TIDMJUB
RNS Number : 7227X
Jubilant Energy N.V.
01 September 2015
01 September 2015
Jubilant Energy NV
("Jubilant" or "the Company")
Results for the year ended 31 March 2015
The Board of directors of Jubilant Energy N.V. (the "Company" or
"Jubilant") is pleased to announce the financial results for the
year ended 31 March 2015. The Company is incorporated under the
laws of the Netherlands and is engaged in the business of oil &
gas exploration and production. It holds Operating and
Non-operating stakes in diversified portfolio of upstream asset
predominantly located in India.
These assets are at different stages of maturation. Kharsang oil
Field is the only producing asset. Three other assets, namely,
KG-OSN-2001/3 (Deendayal/KG) Block, AA-ONN-2001/3 (Tripura) Block
and CB-ONN-2002/3 (Sanand-Miroli) Block are under development /
appraisal having a total of 15 discoveries of commercial interest,
predominantly gas. Two Blocks AA-ONN-2009/1 and AA-ONN-2009/2 in
Manipur and a PSC-I Block in Myanmar are under Exploration. Other
Blocks namely Cauvery, Mehsana and Golaghat are under
relinquishment.
Business Review
1. Deendayal Block
-- Development of the Deendayal West Field (DDW) reached stage
of trial production from 3 completed wells namely D1, D2 and
D3.
-- The commencement of commercial production from the KG Block
has been delayed by more than 3 years from the approved FDP
scheduled commencement date. There has been cost escalation on
development facilities as well as on the development drilling.
-- All the three wells under trial production are sub-optimal.
The Operator has now drawn up plans to redesign the next 2 wells
namely D4 and D5 as well as to deploy large scale hydrofracking
technology, all with objective to enhance well productivities.
-- Considering the progress of work at DDW as well as pending
additional evaluation and studies, the Operator has sought time
extension till end February 2016 for submission of FDP covering six
discoveries in other areas of Deendayal Block, holding Gas in place
of 8.39 TCF (2C resources) which were declared commercial in FY
2014. It is expected that by the end of current fiscal, production
results of next 2 new wells will be known and commercial production
may be declared with added wells.
-- The Company has taken a loan of INR 13,400 million from State
Bank of India (SBI) led consortium of 11 Indian Banks. Due to time
and cost overruns as well as underperformance of initial wells
under trial production, the project has suffered a set-back at this
stage of development, adversely impacting the company's debt
servicing capability.
-- As at 31 March 2015, there is an outstanding cash call demand
of INR 3,134 million by the Operator on account of expenditure at
KG Block which has not been paid by the Company on account of
certain differences between the Operator and the Company. The
Company is in receipt of notice of default in August 2014 followed
by notice of cure in May 2015 stating that failure in payment of
outstanding cash call by the Company within 15 days may result in
forfeiture of the Company's Participating Interest by the Operator.
The Company is actively engaging with the Operator to resolve the
issue amicably.
2. Kharsang Field
-- Production declined by 23% over last fiscal year. Pilot
programs have been initiated to arrest decline through
implementation of new solutions such as Radial drilling.
-- In order to enhance production, Field Development Plan (FDP)
for drilling infill and step-out wells has been submitted to
Directorate General of Hydrocarbons (DGH) for their review.
-- Deeper plays in Lower Girujan and Tipam represent an upside
opportunity and a third party evaluation is currently underway
taking into account new 3D data.
3. Tripura Block
-- North Atharamura discovery is now ready for active appraisal
under an appraisal plan recently reviewed by DGH & Government.
Firm program entails drilling of 2 new wells and 2D seismic API.
But critical statutory approvals such as Forest Diversion are still
pending. The Company has notified DGH that May 2016 deadline for
DOC submission will be difficult to achieve and have requested for
extension.
-- Kathalchari discovery is now ready for first phase of
development under FDP recently approved by DGH & GOI. Approved
target is to achieve peak rate of 10.5 MMSCFD gas and readiness to
commence production by FY 17-18. Development activities can however
be commenced once PML is obtained.
4. Sanand Miroli Block
-- At Sanand-Miroli Block, due to marginal and intermittent
nature of production from the current reservoir interval in the
Miroli Field, the production operations were evaluated to be
unviable and hence the production operations from the Miroli Field
were discontinued in the month of April 2015. The Operator is yet
to provide future plan on reviving the production.
-- As regards part A of the Block (Sanand), RFDP for Kalol
discovery in SE-3 and SE-4 well is under preparation.
5. Manipur I & II
-- GOI recognized that drilling operations cannot be progressed
on account of lack of infrastructure and logistic constraints.
Accordingly Force Majeure has been granted till May 2016.
6. Myanmar
-- In line with its strategy to focus on ongoing and near term
development programs, the Company decided to dilute interest in
long gestation exploration programs. The Company therefore entered
into a farm-out agreement which is currently pending Myanmar
Government approval.
Financial Highlights
-- Gross sales volume from the Kharsang Field stood at 472,704
barrels of oil during the year (Net entitlement to Jubilant 118,176
barrels of oil), lower by 26.4% from previous year.
-- Weighted average oil price realised for sale of Kharsang oil
was USD 94.35 per barrel, lower by 14% as compared to previous
fiscal year. Gas prices for the period April 15 to Sept 15 slid
down to $4.66/MMBTU.
-- Operating revenues were therefore lower by 39% at USD 9.7 MM
on net entitlement basis During the year ended 31 March 2015, the
Company incurred a loss of USD 116.0 MM as compared to a loss of
USD 8.5 MM in the previous year. During the year the loss before
tax was USD 134.8 MM as against loss before tax of USD 3.4 MM in
the previous year. The main reasons for the increase in losses are
attributable to lower operating revenues and recognition of
impairment losses.
-- Company recognises an impairment loss of USD 115.3 MM in the
Deendayal Block on account of postponement of revenues due to delay
in achieving commencement of production, cost escalations and much
lower than expected gas price fixed by GOI.
-- Company also recognises an impairment loss of USD 6.6 MM in
Sanand-Miroli as production from the Miroli Field was evaluated to
be commercially unviable and stopped in April 2015 and there is
significant uncertainty on recommencement of the production.
-- Loss from operating activities during the year stood at USD
121.2 MM (including impairment loss of USD 121.9) as against profit
of USD 8.2 MM in previous year.
-- Total outstanding debt as of 31(st) March 2015 stood at USD
514.4 MM, including debt of USD 146.6 MM from Jubilant Bhartia
Group companies. Undrawn facilities of USD 2.6 MM and cash balance
(including available deposits with banks) of USD 21.6 MM available
to the Company.
-- During this fiscal, Company faced severe cash crunch due to
postponement of revenues from DDW and decline in revenues from
Kharsang. This has adversely impacted Company's ability to fulfil
its debt obligations and meet certain debt covenants under some
facility agreements leading to reclassification of long-term
liability to current. Company has approached its lenders to
restructure the debts in order to address cash flow mismatches.
-- During the year, the Jubilant Bhartia Group Companies
continued to support ongoing operations by extending unsecured loan
facilities amounting to USD 25 MM (Net). The Company has
historically arranged funding from ultimate parent Company -
Jubilant Enpro Private Limited (now known as 'Jubilant Energy
Private Limited') and its subsidiaries/associates for funding the
capital and operating expenditure, debt servicing and for other
corporate purposes. However no formal legal binding agreement is in
place to assure such funding in future.
-- The management acknowledges that uncertainty remains over the
ability of the Company to meet its current and future anticipated
funding requirements and to refinance or repay its banking
facilities as they fall due. The existence of material
uncertainties cast significant doubt about the entity's ability to
continue as a going concern. Nevertheless, the Company is of the
opinion that the going concern assumption is appropriate for the
preparation of financial statements for the year ended 31 March
2015, as timely implementation of the actions is expected to
mitigate the conditions and/or events that materially threat the
Company's ability to continue as a going concern.
Mr. Shyam Bhartia, Chairman and Mr. Hari Bhartia, Co-Chairman of
Jubilant Group commented:
The Financial Year 2015 has been a challenging year for the
company which is facing severe cash crunch due to delay in
commencement of production and cost escalations at KG and decline
in revenues from Kharsang. The fixation of much lower than expected
domestic gas price by GOI has further aggravated the situation.
These factors led to uncertainties around going concern assumption
as well as impairment of its assets.
(MORE TO FOLLOW) Dow Jones Newswires
September 01, 2015 09:10 ET (13:10 GMT)
In order to address the current situation, Company is focusing
on all options including monetizing assets, prioritizing
investments and debt restructuring. Going forward, our hope remains
that the Government will revitalize India's oil and particularly
gas sector, keeping in view Prime Minister's call to decrease
import dependency by 10%. We are hoping that a balanced view is
taken by the Government while arriving at future prices for
domestic gas, in particular for unconventional and difficult
projects like Deendayal as well as for the north-east region oil
& gas resources which we believe are in plenty but lie
unexplored and undeveloped in extremely challenging ground
conditions.
Enquiries:
Jubilant Energy Nikhil Pandey +91 120 7186000
Dominic Morley, Adam +44 20 7886
Panmure Gordon James 2500
Competent Person's - Consent for Release
Mr. Ramesh Bhatia -Chief Operating Officer, holds a Master's of
Science degree in Applied Petroleum Geology and has over 20 years
of experience in the Oil and Gas Exploration, Development and
Production industry. He has reviewed and approved the technical
information contained in this announcement pursuant to the AIM
guidance note for mining and oil and gas companies
Notes and Glossary of abbreviations
The reserve and resource figures disclosed in this announcement
have been estimated using the Petroleum Resources Management System
published by the Society of Petroleum Engineers/ World Petroleum
Council American Association of Petroleum Geologists/ Society of
Petroleum Evaluation Engineers (SPE/WPC/AAPG/SPEE) in March 2007
("SPEPRMS").
2C Resources Contingent Resources are those quantities
of petroleum estimated, as of a given
date, to be potentially recoverable from
known accumulations by application of
development projects, but which are not
currently considered to be commercially
recoverable due to one or more contingencies.
2C Contingent Resource is the Best Estimate.
-------------- -----------------------------------------------
2P Reserves Proved plus Probable Reserves - those
additional reserves which analysis of
geoscience and engineering data indicate
are less likely to be recoverable than
probable reserves.
-------------- -----------------------------------------------
BCF Billion Cubic Feet
-------------- -----------------------------------------------
Best Estimate an estimate representing the best technical
assessment of projected volumes
-------------- -----------------------------------------------
BOPD Barrels of oil per day
-------------- -----------------------------------------------
Contingent those quantities of petroleum estimated,
Recoverable as of a given date, to be potentially
Resources recoverable from known accumulations
by application of development projects,
but which are not currently considered
to be commercially recoverable due to
one or more contingencies. Low/Best/High
Estimates represent the reasonable range
of estimated potentially recoverable
volumes at varying degrees of uncertainty.
-------------- -----------------------------------------------
DDW Deendayal West
-------------- -----------------------------------------------
DGH Directorate General of Hydrocarbons
-------------- -----------------------------------------------
DOC Declaration of Commerciality
-------------- -----------------------------------------------
EUR Expected Ultimate Recovery
-------------- -----------------------------------------------
FDP Field Development Plan
-------------- -----------------------------------------------
GCA Gaffney Cline & Associates
-------------- -----------------------------------------------
GIIP Gas Initially in Place
-------------- -----------------------------------------------
GOI Government of India
-------------- -----------------------------------------------
GOR Gas Oil Ratio
-------------- -----------------------------------------------
INR Indian Rupee
-------------- -----------------------------------------------
KG Krishna Godavari
-------------- -----------------------------------------------
Lkm Line Kilometres
-------------- -----------------------------------------------
OGT Onshore Gas Terminal
-------------- -----------------------------------------------
PEL Petroleum Exploration License
-------------- -----------------------------------------------
PI Participating Interest
-------------- -----------------------------------------------
PML Petroleum Mining Lease
-------------- -----------------------------------------------
PLQP Process cum Living Quarter Platform
-------------- -----------------------------------------------
Those quantities of petroleum which are
estimated, as of a given date, to be
Prospective potentially recoverable from undiscovered
Resources accumulations.
-------------- -----------------------------------------------
PSC Production Sharing Contract
-------------- -----------------------------------------------
MC Management Committee
-------------- -----------------------------------------------
MM Million
-------------- -----------------------------------------------
MMBOE Million Barrels of Oil Equivalent
-------------- -----------------------------------------------
MMBTU Million British Thermal Unit
-------------- -----------------------------------------------
MMSCFD Million Standard Cubic Feet
-------------- -----------------------------------------------
MOGE Myanmar Oil & Gas Enterprise
-------------- -----------------------------------------------
NER North-East Region
-------------- -----------------------------------------------
NOC National Oil Company
-------------- -----------------------------------------------
TCF Trillion Cubic Feet
-------------- -----------------------------------------------
USD US Dollars
-------------- -----------------------------------------------
WHP Well Head Platform
-------------- -----------------------------------------------
Consolidated Statement of Comprehensive Income
(in thousands of US Dollars) For the For the
year ended year ended
31 March 31 March
2015 2014
------------------------------------ ------------ ------------
Oil and natural gas revenue 9,675 15,845
Other income 363 1,162
10,038 17,007
------------------------------------ ------------ ------------
Production and operating
expenses 2,607 2,086
Personnel costs 1,594 2,199
Share-based payment reversal (58) (586)
Depletion, depreciation and
amortisation 2,049 2,503
Impairment loss 121,914 39
Other expenses 3,118 2,565
131,224 8,806
------------------------------------ ------------ ------------
Results from operating activities (121,186) 8,201
Finance income 949 1,478
Finance expenses 14,521 13,070
Net finance expense (13,572) (11,592)
------------------------------------ ------------ ------------
Loss before income taxes (134,758) (3,391)
Income tax benefit/ (expense) 18,752 (5,112)
Loss for the year (116,006) (8,503)
------------------------------------ ------------ ------------
Other comprehensive income
Remeasurement of defined
benefit liability (29) 20
Foreign currency translation
difference for foreign operations (888) (5,215)
------------------------------------ ------------ ------------
Other comprehensive income
for the year,
net of income tax (917) (5,195)
Total comprehensive income
for the Year attributable
to the Owners of the company (116,923) (13,698)
------------------------------------ ------------ ------------
Basic and diluted loss per
share (USD) (0.279) (0.020)
(MORE TO FOLLOW) Dow Jones Newswires
September 01, 2015 09:10 ET (13:10 GMT)
Consolidated Statement of Financial Position
(in thousands of US Dollars) As at As at
31 March 31 March
2015 2014
------------------------------- ---------- ----------
Current Assets
Inventories 808 824
Current tax assets 3,274 2,060
Trade and other receivables 42,032 33,256
Other current assets 1,132 1,208
Cash and cash equivalents 4,179 25,657
Total Current Assets 51,425 63,005
------------------------------- ---------- ----------
Non Current Assets
Property, plant and equipment 158,172 243,475
Intangible exploration and
other intangible assets 251,692 235,604
Trade and other receivables 1,260 924
Other non-current assets 458 689
Total non-current assets 411,582 480,692
------------------------------- ---------- ----------
Total Assets 463,007 543,697
------------------------------- ---------- ----------
Equity
Issued and paid-up share
capital 5,581 5,581
Share premium 105,047 105,047
Retained earnings (233,488) (118,385)
Stock options outstanding
reserve 2,585 3,575
Foreign currency translation
reserve (23,426) (22,538)
Total Equity (143,701) (26,720)
------------------------------- ---------- ----------
Current Liabilities
Loans and borrowings 139,338 14,391
Trade and other payables 58,365 38,119
Current tax liabilities 467 487
Other current liabilities 517 880
Total Current Liabilities 198,687 53,877
------------------------------- ---------- ----------
Non Current Liabilities
Loans and borrowings 399,923 488,455
Employee benefits 365 298
Provisions 3,435 3,183
Deferred tax liabilities 4,298 24,604
Total Non Current Liabilities 408,021 516,540
------------------------------- ---------- ----------
Total liabilities 606,708 570,417
------------------------------- ---------- ----------
Total equity and liabilities 463,007 543,697
------------------------------- ---------- ----------
Consolidated Statement of Cash Flows
(in thousands of US Dollars) For the For the
year ended year ended
31 March 31 March
2015 2014
---------------------------------------- ------------ ------------
Cash flows from operating activities
Loss after tax for the year (116,006) (8,503)
Adjustments for:
Depletion and depreciation 1,864 2,317
Amortisation of other intangible
assets 185 186
Impairment loss 121,914 39
Net finance expenses 12,216 10,861
Equity-settled share-based payment
expense (58) (586)
Current Tax Expenses 58 840
Deferred tax expense (18,810) 4,272
(Gain)/ Loss on sale/disposal
of property, plant and equipment (92) 20
Change in working capital 4,677 (2,061)
---------------------------------------- ------------ ------------
Cash generated from /(used in
) operating activities 5,948 7,385
Income tax paid (net) 15 (72)
Net cash generated from operating
activities 5,963 7,313
---------------------------------------- ------------ ------------
Cash flows from investing activities
Interest received 2,364 1,412
Acquisition of property, plant
and equipment, intangible exploration
assets and other intangible assets (575) (33,043)
Proceeds from disposal of property,
plant and equipment 143 39
Change in advances to co-venturers 1,578 581
Investment in term deposits and
restricted cash (36,962) (20,077)
Proceeds from disposal of term
deposits and restricted cash 17,299 16,194
Tax paid on interest income (1,411) (1,235)
Net cash used in investing activities (17,564) (36,129)
---------------------------------------- ------------ ------------
Cash flows from financing activities
Proceeds from loans and borrowings 57,622 131,676
Payment of debt transaction cost - (1,313)
Repayment of loans and borrowings (14,317) (47,574)
Interest paid (51,647) (49,603)
Net cash (used in)/ generated
from financing activities (8,342) 33,186
---------------------------------------- ------------ ------------
Net increase / (decrease) in
cash and cash equivalents (19,943) 4,370
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at
beginning of financial year 25,657 22,607
Effect of exchange rate fluctuations (1,535) (1,320)
Cash and cash equivalents at
end of financial year 4,179 25,657
---------------------------------------- ------------ ------------
Consolidated Statement of Changes in Equity for the year ended
31 March 2015
(in thousands Share Share Legal Retained Stock options Foreign Total
of US Dollars) capital premium Reserve earnings outstanding currency equity
reserve translation
reserve
---------------- --------- --------- --------- ---------- --------------- ------------- -----------
Balance as at
1 April 2013 5,337 105,047 244 (111,807) 6,066 (17,323) (12,436)
Total
Comprehensive
income for the
year
Translation of
the share
capital (122) - 1221 -
(Loss)/ Profit
for the year - - (8,503) - - (8,503)
Other
comprehensive
Income - - 20 - (5,215) (5,195)
---------------- --------- --------- --------- ---------- --------------- ------------- -----------
Total
comprehensive
Income for the
year (122) - 122 (8,483) - (5,215) (13,698)
---------------- --------- --------- --------- ---------- --------------- ------------- -----------
Transactions
with owners
recorded
directly in
equity:
- Transfer to
retained
earnings
for vested
share
options
forfeited
during the
year - - 1,905 (1,905) - -
- Share-based
payment
reversal
for the year
(net) - - - (586) - (586)
- - - 1,905 (2,491) - (586)
---------------- --------- --------- --------- ---------- --------------- ------------- -----------
Balance as at
31 March 2014 5,215 105,047 366 (118,385) 3,575 (22,538) (26,720)
---------------- --------- --------- --------- ---------- --------------- ------------- -----------
Consolidated Statement of Changes in Equity for the year ended
31 March 2015
(in thousands Share Share Legal Retained Stock options Foreign Total
of US Dollars) capital premium Reserve earnings outstanding currency equity
reserve translation
reserve
--------------------- ---------- --------- --------- ----------- --------------- -------------- ----------
Balance as
at 1 April
2014 5,215 105,047 366 (118,385) 3,575 (22,538) (26,720)
Total comprehensive
profit for
the year
Translation
of the share
Capital (1,063) - 1,063 - - - -
Loss for the
year - - (116,006) - - (116,006)
Other comprehensive
income - - - (29) - (888) (917)
--------------------- ---------- --------- --------- ----------- --------------- -------------- ----------
Total comprehensive
income for
the year (1,063) - 1,063 (116,035) - (888) (116,923)
--------------------- ---------- --------- --------- ----------- --------------- -------------- ----------
Transactions
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with owners
recorded directly
in equity
- Transfer
to retained
earnings for
vested share
options forfeited
during the
year - - - 932 (932) - -
- Share-based
payment reversal
for the year
(net) - - - - (58) - (58)
- - 932 (990) - (58)
--------------------- ---------- --------- --------- ----------- --------------- -------------- ----------
Balance as
at 31 March
2015 4,152 105,047 1,429 (233,488) 2,585 (23,426) (143,701)
--------------------- ---------- --------- --------- ----------- --------------- -------------- ----------
Notes to the accounts
1. General and principal activities
Jubilant Energy N.V. ('the Company' or 'JENV') was incorporated
on 12 June 2007, in Amsterdam, the Netherlands, as a company with
limited liability. The registered office of the Company is
Orlyplein 10, Floor 24, 1043 DP Amsterdam, the Netherlands. The
Company is a subsidiary of Jubilant Energy (Holding) B.V. (JEHBV),
a Netherlands company, which in turn is a wholly-owned subsidiary
of Jubilant Enpro Private Limited ('Jubilant Enpro'), a company
incorporated under the laws of India. On 24 November 2010, the
Company commenced trading on Alternative Investment Market (AIM),
London.
The abbreviated consolidated financial information as at and for
the year ended 31 March 2015 comprises the Company and its
subsidiaries (together referred to as the 'Group' and individually
as 'Group entity') and the Group's proportionate interest in
jointly controlled assets in unincorporated joint ventures.
The Group is engaged in the exploration for and development and
production of oil and natural gas. It conducts many of its
activities jointly with others. The abbreviated consolidated
financial information reflects only the Group's proportionate
interest in such activities.
2. Summary of significant accounting policies
The abbreviated consolidated financial information has been
derived from the Company's Consolidated Financial Statements for
the year ended 31 March 2015 and the Company's Consolidated
Financial Statements for the year ended 31 March 2014 which has
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU. These standards have been
consistently applied throughout the Group and in previous year. The
Company's Consolidated Financial Statements for the year ended 31
March 2015 and the Company's Consolidated Financial Statements for
the year ended 31 March 2014 were authorised for issue by the Board
of Directors on 28 August 2015 and on 25 June 2014
respectively.
Basis of preparation
The abbreviated consolidated financial information, which
comprise the abbreviated statement of financial position as at 31
March 2015, the abbreviated statement of comprehensive income,
statement of changes in equity and cash flow statement for the year
then ended, and related notes, have been derived from the Company's
Consolidated Financial Statements for the year ended 31 March 2015,
and the Company's Consolidated Financial Statements for the year
ended 31 March 2014, on which the Company's audit firm KPMG
Accountants N.V. ("KPMG") provided an unqualified audit opinion
dated 31 August 2015 and 25 June 2014 respectively. However, with
respect to the Company's Consolidated Financial Statements for the
year ended 31 March 2015, KPMG has given an emphasis of uncertainty
with respect to the going concern assumption and has drawn
attention to note on - Preparation of Consolidated Financial
Statements on a going-concern basis (note reproduced here after),
which indicates the existence of material uncertainties which may
cast significant doubt about the entity's ability to continue as a
going concern.
For a better understanding of the Company's financial position
and results, we emphasize that the abbreviated consolidated
financial information should be read in conjunction with the
Company's Consolidated Financial Statements as of and for the year
ended 31 March 2015 and the Company's Consolidated Financial
Statements as of and for the year ended 31 March 2014, from which
the abbreviated consolidated financial information was derived.
Preparation of Consolidated Financial Statements on a
going-concern basis
The Group continues to have a balanced oil and gas portfolio at
different stages of exploration, appraisal, development and
production. In the recent past, the Group's focus had been
development of KG Block and its early monetization, establishment
of in-place gas resources at Tripura and conversion into 2P
reserves, arresting production decline at Kharsang and
establishment of its deeper exploration play.
The much awaited new domestic gas pricing policy for India was
announced by the Government of India effective 1 November 2014. The
notified gas prices are however significantly lower than the
Industry expectations which were set at double the level according
to earlier gas price guidelines approved by Government and were to
be effective from 1 April 2014. This has adversely impacted the
value of our asset portfolio, which is predominantly gas and in
particular value of our core asset namely Deendayal Block or KG
Block.
The commencement of commercial production from the KG Block has
been delayed by more than 3 years from the approved FDP scheduled
commencement date. There has been cost escalation on development
facilities as well as on the development drilling. All the three
wells under trial production are sub-optimal. The Operator has now
drawn up plans to redesign the next 2 wells namely D4 and D5 as
well as deploy large scale hydrofracking technology, all with
objective to enhance well productivities. Considering the progress
of work as well as pending additional evaluation and studies, the
Operator has sought time extension till end February 2016 for
submission of FDP for six discoveries in other areas of Deendayal
Block holding gas in place of 8.39 TCF (2C resources) which were
declared commercial in Financial Year 2014. It is expected that by
the end of the fiscal year ended March 2016, results of next 2 new
wells are expected to be known, Commercial Production may be
declared with added wells, and Government view on gas price premium
being applicable to existing discoveries may be known.
At Kharsang, production declined by 23% over last fiscal year
which along with decline in oil prices has led to significant
reduction in operating cash flow. During the year, pilot programs
have been initiated to arrest decline through implementation of new
solutions such as radial drilling. In order to enhance production,
Field development plan (FDP) for drilling infill and step-out wells
has been submitted to Directorate General of Hydrocarbons (DGH) for
their review. Meanwhile a third party evaluation is currently
underway basis the new 3D data to evaluate the deeper plays in
Lower Girujan and Tipam, which could create upside opportunity.
The Tripura Block is still at pre-development stage. Kathalchari
discovery is now ready for first phase of development under FDP
recently approved by DGH and government of India. Approved target
is to achieve peak rate of 10.5 mmscfd gas and readiness to
commence production by financial year 2017-18. Development
activities can however be commenced once PML is obtained. As
regards North Atharamura discovery, the appraisal program has been
reviewed by DGH & Government and the firm program entails
drilling of 2 new wells and 2D seismic API. But critical statutory
approvals such as Forest Diversion are still pending. We have
notified DGH that May 2016 deadline for DOC submission will be
difficult to achieve and have requested for extension.
At Sanand-Miroli Block, due to marginal and intermittent nature
of production from the current reservoir interval in the Miroli
Field, the production operations were evaluated to be unviable and
hence the production operations from the Miroli Field were
discontinued in the month of April 2015. The Operator is yet to
provide future plan on reviving the production. As regards part A
of the Block (Sanand), RFDP for Kalol discovery in SE-3 and SE-4
well is under preparation.
Because of the logistical issues, the Group's Manipur Blocks are
under force-majeure conditions. There is a stand-still and this has
jeopardized Group's 7 tcf of best case unrisked gas resources.
Myanmar PSC I Block is still at initial stage of exploration and
Group is pursuing its strategy to dilute its interest majorly in
pure exploration assets.
The Company has taken a loan of INR 13,400 million (equivalent
to USD 214 million) from State Bank of India (SBI) led consortium
of 11 Indian Banks. Due to time and cost overruns as well as
underperformance of initial wells under trial production, the
project has suffered a set-back at this stage of development. These
along with the notification of much lower than expected gas price;
have adversely impacted the project economics.
During this fiscal, Company faced severe cash crunch due to
postponement of revenues from DDW. This has adversely impacted
Company's ability to fulfil its debt obligations and meet certain
debt covenants under some facility agreements leading to
reclassification of long-term liability to current. Company has
approached its lenders to restructure the debts in order to
minimize cash flow mismatches.
(MORE TO FOLLOW) Dow Jones Newswires
September 01, 2015 09:10 ET (13:10 GMT)
Further, there have been certain delays in the servicing of the
interest of the KG project. During the financial year, the Group
approached its lenders and requested to approve shifts in scheduled
commercial operation date from March 2014 to February 2016 and to
realign the debt servicing in accordance with the KG Block
estimated cash flows. With mutual discussion with lenders, the
Group has appointed financial advisors to work out a debt
restructuring solution. In order to validate the underlying
economic and technical viability of the KG project, the lenders
have appointed a third party independent consultant to perform
techno-economic viability study, which is currently under way and
will be based on project data to be provided by the Operator.
Currently, there is an uncertainty on the outcome of the
techno-economic viability study. A negative outcome may cast doubt
on the current and anticipated future investments.
As at 31 March 2015, there is an outstanding cash call demand of
USD 50.16 million from the Operator on account of expenditure at KG
Block which has not been paid by the Group on account of certain
differences between the Operator and the Company. As per the Joint
Operating Agreement for the Block, the Operator had issued a notice
of default dated 22 August 2014 and notice of cure on 26 May 2015,
stating that failure in payment of outstanding cash call by the
Group within 15 days from 26 May 2015 may result in forfeiture of
Group's Participating Interest by the Operator. The Group is
actively engaging with the Operator to resolve the issue
amicably.
For funding the exploration, development and related activities,
the Group has taken funding from SBI, Central Bank of India and
EXIM. The declining revenues at Kharsang Block coupled with current
status of KG Block as mentioned above have forced the Group to
approach its lenders for realignment of its debt servicing. The
Group made a request for the same in March 2015. During the year,
there has been breach of certain financial covenants and
subsequently there have also been delays in debt servicing. After
negotiations it was agreed that debt repayments may be made from
the balances available in debt service reserve account.
Since it now appears unlikely that the Group will be able to
meet the debt servicing obligations and covenants, the Group has
been in continuous discussions with its lenders about re-phasing
the debt servicing. Given the uncertainties, the failure to affect
a strategic restructuring on a timely basis could prove to be
materially detrimental to the interest of the Group. If certain
risks materialize, the classification of debt as long-term may not
be appropriate.
One of the key uncertainties and an important driver of the
viability of the gas Fields is the applicable gas price. As per the
guidelines announced by the Government in October 2014, the price
of natural gas was formulated based on several international
indices and with the provision of revision every six months. The
gas price first announced effective November 2014 was USD 5.05 per
MMBTU on GCV basis, which was reduced to USD 4.66 per MMBTU for the
period of April 2015 to September 2015. The important provision of
the new policy relates to providing premium on gas prices for
deepwater, ultra deepwater and HPHT discoveries. However, at the
time of announcement, such provision was made applicable only to
new discoveries post the announcement date. At current gas prices,
the projects like KG Block may prove to be unviable and it can
reasonably be expected that the Government will take initiative to
compensate considering that the stated objective of the Government
is to reduce import dependency and in the process enable
development of discovered gas resources. There remains uncertainty
on future oil prices given the downward trend of oil prices. Any
positive change in the gas price fixed by the government is also
uncertain.
At KG Block, only after drilling of new wells D4 and D5, where
hydrofracking technology is expected to be implemented on a much
larger scale, it can be expected that revenue generation will
commence by the end of fiscal year ended March 2016. GSPC, the
operator is also working to redesign the wells with the aim of
significantly stepping up the producibility. The success at DDW is
expected to pave the way for future efforts to convert large
contingent in place resources of around 8.39 tcf into recoverable
reserves.
At Kharsang, there is an immediate need to increase the
production. A pilot Radial drilling program was executed in 4
wells, which has been a partial success. Various work-over
activities and new technology oriented pilot projects are expected
to be implemented to overcome the complexities and maintain the
production from the existing wells. In order to increase the
production, the Operator has submitted FDP to the DGH with a plan
to drill new wells in Upper Girujan reservoir over next couple of
years. Apart from the producing Upper Girujan reservoir, the Field
has an exploration play in deeper formations i.e. Lower Girujan and
Tipam with significant hydrocarbon potential. To understand
potential of these deeper formations as well as to reassess the
potential of Upper Girujan reservoir, a high quality 3D seismic
data was successfully acquired in the Field. Interpretation of 3D
data is currently ongoing on the basis of which the Company will be
evaluating feasibility of exploring deeper formations in the Field.
Depending upon the feasibility, the Company may target to drill
wells over next couple of years to test the deeper formations,
which will lead to significant addition in hydrocarbon resources of
the Field, both oil and gas. All these new investment initiatives
will require the PSC term, currently expiring in 2020, to be
extended for long term. Currently, we are anticipate that a minimum
of 5 years extension for exploiting balance oil reserves and
additional 5 years for exploiting non-associated gas reserves can
be expected to be obtained. There is uncertainty as to what the key
terms would be and if these terms can support a viable business
case. Several industry representations has been made to Government
to not make extension terms onerous for contractor and in favour of
Government. This new extension policy is expected to be announced
in financial year 2016.
The development and appraisal activities at Tripura will be
important from conversion of gas resources to reserves and starting
a new stream of revenues in next 2-3 years. It will however require
additional capital which is not available at the moment, to drill
new development wells as well as to install facilities to produce
gas.
So the overall strategy is to step up value creation by
undertaking high impact activities; at the same time to minimize
exploration risk capital as well as minimize liabilities. The Group
focuses on three fold strategies that need to be successfully
executed to support viability of the business:
- Business: To consolidate the asset portfolio with an objective
to focus on assets with higher control, direct new capital to
program which generate higher return on investment; focus on early
value creation and monetization and importantly minimization of
risk capital through farm-out and strategic exit.
- Operating and Execution: Arrest the production decline at
Kharsang Block and increase the production through infill /
step-out wells and other work-over activities; Successful
development and appraisal activities at Tripura Block and
establishment / conversion of Group's huge hydrocarbon resources
into Reserves.
- Financial: Debt restructuring with an objective of reduction
in cost of funding, additional funding for future capex and
alignment of debt servicing with the project surplus.
Due to the reasons explained above, the management acknowledges
that uncertainty remains over the ability of the Group to meet its
current and future anticipated funding requirement and to refinance
or repay its banking facilities as they fall due. However
management has reasonable expectation that the Group will be
successful in obtaining adequate resources to continue its
operations for the foreseeable future. In assessing whether the
going-concern assumption is appropriate, the management has taken
into consideration the following factors:
- Available cash balance of USD 19.9 million as at 31 March 2015 for KG project;
- The Group has significant hydro carbon reserves/resources as
confirmed in past by a competent
person's report. The Group has high quality assets, which will be de-risked as the development of assets progress;
- Historically the Group had constantly tied up funding
arrangements from Banks. The Group hired an external financial
advisor and is in active discussions with the lenders and has
already approached banks for re-alignment of its Kharsang and KG
debt obligations in accordance with the expected cash flows from
the respective projects. The KG loan lenders have already appointed
independent expert to assess/evaluate the project viability, based
on which the debt restructuring solution will be proposed. Once the
restructuring solution with the lenders is agreed, then there will
be a definitive funding arrangement. Management believes that
lenders will approve the restructuring solution within the
available regulatory framework which will take care of the debt
service obligations as well as additional capital expenditure
required to complete the KG Block development plan meeting the
objectives of the financial year 2009-10 approved FDP. It is also
proposed that this new funding will also take into account the
outstanding cash call payments to be effected to the Operator, as
are considered valid by the Group.
- The Group has historically arranged funding from ultimate
parent Company - Jubilant Enpro Private Ltd and its
subsidiaries/associates for funding the capital and operating
expenditure, debt servicing and for other corporate purposes.
However no formal legally binding agreement is in place to assure
such funding in future.
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- Kharsang contribution will take care of operational expenses
and discussions are ongoing with the banks to allow Kharsang
contribution to be utilized first for servicing operating
requirements and balance available to banks towards debt servicing
obligations.
- The Group is working on a range of strategic options for the
business and its medium to long-term funding including monetization
/ dilution of its participating interest in oil & gas assets /
reprioritizing investments and re-scheduling its activities and
programs.
- There is industry expectation that there will be significant
correction in natural gas prices from a
policy perspective driving them closer to imported gas
prices
- Under current environment of low oil and gas prices, the Group
will evaluate economic viability of each of its investment plan
across all assets and prioritize its investments accordingly. The
Group believes that its efforts on KG, Tripura and Kharsang Blocks
will be successful and with success at each stage, the Group will
improve its position on cash flows.
The above indicates the existence of material uncertainties
which may cast significant doubt about the entity's ability to
continue as a going concern. Nevertheless, management is of the
opinion that the going concern assumption for the 31 March 2015
financial statements is appropriate as the continuous and timely
implementation of the actions as mentioned above is expected to
mitigate the conditions and/or events that materially threat the
Group's ability to continue as a going concern.
3. Trade and other receivables - current
(in thousands of US Dollars) As at As at
31 March 31 March 2014
2015
------------------------------- ---------- ---------------
Trade receivables 290 2,780
Due from related parties 9,777 10,317
Recoverable from co-venturers
(refer to Footnote a
and b) 4,267 10,732
Term deposits 19,497 147
Interest accrued but not
due on deposits 168 141
Security deposit 239 488
Restricted cash
(refer to Footnote c) 7,794 8,651
Total 42,032 33,256
------------------------------- ---------- ---------------
Footnotes:
a) Represents amounts due from co-ventures on account of
non-payment of cash calls raised by the Group in respect of
operated Blocks and/or advance payments made by the Group in
respect of non-operated Blocks.
b) The recoverable from co-ventures is net of provision of USD
4,023 thousand (31 March 2014: USD Nil thousand) from a joint
venture partner, on which partner has raised certain issues,
management is in active discussion with partner and on account of
uncertainty of collection, management in the current year has
created provision in this respect.
c) Restricted cash - margin money represents margin money
against guarantees and deposits with lenders. Restrictions on
margin money deposits are released on the expiry of the terms of
guarantees.
4. Loans and borrowings (including accrued interest)
(in thousands of US As at 31 March 2015
Dollars)
Current Non-current Total
--------------------------- -------- ------------ --------
Financial liabilities
at amortised cost
Secured foreign currency
term loan 9,004 52,714 61,718
Secured term loans
from banks 64,931 242,234 307,165
Unsecured inter corporate
deposits from related
parties 57,189 82,396 139,585
12% Redeemable preference
shares 8,214 22,579 30,793
Other - - -
Total 139,338 399,923 539,261
--------------------------- -------- ------------ --------
(in thousands of US As at 31 March 2014
Dollars)
Current Non-current Total
--------------------------- -------- ------------ --------
Financial liabilities
at amortised cost
Secured foreign currency
term loan 359 58,965 59,324
Secured term loans
from banks 10,638 292,639 303,277
Unsecured inter corporate
deposits from related
parties 3,391 108,082 111,473
12% Redeemable preference
shares - 28,769 28,769
Other 3 - 3
Total 14,391 488,455 502,846
--------------------------- -------- ------------ --------
5. Share capital
Issued and paid-up share capital
(in thousands of US Dollars) As at As at
31 March 2015 31 March 2014
------------------------------ -------------- --------------
Opening balance as at
1 April 5,581 5,581
Closing balance as at
31 March 5,581 5,581
------------------------------ -------------- --------------
Share premium
(in thousands of US As at As at
Dollars)
31 March 2015 31 March 2014
--------------------- -------------- --------------
Opening balance as
at 1 April 105,047 105,047
Closing balance as
at 31 March 105,047 105,047
--------------------- -------------- --------------
Footnotes:
1) Authorised share capital
The authorised share capital of JENV as at 31 March 2015 is
874,200,000 shares of USD 12,145 thousand equivalent to EUR 8,742
thousand (31 March 2014: USD 12,145 thousand equivalent to EUR
8,742 thousand), having the par value of EUR 0.01 (31 March 2014:
EUR 0.01) per share.
2) Issued share capital
The issued share capital of JENV as at 31 March 2015 is
416,306,787 shares (31 March 2014: 416,306,787 shares).
There has been no change in the issued share capital of JENV
during the year ended 31 March 2015 and 31 March 2014.
All issued shares are fully paid up. The holders of ordinary
shares are entitled to receive dividend as declared from time to
time and are entitled to one vote per share at the meetings of the
Company.
3) Share premium
There has been no change in the share premium of JENV during the
year ended 31 March 2015 and 31 March 2014.
4) Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign
currency differences arising from the translation of the financial
statements of foreign operations.
5) Stock options outstanding reserve
The stock options outstanding reserve comprises the amounts
recognised in respect of the equity-settled share-based payments to
certain employees and others providing similar services.
6. Impairment
During previous years, Group has recognised impairment loss for
carrying value of exploration and evaluation assets for Mehsana,
Cauvery, Golaghat and Australia blocks. During the year, the
Company has recognised an impairment loss of USD 115.3 MM in the
Deendayal Block on account of postponement of revenues due to delay
in achieving commencement of production, cost escalations and much
lower than expected gas price fixed by GOI. The Company has also
recognised an impairment loss of USD 6.6 MM in Sanand-Miroli as
production from the Miroli Field was evaluated to be commercially
unviable and stopped in April 2015 and there is significant
uncertainty on recommencement of the production.
7. Earnings per share
The following is the reconciliation of the loss attributable to
ordinary shareholders and weighted average number of ordinary
shares used in the computation of basic and diluted earnings per
share:
For the year For the year
ended ended
31 March 2015 31 March 2014
--------------------------------- -------------- --------------
Loss
Loss attributable to ordinary
shareholders
(in thousands of US Dollars) (116,006) (8,503)
Ordinary shares
Weighted average number
of ordinary shares outstanding
used in computing EPS
(Nos.) 416,306,787 416,306,787
Basic and diluted EPS
(USD per share) (0.279) (0.020)
--------------------------------- -------------- --------------
The Group has issued options to its employees during the year
ended 31 March 2015 and 31 March 2014. Since the Group does not
have profits during the current year and in the previous year, the
options issued are considered to have an anti-dilutive effect.
Therefore, the basic and diluted EPS are the same.
8. Related Parties
(a) Related parties and nature of relationships where control exists
Relationship Name of related parties
Ultimate holding company Jubilant Enpro Private
Limited
Holding company Jubilant Energy (Holding)
B.V.
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(b) Related parties and nature of relationships where
transactions have taken place during the year
Relationship Name of related parties
Fellow subsidiary 1) Western Drilling Contractors
Private Limited
2) Enpro Oil Private Limited
Enterprises that are 1) Jubilant Securities Private
directly or indirectly Limited
under the control or 2) Jubilant Capital Private Limited
significant influence 3) Jubilant Life Science Limited
of key management personnel 4) Tower Promoters Private Limited
5) Jubilant Generics Limited
Joint venture of the Geo Enpro Petroleum Limited
ultimate holding company
Key management personnel 1) Shyam S Bhartia (Promoter
and Director)
2) Hari S Bhartia (Promoter and
Director)
3) Sir Robert Paul Reid
4) Arun Kumar Duggal
5) Dr. Andrew William Wood
6) Shahzaad S Dalal
7) Radhey Shyam Sharma
8) Rakesh Jain (appointed w.e.f.
12 August 2013)
9) Vipul Agarwal (resigned subsequently
w.e.f. 30 April 2015)
10) Ramesh Bhatia
11) Premanand Mishra (resigned
w.e.f. 28 February 2014)
12) Anil Mathur (resigned w.e.f.
4 October 2013)
13) Sandeep Budhiraja (resigned
w.e.f. 30 September 2013)
(c) Related party transactions
Ultimate Holding Holding Company Joint Venture
(in thousands Company of the Ultimate
of US Dollars) Holding company
For the year For the year For the year
ended ended ended
31 March 31 March 31 March 31 March 31 March 31 March
2015 2014 2015 2014 2015 2014
------ ----------------- -------------------------- ---------------------------- ------------------------------ ----------------------------- ------------------------------- ---------------------------------
(i) Transactions:
Loans taken 11,385 2,820 6,500 78,180 - -
Loans/repaid - - 5,000 - - -
Share of Joint
operative expenditure
paid - - - - 4,365 8,222
Expenses incurred
by the Group
on their behalf 2 - 57 - 8 645
Bank charges
and guarantee
commission 613 501 350 78 - -
Interest expense
on inter corporate
deposits 1,633 1,053 4,750 1,615 - -
Expenses incurred
on behalf of
the Group 1 3 - - 4,608 8,206
Interest on
redeemable
preference
shares 3,380 3,056 - - - -
Joint Venture
(in thousands Ultimate Holding of the Ultimate
of US Dollars) Company Holding Company Holding company
As at As at As at
-------------------------------------------------------- ------------------------------------------------------------- ------------------------------------------------------------------
31 March 31 March 31 March 31 March 31 March 31 March
2015 2014 2015 2014 2015 2014
------ ----------------- -------------------------- ---------------------------- ------------------------------ ----------------------------- ------------------------------- ---------------------------------
Balances
(ii) outstanding
Trade and other
receivables
(loans and
advances recoverable) - - - - - 89
Loans and borrowings
(unsecured
inter-corporate
deposits) 19,746 8,629 95,992 92,742 - -
Trade and other
payables 1,112 501 1,169 876 204 -
Redeemable
preference
shares 30,793 28,769 - - - -
------------------------ -------------------------- ---------------------------- ------------------------------ ----------------------------- ------------------------------- ---------------------------------
(in thousands of US Fellow Subsidiary Enterprises that
Dollars) are directly or
indirectly under
the control or
significant influence
of key management
personnel
For the year For the year ended
ended
------------------------------------------------------------ ---------------------------------------------------------------
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31 March 31 March 31 March 31 March
2015 2014 2015 2014
------ ---------------------------- ---------------------------- ------------------------------ ------------------------------- ------------------------------
(i) Transactions:
Loans taken - - 12,860 8,295
Loans and advances
given - - 24 -
Expenses incurred
by the Group on their
behalf - 129 - -
Sale of other asset - - 26 64
Expenses incurred
on behalf of the
Group - - 163 88
Interest expense
on inter corporate
deposits 147 149 2,498 633
(in thousands of US Fellow Subsidiary Enterprises that
Dollars) are directly or
indirectly under
the control or
significant influence
of key management
personnel
As at As at
------------------------------------------------------------ ---------------------------------------------------------------
31 March 31 March 31 March 31 March
2015 2014 2015 2014
------ ---------------------------- ---------------------------- ------------------------------ ------------------------------- ------------------------------
(ii) Balances outstanding
Trade and other receivables
(loans and advances
recoverable) 125 131 9,674 10,097
Trade and other payables - - - 15
Loans and borrowings
(unsecured inter-corporate
deposits) 1,089 1,160 22,759 8,942
----------------------------------- ---------------------------- ------------------------------ ------------------------------- ------------------------------
(d) Guarantees given by ultimate holding company
a) Secured foreign currency term loans taken by JENV from EXIM:
Corporate guarantees in respect of these loans have been given by
Jubilant Enpro.
b) Secured foreign currency term loan taken by JENV from Axis
Bank: Corporate guarantee in respect of this loan has been given by
Jubilant Enpro.
c) Secured term loans taken by JEKPL from banks: These loans are
secured by primary charge on all present and future receivables of
Jubilant Enpro relating to Kharsang Field.
d) Non-fund based limit taken by JOGPL, JODPL and JEKPL to
furnish bank guarantee: Corporate guarantee in respect of this
non-fund based facility has been given by Jubilant Enpro.
e) Secured term loans taken by JODPL from banks: JEHBV has
entered into an arrangement of Right of Sale of paid-up shares of
JENV (by way of Project Support Undertaking/non-disposal
undertaking and Power of Attorney on the DMAT account), as held by
JEHBV, having market value equivalent to INR 2,000,000 thousand as
on the date of the arrangement.
f) In 2013-14, JEHBV has availed a foreign currency loan of USD
45,000 thousand from EXIM for utilisation of the loan proceeds
towards investments in/on-lending to the subsidiaries of the
Borrower mainly for exploration, development and related activities
in various operating companies owning oil and gas assets. This loan
is secured by the following:
- Negative lien on the present and future PI and receivables
pertaining to all other oil and gas assets held by the Company
and/or subsidiaries and any other company which holds/shall hold
(PI) in any oil and/or gas Block; provided that in case of fund
raising for a particular oil and gas asset/Block against security
of the first charge on the PI and related cash flows or escrow of
receivables in the said asset/Block with prior approval of Exim
Bank, the negative lien stands converted into a second charge over
the PI and residual cash flows/receivables after meeting the debt
service obligations of the first charge-holder(s).
- An Undertaking from JENV and its subsidiaries for non-disposal
of their shareholding in their respective subsidiaries.
- An irrevocable and unconditional Corporate Counter-Guarantee
by JEKPL for guaranteeing the due performance and discharge by
Jubilant Enpro of its obligations and liabilities in terms of the
counter-guarantee backed by first pari passu mortgage of its
Participating Interest (PI) held in Kharsang oil Field and first
pari passu charge by way of hypothecation over the receivables in
respect of the said PI held in the Kharsang oil Field.
- An irrevocable and unconditional Corporate Counter-Guarantee by JODPL for guaranteeing the due
performance and discharge by Jubilant Enpro of its obligations
and liabilities in terms of the counter-guarantee backed by second
pari passu mortgage of its Participating Interest (PI) held in KG
Block and second pari passu charge by way of hypothecation over the
residual cash flows in respect of the said PI held in the KG Block.
The charge shall rank subservient to the first charge in favour
senior lenders to JODPL.
g) As at 31 March 2015, performance guarantee amounting to USD
2,508 thousand (31 March 2014: USD 2,624 thousand) given by Axis
bank on behalf of Jubilant Securities Private Limited against a
lien on the term deposits of JENVPL amounting USD 125 thousand (31
March 2014 : USD 131 thousand) in respect of Golaghat Block.
h) As at 31 March 2015, performance guarantee amounting to USD
1,584 thousand (31 March 2014: USD 1,658 thousand) given by Axis
bank on behalf of Jubilant Capital Private Limited against a lien
on the term deposits of JEKPL amounting USD 80 thousand (31 March
2014 : USD 84 thousand) in respect of Ankleshwar Block.
i) As at 31 March 2015, performance guarantee amounting to USD
744 thousand (31 March 2014: USD 779 thousand) given by Axis bank
on behalf of Jubilant Capital Private Limited against a lien on the
term deposits of JENVPL amounting USD 37 thousand (31 March 2014 :
USD 39 thousand) in respect of Ankleshwar Block.
j) BG limit of USD 3,198 thousand (31 March 2014: USD 3,347
thousand) is available for JCPL and JSPL within the overall limit
of USD 12,154 thousand (31 March 2014: USD 12,718 thousand) of
JOGPL and negative lien on participating interest of JCPL and JSPL
in the Blocks.
9. Contingencies
Contingent liabilities in respect of matters currently in
dispute comprise:
S Entity Dispute Description Status
No With
---- ------------- ----------------- --------------------------------- -------------------
1 Jubilant Service Alleged for non-payment Appeal pending
Oil and tax authorities of service tax on advisory before Customs,
Gas Private and assisting services Excise and
Limited provided to various foreign Service Tax
(JOGPL) entities for their operations Appellate
in India. The amount Tribunal,
involved is USD 149 thousand. Delhi
---- ------------- ----------------- --------------------------------- -------------------
2 Jubilant Asian JOGPL, as an Operator Notice sent
Oil & Oil Field of Manipur- I Block, to AOSL by
Gas Private Services entered into a Seismic JOGPL
Limited Limited Contract with AOSL. Due
(JOGPL) ("AOSL") to non-performance, JOGPL
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put on hold the invoices
amounting to USD 356
thousand. JOGPL has claimed
an amount USD 1,090 thousand
as Liquidated Damages
and damages to JOGPL
attributable to the wanton,
flagrant breach by the
AOSL. JOGPL has retained
aforesaid invoices in
its 'Right to set-off'.
---- ------------- ----------------- --------------------------------- -------------------
3 Jubilant Directorate DGH claimed USD 4,767 To be decided
Oil & General thousand (JOGPL's share after discussion
Gas Private of Hydrocarbons USD 954 thousand) being with Government
Limited ("DGH") the difference in the of India.
(JOGPL) Liquidated Damages amount
between provisionally
paid on pre-estimated
cost basis and actual
cost for 2nd and 3rd
extension of Phase -I
of Tripura Block. JOGPL
has sought from DGH the
details of calculation
and copy of relevant
policy under which differential
LD has been claimed.
Subsequently, DGH has
directed the Operator
to make the part payment
amounting to USD 3,060
thousand (JOGPL's share
USD 612 thousand) and
balance amount to be
decided after discussion
and approval of Government
of India. Operator has
accepted the same and
accordingly JOGPL has
provided its share amounting
to USD 612 thousand in
the current year.
---- ------------- ----------------- --------------------------------- -------------------
4 Jubilant Manipur The Manipur (State Government) Company has
Oil & State has asked JOGPL, as an requested
Gas Private Government operator of Manipur- State Government
Limited I Block, to extend the to suspend
(JOGPL) Petroleum Exploration the PEL fees
License (PEL) for a period until the
of one year and requested force majeure
for payment of PEL fee situation
amounting to USD 142 is alleviated
thousand. Due to force and the matter
majeure situation, JOGPL is under
has requested State Government consideration.
to suspend the PEL fees.
The PEL fees have not
been paid after 14th
November 2014.
---- ------------- ----------------- --------------------------------- -------------------
5 Jubilant Manipur The Manipur (State Government) Company has
Oil & State has asked JOGPL, as an requested
Gas Private Government operator of Manipur- State Government
Limited II Block, to extend the to suspend
(JOGPL) Petroleum Exploration the PEL fees
License (PEL) for a period until the
of one year and requested force majeure
for payment of PEL fee situation
amounting to USD 111 is alleviated
thousand. Due to force and the matter
majeure situation, JOGPL is under
has requested State Government consideration.
to suspend the PEL fees.
The PEL fees have not
been paid after 14th
November 2014.
---- ------------- ----------------- --------------------------------- -------------------
6 Jubilant Geophysical Non-performance of 3D Objection
Energy Institute seismic project by GII petition
Kharsang of Israel in accordance with Contract pending before
Private (GII) provisions. The Arbitral Hon'ble Delhi
Limited Tribunal has allowed High Court
(JEKPL) the claims of GII to
the tune of USD 1,416
thousand (JEKPL's share
USD 354 thousand). The
Operator has challenged
the Arbitral Award by
filing an objection petition
before the Hon'ble Delhi
High Court. The Operator
has filed a counter claim
of USD 1,771 (USD 443
thousand JEKPL's share).
---- ------------- ----------------- --------------------------------- -------------------
7 Jubilant C.A.T. Non-performance of 3D Matter is
Energy Geodata seismic project by CAT pending before
Kharsang GmbH (CAT) in accordance with Contract the Sole
Private provisions. The Operator Arbitrator
Limited terminated the contract (as appointed
(JEKPL) and encashed the bank by the Hon'ble
guarantee of USD 525 Supreme Court)
thousand (JEKPL's share
USD 131 thousand). CAT
had claimed return of
bank guarantee and payment
of USD 2,544 thousand
(JEKPL's share USD 636
thousand) towards unpaid
invoice and direct operational
expense. Disposing of
the Arbitration Petition
filed by CAT, the Hon'ble
Supreme Court has appointed
the Sole Arbitrator to
resolve the dispute.
Operator appealed the
matter and Supreme Court
has appointed a Sole
Arbitrator to resolve
the dispute. Operator
also filed a counter
claim of approximately
USD 867 thousand (JEKPL's
share USD 217 thousand).
---- ------------- ----------------- --------------------------------- -------------------
8 Jubilant Income With respect to the income Appeal is
Energy Tax Authorities tax assessment, for the pending before
Kharsang financial year 2010-11, CIT(A), Delhi
Private interest expense USD
Limited 280 thousand and community
(JEKPL) development expenses
of USD 33 thousand were
disallowed accordingly
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