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Liquidity Risk Management & Going Concern
The Group closely monitors and manages its liquidity risk. Cash forecasts are regularly produced and sensitivities
run for different scenarios including, but not limited to, changes in oil prices, different production rates from the
Group’s producing assets and delays to development projects. In addition to the Group’s operating cash flows,
portfolio management opportunities are reviewed to potentially enhance the financial capability and flexibility
of the Group. In the current low oil price environment, the Group has taken appropriate action to reduce its cost
base (both quantum and timing of payments) and had US$54.5 million in cash at the end of half-year 2016.
The half-year 2016 consolidated financial statements have been prepared on the going concern basis. Further
information relating to use of the going concern assumption is provided in the note 3 ‘Going Concern’ section of
the consolidated financial statements.
Principle Risks & Uncertainties
The Group has identified its principle risk and uncertainties summarised below which could have a material
impact on the Group’s performance over the remaining six months of the financial year and could cause actual
results to differ materially from the expected and historical results. A detailed explanation of these principle
risks and how the group seeks to mitigate the risks, can be found on page 46 and 47 of the 2015 annual report
which is available a
t www.kuwaitenergy.co .
Oil prices volatility
Operational hazards (HSSE)
Project execution
Execution of financial strategy to maintain appropriate liquidity
Geopolitical instability