Misen offers Ukraine to settle dispute related to the imposition of the 70% subsoil use charge

On 16 February 2021, Misen Entergy AB (publ) and its partially owned subsidiary Misen Enterprises AB (collectively as “Misen”) respectfully offered to the Ukrainian Government a final opportunity to resolve the dispute notified to Ukraine in the Notice of Dispute dated 5 October 2015. Absent an amicable solution within the next 30 days, Misen will proceed with the initiation of ICSID arbitration proceeding in accordance with Article 8 of the Agreement between the Government of the Kingdom of Sweden and the Government of Ukraine on the Promotion and Reciprocal Protection of Investments of 1995.

By its notice of 5 October 2015, Misen notified Ukraine of the dispute that pertains to Ukraine’s breaches of Misen’s rights – and the ensuing damage to Misen’s investment in Ukraine – resulting from the imposition of a 70% subsoil use charge for the production of natural gas from depths of up to 5,000 meters. 

As previously reported, the compensation Misen received from JSC Ukrgasvydobuvannya in the arbitration case SCC No. V 2016/114 reflected Misen‘s share of the replacement costs of the equipment subject to the joint ownership under the JAA No.3. However, this compensation did not reflect the going concern value of Misen’s share at the time the exorbitant subsoil use tax was imposed on the Joint Activity, which led to the termination of the JAA No.3.
 

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 Growth Market 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 JSC Ukrgasvydobuvannya (49.99%), a subsidiary of the National Joint Stock Company Naftogaz of Ukraine. JSC 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 texcchnologies via a large-scale investment program for the purposes of attainment of profits.
In June 2016 and in July 2017 Misen Energy AB (publ) sold respectively 37.5% and 10% of Misen Enterprises AB shares to the Hong Kong based company Powerful United Limited. In March 2018, Misen Energy AB (publ) sold 2% of Misen Enterprises AB shares to Mr. Konstantin Guenevski. Owning (the remaining) 50.5% of Misen Enterprises AB shares, Misen Energy AB (publ) maintains full control of the company and preserves a right to obtain 50.5% 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 Growth Market under identification ticker MISE. The Certified Adviser of the company at Nasdaq First North Growth Market is Erik Penser Bank AB, tel.: +46 8 463 80 00, e-mail: certifiedadviser@penser.se.
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 16.30 CET on 17 February 2021.