Kuwait Energy announces increases in revenue and production during Q1 2013

Kuwait Energy announces increases in revenue and production during Q1 2013

Kuwait Energy (“the Company”), one of the fastest growing independent oil and gas exploration and production companies in the Middle East, today announced an update on its financial and corporate activities during its first quarter.
Highlights
· Q1 revenue up 8.6%, year-on-year, to US$64.0 million (Q1 2012: US$59.0 million)
· Q1 production up 24.2% year-on-year, to 21,568 boepd (Q1 2012: 17,370 boepd)
· Q1 revenue up 11.6%, quarter-on-quarter, to US$64.0 million (Q4 2012: US$57.4 million)
· Q1 production up 7.5%, quarter-on-quarter, to 21,568 boepd (Q4 2012: 20,052 boepd)
· Significant increase in production primarily due to the contribution from the Company’s newly acquired 15% interest in Block 5, Yemen
· Formal completion of acquisition of Jannah Hunt Oil Company (JHOC), Yemen with JHOC’s 15% interest in Block 5 adding c. 5,700 bopd to Kuwait Energy’s production
· Contract signed in January 2013 for exploration and development contract for Block 9, Basra, Iraq with effective date of 3 February 2013
· Continued participation in negotiations for Afghanistan Exploration and Production Sharing Contracts, in Blocks I and IV, in second Afghanistan Bid Round
· Short term, three month, debt facility established with Kuwait International Bank for US$25 million to fund a part of the Company’s consideration for the JHOC acquisition
· Year end reserves audited:
– 2P reserves recorded as 221.6mmboe;
– Working interest contingent risked resources recorded as 48.4mmboe; and
– Best estimate of risked prospective resources recorded as 679.6mmboe
Sara Akbar, Chief Executive Officer of Kuwait Energy, commented:
“I am pleased to announce another quarter of production and revenue increases. During the first quarter, we formally completed our Yemen acquisition and also signed a contract for new exploration in Iraq. We also increased our daily average working interest production to well over the 20,000 boepd level. These are very important operational milestones for the Company and 2013 looks set to be another very exciting year for Kuwait Energy.”
During the quarter, the Company formally completed the acquisition of Jannah Hunt Oil Company (JHOC), a company operating in Yemen, which had a 15% participating interest in Block 5. Block 5 is located in the Marib-Shabwa basin and comprises four oil producing fields. Current total production from this Block is c. 38,000 bopd with Kuwait Energy’s working interest share contributing c. 5,700 bopd.
The Kuwait Energy-led consortium that was awarded the Exploration and Development contract for Block 9 in Basra, Iraq, formally signed the contract in January 2013 with an effective date of 3 February 2013. The contract is valid for a period of 20 years until 2032. The consortium comprises Kuwait Energy and Dragon Oil. Kuwait Energy is the operator of the block with a 70% working interest with Dragon Oil holding the remaining 30%. The consortium submitted a field exploration plan to the Joint Management Committee on 31 March 2013.
Kuwait Energy also continued to participate in negotiations, in the second Afghanistan Bid Round, to finalize the terms of Exploration and Production Sharing Contracts (EPSC) for exploration licences for Block I (Sanduqli) and Block IV (Mazar-i-Sharif). Exploration activity is expected to commence soon after the signing of the EPSCs.
Financially, by the end of the first quarter, Kuwait Energy had drawn down US$50 million of its facility with Abraaj Capital and US$50 million with Qatar First Bank to finance near-term development and growth plans. The Company also drew down a further US$50 million from its US$165 million facility with the International Finance Corporation and Deutsche Bank. A short term facility for three month was established with Kuwait International Bank for US$25 million to fund a part of the JHOC (Yemen Block 5) acquisition.
Source: Kuwait Energy
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