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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2016
26
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONTINUED)
Commercial reserves
Calculation of the recoverable value of oil and gas properties and depletion calculations require estimates to be made
of quantities of commercial oil and gas reserves, which are based on estimates determined by Kuwait Energy’s
qualified petroleum engineers and are subject to third party review. Management believes these reserves to be
commercially productive and will provide revenues to the Group adequate to recover remaining net un-depreciated
and un-depleted capitalised oil and gas properties as at 30 June 2016.
Convertible loans fair value
As outlined in note 22, the total finance charge associated with the Group’s convertible loans, which are held at fair
value, depends on the exercise of certain conversion or prepayment options by the lenders and the Company which
are future events and inherently uncertain. At the balance sheet date the Group has assessed the fair values of the
loans based on their best estimate of the relative likelihood of the occurrence of each conversion or prepayment
option.
5.
SEGMENTAL INFORMATION
The information reported to the Group’s Executive Management for the purposes of resource allocation and
assignment of segment performance is specifically focused on the geographical area, namely Egypt, Iraq, Yemen and
rest of the world (included in others).
The Group has one class of business, being the exploration, development, production and sale of crude oil and natural
gas. Therefore all information is being presented for geographical segments. All of the segment revenue reported
below is from external customers. No revenue or assets arose in or relate to Jersey, the Company’s country of domicile,
in either year.
Other operations include discontinued operations, unallocated expenditure and net liabilities of a corporate nature.
The liabilities comprise the Company’s external debt and other non-attributable corporate liabilities. The unallocated
capital expenditure for the year comprises the acquisition of non-attributable corporate assets.
Information about major customers
Major customers
Country
Six months
Period ended 30 June
Year ended
31 December
2016
2015
2015
Audited
Unaudited
Audited
US$ 000’s
US$ 000’s
US$ 000’s
Egyptian General Petroleum Corporation (EGPC)
Egypt
50,455
80,235
146,774
South Oil Company (SOC)
Iraq
14,364
-
-
Exxon Mobil
Yemen
-
8,868
8,868