109
For the six months
ended 30 June
2014
(boepd)
Block 43 ...................................................
371
Yemen Total
..........................................................
4,164
Oman
Oman KSF
(1)
...........................................................
2,552
Group average daily working interest
production
.............................................................
23,098
(1)
Reflects the contribution of the Group’s 20% interest in Medco LLC, which holds a 75% working interest in the Karim Small Fields in
Oman. As the Group does not control Medco LLC, under IFRS 11 Medco LLC cannot be consolidated with the Group’s revenue or expense
items on its consolidated income statement. The Group’s interest in Medco LLC is therefore accounted for in the Group’s consolidated
income statement under “Net result from joint venture.”
Since 31 March 2014, the Group’s average daily working interest production has increased by over 1,000 boepd,
primarily due to the Shahd SE 8 development well in East Ras Qattara field in Egypt, which has contributed
approximately 1,850 boepd to the Group’s average daily working interest production since coming on production in May
2014. This increase has been partially offset by Yemen Block 5 shutdowns due to security-related disruptions in the main
export pipeline during May 2014 and in Block 43 in Yemen from 23 June to 4 July 2014 due to a labour strike.
Results of operations for the six months ended 30 June 2014
The Group has not yet finalized its financial statements in respect of the six months ended 30 June 2014. Based on
currently available information, the Group expects that revenue for the six months ended 30 June 2014 will be similar to
revenue for the three months ended 31 March 2014 due to increased production from Egypt, offset by production
decreases due to the Yemen shutdowns in Block 5 and Block 43. In all other respects, the Group anticipates that its
results for the six months ended 30 June 2014 will be generally in line with trends for the three months ending 31 March
2014.
In the second quarter of 2014, the Group received further payments from EGPC in April 2014 and May 2014, resulting
in receipt of total cash payments of $69.9 million against amounts owed by EGPC, and further decreasing the average
months of arrears from EGPC to the Issuer to 6 months and the total amount of receivables due to the Group from EGPC
to $124.4 million as at 30 June 2014. The Group received an additional cargo payment of $26.4 million on 9 July 2014.
Exploration and development programme
Recent developments in the Group’s exploration and development programmes include the following:
•
Block 9 (Iraq)
: The first exploration well in the block, for which drilling commenced in March 2014, has
reached a depth of 2,720m and is expected shortly to enter the Mishref formation, one of two formations
targeted. Under the terms of the exploration, development and service contract for Block 9, the Group is
required to drill on exploration well to a minimum depth of 4,500m, or 500m below the top of the Sulaiy
formation.
•
Siba (Iraq)
: On 17 May 2014, the Group commenced a programme to drill seven appraisal/development wells
by the end of 2016. The Group’s activities in Siba are focused primarily on commencing commercial
production, with the aim of achieving a daily average production rate of 50 mmscfd by July 2015 and attain the
plateau gas rate of 100 mmscfd by the end of 2015. The Group also recently entered a contract with UOP for
the supply of equipment for a central gas processing facility for the Siba field, which will have the capacity to
process 100 mmscfd.
Disposals and farm out arrangements
On 30 April 2014, the Group completed the sale of its Ukraine assets to Zoynel Limited, a Cypriot investment group, for
total cash consideration of $18.2 million, of which $13.2 million was used to settle existing liabilities of Kuwait Energy
Ukraine LLC and $5.0 million was paid in cash.
