During Kuwait Energy Annual General Meeting of shareholders
Kuwait Energy, one of the fastest growing independent oil and gas companies in the Middle East, today announced record results for the year 2012 during its Annual General Meeting of shareholders. The Company achieved a record net profit of US$44.9 million in 2012, up 29% from 2011, a record operating cash flow of US$148.2 million, up 32% from 2011, and a record daily average working interest production of 17,966 barrels of oil equivalent per day (boepd), up 32% from 2011.
Speaking to shareholders, Kuwait Energy Executive Chairman, Dr. Manssour Aboukhamseen, said: “I am delighted to report that 2012 was another year of financial success and operational progress for Kuwait Energy. The Company achieved record levels in production, profits and revenue, while also consolidating its financial strength through various debt facilities.”
Kuwait Energy also achieved a record year-end exit production of 17,790 barrels of oil production per day (boepd), and an average daily working interest production of 17,966 boepd, a 32% year-on-year increase. The increase in production was achieved primarily from exploration successes made in Egypt during 2011, which came on stream in 2012, as well as from increased production from the development activities in Egypt and Oman during 2012.
2012 in review
The Company continued to be very active operationally with a capital expenditure of US$119.8 million that was primarily spent on drilling 49 development wells and spudding seven exploration wells. There were two successful exploration carryover wells, Al Jahraa 1X and Al Salmiya 1X, both in the Abu Sennan concession in Egypt. The Company also saw two additional exploration successes; one in Abu Sennan (ASA 1X) and one in Area A (West Ahmad), also in Egypt. These successes added to the excellent exploration success rate for the Company. In the five-year period between 2007 and 2012, the Company has achieved an exploration success rate of 53%, with a finding cost for the same period of US$8.73 per barrels of oil equivalent (boe).
Also during the year, Kuwait Energy launched the first phase of operations in the Siba gas field located in the Basra province of Iraq. Kuwait Energy is the operator and holds a 60% working interest in the field.
In addition to organic growth, Kuwait Energy also continued its expansion via selective acquisitions and new licences awarded. In Yemen, Kuwait Energy completed a successful acquisition of “Block 5”, further adding to reserves and increasing production. In Iraq, a significant milestone was achieved reinforcing Kuwait Energy’s presence in Iraq with the Company winning the exploration contract for Basra’s “Block 9” during Iraq’s fourth licensing round.
The year 2012 was also highlighted with the successful bidding in the second Afghanistan bid round for hydrocarbon exploration licences for Block I (Sanduqli) and Block IV (Mazar-i-Sharif), both located in Northern Afghanistan.
The Company closed the year with proven and probable working interest reserves of 221.6 million barrels of oil equivalent (mmboe), audited by Gaffney, Cline & Associates (GCA).
Presenting the Company’s operational outlook to shareholders, Aboukhamseen said: “We expect that 2013 will witness a continuation in Kuwait Energy’s activity with a particular focus on our geographical areas of expertise, the Middle East and North Africa region. We plan to assess potential M&A opportunities in the region that would complement our existing portfolio mix. We also intend to achieve this by utilizing our vast network of relationships while building on our team’s technical expertise to contribute to the Company's continued progress to the next phase of its growth.”
Kuwait Energy plans to drill 16 exploration wells and 56 development wells during 2013. In Iraq, the plan is to demine “Block 9” and spud the first exploration well in the Block. In Egypt, an active programme including exploration and development drilling in existing oil and gas assets is planned.
Akbar added: “The mix of robust anticipated organic growth with selective M&A activity, and the widening of the Group’s interests in the Middle East and North Africa region, means 2013 is set to be another exciting year for Kuwait Energy. ”
Kuwait Energy plc Annual General Meeting outcome
Shareholders approved all Ordinary and Special Resolutions recommended by the Board.