Summary Consolidated Financial Data The summary consolidated financial data presented below for the three years ended December 31, 2001 have been derived from our audited consolidated financial statements and the related notes that are included in this offering memorandum. Our annual consolidated financial statements for the periods presented below have been audited by Deloitte & Touche. Our summary consolidated financial data presented below for each of the nine-month periods ended September 30, 2001 and 2002 are derived from our unaudited consolidated financial statements for such periods included elsewhere in this offering memorandum and which, in the opinion of management, include all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial results for such periods. Interim results are not necessarily indicative of the results which may be expected for any other interim period or for the full year. You should read the summary consolidated financial data in conjunction with the information contained in “Risk Factors”, “Capitalization”, “Selected Historical Financial Data”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Business and Properties”, our consolidated financial statements, including the related notes, and the other financial data appearing elsewhere in this offering memorandum. Nine Months Ended September Year Ended December 31, 30, 1999 2000 2001 2001 2002 (unaudited) (in $ thousands, except ratios) Consolidated Statement of Income Data: Canadian GAAP: Revenue: Crudeoil .................................. 153,047 301,216 252,981 193,342 319,606 Refinedproducts ........................... — 203,728 328,958 264,774 240,476 Processing fees ............................. — 11,884 11,008 8,623 2,112 Interestandotherincome ................... 2,196 6,373 10,109 8,094 6,497 Total revenue .............................. 155,243 523,201 603,056 474,833 568,691 Expenses: Production ................................ 34,443 35,302 43,040 29,681 41,669 Royalties .................................. 16,652 33,709 35,504 30,748 43,709 Transportation ............................. 17,016 25,152 50,237 34,218 100,131 Refining................................... 2,197 12,583 20,562 14,606 17,607 Crude oil and refined product purchases ....... — 48,100 78,788 60,862 50,414 Selling .................................... — 7,728 19,277 15,057 18,724 General and administrative .................. 35,039 44,565 55,204 35,355 42,270 Interestandfinancingcosts .................. 23,874 18,708 19,530 12,126 26,078 Depletion and depreciation .................. 4,991 14,680 34,254 24,618 29,064 Foreign exchange loss (gain) ................. 7,647 (2,266) 1,453 435 1,771 Total expenses ............................. 141,859 238,261 357,849 257,706 371,437 Income before unusual items ................. 13,384 284,940 245,207 217,127 197,254 Unusual items: Defense costs related to potential takeover .... — — 5,546 6,000 — Gain recognized on sale of assets ............. (12,800) — — — — Arbitration settlement ...................... — — — — 7,134 Waiver fees and debt restructuring costs ....... — 20,373 — — — Income before income taxes ................. 26,184 264,567 239,661 211,127 190,120 Income taxes: Current provision ........................... 17,671 100,708 79,679 67,377 64,706 Futureincometax .......................... — (1,051) (11,285) (3,699) 6,312 Total income taxes .......................... 17,671 99,657 68,394 63,678 71,018 Net income before minority interest .......... 8,513 164,910 171,267 147,449 119,102 Minority interest ........................... — 9,980 1,927 1,153 1,672 Netincome ................................ 8,513 154,930 169,340 146,296 117,430 U.S. GAAP: Netincome ............................... 6,502 165,971 162,643 146,296 117,401 10
Nine Months Ended Year Ended December 31, September 30, 1999 2000 2001 2001 2002 (unaudited) (in $ thousands, except ratios) Consolidated Balance Sheet Data (at end of period): Canadian GAAP: Cash and short-term deposits ................ 30,748 59,298 64,812 99,248 162,246 Working capital/(deficit) (1) ................... (176,396) 33,808 61,393 89,741 168,762 Totalassets ............................... 141,437 414,526 572,470 527,153 737,384 Total long-term debt (2) ..................... — 82,048 277,767 249,125 293,197 Total shareholders’ equity/(deficit) ........... (87,582) 185,043 132,140 108,799 247,223 U.S. GAAP: Total shareholders’ equity ................... (117,693) 140,800 79,603 63,387 186,593 Other Financial Data: EBITDA (3) ................................. 55,049 287,975 291,518 246,718 243,590 Capital expenditures ....................... 15,318 21,627 110,207 55,215 101,559 Ratio of EBITDA to cash interest expense ...... 2.3x 15.4x 14.9x 20.3x 9.3x Ratio of earnings to fixed charges (4) .......... 2.1x 15.1x 13.2x 18.4x 8.3x Ratio of net debt to EBITDA (5)(6) .............. 3.0x 0.2x 0.9x 0.6x 0.6x (1) Working capital comprises current assets less current liabilities. (2) $61.1 million and $62.7 million of these amounts represent non-recourse debt incurred by our Kazgermunai joint venture as of December 31, 2001 and September 30, 2002, respectively. (3) “EBITDA” is defined as earnings before interest, dividends paid on preference securities, income taxes, depreciation, depletion and amortization. EBITDA is presented as additional information because we understand that it is one measure used by certain investors to determine our operating cash flow and historical ability to meet debt service and capital expenditure requirements. However, other companies may present EBITDA differently than we do. EBITDA is not a measure of financial performance under generally accepted accounting principles and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with generally accepted accounting principles. (4) The term “earnings” is the amount of income before income taxes from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees, plus fixed charges, plus amortization of capitalized interest, plus distributed income to equity investees, plus the share of pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges, less interest capitalized, less preference security dividend requirements of consolidated subsidiaries, less the minority interest in pre-tax income of subsidiaries that have not incurred fixed charges and less unusual items. The term “fixed charges” means the sum of the following: (a) interest expensed or capitalized, (b) amortized premiums, discounts and capitalized expenses related to indebtedness, (c) an estimate of the interest within rental expense, and (d) preference security dividend requirements of consolidated subsidiaries. The term “preference security dividend” is the amount of pre-tax earnings that is required to pay the dividends on outstanding preference securities, computed as the amount of the dividend divided by one minus the effective income tax rate applicable to continuing operations. (5) “Net debt” represents total debt less cash and cash equivalents. (6) Nine month figures are calculated on an annualized basis. 11
- Page 1 and 2: Offering Circular Hurricane Finance
- Page 3 and 4: Moscow RUSSIA SAMARA Ufa OMSK RUSSI
- Page 5 and 6: Š Š you have made certain acknowl
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- Page 9 and 10: Notice to New Hampshire Residents N
- Page 11 and 12: Offering Memorandum Summary This su
- Page 13 and 14: have a network of sales, storage an
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- Page 17 and 18: a senior intercompany loan to HKM.
- Page 19: Organizational Structure The follow
- Page 23 and 24: Year Ended December 31, 2001 Nine M
- Page 25 and 26: construction of the plant, anticipa
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- Page 33 and 34: subsoil user and the Kazakhstani go
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- Page 39 and 40: Selected Historical Consolidated Fi
- Page 41 and 42: Management’s Discussion and Analy
- Page 43 and 44: (11,642 tonnes per day) in Septembe
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- Page 51 and 52: perform a quarterly ceiling test. T
- Page 53 and 54: The increase in FCA differentials p
- Page 55 and 56: In addition, we incurred production
- Page 57 and 58: plan. The CCAA plan was implemented
- Page 59 and 60: Royalties Royalties increased from
- Page 61 and 62: Cash is managed centrally through t
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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
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or is liquidated into, the Company
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Value, as appropriate, of such prop
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“Wholly Owned Restricted Subsidia
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Sale, Redemption or Retirement of t
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Tax on Income and Capital Gains A h
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Plan of Distribution Subject to the
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Pre-Issue Trades Settlement It is e
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Regulation S Notes By purchasing no
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The issuer’s principal activities
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Lengesskoe Shosse, Shymkent, Yuzhna
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4 The issue of the notes was author
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Hurricane Hydrocarbons Ltd. Interim
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Hurricane Hydrocarbons Ltd. Interim
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3 months ended September 30, 2002 U
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3 months ended September 30, 2001 U
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9 months ended September 30, 2001 T
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Repayment Long term debt principal
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14 Net Income Per Share The income
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accordingly no compensation cost ha
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Management’s Report All informati
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Comments by auditor for U.S. reader
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Hurricane Hydrocarbons Ltd. Consoli
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Hurricane Hydrocarbons Ltd. Notes t
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accordance with current legislation
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In addition the Corporation has now
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Upstream Downstream Eliminations Co
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The crude oil sales elimination of
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The Canadian Notes contained certai
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Interest expense Interest expense f
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14 Income Taxes The Corporation and
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investments or other items that may
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19 Related Party Transactions Durin
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Consolidated Balance Sheets The app
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Legal Proceedings The Corporation h
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Non-FCA sales ................ Oil
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APPENDIX B: The Republic of Kazakhs
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Under the Constitution, the Preside
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International Organizations and Int
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The Kazakhstan Economy Overview Kaz
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Principal Sectors of the Economy Hi
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Oil and Gas For Oil and Gas see Ann
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Public Finance Introduction Fiscal
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The exchange rate regime adopted in
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The following table sets forth data
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(This page has been left blank inte
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Exports General In 2001, the export
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‰ preparing and implementing new
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THE ISSUER Hurricane Finance B.V. S