Information from Interim report January - June 2017 Misen Energy AB (publ)
Following is a summary of the financial information given in Interim Report January - June 2017 (H1 2017) from Misen Energy AB (publ) published today. The complete report is available on the Company's website (http://misenenergy.se/en/main/investors/reports_eng) and is attached to this release.
Summary of results:
- Since December 2016 PJSC Ukrgasvydobuvannya has continued, as the Company believes, manifestly unlawful actions and refused to provide services in respect of production, collection, treatment and transportation of hydrocarbons to the JA. These actions resulted in zero production levels in H1 2017 and, therefore, prevented the JA from selling hydrocarbons.
- Accumulated earnings per share for H1 2017 are negative.
Key events during H1 2017:
- Misen Enterprises AB and LLC Karpatygaz participate in an arbitration proceeding commenced by PJSC Ukrgasvydobuvannya in August 2016 under the JAA No.3 (as amended and restated). In February 2017, Misen Enterprises AB and LLC Karpatygaz received the Statement of Claim whereby PJSC Ukrgasvydobuvannya requested termination of the JAA No.3. In May 2017, Misen Enterprises AB and LLC Karpatygaz submitted their Statement of Defence and agreed with termination of the JAA No.3, albeit on different ground.
- The Government of Ukraine continued to impose a 70 % subsoil use charge for enterprises established under Joint Activity Agreements. This has been done in accordance with the laws adopted in late 2014.
- In May 2017, the JA and PJSC Ukrgasvydobuvannya renewed the terms of the Khrestyschenska BCS lease agreement. In addition, Joint Activity signed agreements with PJSC Ukrgasvydobuvannwhat regards lease of other 6 booster compression stations (BCSs).
- In May 2017, Misen Energy AB (publ) obtained a loan of MEUR 1 with a fixed loan fee KEUR 150 from Powerful United Limited.
- Due to financial constraints imposed by the increased subsoil use tax as well as PJSC Ukrgasvydobuvannya’s, as the Company believes, manifestly unlawful actions, Misen Group almost completely halted investments into the development program in H1 2017.
H1 2017 (H1 2016):
- Consolidated operating group loss: KSEK -45,649 (41,102)
- Consolidated group net turnover: KSEK 14,033 (393,412)
- Earnings per share: SEK -0.22 (0.11)
- Production of natural gas: 0 million cubic meters (333)
Key events after end of H1 2017:
- In accordance to the lease agreements concluded in May 2017, LLC Karpatygaz transferred the BCSs to the use until 30 April 2018 to PJSC Ukrgazvydobuvannya. As of publishing of this report, PJSC Ukrgasvydobuvannya failed to make the lease payments to the JA.
- As of publishing of this report, PJSC Ukrgazvydobuvannya refused to deliver hydrocarbons extracted since December 2016 until July 2017 to the JA (since June 2017 excluding incremental production of natural gas). Being prevented from selling the hydrocarbons Misen Group could not properly implement JAA No.3.
- On 17 August 2017, the Kyiv Court of Appeal obliged PJSC Ukrgazvydobuvannya to deliver hydrocarbons produced by the JA from December 2016 to April 2017. This court ruling is subject to immediate execution, however, could be appealed by PJSC Ukrgazvydobuvannya before the Supreme Court of Ukraine. As of publishing of this report, PJSC Ukrgazvydobuvannya refused to implement the court decision.
- Misen Enterprises AB and LLC Karpatygaz received the Statement of Reply from PJSC Ukrgazvydobuvannya in July 2017.
- In July 2017, Misen Energy AB (publ) closed the sale of 8 % of the shares and shares capital in Misen Enterprises AB to Powerful United Limited. The purchase sum amounted to MEUR 3 and was paid by Powerful United Limited taking over Misen Energy AB (publ) existing debt plus cash payment amounting to MEUR 1.85.
For further information, please contact:
Göran Wolff, MD
Misen Energy AB (publ) (formerly Svenska Capital Oil AB (publ)) is a Swedish upstream oil and gas company with operations in Ukraine. The company was founded in 2004 and its shares are traded on Nasdaq First North since 12 June 2007.In 2011, Misen Energy AB (publ) acquired Misen Enterprises AB and its Ukrainian subsidiary, LLC Karpatygaz, including the rights to 50.01% of the revenue and profit from a gas production project in Ukraine. Under IFRS rules, this transaction is classified as a reverse takeover. In consideration of the acquisition, a new share issue was carried out. The gas producing assets were acquired by production cooperation via a joint activity project governed by a Joint Activity Agreement between at that time the wholly-owned direct and indirect subsidiaries of Misen Energy AB (publ), i.e. Misen Enterprises AB and LLC Karpatygaz (together 50.01%) and PJSC Ukrgasvydobuvannya (49.99%), a subsidiary of the National Joint Stock Company Naftogaz of Ukraine. PJSC Ukrgasvydobuvannya is the largest producer of natural gas in Ukraine. The purpose of the Joint Activity Agreement is to significantly increase production of gas and oil by providing modern technologies via a large-scale investment program for the purposes of attainment of profits.
In June 2016 and in July 2017 Misen Energy AB (publ) sold respectively 37.5% and 8% of Misen Enterprises AB shares to the Hong Kong based company Powerful United Limited. Owning (the remaining) 54.5% of Misen Enterprises AB shares, Misen Energy AB (publ) maintains full control of the company and preserves a right to obtain 54.5% of the future dividends from the operations in Ukraine.
The registered office of Misen Energy AB (publ) is in Stockholm and the shares are traded on First North under identification ticker MISE. The Certified Adviser of the company at Nasdaq First North is Erik Penser Bank AB.
For further information, please visit our website www.misenenergy.se.
This information is information that Misen Energy AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on 31 August 2017.