Information from year end 2016 report Misen Energy AB (publ)

Following is a summary of the financial information given in year end January-December 2016 report 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_2016_ENG.pdf

January – December 2016:

• Consolidated operating group income: KSEK 33,387 (14,609)
• Consolidated group net turnover: KSEK 675,340 (884,373)
• Earnings per share: SEK 0,01 (-0,23)
• Production of natural gas: 596.6 million cubic meters (687.5)

Summary of results:

• Sluggish implementation of the investment program due to exorbitant subsoil use charge resulted in declining production levels of the Joint Activity (“JA”) during January – December 2016.
• During January – December 2016 changed basis of calculation of subsoil use charge resulted in higher margins for Misen Energy AB (publ) led JA what gave rise to consolidated operating group income being 28 % higher when compared to the results for January - December 2015.
• Lower sales prices as well as refusal to deliver hydrocarbons by PJSC Ukrgazvydobuvannya resulted in consolidated group net turnover being lower by 24 % in January-December 2016 compared to the same period of previous year.
• Accumulated earnings per share for January – December 2016 are positive compared to negative indicator for January - December 2015.
• Due to increased subsoil use charge JA investment program fell by 88 % in January – December 2016 compared to January - December 2015.

Key events:

• The Government of Ukraine continued to impose a 70 % subsoil use charge for enterprises established under the Joint Activity Agreements. This has been done in accordance with the laws adopted in late 2014.
• On 5 July Misen Energy AB (publ) completed the sale of 37.5 % of the shares and share capital in its subsidiary Misen Enterprises AB to the Hong Kong based company Powerful United Limited. Misen Energy AB (publ) became to be debt-free and secured financing for the Swedish operation for the period of two years. 
• On 18 July 2016 PJSC Ukrgasvydobuvannya submitted the Request for Arbitration to the Arbitration Institute of the Stockholm Chamber of Commerce and requested termination of Joint Activity Agreement No. 3 dated 10 June 2002 (as further amended) between PJSC Ukrgasvydobuvannya, LLC Karpatygaz and Misen Enterprises AB (“JAA No. 3”).
• In October and November 2016 Pechersk District Court in Kyiv arrested the JA’s property and prohibited LLC Karpatygaz from disposing in any manner of that property. The court rulings arresting the JA’s property have been fully enforced. LLC Karpatygaz confirmed enforcement of the rulings by signing the respective documents in November 2016
• Since December 2016 PJSC Ukrgazvydobuvannya continued its manifestly unlawful actions and refused to provide services with respect to production, collection, treatment and transportation of natural gas, gas condensate, oil and LPG to JA. PJSC Ukrgazvydobuvannya actions resulted in inability of JA to sell the hydrocarbons. Due to these actions Misen Enterprises AB and LLC Karpatygaz, partially owned subsidiaries of Misen Energy AB (publ), could not properly implement JAA No.3 and pay the exorbitant subsoil use charge to Ukraine.
• Misen Enterprises AB and LLC Karpatygaz, the two partially owned subsidiaries of Misen Energy AB (publ), requested the tribunal to reject all claims of PJSC Ukrgasvydobuvannya and order PJSC Ukrgasvydobuvannya to compensate the losses that Misen Enterprises AB and LLC Karpatygaz incurred as a result of PJSC Ukrgasvydobuvannya’s failure to implement JAA No.3.

Key events after end of Q4 2016:

• Misen Energy AB (publ) is in meaningful discussions with the Government of Ukraine regarding application of the exorbitant subsoil use charge and its increasing negative effect to the Company’s investments in Ukraine. Misen Energy AB (publ) reserves its right to submit the dispute to international arbitration in accordance to the Agreement between the Government of the Kingdom of Sweden and the Government of the Ukraine on the Promotion and Reciprocal Protection of Investments.
• Misen Enterprises AB and LLC Karpatygaz, the two partially owned subsidiaries of Misen Energy AB (publ), participate in an arbitration proceeding commenced by PJSC Ukrgasvydobuvannya in 2017 under the JAA No.3 and vigorously defend the legitimate interests of their investors.
• PJSC Ukrgazvydobuvannya continues its manifestly unlawful actions and refuses to provide services with respect to production, collection, treatment and transportation of natural gas, gas condensate, oil and LPG to JA. Being prevented from selling the hydrocarbons Misen Group could not properly implement JAA No.3 and pay the exorbitant subsoil use charge to Ukraine. 
• On 23 February 2017 a district court in Kyiv arrested the JA’s Booster Compressor Stations (“BCS”). The court ruling prevents LLC Karpatygaz, a partially owned subsidiary of Misen Energy AB (publ), from operating the BCSs and obliges to transfer them to PJSC Ukrgasvydobuvannya. As a result, LLC Karpatygaz cannot perform its daily operations and properly implement JAA No. 3. LLC Karpatygaz will comply with the court ruling in accordance with Ukrainian law.

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 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 PJSC Ukrgasvydobuvannya (49.99%), a subsidiary of the National Joint Stock Company Naftogaz of Ukraine. PJSC 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 Misen Energy AB (publ) sold 37.5 % of Misen Enterprises AB shares to the Hong Kong based company Powerful United Limited. Owning (the remaining) 62.5% of Misen Enterprises AB shares, Misen Energy AB (publ) maintains full control of the company and preserves a right to obtain 62.5% 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 12:00 CET on 28 February 2017.