Avner Oil - Annual Report 2011 - Delek Energy Systems

7.20.5 Financial covenants(A)(B)To receive loans from banking and/or non-banking sources the Partnership undertook tomaintain the following financial covenants:Yam Tethys financing agreementTested ratio as of 159Financial covenantRevenue to debtserviceCalculation methodThe ratio of the total revenues (fromdate of last payment through to dateof current payment) from the sale ofnatural gas from the reservoir to thedebt service of the next payment asper the payment schedule set in theagreement (including payments forexploration), will be greater than 1.January 1,2012 160 December 31,20111.7 1.7Revenue to debtservice (for purposeof withdrawing funds)The debt service ratio (total revenueto debt service) for 3 months prior todate of payment will be at least 1.15.The debt service ratio (total revenueto debt service) for 3 monthssubsequent to date of payment willbe at least 1.15.The ratio of current value of net totalrevenue in the loan period to debtbalance on distribution date will beat least 1.31.71.41.31.71.51.3Debt service ratio forany loan periodbalanceThe aforesaid calculation will beattached to the annual financialstatements to be submitted to thelenders as of the annual financialstatements one year after the date offirst withdrawal of funds, i.e. as ofthe financial statements for 2012.- -159 As stipulated in section ‎7.3.10(A)(3) above, there has been a significant decrease in recent months in the ability toproduce natural gas from the Mari B reservoir. The decline in production capacity of natural gas is expected to havean adverse effect on the financial results of the Partnership, inter alia, on the financial covenants. At this stage, thePartnership is unable to estimate with high certainty the full commercial implications the decline in production andsupply capacity and the extent of their impact on the Partnership's financial results, which could be grounds forlocking the funds in the pledged accounts and even grounds for immediate repayment of the loan. It is further notedthat in some of the cases the Partnership has, under the agreements, the option of amending the relevant ratio byway of partial early repayment on account of the loan. The loan balance, net (less the pledged deposits) as of thedate of the report was USD 27.7 million (constituting 25.5% of the original loan). The Partnership is taking measuresto coordinate its operations with the banks.160On the date on which compliance with the financial covenant under the loan agreement is examined (if such a dateis set).A-144