EX-99.9 15 mro-20191231x10kxex999.htm EXHIBIT 99.9 Exhibit
Exhibit 99.9

Alba Plant LLC
Financial Statements
December 31, 2019, 2018 and 2017





Alba Plant LLC
Index
December 31, 2019, 2018 and 2017
 


 
 
 
Page(s)
Independent Auditor’s Report
 
 
1-2
Financial Statements
 
 
 
   Balance Sheets
 
 
3
   Statements of Income
 
 
4
   Statements of Stockholders’ Equity
 
 
5
   Statements of Cash Flows
 
 
6
Notes to Financial Statements
 
 
7-14
 
 
 
 
 
 
 
 







Independent Auditor’s Report

To the Management of Alba Plant LLC:
We have audited the accompanying financial statements of Alba Plant LLC, which comprise the balance sheet as of December 31, 2019, and the related statements of income, stockholders’ equity, and cash flows for the years ended December 31, 2019 and December 31, 2017.

Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alba Plant LLC as of December 31, 2019, and the results of its operations and its cash flows for the years ended December 31, 2019 and 2017 in accordance with accounting principles generally accepted in the United States of America.
Emphasis of matter
As discussed in Note 7 to the financial statements, the Company has significant transactions with related parties. Our opinion is not modified with respect to this matter.







Exhibit 99.9

Other Matter
The accompanying balance sheet of Alba Plant LLC as of December 31, 2018, and the related statements of income, stockholders' equity and cash flows for the year then ended are presented for purposes of complying with Rule 3-09 of SEC Regulation S-X; however, Rule 3-09 does not require the 2018 financial statements to be audited and they are therefore not covered by this report.

/s/ PricewaterhouseCoopers LLP
Houston, Texas
February 20, 2020



Alba Plant LLC
Balance Sheets
December 31, 2019 and 2018*
 

(in thousands of dollars, except share and per share amounts)
 
 
 
 
 
 
 
 
2019
 
2018*
 
 
 
 
 
Assets
 
 
 
 
Cash and cash equivalents
 
$
52,510
 
 
$
87,080
 
Accounts receivable
 
13,050
 
 
21,669
 
Accounts receivable–related parties
 
9,405
 
 
10,565
 
Inventory
 
37,068
 
 
35,674
 
Total current assets
 
112,033
 
 
154,988
 
Facility cost
 
582,226
 
 
568,634
 
Less: Accumulated depreciation
 
362,391
 
 
347,660
 
Net facility cost
 
219,835
 
 
220,974
 
Total assets
 
$
331,868
 
 
$
375,962
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
Accounts payable and accrued liabilities–related parties
 
12,318
 
 
7,471
 
Accrued government royalty–net profit interest
 
17,419
 
 
28,118
 
Foreign income taxes payable
 
49,340
 
 
83,923
 
Total current liabilities
 
79,077
 
 
119,512
 
Net deferred tax liability
 
45,188
 
 
45,106
 
Stockholders' equity
 
 
 
 
Common stock - 1,000 shares issued and outstanding
 
1
 
 
1
 
(par value $1.00 per share, 50,000 shares authorized)
 
 
 
 
Retained earnings
 
207,602
 
 
211,343
 
Total stockholders' equity
 
207,603
 
 
211,344
 
Total liabilities and stockholders' equity
 
$
331,868
 
 
$
375,962
 









The accompanying notes are an integral part of these financial statements.
*December 31, 2018 is not covered by the auditor's report.
3

Alba Plant LLC
Statements of Income
Years Ended December 31, 2019, 2018* and 2017
 


(in thousands of dollars)
 
 
 
 
 
 
 
 
 
2019
 
2018*
 
2017
 
 
 
 
 
 
 
 
 
Revenues from contracts with customers
 
 
 
 
 
 
 
Plant products
 
$
185,801

 
 
$
295,357

 
 
$
298,923

 
Plant products–related parties
 
982
 
 
 
933
 
 
 
799
 
Condensate
 
114,050
 
 
 
 
 
 
 
Condensate–related parties
 
 
 
 
140,707
 
 
 
131,923
 
Other sales
 
923
 
 
 
837
 
 
 
962
 
Other sales–related parties
 
 
 
 
248
 
 
 
286
 
Total revenues from contracts with customers
 
301,756
 
 
 
438,082
 
 
 
432,893

 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
Direct operating–related parties
 
41,203
 
 
 
35,541
 
 
 
37,331

 
Depreciation and amortization
 
14,732
 
 
 
12,564
 
 
 
11,233

 
General and administrative–related parties
 
27,777
 
 
 
30,059
 
 
 
28,165

 
Government royalty–net profit interest
 
17,416
 
 
 
28,117
 
 
 
28,380

 
Shipping and handling–related parties
 
3,960
 
 
 
4,898
 
 
 
3,543

 
Total expenses
 
105,088
 
 
 
111,179
 
 
 
108,652

 
Income from operations
 
196,668
 
 
 
326,903
 
 
 
324,241

 
Interest income
 
1,011
 
 
 
996
 
 
 
227

 
Income before income taxes
 
197,679
 
 
 
327,899
 
 
 
324,468

 
Income tax expense
 
49,420
 
 
 
82,009
 
 
 
81,152

 
Net income
 
$
148,259

 
 
$
245,890

 
 
$
243,316

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







The accompanying notes are an integral part of these financial statements.
*Year ended December 31, 2018 is not covered by the auditor's report.
4


Alba Plant LLC
Statements of Stockholders' Equity
Years Ended December 31, 2019, 2018*, and 2017
 


 
 
 
 
 
 
 
 
Total
 
 
Common Stock
Retained
 
Stockholders'
(in thousands of dollars)
 
Shares
 
Amount


 
Earnings
 
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at December 31, 2016
 
1

 
$
1

 
$
299,137

 
$
299,138

Net income
 
 
 
 
 
243,316

 
243,316

Dividends
 
 
 
 
 
(242,000)

 
(242,000
)
Balances at December 31, 2017
 
1

 
$
1

 
$
300,453

 
$
300,454

Net income*
 
 
 
 
 
245,890

 
245,890

Dividends*
 
 
 
 
 
(335,000
)
 
(335,000
)
Balances at December 31, 2018*
 
1

 
$
1

 
$
211,343

 
$
211,344

Net income
 
 
 
 
 
148,259

 
148,259

Dividends
 
 
 
 
 
(152,000
)
 
(152,000
)
Balances at December 31, 2019
 
1

 
$
1

 
$
207,602

 
$
207,603








The accompanying notes are an integral part of these financial statements.
*Year ended December 31, 2018 is not covered by the auditor's report.
5


Alba Plant LLC
Statements of Cash Flows
Years Ended December 31, 2019, 2018*, and 2017
 



(in thousands of dollars)
 
 
 
 
 
 
 
 
2019
 
2018*
 
2017
 
 
 
 
 
 
 
Operating activities
 
 
 
 
 
 
Net income
 
$
148,259

 
$
245,890

 
$
243,316

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
Depreciation and amortization
 
14,732

 
12,564

 
11,233

Deferred income tax
 
82

 
(1,739
)
 
6,827

Changes in:
 
 
 
 
 
 
Accounts receivable
 
8,619

 
7,938

 
905

Accounts receivable-related parties
 
1,160

 
4,166

 
(3,873
)
Inventory
 
(1,394
)
 
2,019

 
(656
)
Accounts payable and accrued liabilities-related parties
 
(2,760
)
 
221

 
75

Accrued government royalty–net profit interest
 
(10,699
)
 
(260
)
 
10,841

Foreign income taxes payable
 
(34,583
)
 
9,601

 
38,387

Net cash provided by operating activities
 
123,416

 
280,400

 
307,055

Investing activities
 
 
 
 
 
 
Capital expenditures
 
(5,986
)
 
(769
)
 
(65
)
Net cash used in investing activities
 
(5,986
)
 
(769
)
 
(65
)
Financing activities
 
 
 
 
 
 
Dividends
 
(152,000
)
 
(335,000
)
 
(242,000
)
Net cash used in financing activities
 
(152,000
)
 
(335,000
)
 
(242,000
)
Net increase (decrease) in cash and cash equivalents
 
(34,570
)
 
(55,369
)
 
64,990

Cash and cash equivalents at beginning of period
 
$
87,080

 
$
142,449

 
$
77,459

Cash and cash equivalents at end of period
 
$
52,510

 
$
87,080

 
$
142,449

Supplemental disclosure
 
 
 
 
 
 
Income taxes paid
 
$
83,920

 
$
74,146

 
$
35,939

Change in capital expenditure accrual
 
$
7,606

 
$
198

 
$
(13
)
 
 
 
 
 
 
 







The accompanying notes are an integral part of these financial statements.
*Year ended December 31, 2018 is not covered by the auditor's report.
6


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


1.
Organization and Nature of Business
Alba Plant LLC (the “Company”) is an exempted limited liability company organized under the laws of the Cayman Islands. The purposes of the Company are (i) to construct, own, operate and maintain the Alba Liquefied Petroleum Gas Plant (“the plant”); (ii) to further process the natural gas produced under the Alba Production Sharing Contract (“Alba PSC”); (iii) to recover additional condensate; (iv) to separate butane and propane from the natural gas and process them into gas liquids; (v) to store the liquid hydrocarbons processed; (vi) to sell all liquid hydrocarbons produced by the plant; and (vii) to finance such activities on terms the Company determines to be appropriate. The Company commenced commercial operations in January 1997. Sociedad Nacional de Gas de Guinea Ecuatorial (“Sonagas”) has a 20% ownership in the Company with the remaining 80% owned by Alba Associates LLC. The ownership interest in Alba Associates LLC is as follows as of December 31, 2019, 2018 and 2017:
Samedan of North Africa, Inc. ("Samedan")
 
34.79166%
Marathon E.G. LPG Limited ("EG LPG")
 
23.45834
Marathon E.G. Alba Limited ("EG Alba")
 
19.08334
Marathon E.G. Production Limited ("MEGPL")
 
11.45833
Marathon E.G. Offshore Limited ("EG Offshore")
 
11.20833
 
 
100.00000%
The Equatorial Guinea Government is entitled to a 10% interest in the Company’s annual net profit, as defined in the Processing and Marketing Agreement (“PMA”) between The Republic of Equatorial Guinea and the Company dated January 22, 1996.
The Company has no employees, and as such has entered into an agreement with MEGPL to provide certain operating, general and administrative services on behalf of the Company (Note 6).
2.
Summary of Significant Accounting Policies
Basis of Presentation
These financial statements, including notes, have been prepared in accordance with U.S. generally accepted accounting principles. The December 31, 2018 financial statements, including notes, are not covered by the auditor's report.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the respective reporting periods. Actual results could differ from those estimates.
Foreign Currency Transactions
The functional currency applicable to the Company is the U.S. dollar. Current assets and current liabilities denominated in other currencies are converted into U.S. dollars at the applicable rate on the

*Year ended December 31, 2018 is not covered by auditor's report.

7


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


balance sheet date, and the resulting unrealized foreign exchange gains and losses are recorded in the statement of income.
Cash and Cash Equivalents
Includes cash on hand and highly liquid investments with original maturities of three months or less.
Receivables less Allowance for Doubtful Accounts
Receivables recorded in the financial statements represent bona fide claims against debtors, or other charges arising on or before the balance sheet date. All receivables have been appropriately reduced to their estimated net realizable value. All receivables are recorded at the invoiced amounts and do not bear interest. An allowance for receivables is created with a charge directly to bad debt expense when it becomes probable the receivables will not be collected. No allowance has been recorded as of December 31, 2019 and December 31, 2018.
Inventory
Materials and supplies inventory is valued at weighted average cost and reviewed periodically for obsolescence or impairment when market conditions indicate. Condensate, propane, and butane inventories are recorded at weighted average cost and carried at the lower of cost or net realizable value.
Facility Cost
Facility cost represents the cost of the plant including related extraction components, piping and other equipment, and includes the cost of related engineering and design services and installation materials and labor. Facility costs are primarily depreciated on a straight-line basis over the estimated remaining life of the plant, which is 2034.
Maintenance and repairs are charged to expense as incurred. Renewals, betterments and major repairs that materially extend the life of the plant are capitalized.
The Company evaluates the plant including related extraction components, piping and other equipment, for impairment of value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the value from the use of the asset and its eventual disposition is anticipated to be less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset. Assets deemed to be impaired are written down to their fair value, as determined by discounted future net cash flows or, if available, comparable market value.
Under the provisions of the PMA, the Company is not legally obligated to dismantle the plant and restore the Alba site, and as such, no asset retirement obligation has been recorded for these facilities.
Taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The realization of deferred tax assets is assessed periodically based on several interrelated factors. These factors include the Company’s expectation to generate sufficient future taxable income including tax credits, and operating loss carryforwards. Valuation allowances

*Year ended December 31, 2018 is not covered by auditor's report.

8


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


are recorded against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized. The Company uses the liability method in determining our provision and liabilities for our income taxes, under which current and deferred tax liabilities and assets are recorded in accordance with enacted tax laws and rates.
Revenue Recognition
Revenues associated with the sales of plant products and condensate are recognized when the Company’s performance obligation is satisfied, which typically occurs at the point where control transfers to the customer based on contract terms. Revenue is measured as the amount the Company expects to receive in exchange for transferring commodities to the customer. Hydrocarbon sales are typically based on prevailing market-based prices and may include quality or location differential adjustments. Payment is generally due within 30 days of delivery.
We typically incur shipping and handling costs prior to control transferring to the customer and account for these activities as fulfillment costs. These costs are reflected in shipping and handling-related parties line in our statement of income.

Our plant products and condensate may be stored as inventory and sold at a later time. See Note 4 for further discussion of the revenue recognition accounting policies.

3.
Accounting Standards
Not Yet Adopted
Financial instruments - credit losses
In June 2016, the FASB issued a new accounting standards update that changes the impairment model for trade receivables, net investments in leases, debt securities, loans and certain other instruments. The standard requires the use of a forward-looking “expected loss” model as opposed to the current “incurred loss” model. This standard is effective for us in 2023 and will be adopted on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the adoption period. Early adoption is permitted. The Company is evaluating the provisions of this accounting standards update and assessing the impact, if any, it may have on its results of operations, financial position or cash flows.

*Year ended December 31, 2018 is not covered by auditor's report.

9


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


Recently Adopted
Revenue recognition standard
On January 1, 2019 the Company adopted the new Accounting Standards Codification Topic 606 (“new revenue standard”), Revenue from Contracts with Customers, and all the related amendments using the modified retrospective method. The Company evaluated the effect of transition by applying the provisions of the new revenue standard to contracts with remaining obligations as of January 1, 2019. No cumulative adjustment to retained earnings was necessary as a result of adopting this standard. Results for reporting periods beginning after January 1, 2019 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting policies.
The primary change from adoption of the new revenue standard relates to presentation of condensate sales to Marathon Oil Marketing, Ltd (“MOM”), a related entity. These transactions were classified as related party revenues under the previous accounting guidance. After applying the provisions of the new revenue standard, the Company determined that MOM was acting as an agent; therefore, the Company is now recognizing revenue based on third-party sales and it is no longer classified as a related party revenue on our statements of income.
Lease accounting standard
In February 2016, the FASB issued a new lease accounting standard, which requires lessees to recognize most leases, including operating leases, on the balance sheet as a right of use asset and lease liability. Short-term leases can continue being accounted for off balance sheet based on a policy election. The Company adopted this standard on January 1, 2019, based on the early adoption option permitted by the standard, using a modified retrospective approach. The Company applied practical expedients provided in the standard that allow, amongst others, not to reassess contracts that commenced or expired prior to the effective date. The Company also elected a policy not to recognize right of use assets and lease liabilities related to short-term leases. The adoption of this accounting standard had no impact on the Company's results of operations, financial position or cash flows since the Company currently have no leases in scope of this standard.
Classification in the statement of cash flows
In August 2016, the FASB issued a new accounting standards update which seeks to reduce the existing diversity in practice in how certain transactions are classified in the statement of cash flows. The Company adopted this standard in 2018 on a retrospective basis with no significant impact on its results of operations, financial position or cash flows.

4.
Revenues
The majority of the Company's revenues are derived from the sale of plant products (butane and propane) and condensate, under spot and term agreements with customers in the various international locations.
In 2019, sales to Geogas Trading S.A. and Mitsui & Co. Energy Trading Singapore Pte Ltd., accounted for approximately 62% and 12%, respectively, of total revenues. In 2018, sales to Vitol SA and Philia

*Year ended December 31, 2018 is not covered by auditor's report.

10


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


Trading PTE Ltd, accounted for approximately 55% and 13%, respectively, of total revenues. In 2017, sales to Vitol SA accounted for approximately 69% of total revenues.
The pricing in the hydrocarbon sales agreements are variable, determined using various published benchmarks which are adjusted for negotiated quality and location differentials. As a result, revenue collected under these agreements with customers is highly dependent on the market conditions and may fluctuate considerably as the hydrocarbon market prices rise or fall. Typically, customers pay the Company monthly, within a short period of time after delivery of the hydrocarbon products. As such, the Company does not have any financing element associated with contracts.
The entire consideration amount is variable due to pricing and/or volumes. The Company recognizes revenue in the amount of variable consideration allocated to distinct units of hydrocarbons transferred to a customer. Such allocation reflects the amount of total consideration the Company expects to collect for completed deliveries of hydrocarbons and the terms of variable payment relate specifically to efforts to satisfy the performance obligations under these contracts. The Company's performance obligations under the hydrocarbon sales agreements are to deliver specified contractual volumes of hydrocarbons.
Condensate
All of the condensate is sold in cargo deals through MOM. Under the provisions of the new revenue standard, the Company determined that MOM acts as a marketing agent, and for that reason, the Company no longer recognizes related party revenues starting in 2019. The condensate revenue is now recognized as third-party sales once product title is conveyed by MOM to the final buyer at the permanent flange of the buyer’s vessel where the Company satisfies all of the performance obligations and customers take control of the condensate.
Plant Products
Substantially all of the plant products are sold directly to third parties under one- to two-year term contracts. The plant product revenue is recognized once product title is conveyed to the buyer at the flange connection of the buyer’s vessel where the Company satisfies all of the performance obligations and the customer takes control of the plant products.

5.
Inventory
Inventory as of December 31, 2019 and 2018 is summarized as follows:
(in thousands of dollars)
 
 
 
 
 
 
2019
 
2018*
 
 
 
 
 
Materials and supplies
 
$
35,158

 
$
35,230

Liquid hydrocarbon products
 
1,910

 
444

 
 
$
37,068

 
$
35,674

 
 
 
 
 

*Year ended December 31, 2018 is not covered by auditor's report.

11


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


6.
Income Taxes
For income tax purposes, Alba Plant LLC is treated as a local corporation and is only subject to local income taxes in accordance with the PMA between The Republic of Equatorial Guinea and Alba Plant LLC dated January 22, 1996. The Company’s effective tax rate for 2019, 2018 and 2017 was 25%. Income before income taxes for Alba Plant LLC was $197 million, $327 million and $324 million for 2019, 2018 and 2017 respectively.
The provision for income tax expense comprises:
(in thousands of dollars)
 
 
 
 
 
 
 
 
2019
 
2018*
 
2017
 
 
 
 
 
 
 
Current tax expense
 
$
49,338

 
$
83,748

 
$
74,325

Deferred tax expense (benefit)
 
82

 
(1,739
)
 
6,827

 
 
$
49,420

 
$
82,009

 
$
81,152

The deferred tax assets and deferred tax liability resulted from the following:
(in thousands of dollars)
 
 
 
 
 
 
2019
 
2018*
 
 
 
 
 
Deferred tax assets
 
 
 
 
Government royalty - net profit interest
 
$
4,355

 
$
7,030

 
 
$
4,355

 
$
7,030

Deferred tax liability
 
 
 
 
Facility cost
 
$
49,543

 
$
52,136

 
 
$
49,543

 
$
52,136

 
 
 
 
 
 
 
 
 

Net deferred tax liabilities
 
$
45,188

 
$
45,106

As of December 31, 2019 the Company's income tax returns for Equatorial Guinea remain subject to examination for the tax years 2007-2018. As of December 31, 2019 and 2018 there are no uncertain tax positions.

*Year ended December 31, 2018 is not covered by auditor's report.

12


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


7. Related Party Transactions
Related parties include:
Alba Associates LLC and Sonagas, the Company’s owners;

Samedan, EG LPG, EG Alba, MEGPL, and EG Offshore, the owners in Alba Associates LLC; and

MOM, Equatorial Guinea LNG Train1, S.A. (“EG LNG”) and other affiliates of Marathon Oil Corporation (“Marathon”), which is the ultimate owner of several of the owners of Alba Associates LLC.

The Company enters into certain sales and purchases and has certain accounts receivable and accounts payable with related parties arising in the normal course of business. Accounts receivable, less allowance for doubtful accounts and accounts payable associated with related parties at December 31, 2019 and 2018, consist of the following:
 
 
 
 
 
 
 
2019
 
2018*
(in thousands of dollars)
 
Receivable from
 
Payable to
 
Receivable from
 
Payable to
 
 
 
 
 
 
 
 
 
Sonagas
 
$
285

 
$

 
$
1,052

 
$

MOM
 
8,607

 

 
9,472

 

EG LNG
 
30

 
36

 

 

MEGPL
 
458

 
12,275

 
17

 
7,434

Marathon
 
25

 
7

 
24

 
37

 
 
$
9,405

 
$
12,318

 
$
10,565

 
$
7,471

Plant products-related parties revenue for the years ended December 31, 2019, 2018 and 2017, relate to LPG sold to Sonagas, and propane sold to EG LNG.
Condensate-related parties revenue for the years ended December 31, 2018 and 2017, relates to sales of condensate to MOM.
Other sales-related parties for the years ended December 31, 2018 and 2017, relates to terminal fees on condensate sold to MOM.
The Company purchases its feed gas from gas produced under the Alba PSC at a rate of $0.25/mmbtu as specified in the PMA. MEGPL, the operator of Alba PSC, collects the funds related to the feed gas sales.
Direct operating expenses-related parties for the years ended December 31, 2019, 2018 and 2017, were costs incurred by MEGPL for the operation of the plant and billed to the Company in accordance with the Technical and Administrative Services Agreement. This agreement is effective through 120

*Year ended December 31, 2018 is not covered by auditor's report.

13


Alba Plant LLC
Notes to Financial Statements
December 31, 2019, 2018* and 2017
 


days after processing activities have terminated, as defined by the agreement. Additionally, the Company has agreed to pay an overhead fee to MEGPL equal to 1% of all cost incurred in support of plant operations.
Shipping and handling services, and general and administrative services are provided primarily by MEGPL. These services are charged to the Company at cost.
8.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, receivables and short-term payables. The carrying amounts approximate fair market value due to the highly liquid nature of the short-term instruments.
9.
Dividends
In accordance with the Alba Plant Members’ Agreement, all available funds, as defined in the agreement, are distributed to the Company’s owners on the basis of their respective ownership. Dividends distributed in 2019, 2018 and 2017 were $152 million, $335 million and $242 million, respectively. Dividends per share in 2019, 2018 and 2017 were $152 thousand, $335 thousand and $242 thousand, respectively.
10.
Contingencies
Various local laws and regulations affect the Company’s operations and costs. Management believes that the Company is in substantial compliance with all applicable local laws and regulations and that the ultimate resolution of any claims or legal proceedings, if any, instituted against the Company will not have a material effect on its financial position, results of operations, or cash flows.
11.
Subsequent Events
Events and transactions subsequent to the balance sheet date have been evaluated through February 20, 2020, the date these financial statements were issued, for potential recognition or disclosure in the financial statements.



*Year ended December 31, 2018 is not covered by auditor's report.

14