KUWAIT ENERGY plc GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2013
F-56
15.
ACQUISITION OF NEW SUBSIDIARY
On the 31 January 2013 the Group completed the acquisition of 100% of Jannah Hunt Oil Company (Hunt) by
acquiring its shares, a company with oil and gas assets in Yemen. The acquisition of Hunt added a 15%
participating interest in the producing Block 5 licence, adding to the Group’s existing portfolio. The transaction
had an effective date of 1 October 2012 but completed on 31 January 2013 and this is therefore the acquisition
date. The transaction is accounted for in 2013 as a business combination in accordance with IFRS 3, ‘Business
Combinations’.
Fair value on acquisition
USD 000’s
Non-current assets
Property, plant and equipment
129,922
Current assets and current liabilities
Inventories
8,098
Trade and other receivables
175
Cash and cash equivalents
961
Trade and other payables
(4,466)
Non-current liabilities
Future decommissioning provision
(965)
Purchase consideration paid in cash
133,725*
* Of which approximately USD 30 million was paid in 2012.
The total purchase consideration equals the aggregate of the fair value of the identifiable assets and liabilities of
Jannah Hunt Oil Company and therefore no goodwill has been recorded on acquisition. The fair value is arrived at
by Level 3 fair value measurements. During the interim financial statement period for the six months ended 30
June 2013, the valuation exercise to determine the fair value of assets and liabilities was not concluded and hence
the amounts reported were preliminary. The fair valuation exercise has since been completed which resulted in a
reduction in inventory by USD 477 thousand and an increase in property, plant and equipment by USD 1,588
thousand.
Transaction costs of USD 996 thousand in respect of the acquisition were recognised in the 2013 income
statement.
From the date of acquisition, Jannah Hunt Oil Company has contributed USD 54.9 million to Group revenues and
a profit of USD 4,566 thousand to the profit of the Group. If the acquisition had been completed on the first day
of the financial year, Group revenues and loss for the period would have been USD 289 million and USD 258.2
million respectively.
There were no acquisitions involving business combinations in 2012.
