Information from Interim report January - September 2017 Misen Energy AB (publ)
Following is a summary of the financial information given in Interim Report January - September 2017 (9M 2017) from Misen Energy AB (publ) published today. The complete report is available in both English and Swedish on the Company's website: http://misenenergy.se/repository/Financial_reports_ENG/Misen_Energy_Q3_2017_ENG.pdf
Summary of results:
- Since December 2016 PJSC Ukrgasvydobuvannya has continued, as Misen Energy AB (publ) 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 for 9M 2017 and, therefore, prevented the JA from selling hydrocarbons.
- Accumulated earnings per share for 9М 2017 are negative.
Key events during 9M 2017:
- 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 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 during 9M 2017 to the JA (since June 2017 excluding incremental production of natural gas related to leased BCSs). Being prevented from selling the hydrocarbons Misen Group could not properly implement JAA No.3.
- 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.
- Misen Enterprises AB and LLC Karpatygaz received the Statement of Reply from PJSC Ukrgazvydobuvannya in July 2017. Therein PJSC Ukrgazvydobuvannya maintained its claims, except for continuation of the JAA No.3.
- In August 2017, the Kyiv Court of Appeal obliged PJSC Ukrgazvydobuvannya to deliver hydrocarbons produced by the JA from December 2016 to April 2017. However, PJSC Ukrgazvydobuvannya appealed the ruling before the Supreme Court of Ukraine.
- In September 2017, PJSC Ukrgasvydobuvannya submitted criminal complaint to the National Anticorruption Bureau of Ukraine (thereafter as “NABU”). As a result, NABU initiated a pre-trial investigation in criminal case what regards invalidation of the Amendment No.4 (et al. concluded afterwards) to the JAA No.3.
- In September 2017, the Supreme Court of Ukraine reversed decisions of lower courts related to Sberbank Leasing case, which ordered PJSC Ukrgazvydobuvannya, Misen Enterprises AB and LLC Karpatygaz to pay to Sberbank Leasing approximately 37 MUSD and returned the case for reconsideration in the new circle.
9M 2017 (9M 2016):
- Consolidated operating group loss/income: KSEK -64,004 (25,252)
- Consolidated group net turnover: KSEK 22,471 (550,312)
- Earnings per share: SEK -0.26 (0.02)
- Production of natural gas: 0 million cubic meters (493.8)
Key events after end of 9M 2017:
- As of publishing of this report, PJSC Ukrgazvydobuvannya refused to deliver hydrocarbons extracted since December 2016 until October 2017 to the JA (since June 2017 excluding incremental production of natural gas related to leased BCSs). Being prevented from selling the hydrocarbons Misen Group could not properly implement JAA No.3.
- In October 2017, the Supreme Court of Ukraine reversed decisions of lower courts, which obliged PJSC Ukrgazvydobuvannya to deliver hydrocarbons produced by the JA from December 2016 to April 2017, and returned the case for reconsideration in the new circle.
- In October 2017 Misen Enterprises AB and LLC Karpatygaz submitted their Statement of Rejoinder, confirmed their agreement on termination of the JAA, albeit on different grounds than argued by UGV,and requested the Arbitral Tribunal to dismiss the UGV’s claims.
- In November 2017 the court held hearing in Sberbank Leasing case . The court postponed the proceeding to June 2018 and obliged PJSC Ukrgazvydobuvannya to properly notify Misen Enterprises AB about the ongoing court proceeding.
- NABU finished its pre-trial investigation and in October 2017 submitted a statement claim to the Commercial Court of Kiev. NABU requested the court to invalidate the Amendment No.4 to the JAA No.3 and the agreement for the provision of services on production, collection, treatment and transportation of natural gas, natural gas, oil and gas condensate that LLC Karpatygaz concluded with PJSC Ukrgasvydobuvannya in April 2011.
- In November 2017, Misen Energy AB (publ) closed the sale of 2% of the shares and shares capital in Misen Enterprises AB to PUL. The purchase sum amounted to MEUR 1.0 (KSEK 9,611). As a result, Misen Energy AB (publ) secured short term financing for the Swedish operation.
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 10% of Misen Enterprises AB shares to the Hong Kong based company Powerful United Limited. Owning (the remaining) 52.5% of Misen Enterprises AB shares, Misen Energy AB (publ) maintains full control of the company and preserves a right to obtain 52.5% 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 11:00 CET on 30 November 2017.