Information from Year-end report January - December 2019 Misen Energy AB (publ)

Following is a summary of the financial information given in Year-end Report January - December 2019 ("12M 2019") 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_year_end_2019_ENG.pdf

Results for the January-December 2019 (within brackets same period 2018)

• Consolidated operating group result KSEK -13,356 (-4,140) 
• Consolidated group net turnover: KSEK 28,071 (26,525)
• Earnings per share: SEK -0.05 (-0.04)
• Production of natural gas: at zero level (at zero level)

Results for the October-December 2019 (within brackets same period 2018)

• Consolidated operating group result KSEK -7,192 (8,521)
• Consolidated group net turnover: KSEK 6,113 (20,636)
• Earnings per share: SEK -0.02 (0.03)
• Production of natural gas: at zero level (at zero level)

Summary of results:

• Given that the Arbitral Tribunal rendered a final partial award to terminate the Joint Activity Agreement No.3 (the “JAA”), Misen Energy AB (publ) believes that control over the specific assets owed by the Joint Activity (the “JA”) 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 JA under which assets and liabilities are not presented in the financial statements.
• Accumulated earnings per share for 12M 2019 are SEK -0.05.

Key events during 12M2019:

• In July 2018, the Arbitral Tribunal rendered a Final Partial Award in the arbitration proceeding commenced under the JAA 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.
• During 12M 2019 Misen Enterprises AB, LLC Karpatygaz and JSC Ukrgazvydobuvannya commenced the second phase of the arbitration proceeding. JSC Ukrgazvydobuvannya filed its submission in March 2019. Misen Enterprises AB and LLC Karpatygaz filed their submission in June 2019.
• On 22-24 July 2019, JSC Ukrgazvydobuvannya, Misen Enterprises AB and LLC Karpatygaz attended the hearing in the arbitration proceeding. The parties maintained their claims submitted to the Arbitral Tribunal respectively in their submissions earlier in 2019. The closing statements were held on 2 September 2019 in Stockholm.
• In November 2019, JSC Ukrgazvydobuvannya, Misen Enterprises AB and LLC Karpatygaz filed their statements on costs.  Misen Enterprises AB and LLC Karpatygaz claim that JSC Ukrgazvydobuvannya should bear the costs incurred in the first phase of the arbitration because JSC Ukrgazvydobuvannya’s claims in first phase of the arbitration proceeding for "fundamental breach", "invalidity" and "malicious arrangement" has burdened the arbitration, and were rejected in the Partial Final Award.
• In November 2018, Misen Energy AB (publ) signed the Financing Agreement with Powerful United Limited for the maximum sum up to 12 million Euros. The Agreement obliges PUL to provide financing for the Swedish operation and an arbitration proceeding commenced by JSC Ukrgazvydobuvannya under Arbitration Rules of the Arbitration Institute of Stockholm Chamber of Commerce in July 2016 against Misen Enterprises AB and LLC Karpatygaz. During 12M 2019 PUL provided additional financing for the arbitration proceeding and the operations of the Swedish companies.
• Misen Enterprises AB and LLC Karpatygaz believe that starting from 11 July 2018, when the Arbitral Tribunal terminated the JAA, agreements for lease of the booster compressor stations (“BCSs”) ceased to exist.
• As of the date of this report, JSC Ukrgazvydobuvannya refused to deliver to the JA hydrocarbons produced since December 2016 until 11 July 2018 (since June 2017 excluding incremental production of natural gas from leased BCSs).
• On 21 May 2019 the hearing was held in the court proceeding in Case initiated by National Anticorruption Bureau of Ukraine (“NABU”) based on the criminal complaint submitted by JSC Ukrgasvydobuvannya in 2017. The Kyiv Economic Court of Appeal dismissed appeal claims submitted by NABU and UGV. The Court upheld the decision of the first instance court. NABU and UGV appealed against the decision of the Kyiv Economic Court of Appeal.
• On 5 June 2019, the Constitutional Court of Ukraine decided that the NABU does not have an authority to challenge validity of the JAA.
• Disregarding the above decision of the Constitutional Court of Ukraine, NABU and JSC Ukrgasvydobuvannya appealed against the decision rendered by the North Economic Court of Appeal.
• On 4 December 2019 the Supreme Court of Ukraine upheld cassation appeal of NABU and partially upheld cassation appeal of JSC Ukrgasvydobuvannya. At the same time the court cancelled rulings of Kyiv Economic Court and North Economic Court and sent the case for reconsideration in a new circle.
• In July 2019 the Kyiv Commercial Court re-opened the proceeding in the case No. 910/21720/15 initiated by Financial Leasing LLC against JSC Ukrgasvydobuvannya, LLC Karpatygaz and Misen Enterprises AB.
• On 11 November 2019, Kyiv Commercial Court rendered a judgment granting the claims of Financial Leasing Center for recovery USD 37,219,201.00 (UAH 911,948,019.95) from JSC Ukrgazvydobuvannya, Misen Enterprises AB and LLC Karpatygaz jointly. LLC Karpatygaz and JSC Ukrgazvydobuvannya appealed the judgment.
• 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 95,619,376) of lost profit and UAH 9,856 (SEK 3,968) of court costs to Financial Leasing Center in the court proceeding in Case No. 910/24412/16. In February 2019. Supreme Economic Court partially upheld cassation appeals of JSC Ukrgasvydobuvannya, LLC Karpatygaz and Misen Enterprises AB and annulled rulings of lower instance courts. In September 2019 the Kyiv Commercial Court suspended the court proceedings in case no. 910/24412/16 upon a request of LLC Karpatygaz, until the final judgment in the case no. 910/21720/15.

Key events after end of 12M2019:

• On 31 January 2020 following the request of the Arbitral Tribunal, the Arbitration Institute of the Stockholm Chamber of Commerce decided that the Final Award shall be rendered by 31 March 2020
• By ruling dated 11 January 2020 the Kyiv Commercial Court resolved to open the proceeding in the case No. 910/18439/17 (National Anticorruption Bureau of Ukraine) and scheduled to hold preparatory hearing on 12 March 2020.
• On 2 January 2020 the North Economic Court resolved to open appeal procedure initiated by JSC Ukrgazvydobuvannya and by LLC Karpatygaz in case No. 910/21720/15 against Center of Financial Leasing LLC and scheduled to hold hearing on 4 March 2020.
• 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 from leased BCSs).
• As of publishing of this report, JSC Ukrgasvydobuvannya failed to make the lease payments under lease agreements to the JA for the period until 11 July 2018, except the amount paid to PJSC Sberbank, a subsidiary bank of Sberbank of Russia, and set off against future liabilities under renewed lease agreements.

Publication of the January - December 2019 year-end report

This January – December 2019 year-end report is published at the Company’s website (http://www.misenenergy.se), and a printed version can be ordered at info@misenenergy.se.

Future reports and events

• Next report, the annual report 2019, will be published on 8 April 2020. 
• The AGM will be held 29 April 2020.

For further information, please contact:

Göran Wolff, MD           

Direct line:  +46 31 759 50 72
Mobile:       +46 709 45 48 48
E-mail:        goran@misenenergy.se
                info@misenenergy.se

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 Growth Market 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 Growth Market under identification ticker MISE. The Certified Adviser of the company at Nasdaq First North Growth Market is Erik Penser Bank AB, tel.: +46 8 463 80 00, e-mail: certifiedadviser@penser.se.
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 CEST on 28 February 2020.