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31 May 2014, the Post-Closing Guarantor represented 3.2% of the Group’s 1P reserves on a net entitlement basis and 12.0% of the Group’s
NPV of 1P reserves.
(6)
As a result of certain Kuwaiti law local ownership requirements the Issuer has entered into certain arrangements (the “
KEC Kuwait
Restructuring
”) with entities established in the GCC to permit the Issuer to exercise ownership and control of Kuwait Energy Company
KSCC (“
KEC Kuwait
”). As a result, under the Group’s current ownership structure, KEC Kuwait is a direct subsidiary of the Issuer, by
virtue of the Management Agreement and TRS as described in “
The Group’s business—Corporate structure
.” To implement this ownership
arrangement, the Issuer engaged in an ongoing exchange offer for the shares of KEC Kuwait. At the date of this Offering Memorandum,
shareholders holding over 51% of the shares of KEC Kuwait have transferred their shares in KEC Kuwait (in exchange for ordinary shares
in the Issuer) to a GCC SPV structure, with the SPV, Awal II Shares and Securities Co. SPC (“
Awal II
”), maintaining legal title to the KEC
Kuwait shares while the Issuer maintains contractual rights to any economic benefit of such KEC Kuwait shares (by way of the TRS).
(7)
As at 31 December 2013, after giving effect to the issue and sale of the Notes and the application of the proceeds thereof as described under
“
Use of proceeds
”, on a consolidated basis, the members of the Group that will not guarantee the Notes (the “
Non Guarantors
”) would
have had $100.0 million in borrowings outstanding.
(8)
Following the Offering, the Group intends to transfer all of the shares of Kuwait Energy Iraq Ltd to KEC Kuwait.
