Information from Interim Report January - June 2018 Misen Energy AB (publ)
Following is a summary of the financial information given in Interim Report January - June 2018 ("H1 2018") from Misen Energy AB (publ) published today. The complete report is attached and is available in both English and Swedish on the Company's website: http://misenenergy.se/repository/Financial_reports_ENG/Misen_Energy_Q2_2018_ENG.pdf
Summary of results:
- Given that the parties to an arbitration proceeding commenced by JSC Ukrgasvydobuvannya confirmed their agreement to terminate the joint Activity Agreement No.3 (“JAA”), Misen Energy AB (publ) believes that control over the specific assets under JAA No.3 no longer exists. Thus, Misen Energy AB (publ) continues accounting treatment of 50.01% along with Powerful United Limited and Mr Konstantin Guenevski participation interest in the Joint Activity (“JA”) under which assets and liabilities are not presented in the financial statements.
- Accumulated earnings per share for H1 2018 are SEK -0.07.
Key events during H1 2018:
- Misen Enterprises AB and LLC Karpatygaz, partially owned subsidiaries of Misen Energy AB (publ) attended the closing statement in accordance to the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.
- In March 2018, Misen Energy AB (publ) closed the sale of 2% of the shares and shares capital in its partially owned subsidiary Misen Enterprises AB to Mr Konstantin Guenevski, Bulgarian citizen, who is a senior trader of one of the world’s leading independent commodity trading and logistics houses. The purchase sum amounts to MEUR 1.0 (KSEK 9,964). As a result, Misen Energy AB (publ) secured short term financing for Swedish operations.
- In May-June 2018, the preparatory hearings were held in the civil court proceeding commenced by the National Anticorruption Bureau of Ukraine (thereafter as “NABU”).
- In May 2018 booster compressor stations (“BCSs”) lease agreements with JSC Ukrgazvydobuvannya were renewed. According to these agreements BCSs were transferred by LLC Karpatygaz in its capacity as Operator of the Joint Activity to JSC Ukrgazvydobuvannya until 30 April 2019. As of publishing of this report, JSC Ukrgasvydobuvannya failed to make the lease payments to the JA under agreements concluded earlier.
- On 13 June 2018 the settlement agreement was reached among JSC Ukrgasvydobuvannya, LLC Karpatygas as Operator of JA and PJSC Sberbank, subsidiary bank of Sberbank of Russia. According to the agreement the principal amount of loan, interest and the court costs accrued by PJSC Sberbank, subsidiary bank of Sberbank of Russia, were repaid via the funds JSC Ukrgasvydobuvannya owed to the Joint Activity in accordance to the recently renewed agreements for lease of the BCSs as well as own funds of the JA.
- As of date of this report, JSC Ukrgazvydobuvannya refused to deliver hydrocarbons since December 2016 to the JA (since June 2017 excluding incremental production of natural gas).
- In June 2018, Kyiv Economic Court ruled to halt the court proceeding in Case No. 910/21720/15 against Center of Financial Leasing LLC (previously Sberbank Leasing) until the court finally decides on the claims brought by NABU. Financial Leasing Center appealed against the ruling of Kyiv Economic Court in June 2018.
- In May 2018Kyiv Economic Court of Appeal engaged NABU as a third party to the court proceeding in Case No. 910/24412/16.
H1 2018 (H1 2017):
- Consolidated operating group loss/income: KSEK -15,225 (-45,649)
- Consolidated group net turnover: KSEK 640 (14,033)
- Earnings per share: SEK -0.07 (-0.22)
- Production of natural gas: at zero level (at zero level)
Key events after end of H1 2018:
- On 11 July 2018, the Arbitral Tribunal rendered a Final Partial Award in the arbitration proceeding commenced under the JAA No.3 in accordance to the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. The Arbitral Tribunal fully rejected the JAA’s invalidity arguments, as well as the overwhelming majority of JSC Ukrgasvydobuvannya’s arguments concerning Misen Enterprises AB and LLC Karpatygaz alleged “breaches”.The Arbitral Tribunal concluded that the JAA must be terminated as of 11 July 2018.
- Pre-trial investigations in criminal cases are ongoing.
- In August 2018, Misen Energy AB (publ) signed the Loan Agreement for 500 kEUR with Powerful United Limited.
- In August 2018, Kyiv Economic Court of Appeal upheld the decision of the first instance court and resolved to recover UAH 237,507,020 (SEK 79,678,618) of lost profit and UAH 9,856 (SEK 3,306) of court costs to Financial Leasing Center in the court proceeding in Case No. 910/24412/16. This decision is subject to an immediate enforcement. LLC Karpatygaz plans to challenge this decision in the Supreme Economic Court of Ukraine.
- As of publishing of this report, JSC Ukrgazvydobuvannya refused to deliver hydrocarbons extracted since December 2016 until 11 July 2018 to the JA (since June 2017 excluding incremental production of natural gas).
- As of publishing of this report, JSC Ukrgasvydobuvannya failed to pay for the BCSs lease to the JA, except the amount paid to PJSC Sberbank, subsidiary bank of Sberbank of Russia.
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 JSC Ukrgasvydobuvannya (49.99%), a subsidiary of the National Joint Stock Company Naftogaz of Ukraine. JSC 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. In March 2018, Misen Energy AB (publ) sold 2% of Misen Enterprises AB shares to Mr. Konstantin Guenevski. Owning (the remaining) 50.5% of Misen Enterprises AB shares, Misen Energy AB (publ) maintains full control of the company and preserves a right to obtain 50.5% 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 10:30 CET on 31 August 2018.