Information from Interim report January-December 2022 Misen Energy AB (publ)

Following is a summary of the financial information given Interim report January - December 2022 (12M 2021) 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: https://misenenergy.se/repository/Financial_reports_ENG/Misen_Energy_Q4_2021_ENG.pdf

Results for January-December 2021 (within brackets same period 2020):

• Consolidated operating group result KSEK -40,824 (340,451)
• Consolidated group net turnover: KSEK 33,761 (509,842)
• Earnings per share: SEK -0.28 (0.82)
• Production of natural gas: at zero level (at zero level)

Results for October-December 2021 (within brackets same period 2020):

• Consolidated operating group result KSEK -12,595 (330,272)
• Consolidated group net turnover: KSEK 265 (485,822)
• Earnings per share: SEK -0.08 (0.75)
• Production of natural gas: at zero level (at zero level)

Summary of results:

• Given that the Arbitral Tribunal rendered an award to terminate the Joint Activity Agreement No.3 (the “JAA”), Misen Energy AB (publ) believes that control over the specific assets owned by the Joint Activity (the “JA”) no longer exists. Thus, Misen Energy AB (publ) continues accounting treatment of 50.01% participation interest in the JA under which assets and liabilities are not presented in the financial statements.

Key events during 12М 2021:

• In November 2020, Misen Enterprises AB and LLC Karpatygaz received a Final Award by Consent from the Arbitral Tribunal in the SCC Arbitration. On 5 January 2021 the Kiev Court of Appeal recognized Final Award by Consent dated 5 November 2020. On 10 February 2021, Misen Enterprises received
• USD 47,060,537.16 (KSEK 403,668 ) and LLC Karpatygaz received UAH 1,001,242.74 (KSEK 312) from JSC Ukrgasvydobuvannya. This compensation is after taxes applicable to Misen Enterprises AB in Ukraine. JSC Ukrgasvydobuvannya was entitled to withhold a tax on non-resident income for 15% of the compensation to Misen Enterprises AB (UAH 236,113,788, KSEK 73,629) and pay the withheld amount to the budget of Ukraine.
• On 14 January 2021 the Supreme Court of Ukraine issued a ruling recognizing the Second Partial Final Award dated 12 June 2020 (subject to the Corrections of the Second Partial Final Award dated 18 August 2020). Accordingly, JSC Ukrgasvydobuvannya transferred EUR 2,739,784.53 (KSEK 27,787), SEK 344,415.38, USD 7,971.59 (KSEK 68), and GBP 10,940.05 (KSEK 123) to Misen Enterprises AB for the legal costs incurred the SCC Arbitration.
• Following successful resolution of the SCC arbitration and given that Misen Enterprises AB received compensation from JSC Ukrgasvydobuvannya, Misen Energy AB (publ) and Misen Enterprises AB executed payments to the funders under the financing agreements. Namely, under the Financing Agreement concluded in March 2020 the companies EUR 1,940,000.00 (SEK 19,675,567); under the Financing Agreement concluded in November 2018 the companies EUR 8,452,140.90 (SEK 85,721,993) and EUR 3,221,404.00 (SEK 32,671,624).
• On 13 September 2021, Misen Energy AB (publ) closed the purchase of 47.5% of shares and share capital in Misen Enterprises AB with PUL. The shares’ purchase price was SEK 2,724,817 plus 47.5% of the distributable income from the compensation, if any, to be received following the completion of the investment arbitration against Ukraine in ICSID Case No. ARB/21/15 (“BIT arbitration”). Under the agreement, Misen Energy AB (publ) and PUL undertook to share the costs of the funding, if any, to finance the BIT arbitration
• On 1 October 2021, Misen Energy AB (publ) closed the purchase of 2% of shares and share capital in Misen Enterprises AB with Mr. Konstantin Guenevski, Bulgarian citizen, who is a senior trader of one of the world’s leading independent commodity trading and logistics houses. The shares’ purchase price was SEK 114,729.00 plus 2% of the distributable income from the compensation, if any, to be received following the completion of the BIT arbitration against Ukraine. Under the agreement, Misen Energy AB (publ) and Mr. Konstantin Guenevski undertook to share the costs of the funding, if any, to finance the BIT arbitration.
• On 24 March 2021, Misen Energy AB (publ) and its partially owned subsidiary Misen Enterprises AB filed a Request for Arbitration under the Washington Convention and the Rules of the International Centre for Settlement of Investment Disputes (ICSID) against Ukraine. ICSID is an international organization that is part of the World Bank Group, headquartered in Washington, D.C., in the United States. The claims against Ukraine relate to Ukraine’s breaches of the companies’ rights – and the ensuing damage to the companies’ 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.
• On 30 June 2021 the tribunal was constituted in ICSID arbitration against Ukraine. Professor Jan Paulsson has been appointed as president of the Arbitral Tribunal in a dispute between Misen Energy AB (publ) and Misen Enterprises AB vs. Ukraine (ICSID Case No. ARB/21/15). Earlier the Swedish companies appointed Dr. Stanimir Alexandrov and Ukraine - Professor W. Michael Reisman.
• On 29 October 2021, Misen Energy AB (publ) and Misen Enterprises AB submitted a Memorial in international investment arbitration case against Ukraine (ICSID Case No. ARB/21/15). Misen requested for compensation that reflects the going concern value of Misen’s share at the time exorbitant subsoil use tax was imposed on Joint Activity, which led to the termination of the JAA No.3.
• In January 2020, the hearing was held in the court proceeding in Case initiated by the National Anticorruption Bureau of Ukraine (“NABU”) based on the criminal complaint submitted by JSC Ukrgasvydobuvannya in 2017. On 5 June 2019, the Constitutional Court of Ukraine decided that NABU has no authority to challenge validity of any such agreements. Disregarding the above decision of the Constitutional Court of Ukraine, as well as the awards dismissing any allegations concerning illegality of the JAA No.3 rendered in the SCC Arbitration, NABU and JSC Ukrgasvydobuvannya continue legal proceedings in Ukraine.
• On 31 December 2021 the subsidiary LLC Karpatygaz and LLC Tekhhproekt signed settlement agreement with JSC Ukrgasvydobuvannya according to which the Joint Activity Agreement #493 was to be terminated on 1 January 2022. According to the settlement agreement the total value to be paid by JSC Ukrgasvydobuvannya to LLC Karpatygaz is UAH 165,617,516 (KSEK 54,311) for their share in the joint property under the JAA No.493 including for hydrocarbons produced using JA’s assets from 1 January 2017.

Key events after end of 12М 2021:

Termination of the JAA No.493

On 13 January 2022 JSC Ukrgasvydobuvannya transferred to LLC Karpatygaz UAH 82,808,758 (KSEK 27,155) which amounts to 50% of total compensation under settlement agreement dated 31 December 2021 between the subsidiary LLC Karpatygaz, LLC Tekhhproekt and JSC Ukrgasvydobuvannya according to which the Joint Activity Agreement No.493 was terminated.

BIT Arbitration against Ukraine

On 27 January 2022, Ukraine proposed to disqualify Dr Stanimir Alexandrov, an arbitrator appointed by Misen Energy AB (publ) and Misen Enterprises AB in ICSID Case No ARB/21/15. On 7 February 2022, Misen Energy AB (publ) and Misen Enterprises AB submitted their objections. The proceeding was suspended until the Chairman of the Administrative Council of ICSID will decide on the Ukraine’s proposal to disqualify Dr. Stanimir Alexandrov. Misen Energy AB (publ) and Misen Enterprises AB anticipates to receive a decision by the end of March 2022. However, if the situation in Ukraine does not materially improve by the mentioned decision, in light of the exceptional circumstances, Ukraine may apply for the arbitration to be stayed.

Despite the legal troubles that Misen Energy AB (publ) has had with its investments in Ukraine, the Board of Directors and the Management unconditionally and wholeheartedly support Ukraine and its people in their fight against the Russian aggression.

After Ukraine emerges victorious from this heinous war, Misen Energy AB (publ) and Misen Enterprises AB intend to propose amicable settlement to Ukraine on the fair terms that shall fully take in to account those atrocious current developments on Ukrainian soil. Misen Energy AB (publ) will inform the market accordingly.

Transfer of LLC Karpatygaz for liquidation purposes

Given the extraordinary circumstances in Ukraine, on 25 February 2022 the board of Misen Enterprises AB decided to transfer LLC Karpatygaz to a local law firm “Victoria Legis” for liquidation purposes without bankruptcy proceedings. The transfer is expected to happen when possible without unreasonable delays. Misen Energy AB (publ) will inform the market accordingly.

Publication of the Interim report January - December 2021

This Interim report January - December 2021 is published at the Company’s website (www.misenenergy.se), and a printed version can be ordered at info@misenenergy.se.

Future reports and events

Next report, the annual report 2021, will be published on 8 April 2022.

The AGM will be held 28 April 2022.

The interim January-March Q1 2022 report will be published 31 May 2022.

The interim January-June Q2 2022 report will be published 31 August 2022.

The interim January-September Q3 2022 report will be published 30 November 2022.

The interim January-December Q4 2022 report will be published 28 February 2023.
 

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

The company was founded in 2004 and its shares have been traded on Nasdaq First North Growth Market since 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. Misen Energy AB (publ) acquired the rights to produce hydrocarbons under Joint Activity Agreement No.3 (“JAA No.3“) between Misen Enterprises AB and LLC Karpatygaz (together 50.01%) and JSC Ukrgasvydobuvannya (49.99%), a subsidiary of the NJSC Naftogaz of Ukraine. The purpose of the JAA No.3 was to significantly increase production of hydrocarbons by providing modern technologies via a large-scale investment program for the purposes of attainment of profits.
The JAA No.3 (as amended and restated) was terminated in June 2018. As a result, Misen Energy AB (publ) received compensation that reflected its share of the replacement costs of the equipment subject to the joint ownership under the JAA No.3. In March 2021, Misen Energy AB (publ) and Misen Enterprises AB initiated an investment arbitration against Ukraine (ICSID Case No. ARB/21/15) concerning Ukraine‘s breaches of the investor‘s rights resulting from the imposition of a 70% subsoil use charge.
The registered office of Misen Energy AB (publ) is in Stockholm. Misen Energy AB (publ) is listed on Nasdaq First North Growth Market and the Company adheres to the rules and regulations for First North. The Certified Adviser of the Company is Erik Penser Bank AB, tel.: +46 8 463 80 00, email: 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 15:30 CET on 28 February 2022.