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LANCE
Who we are
Kuwait Energy is an independent oil and gas company actively engaged in the exploration, appraisal,
development and production of hydrocarbons. Kuwait Energy is focused in MENA region and its portfolio
consists of 10 oil and gas assets across Egypt, Iraq, Yemen, and Oman of which we operate seven assets.
Sara Akbar, Chief Executive Officer (CEO), commented:
“Despite the challenging external environment in the industry, I am pleased to report that during the first half
of this year Kuwait Energy has generated positive operating cash flow of US$35.1 million and have optimised
costs in every aspect, reducing capital expenditure, delaying discretionary activities, renegotiating major
contracts and continuing to optimise our portfolio. Block 9, Iraq continues to produce steadily at an average
daily production rate of 3.3 kbopd (WI) which is expected to increase to over 9.0 kbopd (WI) by the end of 1H
2017. We remain focused on bringing Siba online by 1H 2017 and are working closely with all the stakeholders
involved to achieve this.”
Key Operational Highlights
LTIFR stood at 0.38 with over 2.6 million man-hours worked.
Average daily Working Interest production is 24.8 kboepd
(1H 2015: 25.7 kboepd)
, despite continued Block
5, Yemen shut-down.
Iraq Block 9 Faihaa-1 well continues to produce steadily with average daily WI production of 3.3 kbopd. The
Faihaa-2 well has been drilled and is undergoing production testing while the Faihaa-3 well was spud at the
end of August 2016.
An Export Oil Sales Agreement was signed with SOMO in March 2016, the first cargo from Iraq is expected
to be allocated in October 2016 for a total quantity of 300 kbbls (Gross: 500 kbbls); covering Kuwait Energy’s
share of production until the end of June 2016.
The Siba EPC works are progressing with construction activities on the ground. First gas is expected in 1H
2017.
The Abu Sennan Al Jahraa SE-1X exploration well was a successful discovery and was put on production in
August 2016. It is currently producing at an average WI daily rate of 200 boepd (Gross: 400 boepd).
Key Financial Highlights
Cash and cash equivalents balance of US$54.5 million and net debt of US$316.3 million. No debt maturities
in the next 12 months.
Positive operating cash flow of US$35.1 million (
1H 2015: US$51.5 million
), in a low oil price environment.
First half revenue US$64.8 million (
1H 2015: US$89.1 million
), average realised oil price US$34.8/bbl
(1H
2015: US$57.6 /bbl)
.
Capital expenditure incurred US$80.7 million; US$78.6 million was incurred on development activities and
US$2.1 million spent on exploration activities. Actual cash spent on capital expenditure was US$48.0 million
due to timing difference in payment to creditors.
Working diligently to manage costs. Reduced field operating cost per barrel by 17% to US$6.0 per barrel
and net general and administrative expenses by 25% to US$6.9 million.