79
expenditure in 2012. The increase in purchases of property, plant and equipment was primarily attributable to a $23.0
million capital expenditure in respect of the Siba field in Iraq, a $14.9 million capital expenditure in respect of Abu
Sennan in Egypt, and a $13.7 million capital expenditure in respect of ERQ in Egypt, compared to $10.5 million, $1.5
million and $3.3 million in respect of these fields in 2012, respectively.
Net cash used in investing activities increased by $68.0 million, or 103.2%, from $65.9 million in 2011 to $133.9 million
in 2012. Adjusting for net cash used in investing activities in the Group’s discontinued businesses in Russia and Ukraine
in 2012 of $30.4 million, net cash used in investing activities in 2012 would have been $103.5 million. The increase was
primarily attributable to a $30.0 million advance payment for the purchase of Block 5 in Yemen that was paid in 2012, as
well as $15.0 million in capital expenditure for development wells in the Siba and Mansuriya fields in Iraq, advance
payment of $5.0 million for purchase of certain parts and equipment for the exploration well in Latvia, $4.0 million in
capital expenditure for the drilling of a well in Ukraine, and the loss of $3.7 million in cash provided as a letter of
guarantee in Yemen upon the Group’s relinquishment of Block 74. The significant increase in cash used in investing
activities in 2012 as compared to 2011 was also due, in part, to the inclusion of cash from investing activities received as
deferred proceeds during 2011 from farm out arrangements in respect of the 2010 sale of a 22% working interest in Abu
Sennan and a 15% working interest in Mesaha (Block 6) in Egypt to Beach Energy Limited, totalling $19.4 million.
These disposals, which partly offset net cash used in investing activities in 2011, did not recur in 2012. Partly offsetting
the increase in cash used in investing activities in 2012 were lower levels of drilling and facility capital spending in
Egypt, Russia, Yemen and Pakistan in 2012 as compared to 2011.
For additional information see “—
Capital expenditures
” below.
Net cash generated by (used in) financing activities
Net cash generated by financing activities decreased by $98.6 million, from a cash inflow of $89.3 million in the three
months ended 31 March 2013 to a cash outflow of $9.3 million in the three months ended 31 March 2014. This decrease
was primarily attributable to drawdowns of the Group’s Borrowing Base Facilities and Convertible Loans and entry into
a $25.0 million short-term wakala with Kuwait International Bank in the three months ended 31 March 2013, as well as
partial repayment of loans from Arab Bank and Deutsche Bank in the three months ended 31 March 2014.
Net cash generated by financing activities increased by $54.1 million from $53.0 million in 2012 to $107.1 million in
2013. This increase was primarily attributable to a drawdown of $60.0 million on the Arab Bank Facility loan, used to
finance the acquisition of the remainder of the Group’s interest in Block 5 in Yemen, as well as further draws on the
Group’s Borrowing Base Facilities and Convertible Loans in 2013, resulting in higher debt levels and higher levels of
finance costs paid in 2013.
Net cash generated by financing activities increased by $14.9 million, or 39.1%, from $38.1 million in 2011 to $53.0
million in 2012. This increase was primarily attributable to first draws on the Convertible Loans, partly offset by
repayment on maturity of a loan from IFC.
Debt financing
The following table sets out the Group’s borrowings as at 31 March 2014. See
“Capitalisation.”
Currency
Annual
Interest
Rate
Final
Maturity
Interest
Payment
Dates
Amount
Drawn as at
31 March 2014
($ thousands)
Borrowing Base Facilities
(1)
...........
US dollars
Libor+5% 30 June 2017 June/Dec
103.9
Abraaj Investments Management
Limited convertible term loan
facility ............................................
US dollars
8%
(2)
15 Dec 2018
May/Nov
50.0
Qatar First Bank convertible term
loan facility ....................................
US dollars
8%
(2)
10 March
2019
Mar/Sept
50.0
Arab Bank Facility
(3)
.......................
US dollars
Libor+5% 25 Dec 2016
Mar/June/
Sept/Dec
55.0
Total
258.9
(1)
As at 31 March 2014, the aggregate undrawn amount available under the Borrowing Base Facilities was $61.1 million. The assets pledged to
the lenders under the Borrowing Base Facilities include the subsidiaries operating the Group’s Area A, Burg El Arab, ERQ and Abu Sennan
