Highlights• Q3 revenue up 24.2% year-on-year to $59.5m (Q3 2011: $47.9m)
• Q3 production up 29.1% year-on-year to 17,520 boepd (Q3 2011: 13,568 boepd)
• Q3 operating profit up 32.7% year-on-year to $37.7m(Q3 2011: $28.4m)
• Q3 revenue up 12.9% quarter-on-quarter to $59.5m (Q2 2012: $52.7m)
• Q3 production up 3.6% quarter-on-quarter to 17,520 boepd (Q2 2012: 16,906 boepd)
• Q3 operating profit up 17.1% quarter-on-quarter to $37.7m (Q2 2012: $32.2m)
• First production from the Abu Sennan concession, Egypt
• Contracts were initialled for exploration, development and production at Block 9, Basra
• Strategic Investment Agreement signed with Qatar First Investment Bank for a $150m convertible debt facility
• Ukraine Supreme Commercial Court rules to restore the JAA 429 agreement and to resume development operations.
Sara Akbar, Chief Executive Officer of Kuwait Energy, commented, "I am delighted to announce yet another special quarterly performance as we were able to register an increase in revenues, operating profits and production. Q3 also witnessed the commencement of production from the Abu Sennan concession in Egypt following last year's four discoveries in the area, which represents a great milestone for the Company."
The quarter's year-on-year increases in revenue, operating profits and production were primarily due to exploration successes of Petroshahd Company (previously East Ras Qattara concession), Egypt, development of Burg El Arab, Egypt, the start of production in Abu Sennan, Egypt and higher production from the Luzskoye field, Russia.
Financially, the Company signed a Strategic Investment Agreement during the quarter with Qatar First Investment Bank, a leading regional investor, to finance its near-term development and growth plans. The agreement is for a $150m convertible debt facility with mandatory conversion into ordinary shares of Kuwait Energy on an IPO, of which $25m was drawn down at the end of Q3.
The Company also signed a reserve based lending facility of up to $165m from the International Finance Corporation and Deutsche Bank, to finance its near-term capital activities and is currently working towards financial close of this facility.
Operationally, the Company spud one exploration well during the quarter, well ASA1-X in the Abu Sennan concession, Egypt. This well was drilling at the end of the quarter. Drilling on well West-Ahmed in Area A, Egypt, which had spud during Q2 2012, was completed successfully in Q3 2012 and produced at an initial gross rate of 1,240 bopd.
13 development wells were also drilled during the quarter. This activity took place mainly in Oman (nine wells), with the remainder in Egypt, Yemen and Russia.
Kuwait Energy regained title to its 25% working interest in JAA 429, Ukraine, after final ruling by the Ukraine Supreme Commercial Court that restored the JAA 429 agreement to resume development operations of the Bilske and Kulychykhynske gas-condensate fields located in the Poltava region.
The Company also continued its CSR activities during the quarter, partnering with the Kuwait Oasis Team in the country's largest voluntary environmental initiative, the "Kuwait Green Wall". The Company also sponsored an Iraq British Business Council conference in Baghdad with the aim of connecting Iraqi businessmen with international stakeholders.