82
Trade and other payables .......................................
96,159
-
-
-
96,159
Operating leases
(4)
...................................................
1,450
13
-
-
1,463
Total
.......................................................................
172,032
64,267
111,197
250,000
597,496
(1)
Including aggregate principal amount of the Notes offered hereby. Assumes full repayment of Reserve Based Lending and Arab Bank Loan.
(2)
Including scheduled payments of both interest and principal. The figures provided assume full repayment of Convertible Loans at maturity.
See “
Description of other indebtedness—Convertible Loans
.”
(3)
Reflects amounts expected to be spent under the terms of the Group’s exploration licenses (assuming these are continued and not
relinquished) as at 31 March 2014, with estimated maturity profile based on when the Issuer believes the obligations will be discharged as
opposed to the actual date by when the obligation is required to be discharged. The committed exploration capital expenditures are included
within the Group’s overall exploration and development capital expenditures, as described in detail in “
The Group’s Business—Planned
capital expenditure and near-term exploration and appraisal programmes
,” which includes amounts which the Group can choose not to pay
by relinquishing the related licenses. Totals provided here do not include performance guarantees to be entered into in respect of the Group’s
commitments in Iraq.
(4)
Including minimum operating lease payments.
Under the terms of the Group’s licenses, the Group is committed to meeting certain work programme obligations which
will necessitate certain committed capital expenditures prior to the expiry of the licences. In general, these committed
capital expenditures relate to seismic testing for prospective oil and gas deposits, the requirement to drill a specified
number of exploratory or appraisal wells, benchmarks to be met in working over existing or abandoned wells, and
undertaking environmental impact assessments or reserves estimation studies. See
“The Group’s business—Exploration,
appraisal and development programmes.”
Under certain of its licences, the Group is required to provide letters of credit
of specified amounts, as a bond of future performance under its minimum work commitments. If these minimum work
commitments are not fulfilled, for example due to the Group deciding to relinquish the licence, these amounts will be
recognised as an expense on the Group’s consolidated income statement as exploration expenditures written off.
Off Balance Sheet arrangements
In January 2011, KEC Kuwait (the then holding company of the Group) entered into an arrangement (the “
Share
Purchase Arrangement
”) to acquire 19.3 million of the outstanding ordinary shares of KEC Kuwait, to be used to
incentivize and maintain key employees. Under the terms of the Share Purchase Arrangement, Mohammad Al Howqal,
the Group’s Chief Operating Officer (the “
COO
”), acting on behalf of the employees of KEC Kuwait, entered into an
agreement with the acquirer of the ordinary shares, Al Tijari Investment Company K.S.C(C) (“
Al Tijari
”) under which
the COO committed to purchase the 19.3 million ordinary shares of KEC Kuwait then held by Al Tijari prior to the end
of January 2012 at an agreed price. Because KEC Kuwait anticipated at that time that it would undertake an initial public
offering (“
IPO
”) of its ordinary shares during the course of 2011, the arrangement was intended to allow key employees
to purchase shares from Al Tijari at a favourable price after the IPO.
As a result of the restructurings in 2011 and 2014, the employee incentive structure underlying the Share Purchase
Arrangement became obsolete in the context of a Jersey company, and the Share Purchase Arrangement was also
amended to substitute Securities Group K.S.C.C. (“
SG
”) for Al Tijari and effectively substitute the 19.3 million ordinary
shares of KEC Kuwait with 4,825,001 shares of the Issuer. In May 2014, the COO was required by SG to purchase
792,741 shares of the Issuer for approximately $1.9 million pursuant to the Share Purchase Arrangement (with the
assistance of a loan from the Issuer until such time as the COO is able to sell such shares and repay the loan), leaving
4,032,260 shares of the Issuer remaining to be purchased.
Under the Share Purchase Arrangement now in place, upon notice by SG of the exercise of its option to put the ordinary
shares to the COO on or before 1 May 2015, the COO will be obliged to pay the value of the remaining ordinary shares,
or approximately $9 million, to SG. Unless otherwise agreed, in the event of SG exercising its rights to put the ordinary
shares to the COO, the Issuer has agreed to lend the COO the purchase price until such time as the COO is able to sell
the 4,032,260 ordinary shares of the Issuer and repay the loan to the Issuer. As a result, as at 31 December 2013, the
Issuer’s obligation to pay an amount of approximately $11 million to the COO represented an off balance sheet
obligation of the Issuer. See note 31(d) to the consolidated financial statements of Kuwait Energy plc Group for the year
ended 31 December 2013 included herein.
Critical accounting policies subject to significant judgments, estimates and assumptions
The Group’s significant accounting policies are more fully described in the notes to the consolidated financial statements
presented elsewhere in this Offering Memorandum.
