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KUWAIT ENERGY PLC
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
For the three month period ended 31 March 2017
13
10.
ASSETS HELD FOR SALES
Siba farm-out
In October 2016 the Group has signed a farm-out agreement with an effective date of 1 January 2016 to assign a 20%
paying and 15% revenue interest in the Iraq Siba area gas development and production service contract. Following
completion of certain conditions precedent, including the written approval of the assignment by the Iraqi government,
the Group will have 40% paying and 30% revenue interest in Siba. Under the terms of the farm-out agreement, the
farmee will settle the consideration by paying the Group’s share of costs of a major related contract with any balance
being payable from allocation of cost recovery receivable when production commences from this field. In May 2017
the Group has completed this farm-out transaction (see note 14).
Abu Sennan farm-out
In December 2016 the Group signed a farm-out agreement to assign a 25% interest in Abu Sennan in Egypt with an
effective date of 31 December 2016. Under the terms of farm-out agreement the Group has received an advance of
US$ 7.0 million. Following the completion of pre-emption and government approvals, the Group will have 25% revenue
interest and 53% cost interest in Abu Sennan. Farm-out is expected to complete in 2017 and the receipt of the required
government approvals, which are usual and customary for sale of such assets, is considered highly probable.
The assets and liabilities held for sale are carried at fair value less costs to sell of the sales consideration for each farm-
out. The fair value of the deferred consideration was calculated by discounting expected receipts based on
management’s best estimate of timing.
The major classes of assets and liabilities comprising the assets classified as held for sale:
31 March
31 December
2017
2016
Unreviewed
Audited
US$ 000’s
US$ 000’s
Intangible exploration and evaluation assets
5,989
5,989
Property, plant and equipment
122,833
117,995
Inventories
1,648
1,493
Trade and other receivables
316
282
Cash and cash equivalents
102
385
Total assets classified as held for sale
130,888
126,144
Trade and other payables
17,776
22,462
Total liabilities directly associated with assets classified as held for sale
17,776
22,462
Net assets of disposal groups
113,112
103,682
11.
TRADE AND OTHER PAYABLES
31 March
31 December
2017
2016
Unreviewed
Audited
US$ 000’s
US$ 000’s
Trade Payables and accruals
118,234
118,514
Advance against farm-out of working interest
7,000
3,500
Joint venture partners payables
5,835
7,568
Accrued interest payable
5,478
10,313
Salaries and bonus payables
4,391
4,473
140,938
144,368