000’s
At 1 January 2014
585,008
17,309
602,317
Additions
208,196
1,130
209,326
Disposal
-
(15)
(15)
Transfer from Intangible Exploration and Evaluation (note 13)
66,996
-
66,996
At 31 December 2014
860,200
18,424
878,624
Additions
210,954
11,311
222,265
Acquisition of asset
16,769
-
16,769
Transfer
6,074
(6,074)
-
Disposal
(37,066)
-
(37,066)
Transfer from Intangible Exploration and Evaluation (note 13)
10,349
-
10,349
At 31 December 2015
1,067,280
23,661
1,090,941
Accumulated Depreciation, depletion, amortisation and impairment
At 1 January 2014
246,664
6,686
253,350
Charge for the year
81,853
1,652
83,505
Impairment
19,247
-
19,247
Disposal
-
(15)
(15)
At 31 December 2014
347,764
8,323
356,087
Charge for the year
67,757
1,390
69,147
Impairment
69,010
-
69,010
Disposal
(24,874)
-
(24,874)
At 31 December 2015
459,657
9,713
469,370
Carrying amount
At 31 December 2015
607,623
13,948
621,571
At 31 December 2014
512,436
10,101
522,537
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