JPMorgan - KASE

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5 Long Term Investments The Corporation has entered into a Sale and Purchase Agreement to acquire a 49.9% interest, with equal management rights in a company, which has a 1.75% interest in the Caspian Pipeline Consortium (“CPC pipeline”). The first payment of $40 million was made on December 28th, 2001. The second payment of $30 million is due on or before March 29, 2002, with a third payment due on or before August 30, 2002 of $10 million for total payments of $80 million. The Corporation has also agreed to assume a $20 million obligation with respect to potential future liabilities undertaken by the previous owner. The first payment is reimbursable except as to a $10 million non-refundable break up fee in the event the second payment is not made and certain conditions precedent are not met. Management expects to finalize this transaction on or before the end of March 2002 and does not believe the break up fee will be applicable. The deferred payments bear interest at LIBOR plus one half of a percent per annum applicable to the second payment and LIBOR plus five percent per annum, which applies to the third payment. 6 Joint Ventures The Corporation has the following interests in two joint ventures: (a) 50% equity shareholding with equivalent voting power in CJSC Turgai Petroleum (“Turgai”), formerly Kumkol Lukoil CJSC, which operates the northern part of the Kumkol field in Kazakhstan. (b) 50% equity shareholding with equivalent voting power in LLP Kazgermunai (“Kazgermunai”), which operates three oil fields in Kazakhstan: Akshabulak, Nuraly and Aksai. From November 28, 2000 Hurricane assumed a more active role in the management of Kazgermunai. As a result, the Corporation commenced to account for their interest by way of proportionate consolidation from that date. As at November 28, 2000 the Corporation’s share of the net assets of Kazgermunai was as follows: Working capital, including cash of $ 16.6 million ......................................................... 18,171 Fixedassets ......................................................................................... 63,172 Long term debt ..................................................................................... (81,343) Totalnetassets...................................................................................... — Kazgermunai is restricted from paying dividends until all outstanding loans have been repaid in full. The long-term debt is non-recourse to the Corporation (as more fully disclosed in Note 12). The Corporation’s interests in these joint ventures have been accounted for using the proportionate consolidation method. Under this method, the Corporation’s balance sheets, statements of income and deficit and cash flows incorporate the Corporation’s share of income, expenses, assets, liabilities and cash flows of these joint ventures. The following amounts are included in the Corporation’s financial statements as a result of the proportionate consolidation of its joint ventures and before consolidation eliminations, as at December 31: Turgai Kazgermunai Total 2001 Cash ............................................................ 1,500 11,516 13,016 Currentassets,excludingcash ...................................... 7,426 12,728 20,154 Capitalassets,net ................................................ 19,394 55,031 74,425 Current liabilities ................................................. 16,899 5,598 22,497 Long term debt .................................................. — 61,068 61,068 Revenue ......................................................... 67,819 49,803 117,622 Expenses ........................................................ 31,758 39,092 70,850 Netincome ...................................................... 36,061 10,711 46,772 Cash flow from operating activities ................................. 43,748 18,227 61,975 Cash flow used in financing activities ................................ (50,000) (20,980) (70,980) Cash flow used in investing activities ................................ (13,330) (4,386) (17,716) F-31
The crude oil sales elimination of $170.9 million shown in Note 4 for the year ended December 31, 2001 includes $52.9 million of net crude oil sales made by Turgai to ShNOS and $2.6 million of net crude oil sales made by Kazgermunai to ShNOS. Turgai Kazgermunai Total 2000 Cash ............................................................. 21,082 18,655 39,737 Currentassets,excludingcash ....................................... 3,294 8,375 11,669 Capitalassets,net.................................................. 8,372 62,405 70,777 Current liabilities .................................................. 7,545 5,315 12,860 Long term debt ................................................... — 82,048 82,048 Revenue .......................................................... 50,686 3,884 54,570 Expenses ......................................................... 25,931 2,370 28,301 Netincome ....................................................... 24,755 1,514 26,269 Cash flow from operating activities .................................. 21,397 2,017 23,414 Cash flow from financing activities ................................... — — — Cash flow used in investing activities ................................. (4,493) — (4,493) The crude oil sales elimination of $201.0 million shown in Note 4 for the year ended December 31, 2000 includes $17.5 million of net crude oil sales made by Turgai to ShNOS. 7 Accounts Receivable Accounts receivable consist of the following: 2001 2000 As at December 31 Trade accounts receivable .............................................................. 25,930 17,156 Due from joint venture ................................................................ — — Value added tax recoverable ............................................................ 10,153 17,199 Withholding tax recoverable ............................................................ 5,000 — Other receivables ...................................................................... 11,204 1,359 52,287 35,714 8 Inventory Inventory consists of the following: As at December 31 2001 2000 Refined products finished goods ........................................................ 4,029 2,226 Refinedproductsworkinprocess........................................................ 7,319 7,762 Crudeoil ............................................................................. 2,584 1,043 Rawmaterialsandsupplies ............................................................. 16,014 9,777 29,946 20,808 9 Capital Assets December 31, 2001 Cost Accumulated Depletion and Depreciation Net Book Value Oil and gas properties and equipment .................... 466,732 274,955 191,777 Refining............................................... 130,587 16,939 113,648 597,319 291,894 305,425 Othercapitalassets ..................................... 30,319 2,848 27,471 627,638 294,742 332,896 F-32
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Offering Circular Hurricane Finance
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Moscow RUSSIA SAMARA Ufa OMSK RUSSI
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Š Š you have made certain acknowl
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Unless otherwise indicated, all ref
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Notice to New Hampshire Residents N
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Offering Memorandum Summary This su
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have a network of sales, storage an
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Š our QAM pipeline construction pr
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a senior intercompany loan to HKM.
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Organizational Structure The follow
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Nine Months Ended Year Ended Decemb
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Year Ended December 31, 2001 Nine M
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construction of the plant, anticipa
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Inadequate infrastructure could adv
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fully prohibit us from doing so. In
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Kazakhstan’s foreign investment,
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subsoil user and the Kazakhstani go
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In general, estimates of economical
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thereon and any other amounts owed
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Selected Historical Consolidated Fi
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Management’s Discussion and Analy
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(11,642 tonnes per day) in Septembe
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Adoption of Certain Accounting Stan
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The following table sets out the so
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The total royalty and tax expense f
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perform a quarterly ceiling test. T
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The increase in FCA differentials p
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In addition, we incurred production
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plan. The CCAA plan was implemented
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Royalties Royalties increased from
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Cash is managed centrally through t
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Š completion of the gas utilizatio
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Competitive Strengths We believe th
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Š refurbishing and recommissioning
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The daily business of Kazgermunai i
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Kumkol North. We have a 50% interes
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are currently five producing wells.
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Estimated Reserves and Present Wort
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The following table sets forth a re
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The following tables show our avera
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amended in April 1999, required Kaz
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price we paid for the shares of HKM
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expenditures or investments. The ag
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Several investments with high profi
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In addition, we have opened new rou
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On January 8, 2003, the President o
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As a result of these discussions, H
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Management Directors and Senior Man
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and managerial positions. In 1992,
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approved by our shareholders in Nov
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Related Party Transactions Set fort
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Indebtedness of Directors and Senio
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Prepayments HKM may voluntarily pre
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guarantees any Indebtedness of an O
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will also (i) make such withholding
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The Change of Control Offer will re
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shown on the most recent balance sh
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(a) no Default or Event of Default
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Disqualified Stock and will not per
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transaction are at least equal to t
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in HKM or HOP respectively, from th
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Restricted Subsidiary sell, assign,
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(2) reduce the rate of interest on
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Issuer may, at its option and at an
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(g) waive a redemption payment with
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issue date of the Notes within the
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Exchange of Global Notes for Defini
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Luxembourg or their respective dire
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the Company or to a Guarantor, (e)
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“Consolidated Net Income” means
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excluded, and (iii) the Fixed Charg
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shall be deemed to make an “Inves
Page 145 and 146: or is liquidated into, the Company
Page 147 and 148: Value, as appropriate, of such prop
Page 149 and 150: “Wholly Owned Restricted Subsidia
Page 151 and 152: Sale, Redemption or Retirement of t
Page 153 and 154: Tax on Income and Capital Gains A h
Page 155 and 156: Plan of Distribution Subject to the
Page 157 and 158: Pre-Issue Trades Settlement It is e
Page 159 and 160: Regulation S Notes By purchasing no
Page 161 and 162: The issuer’s principal activities
Page 163 and 164: Lengesskoe Shosse, Shymkent, Yuzhna
Page 165 and 166: 4 The issue of the notes was author
Page 167 and 168: Hurricane Hydrocarbons Ltd. Interim
Page 169 and 170: Hurricane Hydrocarbons Ltd. Interim
Page 171 and 172: 3 months ended September 30, 2002 U
Page 173 and 174: 3 months ended September 30, 2001 U
Page 175 and 176: 9 months ended September 30, 2001 T
Page 177 and 178: Repayment Long term debt principal
Page 179 and 180: 14 Net Income Per Share The income
Page 181 and 182: accordingly no compensation cost ha
Page 183 and 184: Management’s Report All informati
Page 185 and 186: Comments by auditor for U.S. reader
Page 187 and 188: Hurricane Hydrocarbons Ltd. Consoli
Page 189 and 190: Hurricane Hydrocarbons Ltd. Notes t
Page 191 and 192: accordance with current legislation
Page 193 and 194: In addition the Corporation has now
Page 195: Upstream Downstream Eliminations Co
Page 199 and 200: The Canadian Notes contained certai
Page 201 and 202: Interest expense Interest expense f
Page 203 and 204: 14 Income Taxes The Corporation and
Page 205 and 206: investments or other items that may
Page 207 and 208: 19 Related Party Transactions Durin
Page 209 and 210: Consolidated Balance Sheets The app
Page 211 and 212: Legal Proceedings The Corporation h
Page 213 and 214: Non-FCA sales ................ Oil
Page 215 and 216: APPENDIX B: The Republic of Kazakhs
Page 217 and 218: Under the Constitution, the Preside
Page 219 and 220: International Organizations and Int
Page 221 and 222: The Kazakhstan Economy Overview Kaz
Page 223 and 224: Principal Sectors of the Economy Hi
Page 225 and 226: Oil and Gas For Oil and Gas see Ann
Page 227 and 228: Public Finance Introduction Fiscal
Page 229 and 230: The exchange rate regime adopted in
Page 231 and 232: The following table sets forth data
Page 233 and 234: (This page has been left blank inte
Page 235 and 236: Exports General In 2001, the export
Page 237 and 238: ‰ preparing and implementing new
Page 239: THE ISSUER Hurricane Finance B.V. S
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JPMorgan - KASE

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