tulip oil netherlands offshore b.v. · 2019. 10. 17. · 2 half yearly report h1 2018 important...

H1 2018 UNAUDITED HALF YEARLY REPORT FOR

TULIP OIL NETHERLANDS OFFSHORE B.V.

The Hague, 30 August 2018

2018 All Statements contained in this document are subject to legal disclaimer and risk factors detailed in Appendix 1.

Forward-looking statements in this report reflect current views about future events and are, by their nature, subject

to significant risks as detailed and uncertainties because they relate to events and depend on circumstances that

will occur in the future.

All figures are presented in € unless otherwise stated, and figures in brackets apply to the corresponding period in

the previous period.

2 HALF YEARLY REPORT H1 2018

Important information and disclaimer

THIS REPORT (THE “REPORT”) CONTAINS FINANCIAL INFORMATION (THE “FINANCIAL INFORMATION”), OPERATIONAL, LEGAL AND OTHER

INFORMATION CONCERNING TULIP OIL NETHERLANDS B.V. (THE “COMPANY”) AND ITS BUSINESS. THE REPORT HAS BEEN PREPARED BY OR AT

THE DIRECTION OF THE COMPANY FOR INFORMATION PURPOSES ONLY. THE INFORMATION CONTAINED IN THIS REPORT MAY INCLUDE RESULTS OF ANALYSES FROM A QUANTITATIVE MODEL THAT MAY REPRESENT

POTENTIAL FUTURE EVENTS THAT MAY OR MAY NOT BE REALIZED, AND IS NOT A COMPLETE ANALYSIS OF EVERY MATERIAL FACT RELATING TO

THE COMPANY OR ITS BUSINESS. THIS REPORT CONTAINS PROJECTIONS AND FORWARD LOOKING STATEMENTS. THE WORDS “BELIEVE”, “EXPECT”, “COULD”, “MAY”, “ANTICIPATE”, “INTEND” AND “PLAN” AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. ALL

STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDED IN THE REPORT, INCLUDING, WITHOUT LIMITATION, THOSE REGARDING

THE FINANCIAL INFORMATION, THE COMPANY’S FINANCIAL POSITION, POTENTIAL BUSINESS STRATEGY, POTENTIAL PLANS AND POTENTIAL

OBJECTIVES, ARE FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE COMPANY’S ACTUAL RESULTS, PERFORMANCE, ACHIEVEMENTS AND VALUE TO

BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE, ACHIEVEMENTS OR VALUES EXPRESSED OR IMPLIED BY SUCH

FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE

COMPANY’S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. NO

WARRANTY OR REPRESENTATION IS GIVEN BY THE COMPANY OR ANY OF ITS REPRESENTATIVES AS TO THE REASONABLENESS OF THESE

ASSUMPTIONS. FURTHER, CERTAIN FORWARD-LOOKING STATEMENTS ARE BASED UPON ASSUMPTIONS OF FUTURE EVENTS THAT MAY NOT

PROVE TO BE ACCURATE. THE FORWARD-LOOKING STATEMENTS IN THE FINANCIAL INFORMATION SPEAK ONLY AS AT THE DATE OF THE

FINANCIAL INFORMATION AND THE COMPANY ASSUMES NO OBLIGATION TO UPDATE OR PROVIDE ANY ADDITIONAL INFORMATION IN RELATION TO

SUCH FORWARD-LOOKING STATEMENTS. NOTHING IN THIS REPORT IS, OR SHOULD BE CONSTRUED AS, A PROFIT FORECAST. BY ATTENDING OR

RECEIVING THIS REPORT, YOU ACKNOWLEDGE THAT YOU WILL BE SOLELY RESPONSIBLE FOR FORMING YOUR OWN VIEW OF THE POTENTIAL

FUTURE PERFORMANCE OF THE COMPANY.


HIGHLIGHTS IN H1 2018 CONTENTS

Q10AProject on track

€61mln in available cash and cash equivalents

+€25mlndrawn down from the bond

€49mln Available fiscal losses

(€13mln in CIT and €36mln in SPS end 2017)

Key events in H1 2018 4

Summary of financial results 5

Summary of the first half year 6

Financial review 8

Financial statements with notes 10

Income statement 11

Statement of financial position 12,13

Statement of changes in equity 14

Statement of cash flow 15

Notes to the financial statements 16

Appendix 1 – Risk Factors 25

All figures are presented in € unless otherwise stated, and figures in brackets apply to the first half year period in

2017 (H1 2017).

3D model view of Q10A Tulip platform


KEY EVENTS IN H1 2018

KEY EVENTS - OUTLOOK

Q10A Final Investment Decision11 January 2018

First Steel has been cut for the Q10A unmanned offshore platform18 April 2018

Line Pipe produced and deliveredApril 2018

Dredging and rock removal for the pipelay completed on seabedMay 2018

Rig contract signed with Borr (Prospector 1)5 June 2018

Pipelay operation using Allseas Lorelay vessel completed in record time.28 June 2018

Project engineering design work finalised

All long leads ordered for platform and pipeline which are being delivered as per plan.

Construction work for the platform and jacket on schedule.

Q2 2018

Listing of Bond on the Oslo Bors - August 2nd

Trenching of pipeline

Installation of the spool pieces near P15-D

Closing weather deck and start assembling and hook-up equipmentQ3 2018

Commencement of Installation of jacket and topside operationQ4 2018


SUMMARY OF FINANCIAL RESULTS

(€ 1000)

H1 2018 H1 2017

2017 Audited

FY

2016 Audited

FY

Operating profit/(loss) (936.9) (567.9) (1,944.8) (7,098.6) EBITDA (900.5) (506.2) (1,883.1) (1,337.0) Net profit/(loss) for the period (658.1) (997.8) (3,348.2) (4,032.0) Cash flow from operations (4,342.4) (2,340.0) (4,183.1) (2,338.0) Cash flow from investments (14,357.8) (97.2) (455.4) (6,461.6) Total assets 116,474.3 22,645.9 105,953.9 23,085.6 Net interest-bearing debt 93,494.8 29,726.6 93,322.2 27,651.6 Cash and cash equivalents 60,661.5 45.2 79,386.3 407.4


SUMMARY OF THE FIRST HALF YEAR 2018

On 11 January 2018, the Board of Tulip Oil Holding B.V. approved to take final investment decision (“FID”)

on the Q10A project within Tulip Oil Netherlands Offshore B.V. (“the company” or “TONO”). This marked

the successful conclusion to many successful steps throughout 2017 to allow Tulips’ Partner EBN and the

board of Tulip to approve the commencement of the Q10A Project for Development.

The company has proceeded expeditiously to build the offshore platform, lay the pipeline and make the

connections with the P15D TAQA platform. During the first half of the year, significant progress has been

achieved and to date more than 50% of the pre drilling project scope has been completed. The notable

events have been the finalisation of the project engineering design work, the ordering of all key long leads

for the platform and the pipeline which are being delivered as per plan. The construction work for the

platform deck and jacket is progressing and on schedule. The pipelay operation using the Allseas Lorelay

vessel has been completed in record time.

The company expects to install the jacket and the topside before the end of this year, following which the

company will re-connect the existing exploration well and drill four new production wells.

In June 2018, the company has contracted the Borr Prospector 1 offshore rig to be used for the drilling

programme in 2019.

EBITDA for H1 2018 (H1 2017) amounted to a loss of €900.5 (loss of €506.2) thousand and EBIT was a

loss of €936.9 (loss of €567.9) thousand. Net loss for the period was a loss of €658.1 (loss of €997.8)

thousand. Interest bearing debt amounted to €93,494.8 (€29,726.6) thousand at 31 December 2017

comprising of both the bond and the intercompany loan from Tulip Oil Netherlands BV. Fiscal corporate tax

losses at 31 December 2017 amounted to €13 million and fiscal state profit share losses amounted to €36

million.

On the 2 August 2018, Tulip Oil Netherlands Offshore B.V. FRN 8.50% Senior Secured €87 million Callable

Bond Issue 2017/2022 – ISIN 001080823.1 was listed on the Oslo Bors.

Allseas’ Lorelay pipelaying vessel

& Fortitude arriving at P15D


Pipeline on rail

cars

Rock removal from

seabed

Concrete mattresses for

for pipeline crossings

First Factory

Acceptance Testing

on Wellhead control

panel

Pipeline installation

Pipeline Laydown heads

(removed with spool piece)

First steel cutting

Welding the

platform cellar

deck

PIPELINE PLATFORM


FINANCIAL REVIEW

INCOME STATEMENT

(€ 1000) H1 2018 H1 2017

Total income - - EBITDA (900.5) (506.2) EBIT (936.9) (567.9) Net financial items (2,142.7) (1,202.4) Profit/(loss) before taxes

(3,079.6) (1,770.3)

Taxes 2,421.5 772.5 Net profit/(loss) for the period

(658.1) (997.8)

Production costs for the period are higher at €550.1

thousand (€147.4 thousand) in line with

expectations. These higher costs are due to

insurance costs related to the Q10A development

project and higher surface rights cost following the

granting of a production licence. Other operating

expenses are similar to the comparative previous

period.

There is no depreciation or impairment on tangible

fixed assets in the period. The Q10A platform is

under construction and depreciation will commence

after first gas production.

TONO commenced capitalization of interest from

the date of Final Investment Decision. This has

resulted in some of the interest expenses being

transferred to capital expenditure.

The net loss for the period was lower at €(658.1)

(€(997.8)) thousand mainly as a result of a large tax

credit of €2,421.5 (€772.5) thousand arising from

project expenditure offset by higher net financial

items of €(2,142.7) (€(1,202.4)) thousand.

Interest is being regularly accrued on the bond

payable in 2022. Quarterly instalment payments in

January and April 2018 have been duly made. July

2018 payments have also been made.

STATEMENT OF FINANCIAL POSITION

(€ 1000) H1 2018 H1 2017

Deferred tax assets 12,633.6 8,689.4 PPE 35,337.4 13,765.1 Cash and cash equivalents

60,661.5 45.2

Net working capital (6,872.0) 77.8 Total assets 116,474.3 22,645.9 Equity 10,208.3 (7,299.8) Interest bearing debt

93,494.8 29,726.6

Deferred tax assets increased to €12,633.6

(€8,689.4) thousand with the operating loss incurred

in the half year period. Total available fiscal

corporate tax losses at 31 December 2017

amounted to €13 million and fiscal state profit share

losses amounted to €36 million. Management

expects to fully utilize these losses once first gas

production starts in 2019.

At 30 June 2018, the project, excluding drilling

scope, has progressed significantly with some 50%

of the work complete. This translates into the

increase in property, plant and equipment to

€35,337.4 (€13,765.1) thousand.

Cash and cash equivalents continue to remain

strong with balances of €60,661.5 (€45.2) thousand

as of 30 June 2018 which is forecast to suffice for

the completion of the ongoing Q10A development

project.

Equity amounted to €10,208.3 (€-7,299.8) thousand

at the half year, corresponding to an equity ratio of

8.8% (-32.2%) percent. The improvement is

resulting from the capitalisation of intercompany

loans.


CASHFLOW STATEMENT

(€ 1000) H1 2018 H1 2017

Cash flow from operations

(4,342.4) (2,340.0)

Cash flow from investing

(14,357.8) (97.2)

Cash flow from financing

(24.6) 2,075.0

Net change in cash and cash eq.

(18,724.8) (362.2)

Cash and cash eq. end of period

60,661.5 45.2

An outflow of cash from operating activities of

€4,342.4 (€2,340.0) thousand is mainly driven from

operating expenses and interest payable on the

bond and intercompany loans.

The cash outflow on investing activities of €14,357.8

(€97.2) thousand comprises milestone payments for

the Q10A development to key suppliers and project

interest paid during the period.

Funding

At the end of H1 2018, the company had total

available liquidity of €60,661.5 (€45.2) thousand,

comprising of cash and cash equivalents of

€51,307.6 (€45.2) thousand and restricted cash and

cash equivalents of €9,353.9 (€nil) thousand. The

restricted cash mainly relates to the minimum cash

balance that needs to be held and the amounts held

exclusively for interest payments on the bond.

In October 2017, the company priced senior

secured notes offering of €87 million aggregate

principal amount due in 2022 at par in a bullet

manner. The coupon rate on the bond amounts to 3

month EURIBOR + 8.5% p.a. with interest payable

quarterly. The offering was closed on 25 October

2017. The bond has been listed on the Oslo Bors

on 2 August 2018.

10

FINANCIAL

STATEMENTS

WITH NOTES


INCOME STATEMENT

Unaudited Unaudited Audited

H1 H1 01.01-31.12

(€ 1000) Note 2018 2017 2017

Petroleum revenues - - -

Total Income - - -

Exploration expenses 2 (3.7) (0.7) (0.7)

Production costs (550.1) (147.4) (158.9)

Depreciation 6,7 (36.4) - -

Impairments 3,7 - (61.7) (61.7)

Other operating expenses 4 (346.7) (358.1) (1,723.5)

Total operating expenses (936.9) (567.9) (1,944.8)

Operating profit/(loss) (936.9) (567.9) (1,944.8)

Interest income - - -

Other financial income 0.2 - 0.1

Interest expenses (1,719.6) (1,197.9) (3,537.4)

Other financial expenses (423.3) (4.5) (161.3)

Net financial items 5 (2,142.7) (1,202.4) (3,698.6)

Profit/(loss) before taxes (3,079.6) (1,770.3) (5,643.4)

Tax (charge)/credit 6 2,421.5 772.5 2,295.2

Net profit/(loss) for the period (658.1) (997.8) (3,348.2)

Net profit/(loss) for the period is attributable to:

Tulip Oil Netherlands Offshore B.V. (658.1) (997.8) (3,348.2)

STATEMENT OF COMPREHENSIVE INCOME


H1 H2 01.01-31.12

(€ 1000) 2018 2017 2017

Net profit/(loss) for the period (658.1) (997.8) (3,348.2)

Total comprehensive income in period (658.1) (997.8) (3,348.2)




H1 H1 (restated – see note 1)

H2 (restated – see note 1)

(€ 1000) Note 30.06.2018 30.06.2017 31.12.2017

ASSETS

Intangible assets

Other intangible assets 7 1,766.8 - 1,803.2

Tangible fixed assets

Property, plant and equipment 8 35,337.4 13,765.1 14,037.0

Financial assets

Deferred tax assets 6 12,633.6 8,689.4 10,212.1

Total non-current assets 49,737.8 22,454.5 26,052.3

Inventories

Inventories - - -

Receivables

Accounts receivable 3,442.6 114.3 323.3

Other short-term receivables 9 2,632.4 31.9 192.0

Cash and cash equivalents

Cash and cash equivalents * 9 60,661.5 45.2 79,386.3

Total current assets 66,736.5 191.4 79,901.6

TOTAL ASSETS 116,474.3 22,645.9 105,953.9

*including restricted cash and cash equivalents





H2 (restated – see note 1)

(€ 1000) Note 30.06.2018 30.06.2017 31.12.2017

EQUITY AND LIABILITIES

Equity

Share capital - - -

Share premium 20,516.6 - 20,516.6

Retained earnings (10,308.3) (7,299.8) (9,650.2)

Total equity 10,208.3 (7,299.8) 10,866.4

Non-current liabilities

Deferred taxes - - -

Long-term abandonment provision 11 210.8 150.7 69.0

Long-term bonds 12 83,305.0 - 82,904.6

Interest-bearing loans from affiliates 13 8,000.0 29,726.6 8,000.0

Other non-current liabilities 1,803.2 - 1,803.2

Current liabilities

Trade creditors 7,567.9 24.6 664.4

Accrued expenses 3,634.1 - 58.3

Liabilities against affiliates 389.2 43.8 252.8

Other current financial liabilities 14 1,355.8 - 1,335.2

Total liabilities 106,266.0 29,945.7 95,087.5

TOTAL EQUITY AND LIABILITIES 116,474.3 22,645.9 105,953.9


STATEMENT OF CHANGES IN EQUITY (Unaudited)

(€ 1000) Share

capital Share

premium Retained earnings

Total equity

Equity as of 31.12.2016 (restated) - - (6,302.0) (6,302.0)

Share premium injection - - - -

Net profit/(loss) for the period - - (997.8) (997.8)

Equity as of 30.06.2017 - - (7,299.8) (7,299.8)

Share premium injection - 20,516.6 - 20,516.6 Net profit/(loss) for the period - - (2,350.4) (2,350.4)

Equity as of 31.12.2017 - 20,516.6 (9,650.2) 10,866.4

Share premium injection - - - -

Net profit/(loss) for the period - - (658.1) (658.1)

Equity as of 30.06.2018 - 20,516.6 (10,308.3) 10,208.3


STATEMENT OF CASH FLOW

Note Unaudited Unaudited Audited

H1 H1 01.01-31.12

(€ 1000) 2018 2017 2017

CASH FLOW FROM OPERATING ACTIVITIES


Net financial items 5 2,142.7 1,202.4 3,698.6

Taxes paid during the period 6 - - -

Depreciation 7 36.4 - -

Impairment losses 8 - 61.7 61.7

Interest paid:

Interest expenses 5 (2,142.7) (1,202.4) (3,698.6)

Accretion expenses 5 (1.6) 4.5 9.1

Unwinding of bond discount 5 172.5 - 62.2

Change in other current financial liabilities (796.8) - 1,335.2

Amortisation of legal bond costs 5 252.4 - 90.0

Decrease/(increase) in trade and other receivables

(3,798.9) 885.5 516.2

Decrease/(increase) in trade, other payables and provisions

2,873.2 (1,521.4) (614.1)

NET CASH FLOW FROM OPERATING ACTIVITIES

(4,342.4) (2,340.0) (4,183.1)

CASH FLOW FROM INVESTMENT ACTIVITIES

Payments to acquire tangible fixed assets (12,825.1) (97.2) (455.4)

Interest paid for project capital expenditure (1,532.7) - -

NET CASH FLOW FROM INVESTMENT ACTIVITIES

(14,357.8) (97.2) (455.4)

CASH FLOW FROM FINANCING ACTIVITIES

Loans received from affiliates 13 - 2,075.0 2,865.0

Loans repaid to affiliate 13 - - (2,000.0)

Bond setup costs paid (24.6) - (2,507.6)

Net proceeds from issuance of bond - - 85,260.0

NET CASH FLOW FROM FINANCING ACTIVITIES

(24.6) 2,075.0 83,617.4

Net change in cash and cash equivalents (18,724.8) (362.2) 78,978.9

Cash and cash equivalents at start of period 79,386.3 407.4 407.4

CASH AND CASH EQUIVALENTS AT END OF PERIOD

10 60,661.5 45.2 79,386.3


NOTES TO THE FINANCIAL STATEMENTS (Unaudited)

(All figures in € 1000 unless otherwise stated)

These interim financial statements have been prepared in accordance with the International Financial

Reporting Standards as adopted by the EU ("IFRS") IAS 34 "Interim Financial Reporting". Thus the interim

financial statements do not include all information required by IFRS and should be read in conjunction with the

company’s annual financial statements as at 31 December 2017. The interim financial statements reflect all

adjustments which are, in the opinion of management, necessary for a fair statement of the financial position,

results of operations and cash flows for the dates and interim periods presented. Interim period results are not

necessarily indicative of results of operations or cash flows for an annual period. These interim financial

statements have not been subject to review or audit by independent auditors.

These interim financial statements were authorized for issue by Tulip Oil Holding B.V’s Board of Directors on

29 August 2018.

Note 1 Accounting principles

The accounting principles used for this interim report are consistent with the principles used in the Company’s

(Tulip Oil Netherlands Offshore B.V.) annual financial statements as at 31 December 2017. There are no new

standards effective from 1 January 2018.

In preparing these interim financial statements, management has made judgements, estimates and

assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities,

income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Company’s accounting policies and the key

sources of estimation uncertainty were the same as those that applied to the annual financial statements as at

31 December 2017.

The prior year financial statements have been restated for an overstatement in the deferred tax asset balance arising from the non recognition of some temporary differences. This restatement results in an adjustment to the opening retained earnings at 1.1.2016 of €3,254.9 thousand. For full details see the financial statements for the year ended 31 December 2017. Note 2 Exploration expenses


H1 H1 01.01-31.12

(€ 1000) 2018 2017 2017

Other exploration expenses 3.7 0.7 0.7

Total exploration expenses 3.7 0.7 0.7

Note 3 Impairments

Impairment tests of individual cash-generating units are performed when impairment triggers are identified. No

triggers have been identified during the first half of 2018. The Q10A development took Final Investment

Decision on 11 January 2018.


Note 4 Other operating expenses

Unaudited Unaudited Audited H1 H1 01.01-31.12 (€ 1000) 2018 2017 2017

Salary and contractors 57.6 4.1 9.8 Travel and travel related costs 43.6 10.5 109.2 IT and communication 149.7 - 89.2 Professional services 84.2 (6.0) 285.6 Cost recharges 1,490.7 469.9 1,672.4 Other (including recovery of cost) (1,479.1) (120.4) (442.7)

Total other operating expenses 346.7 358.1 1,723.5

There are no employees of the company in the first half of 2018 (H1 2017: Nil).

The directors of Tulip Oil Netherlands Offshore B.V. received no compensation for their services. All fees

related to the duties of the directors is disclosed in the consolidated financial statements of the parent, Tulip

Oil Holding B.V.

Note 5 Financial items


H1 H1 01.01-31.12

(€ 1000) 2018 2017 2017

Other financial income (0.2) - (0.1)

Total interest income (0.2) - (0.1)

Interest expenses 3,737.7 - 1,335.2

Interest on loans from affiliates 331.4 1,197.9 2,202.2

Capitalized interest cost, development projects (2,349.5) - -

Total interest expenses 1,719.6 1,197.9 3,537.4

Bond discount unwinding 172.5 - 62.2

Accretion expenses (1.6) 4.5 9.1

Amortised loan costs 252.4 - 90.0

Total other financial expenses 423.3 4.5 161.3

Net financial items 2,142.7 1,202.4 3,698.6


Note 6 Taxes



01.01-31.12 (restated – see note 1)

Taxes for the period (€ 1000) 2018 2017 2017

Calculated current year tax - - -

Change in deferred taxes 2,421.5 772.5 2,295.2

Tax (charge)/credit 2,421.5 772.5 2,295.2

The income tax credit for the year can be reconciled to the accounting profit as follows:



01.01-31.12 (restated – see note 1)

2018 2017 2017


Combined tax rate of corporate income tax and State Profit Share of 50%

1,539.8 885.2 2,821.7

Fluctuations from statutory rate:

Tax deduction not expensed 2,473.3 37.3 513.8

Settlement of losses with no cash settlement (387.6) (177.0) (400.1)

Other movements (1,204.0) 27.0 (640.2)

Tax (charge)/credit 2,421.5 772.5 2,295.2

Unaudited

Tax losses Provisions Other Total

Deferred taxes for the period (€ 1000)

At 31 December 2016 - restated 10,052.0 73.1 (2,208.2) 7,916.9

(Charged)/credited to:

Profit and loss account 734.2 0.7 37.6 772.5

At 30 June 2017 10,786.2 73.8 (2,170.6) 8,689.4

(Charged)/credited to: Profit and loss account 2,543.2 (39.3) (981.2) 1,522.7

At 31 December 2017 13,329.4 34.5 (3,151.8) 10,212.1

(Charged)/credited to:

Profit and loss account 2,391.7 70.9 (41.1) 2,421.5

At 30 June 2018 15,721.1 105.4 (3,192.9) 12,633.6

The significant deferred tax assets at the end of the year relate primarily to the corporate income tax losses that can be carried for a period of nine years from the originating year and State Profit Share losses that can be carried forward indefinitely. Management expects to recover these losses against future profits.


Note 7 Intangible assets

Unaudited

(€ 1000) Licenses*

Acquisition cost 01.01.2017 -

Additions -

Disposals -

Reclassification -


Accumulated depreciation and impairments 01.01.2017 -

Depreciation -

Impairment -


Book value 30.06.2017 -

Acquisition cost 30.06.2017 - Additions* 1,803.2 Disposals - Reclassification -

Acquisition cost 31.12.2017 1,803.2 Accumulated depreciation and impairments 30.06.2017 - Depreciation - Impairment -


Book value 31.12.2017 1,803.2


Additions* 1,803.2

Disposals -

Reclassification -

Acquisition cost 30.06.2018 1,803.2


Depreciation (36.4)

Impairment -

Accumulated depreciation and impairments 30.06.2018 (36.4)

Book value 30.06.2018 1,766.8

*see note 14

Licences are depreciated over the licence period of 24 years.


Note 8 Tangible fixed assets

Unaudited Unaudited Unaudited Unaudited

(€ 1000) Assets under construction

Production facilities

including wells

Fixtures and fittings,

office equipment Total

Acquisition cost 31.12.2016 19,491.2 - - 19,491.2 Additions 97.2 - - 97.2 Other movements - - - - Reclassification - - - -

Acquisition cost 30.06.2017 19,588.4 - - 19,588.4 Accumulated depreciation and impairments 31.12.2016

(5,761.6) - - (5,761.6)

Depreciation - - - - Impairment (61.7) - - (61.7)

Accumulated depreciation and impairments 30.06.2017

(5,823.3) - - (5,823.3)

Book value 30.06.2017 13,765.1 - - 13,765.1

Acquisition cost 30.06.2017 19,588.4 - - 19,588.4 Additions 358.1 - - 358.1 Other movements (86.2) - - (86.2) Reclassification - - - -

Acquisition cost 31.12.2017 19,860.3 - - 19,860.3 Accumulated depreciation and impairments 30.06.2017

(5,823.3) - - (5,823.3)

Depreciation - - - - Impairment - - - -


(5,823.3) - - (5,823.3)

Book value 31.12.2017 14,037.0 - - 14,037.0

Acquisition cost 31.12.2017 19,860.3 - - 19,860.3 Additions 21,157.0 - - 21,157.0 Other movements 143.4 - - 143.4 Reclassification - - - -

Acquisition cost 30.06.2018 41,160.7 41,160.7 Accumulated depreciation and impairments 31.12.2017

(5,823.3) - - (5,823.3)

Depreciation - - - - Impairment - - - -


(5,823.3) - - (5,823.3)

Book value 30.06.2018 35,337.4 - - 35,337.4


Note 8 Tangible fixed assets (cont’d)


H1 H1 01.01-31.12

Depreciation in the Income statement (€ 1000) 2018 2017 2017

Depreciation of tangible fixed assets - - -

Depreciation of intangible assets 36.4 - -

Total depreciation in the Income statement 36.4 - -

Impairment in the Income statement (€ 1000)

Impairment/(reversal) of tangible fixed assets - 61.7 61.7

Total impairment in the Income statement - 61.7 61.7

Note 9 Other short-term receivables


(€ 1000) 30.06.2018 30.06.2017 31.12.2017

Project invoices in advance of work done 2,568.7 - 20.7

VAT receivable 63.7 31.9 171.3

Total other short-term receivables 2,632.4 31.9 192.0


Note 10 Cash and cash equivalents

The item 'Cash and cash equivalents' consists of bank accounts and bond related restricted cash balances.

The restricted funds relate to four quarters of interest payments on the bond and the remaining amount relates

to funds available in specified tranches after final investment decision. Final investment decision of the project

was taken on 11 January 2018.


(€ 1000) 30.06.2018 30.06.2017 31.12.2017

Cash in hand - - -

Bank accounts 51,307.6 45.2 6,529.2

Restricted funds 9,353.9 - 72,857.1

Cash and cash equivalents 60,661.5 45.2 79,386.3

Note 11 Provision for abandonment liabilities


(€ 1000) 30.06.2018 30.06.2017 31.12.2017

Provisions as of beginning of the period 69.0 146.2 146.2

Accretion expense – present value calculation (1.6) 4.5 9.1

Change in estimates 143.4 - (86.3)

Total provision for abandonment liabilities 210.8 150.7 69.0

Break down of the provision to short-term and long-term liabilities

Short-term - - -

Long-term 210.8 150.7 69.0

Total provision for abandonment liabilities 210.8 150.7 69.0

During 2018, the discount rate on the abandonment liabilities has been changed to 5.3% (2017: 8.5%) which allows for a net discount of 3% (2017: net 6.2%), after inflation 2.3% (2017: 2.3%). This has resulted in an increase in the abandonment provision shown under change in estimates. The underlying cost of abandonment in real terms has not changed since 31 December 2017. Note 12 Bonds


(€ 1000) 30.06.2018 30.06.2017 31.12.2017

TULIP Senior secured bond ** 85,494.8 - 85,322.2 Bond setup costs (2,189.8) - (2,417.6)

Long-term bonds 83,305.0 - 82,904.6

** The loan of €87 million (face value) is denominated in € and runs from October 2017 to September 2022 and carries an interest rate of 3 month EURIBOR + 8.5%. The principal falls due on September 2022 and interest is paid on a quarterly basis. Tulip Oil Netherlands Offshore B.V. is the issuer of the Bond and Tulip Oil Netherlands B.V. and Tulip Oil Holding B.V. are Guarantors.


Note 12 Bonds (cont’d)

ln respect of the bond the following pledges are required:

• Tulip Oil Holding B.V. lntra-Group Loan Pledge over all intra-Group loans made by the Ultimate Parent to the Parent, granted by the Ultimate Parent in favour of the Bond Trustee on first priority, as security for the obligations and liabilities;

• Tulip Oil Netherlands B.V. Share Pledge over all of the shares in the Parent, granted by the Ultimate Parent in favour of the Bond Trustee on first priority, as security for the obligations and liabilities;

• Tulip Oil Netherlands B.V. Subordinated Loans Pledge over all Subordinated Loans made by the Parent to the lssuer, granted by the Parent in favour of the Bond Trustee on first priority, as security for the obligations and liabilities;

• A Dutch law governed omnibus pledge granted by Tulip Oil Netherlands Offshore B.V. in favour of the bond holders on first priority, as security for the obligations and liabilities comprising: (a) a receivables pledge of all of Tulip Oil Netherlands Offshore B.V.'s monetary claims under or with respect to any insurances required to be taken out; (b) a receivables pledge over each of Tulip Oil Netherlands Offshore B.V.'s existing bank accounts held with Dutch banks (except for the Escrow Account and the Debt Service Retention Account related to the bond); (c) a receivables pledge over the earnings from the sale of hydrocarbons; and (d) a receivables pledge over monetary claims under or with respect to any loans granted by the Tulip Oil Netherlands Offshore B.V. to another Group Company.

A voluntary repayment option exists to redeem the outstanding bonds at set prices at specified periods upto April 2022.

Note 13 Interest bearing loans from affiliates


(€ 1000) 30.06.2018 30.06.2017 31.12.2017

Balance at the beginning of the year 8,000.0 27,651.6 27,651.6

Movements during the year:

Additions - 2,075.0 2,865.0

Repayments - - (2,000.0)

Conversion from loan to equity - - (20,516.6)

Balance at the end of the year 8,000.0 29,726.6 8,000.0

Tulip Oil Netherlands Offshore B.V. has entered into a loan agreement with Tulip Oil Netherlands B.V. to finance the purchase of the licence interest in Q7 and Q10A. The loan is unsecured, bears an interest rate of 8.4% per annum and is repayable by 1 January 2020. During 2017 a loan to equity swap of €20,516.6 thousand was effected to increase share premium and reduce the loan amount. Note 14 Other current financial liabilities


(€ 1000) 30.06.2018 30.06.2017 31.12.2017

Interest due on TULIP bond 1,355.8 - 1,335.2

Total other current financial liabilities 1,355.8 - 1,335.2


Note 15 Contingent liabilities

ln January 2015 TON purchased 30% of the license of Q7-Q10A from PA Resources Ltd. ln this contract there is a contingent liability to pay PA Resources GBP 1,600,000 following and provided that TON shall have fully recovered all of its Qualifying Cost and Expenses up to the Point of Break Even, in respect of that development. On 17 July 2015 Tulip Oil Netherlands B.V. entered into a sale and purchase agreement with Tulip Oil Netherlands Offshore B.V. to transfer the license of Q7-Q10A. This transaction was completed on 13 August 2015 and hence this contingent liability has been transferred to Tulip Oil Netherlands Offshore B.V. ln 2017 this amount has been recorded within other non-current liabilities given approval of the Q10A project in January 2018.

Note 16 Guarantees

On 25 October 2017 Tulip Oil Netherlands Offshore B.V. has entered into a Senior Secured Callable Bond

Issue (hereafter “Bond”) agreement for the amount of €87 million. Tulip Oil Netherlands Offshore B.V. is the

issuer of the Bond and Tulip Oil Netherlands B.V. is a Guarantor.

For the first Escrow Account Release the following securities are given by Tulip Oil Netherlands B.V.:

- A Dutch law pledge over the entire share capital of Tulip Oil Netherlands Offshore B.V. (which, i.a.,

will contain an undertaking to pledge future shares);

- A Dutch law receivables pledge over all Subordinated Loans to Tulip Oil Netherlands Offshore B.V.

(which, i.a., will contain an undertaking to pledge future Subordinated Loans);

- A Norwegian law personal guarantee.


Appendix 1 – Risk Factors

The Company's activities expose it to a variety of operational and financial risks, including without limitation,

general oil and gas industry risks, specific risks related to the business, credit risk, currency risk, interest risk

and liquidity risk. The half year financial do not include all financial risk management information and

disclosures required in the annual financial statements; they should be read in conjunction with the Company’s

audited annual financial statements as at 31 December 2017. There have been no significant changes in any

risk management policies since year end.

tulip oil netherlands offshore b.v. · 2019. 10. 17. · 2 half yearly report h1 2018 important...

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