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KUWAIT ENERGY PLC
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
For the nine month period ended 30 September 2016
12
10.
CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
30 September
31 December
2016
2015
Unaudited
Audited
US$ 000’s
US$ 000’s
a)
Contingent liabilities - letters of guarantee
4,000
7,500
b)
Capital commitments
35,525
46,725
c)
Agreement to purchase shares
6,273
7,121
Capital commitments includes committed seismic expenditures, exploration and development well drilling as
specified in the licence.
11.
FAIR VALUE OF FINANCIAL INSTRUMENTS
As at 30 September 2016 and 31 December 2015 the convertible loans were only the financial instrument carried at
fair value and were classified as level 3. There was no financial instrument classified as level 1 and level 2.
The following table shows a reconciliation of movements in the fair value of convertible loan categorised within Level
3 between the beginning and the end of the reporting period.
30 September
31 December
2016
2015
Unaudited
Audited
US$ 000’s
US$ 000’s
As at 1 January
119,400
117,829
Change in fair value
10,769
10,974
Payment
(7,269)
(9,403)
As end of the period
122,900
119,400
12.
SUBSEQUENT EVENTS
a)
Subsequent to the period end, the Group has signed a farm-out agreement to assign to EGPC a 20% paying (15%
revenue) interest in the gas development and production service contract for the Siba contract area in Iraq, with an
effective date of 1 January 2016. This assignment, which is subject to certain conditions precedent including the
written approval of the assignment by the Iraqi government, will materially reduce the Group’s contractual payment
commitments in 2016 and 2017.
b)
Subsequent to the period end, the Group has signed an agreement with Vitol for a senior secured crude oil revolving
prepayment facility of up to US$ 100 million, repayable principally by the delivery of the Group’s crude oil
entitlement from Block 9, Iraq (in settlement of remuneration fees and costs under the exploration, development
and production service contract for Block 9, Iraq). The proceeds of the facility will primarily be used for accelerating
the development of certain assets to bring additional production online.