We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Serinus Energy Plc | LSE:SENX | London | Ordinary Share | JE00BNNMKT29 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.10 | -3.08% | 3.15 | 3.00 | 3.30 | 3.25 | 3.15 | 3.25 | 121,363 | 13:16:47 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Oil & Gas Field Services,nec | 15.84M | -13.02M | -0.1151 | -0.27 | 3.56M |
From Apr 2019 to Apr 2024
TIDMSENX
RNS Number : 1671Z
Serinus Energy PLC
16 May 2019
Serinus Energy plc
First Quarter 2019 Interim Report and Accounts
(US dollars)
Q1 2019 Highlights
Operational
-- Commercial production and gas sales from the Moftinu gas facility commenced on 25 April 2019
-- During the first quarter of 2019, Serinus completed the Moftinu gas facility in Romania. The delayed Low Temperature Separation ("LTS") unit and the Triethylene Glycol ("TEG") unit (the "Units") were delivered to Romania on 28 January 2019 at which point it was determined that the fabrication of the Units was much more incomplete than anticipated. Further work was undertaken to enable these Units to be operational prior to installation and testing at the facility site
-- Production from the Tunisian operations was 317 boe/d for the first quarter of 2019 (2018 - 380 boe/d)
-- All production in 2018 was from the Sabria field in Tunisia
-- The reopening of the Chouech Es Saida field in southern Tunisia commenced late in the quarter, having been shut in since February 2017
Financial
-- During the quarter, the Company undertook a placing raising gross proceeds of $3.0 million, by issuing 21,553,583 shares at a price of 10.5 pence per share. Attached to each share issued is 0.105 warrants, with each full warrant entitling the holder to purchase one ordinary share at an exercise price of 10.5 pence per share, exercisable for a period of 24 months after closing. The warrants must be approved by a special resolution of the Company's shareholders, at the Annual General Meeting on 16 May 2019, in order to disapply pre-emption rights that would otherwise apply to the exercise of the warrants, before they can be exercised.
-- $1.7 million received in revenue (gross of royalties) in the period
-- Realised oil price averaged $60.90 per bbl for the quarter (2018 - $66.00 per bbl), a decrease of 8%
-- Capital expenditures of $1.1 million were incurred for the quarter and were primarily focused on the final phase of the construction of the Moftinu gas facility
-- Funds from (used in) operations amounted to an outflow of $0.1 million in 2019 (2018 - inflow of $2.6 million), with the decrease due to insurance recoveries in 2018 attributable to the well incident in December 2017
OPERATIONAL UPDATE
During the first quarter of 2019, the Group completed the construction of the gas facility in Romania. Commercial sales commenced on 25 April 2019 with production from the Moftinu 1003 well flowing through the gas plant into the sales gas pipeline. The processed gas meets the water dew point and hydrocarbon dew point specifications set by the Romanian National Gas Transportation Company, Transgaz. The Company will follow a conventional start-up program whereby production parameters and plant performance will be stabilized, after which gas from the Moftinu 1007 well will also be brought onto production and flowed through the gas plant.
The construction of the gas facility has been severely delayed due to the delay in receiving the Units from Canada, the Units arrived at the EPC Contractors yard on 28 January 2019. After unpacking and reassembling the Units, it was determined that the fabrication of the Units was much more incomplete than expected. It was discovered that numerous components were missing from the Units, some instruments were not properly calibrated to design specifications, and some fabrication work had to be redone to correct subpar fabrication work. The Group and the EPC Contractor worked to complete the remedial work, test the Units, move the Units to the site and install before full testing and commissioning could commence.
Given the delay in the fabrication and delivery of the Units, the Group has filed a suit for more than US$25.4 million in damages against Aval Engineering Inc. of Alberta and Kocken Energy Systems Incorporated of Nova Scotia and certain of their directors and officers.
In Tunisia, our local team commenced the reopening of the Chouech Es Saida field in southern Tunisia in late Q1 2019. Initial steps include the re-hiring of employees, road clearing, inspection of down hole equipment and consumable inventories, tendering for services and site inspections. These procedures are ongoing, with work to replace the pumps in wells due to commence during the second quarter with production anticipated in Q3 2019.
OUTLOOK
Romania
The outlook for Romania remains strong. The Moftinu Gas Development project offers a significant opportunity for the Group to materially increase both its production and its associated cashflow. Production commenced on 25 April 2019. The Company will follow a conventional start-up program whereby production parameters and plant performance will be stabilized, after which, gas from the Moftinu 1007 well will also be brought onto production and flowed through the gas plant. During the start-up and stabilization period gas will be sold on a daily basis. Following the start-up period, and once gas volumes are more regular, gas will be sold on a monthly basis as per the previously announced Gas Sales Agreement. Natural gas prices secured on a daily basis were approximately $6 per mcf in April.
The Group has also commenced permitting for its planned 3D seismic survey over a portion of the Satu Mare Concession. This survey is scheduled to be undertaken in Q3/Q4 2019.
The Group also expects to drill the Moftinu-1004 well. This well is an appraisal well designed to provide additional gas to the Moftinu gas plant. Due to the delays in production from the Moftinu plant, it is expected that this well will be drilled in early 2020. This well will allow the Moftinu Gas Plant to operate at full capacity and to extend the plateau of production further.
The government of Romania introduced emergency legislation in December 2018 to cap the price at which gas producers sell their gas for purposes of household consumption. This legislation caps the price at 68 RON/Mwh (approximately $5/mcf). In late March 2019, the legislation was amended to delay the effective date to 1 May 2019 and to clarify that the price cap is only applicable to certain producers. This is good news for Serinus as the legislation is not applicable to the Group. The European Union Commission has formally started infringement proceedings against Romania as this law violates EU directives regarding the natural gas market.
Tunisia
Operations in Tunisia are ramping up after an extended period of stagnation due to the difficult social conditions in the country. Our local team commenced the reopening of the Chouech Es Saida field in southern Tunisia in late Q1 2019. Initial steps include the re-hiring of employees, road clearing, inspection of down hole equipment and consumable inventories, tendering for services and site inspections. These procedures are ongoing, with work to replace the pumps in wells due to commence during the second quarter with production anticipated in Q3 2019.
The Group also expects to deploy additional capital to the Sabria field in the form of a re-entry into a well that was mechanically damaged during completion many years ago. The Group views activities like this as excellent capital allocation with low exploration risk and technical risk that has been mitigated over the years by improving technology. The Sabria field has been producing, since its discovery, on simple primary production. Serinus is considering applying artificial lift to this field. This capital investment work at Sabria is anticipated to start in late 2019.
FINANCIAL REVIEW
Liquidity, Debt and Capital Resources
Due to the delay in production from Romania, in March 2019 the Group undertook a placing to raise gross proceeds of $3.0 million, by issuing 21,553,583 shares at a price of 10.5 pence per share. Attached to each share issued is 0.105 warrants, with each full warrant entitling the holder to purchase one ordinary share at an exercise price of 10.5 pence per share, exercisable for a period of 24 months after closing. The warrants must be approved by special resolution of the shareholders at the Annual General Meeting on 16 May 2019 before they can be exercised.
The proceeds of the equity issuance were used to fund a Senior debt repayment to the European Bank of Reconstruction and Development ("EBRD") due 31 March 2019 of $2.9 million.
In Romania, the Group invested $1.1 million primarily to complete the construction of the gas plant from which commercial production commenced 25 April 2019.
In Tunisia, production from the Sabria field continued during the quarter and with crude oil prices in 2019, Tunisia was a positive cash flow generating business unit during the quarter. Cash flow generation in Tunisia remains challenging given the current production level. Given the Group's focus on Romania, there was minimal capital expenditure in Tunisia during the quarter. The restart of the Chouech Es Saida field commenced in late Q1 2019 and the Group plans to undertake a capital investment program in Sabria which will enhance production and cash flow generation.
Funds from operations decreased year over year to an outflow of $0.1 million in 2019 as compared to an inflow of $2.6 million in 2018. Taking into consideration the movement in working capital, the cash flows from operating activities in Q1 2019 were $2.9 million (2018 - outflow of $0.9 million).
Delays with achieving first production in Romania has resulted in delayed operating cash flows, tightening the ability of the Group to meet cash obligations as they come due, and breach of financial covenants associated with the debt held with the European Bank of Reconstruction and Development ("EBRD"), as well as contributing to the delay of capital investment programmes in Tunisia, the implications of which are further discussed below.
Hot Features
Premium
31 March 31 December
------------------------- ---- ------------------ --------------------
($000) 2019 2018
------------------------- --- ------------------ --------------------
Current assets 11,389 13,480
Current liabilities (25,781) (28,918)
------------------------------- ------------------ --------------------
Working Capital deficit (14,392) (15,438)
------------------------------- ------------------ --------------------
The working capital deficit of the Group at 31 March 2019 was $14.4 million. Included in current liabilities at 31 March 2019 was $2.8 million of EBRD debt, accounts payable of $13.8 million, a decommissioning provision of $8.7 million and a lease provision of $0.4 million. Included in accounts payable was $8.2 million relating to Brunei. Of this amount, $2.2 million relates to a dispute with a drilling company dating back to 2013 on Block L and the remaining $6.0 million relates to work commitments on the Brunei Block M production sharing agreement which expired August 2012. Current liabilities also include $2.8 million relating to decommissioning provisions in Brunei and Canada, and $5.9 million relating to Tunisia. The obligations in Canada are offset by cash held on deposit as restricted cash of $1.1 million in current assets.
Given the tight operating conditions, the Group continues to actively manage its costs.
The Group renegotiated its EBRD debt in late 2017, which provided a holiday from making principal repayments on the Senior Loan until 2019 and a holiday from covenants until September 2018, to allow a period of time to develop Romania and achieve first production. The Senior Loan is repayable in 2019, with the first repayment of $2.7 million plus interest having been made in March 2019. The remaining $2.7 million plus interest is due to be repaid on 30 September 2019.
On 29 March 2019, the Group received a waiver from the EBRD formally waiving compliance with the financial covenants for the period ended 31 March 2019.
Given the above noted delays there are material uncertainties as to whether the Group can meet all its cash obligations as they come due. The Group's ability to settle its obligations as they come due is dependent on its ability to generate future cash flows from operations and/or obtain the necessary financing. In addition, given the above noted delays, our internally prepared forecast also indicates non-compliance with financial covenants in future quarters. The key assumptions in the base case forecast are the performance of the gas facility and wells in Romania, the timing and performance of the Chouech Es Saida field in Tunisia once reopened, and commodity prices. The Group continues to closely monitor the Group's covenant compliance in respect of its debt facilities.
Financial Review - Three months ended 31 March 2019
Funds from Operations
The Group uses funds from operations as a key performance indicator to measure the ability of the Group to generate cash from operations to fund future exploration and development activities.
The following table is a reconciliation of funds from operations to cash flow from operating activities:
Three months ended
31 March
--------------------------------- ---- ----------------------------------------------
($000) 2019 2018
--------------------------------- --- ---------------------- ----------------------
Cash flow from (used in)
operations 2,870 (931)
Changes in non-cash working
capital (2,910) 3,568
--------------------------------------- ---------------------- ----------------------
Funds from (used in) operations (40) 2,637
--------------------------------------- ---------------------- ----------------------
Funds from (used in) operations
per share (1) 0.00 0.02
--------------------------------------- ---------------------- ----------------------
(1) Based on average shares outstanding in the period
The decrease in funds from operations in 2019 was primarily attributable to insurance proceeds of $2.6 million recognized in 2018 relating to the well incident in December 2017. Funds from operations generated in Tunisia were $0.7 million, Romania $0.1 million and funds used corporately were $0.8 million.
Production
Three months ended
31 March
--------------------- ---- ---------------------
2019 2018
--------------------- --- ---------- ---------
Crude oil (bbl/d) 230 276
Natural gas (Mcf/d) 522 626
--------------------------- ---------- ---------
Total (boe/d) 317 380
--------------------------- ---------- ---------
% oil weighting 73% 73%
% gas weighting 27% 27%
--------------------------- ---------- ---------
Production is exclusively from the Sabria field in Tunisia.
Production volumes of 317 boe/d were down from 380 boe/d in Q1 2018 due to natural production declines from primarily the Win-13 and Win-12 wells in Sabria. The Company performed a slickline operation in Q2 2018 to investigate the Win-12bis well and may perform a well intervention to improve performance in the future.
Oil and Gas Revenue
Three months ended
31 March
------------------------ ---- ------------------------------------------
($000) 2019 2018
------------------------ --- -------------------- --------------------
Oil revenue 1,260 1,638
Gas revenue 443 573
------------------------------ -------------------- --------------------
Total revenue 1,703 2,211
------------------------------ -------------------- --------------------
Oil revenue (%) 74% 74%
Gas revenue (%) 26% 26%
------------------------------ -------------------- --------------------
Oil ($/bbl) 60.90 66.00
Gas ($/Mcf) 9.42 10.17
------------------------------ -------------------- --------------------
Average realized price
($/boe) 59.70 64.63
------------------------------ -------------------- --------------------
Revenue is currently generated exclusively from the Sabria field in Tunisia. The Group is required to sell 20% of its annual crude oil production from the Sabria concession into the local market, which is sold at an approximate 10% discount to the price obtained on its other crude sales. The remaining crude oil production is sold to the international market, through which the Group has a marketing agreement with Shell International Trading and Shipping Company Limited ("Shell agreement").
Oil and gas revenues totaled $1.7 million for Q1 2019, as compared to $2.2 million in the comparable period of 2018. The decrease is attributable to an 8% decrease in the average realized price and 17% decrease in production.
Crude oil realized prices decreased to $60.90 per bbl in 2019, which reflects the decrease in Brent price from $66.80 per bbl in Q1 2018 to $63.17 per bbl in Q1 2019. The Group realized 96% of the Brent price during Q1 2019, as compared to 99% in the comparable period of 2018.
The average realized price for natural gas decreased to $9.42 per mcf as compared to the comparable period in 2018. Natural gas prices are nationally regulated and in Sabria are tied to the current month average of high sulphur heating oil.
Royalties
Three months ended
31 March
-------------------------- ---- --------------------------------------------
($000) 2019 2018
-------------------------- --- --------------------- ---------------------
Royalties 165 213
-------------------------------- --------------------- ---------------------
Royalties ($/boe) 5.78 6.23
Royalties (% of revenue) 9.7% 9.6%
-------------------------------- --------------------- ---------------------
Tunisian royalties are based on individual concession agreements. In Sabria, the royalty rate varies depending on a calculation of cumulative revenues, net of taxes, as compared to cumulative investment in the concession, known as the "R factor". As the R factor increases, so does the royalty percentage to a maximum rate of 15%. During 2019, the royalty rate in the Sabria concession was 10% for oil and 8% for gas. In the Chouech Es Saida concession, royalty rates are flat at 15%.
Royalties decreased due to the decrease in revenue. The effective royalty rate increased slightly from 9.6% in Q1 2018 to 9.7% in Q1 2019.
Production Expenses
Three months ended
31 March
------------------------------ ---- --------------------------------------------
($000) 2019 2018
------------------------------ --- --------------------- ---------------------
Production expense - Tunisia 629 728
Production expense - Canada 12 11
------------------------------------ --------------------- ---------------------
Production expense - Total 641 739
------------------------------------ --------------------- ---------------------
Tunisia production expense
($/boe) 22.05 21.28
------------------------------------ --------------------- ---------------------
Tunisian production expenses for Q1 2019 decreased by 14% to $0.6 million as compared to $0.7 million in the comparable period of 2018. The decrease in 2019 was due lower Tunisian office costs driven by lower personnel expenses and professional services, partially offset by lower recoveries from the working interest partner in Sabria.
Canadian production expenses relate to the Sturgeon Lake assets, which are not producing and are incurring minimal operating costs to maintain the property.
Operating Netback
Serinus uses operating netback as a key performance indicator to assist management in understanding Serinus' profitability relative to current market conditions and as an analytical tool to benchmark changes in operational performance against prior periods. Operating netback consists of petroleum and natural gas revenues less direct costs consisting of royalties and production expenses. Netback is not a standard measure under IFRS and therefore may not be comparable to similar measures reported by other entities.
Three months ended 31 Three months ended 31
March 2019 March 2018
------------------- ----------------------------------------------------- --------------------------------------
Total Total
Oil (bbl) Gas (Mcf) (boe) Oil (bbl) Gas (Mcf) (boe)
------------------- ---------------- ----------------- ---------------- ---------------- ---------- --------
Production
volume 230 522 317 276 626 380
Realized price 60.90 9.42 59.70 66.00 10.17 64.63
Royalties (6.28) (0.74) (5.78) (6.73) (0.82) (6.23)
Production
expense (22.47) (3.49) (22.05) (21.72) (3.35) (21.28)
------------------- ---------------- ----------------- ---------------- ---------------- ---------- --------
Operating netback 32.15 5.19 31.87 37.55 6.00 37.12
------------------- ---------------- ----------------- ---------------- ---------------- ---------- --------
The decrease in operating netback to $31.87 per boe in Q1 2019 was primarily due to decreased realized prices.
General and Administrative Expense
Three months ended
31 March
--------------------- ---- --------------------------------------------
($000) 2019 2018
--------------------- --- --------------------- ---------------------
G&A expense 673 698
G&A expense ($/boe) 23.59 20.40
--------------------------- --------------------- ---------------------
General and administrative ("G&A") costs incurred by the Group are expensed, with certain costs directly related to exploration and development assets being capitalized or reported as production costs. The G&A expense reported is on a net basis, representing gross G&A costs incurred less recoveries of those costs presented as capital or production costs.
G&A costs for Q1 2019 were consistent with Q1 2018. On a per boe basis G&A expenses increased due to lower production volumes in Q1 2019.
Share-Based Compensation
Three months ended
31 March
-------------------------- ---- --------------------------------------------
($000) 2019 2018
-------------------------- --- --------------------- ---------------------
Stock-based compensation 219 129
Stock-based compensation
($/boe) 7.68 3.77
-------------------------------- --------------------- ---------------------
The increase in share-based compensation expense recognized in Q1 2019 as compared to Q1 2018 is primarily due to stock options issued in December 2018.
Depletion, Depreciation and Impairment
Three months ended
31 March
---------------------------- ---- --------------------------------------------
($000) 2019 2018
---------------------------- --- --------------------- ---------------------
Depletion and depreciation
- Tunisia 371 414
Depletion and depreciation
- Romania 25 1
Depletion and depreciation
- Canada 166 40
562 455
-------------------------------- --------------------- ---------------------
Tunisia depletion and
depreciation ($/boe) 13.01 12.10
---------------------------------- --------------------- ---------------------
Depletion and depreciation expense is computed on a concession by concession basis considering the net book value of the concession, future development costs associated with the reserves as well as the proved and probable reserves of the concession.
Tunisia depletion and depreciation expense for Q1 2019 decreased to $0.4 million, due to lower production in 2019, as compared to 2018, partially offset by a slightly higher depletion rate per boe. On a per boe basis, the depletion rate was $13.01 per boe for 2019, compared to $12.10 per boe in 2018.
Depletion and depreciation in Canada includes $0.1 million representing the depreciation of right-of-use assets which, effective 1 January 2019, is required to be reported on the statement of financial position. Refer to note 3 of the accounts for further information.
Interest and Accretion Expense
Three months ended
31 March
------------------ ----
($000) 2019 2018
------------------ --- --------------------- ---------------------
Interest expense 857 714
------------------------ --------------------- ---------------------
Interest expense for Q1 2019 increased to $0.9 million, due to higher debt balances (due to interest accrued on the convertible loan) and higher interest rates on the loans in 2019, due to an increase in LIBOR. The average debt balance included in the interest expense calculation for the first quarter of 2019 was $33.0 million compared to $30.5 million in the comparable period of 2018.
Share Data
As at the date of issuing this report, the following are the options outstanding and changes to directors' shares owned since 31 March 2019, up to the date of this report.
Shares
Options held at
held at Shares 31 March
31 March held at 2019 and
and 15 31 December Change 15 May
Name of Director May 2019 2018 in ownership 2019
-------------------------- ----------- ------------- -------------- ----------
Executive Directors:
Jeffrey Auld 7,000,000 22,197 - 22,197
Tracy Heck 4,950,000 - - -
Non-Executive Directors:
Lukasz Redziniak - - - -
Jim Causgrove 100,000 - - -
Eleanor Barker 100,000 100,000 - 100,000
Evgenij Iorich (a) 100,000 3,415 - 3,415
Dawid Jakubowicz - - - -
12,250,000 125,612 - 125,612
-------------------------- ----------- ------------- -------------- ----------
(a) Mr. Iorich holds a position with Pala Investments, which is related to Pala Assets Holdings Limited ("Pala"). Pala owned 11,266,084 Shares as at 31 March 2019. By virtue of his position with Pala Investments, Mr. Iorich is deemed to have direction over such Shares in addition to those Shares that are shown above.
As of the date of issuing this report, management is aware of the following shareholders holding more than 5% of the ordinary shares of the Company, as reported by the shareholders to the Company: Kulczyk Investments S.A. 38.77%, Marlborough Fund Managers 10.64% and JCAM Investments Ltd 7.89%.
Serinus Energy plc
Condensed Consolidated Interim Statement of Comprehensive Income
(US 000s) (unaudited)
Three months
ended 31 March
------------------------------- ----- ------------------
Note 2019 2018
------------------------------- ----- -------- --------
Revenue, net of royalties 5 1,538 1,998
------------------------------- ----- -------- --------
Cost of sales
Production expenses (641) (739)
Depletion and depreciation 10 (562) (455)
------------------------------- ----- -------- --------
Total cost of sales (1,203) (1,194)
------------------------------- ----- -------- --------
Gross profit 335 804
Total administrative expenses (673) (698)
Share-based payment expense 6 (219) (129)
Well incident recovery - 2,592
Listing costs - (386)
------------------------------- ----- -------- --------
Operating (loss) profit (557) 2,183
Finance expense 7 (1,427) (728)
------------------------------- ----- -------- --------
(Loss) profit before tax (1,984) 1,455
Taxation (347) (453)
------------------------------- ----- -------- --------
(Loss) profit for the period (2,331) 1,002
------------------------------- ----- -------- --------
Earnings (loss) per share:
Basic and diluted 8 (0.01) 0.01
------------------------------- ----- -------- --------
The accompanying notes on pages 13 to 22 form part of the condensed consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Financial Position
(US 000s) (unaudited)
31 December
As at Note 31 March 2019 2018
---------------------------------- ----- -------------- ------------
Non-current assets
Property, plant and equipment 10 108,954 107,541
---------------------------------- ----- -------------- ------------
Current assets
Restricted cash 1,079 1,054
Trade receivables and other 11 7,117 10,143
Cash and cash equivalents 3,193 2,283
---------------------------------- ----- -------------- ------------
Total current assets 11,389 13,480
---------------------------------- ----- -------------- ------------
Total assets 120,343 121,021
---------------------------------- ----- -------------- ------------
Equity
Share capital 12 377,921 375,208
Warrants 13 97 -
Share-based payment reserve 23,526 23,307
Accumulated deficit (387,504) (385,173)
---------------------------------- ----- -------------- ------------
Total equity 14,040 13,342
---------------------------------- ----- -------------- ------------
Liabilities
Non-current liabilities
Decommissioning provision 36,880 36,573
Deferred tax liability 13,441 13,154
Long-term debt 14 28,494 27,667
Other provisions 15 1,707 1,367
---------------------------------- ----- -------------- ------------
Total non-current liabilities 80,522 78,761
---------------------------------- ----- -------------- ------------
Current liabilities
Decommissioning provision 8,716 8,696
Current portion of long-term
debt 14 2,793 5,624
Other provisions 15 435 -
Accounts payable and accrued
liabilities 13,837 14,598
---------------------------------- ----- -------------- ------------
Total current liabilities 25,781 28,918
---------------------------------- ----- -------------- ------------
Total liabilities 106,303 107,679
---------------------------------- ----- -------------- ------------
Total equity and liabilities 120,343 121,021
---------------------------------- ----- -------------- ------------
The accompanying notes on pages 13 to 22 form part of the condensed consolidated interim financial statements
These condensed consolidated interim financial statements were approved by the Board of Directors and authorized for issue on 15 May 2019 and were signed on its behalf by:
ELEANOR BARKER JEFFREY AULD DIRECTOR, CHAIR OF THE AUDIT COMMITTEE DIRECTOR, PRESIDENT AND CEO
Serinus Energy plc
Condensed Consolidated Interim Statement of Shareholder's Equity
(US 000s) (unaudited)
Share-based
Share payment Accumulated
Note capital Warrants reserve deficit Total
-------------------------- ----- -------- -------- ----------- ----------- --------
Balance at 31 December
2017 362,534 - 22,487 (381,317) 3,704
Comprehensive income
for the period - - - 1,002 1,002
Adjustment on initial
application of IFRS
9 - - - 1,034 1,034
Transactions with equity
owners
Share-based payment
expense 6 - - 129 - 129
-------------------------- ----- -------- -------- ----------- ----------- --------
Balance at 31 March
2018 362,534 - 22,616 (379,281) 5,869
-------------------------- ----- -------- -------- ----------- ----------- --------
Balance at 31 December
2018 375,208 - 23,307 (385,173) 13,342
Comprehensive loss
for the period - - - (2,331) (2,331)
Transactions with equity
owners
Share issue, net of
issue costs 12,13 2,713 97 - - 2,810
Share-based payment
expense 6 - - 219 - 219
Balance at 31 March
2019 377,921 97 23,526 (387,504) 14,040
-------------------------- ----- -------- -------- ----------- ----------- --------
The accompanying notes on pages 13 to 22 form part of the condensed consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Cash Flows
(US 000s) (unaudited)
Three months
ended 31 March
---------------------------------------- ----- ------------------
Note 2019 2018
---------------------------------------- ----- -------- --------
Operating activities
(Loss) profit for the period (2,331) 1,002
Items not involving cash:
Depletion and depreciation 10 562 455
Accretion expense 7 307 260
Share-based payment expense 6 219 129
Foreign exchange loss (gain)
unrealized 40 (414)
Current tax expense 60 132
Deferred tax expense 287 321
Interest expense 7 958 776
Income taxes paid (142) -
Expenditures on decommissioning
liabilities - (24)
---------------------------------------- ----- -------- --------
Funds (used in) from operations (40) 2,637
Changes in non-cash working capital 16 2,910 (3,568)
---------------------------------------- ----- -------- --------
Cashflows from (used in) operating
activities 2,870 (931)
---------------------------------------- ----- -------- --------
Financing activities
Ordinary shares issued 12 3,000 -
Share issue costs 12 (190) -
Repayment of long-term debt 16 (2,700) -
Interest and financing fees 16 (235) (204)
Lease payments 15 (129) -
---------------------------------------- ----- -------- --------
Cashflows used in financing activities (254) (204)
---------------------------------------- ----- -------- --------
Investing activities
Property, plant and equipment
expenditures, net 10 (1,680) (3,036)
Change in restricted cash (5) (5)
Cashflows used in investing activities (1,685) (3,041)
---------------------------------------- ----- -------- --------
Impact of foreign currency translation
on cash (21) 394
Change in cash and cash equivalents 910 (3,782)
Cash and cash equivalents, beginning
of year 2,283 7,252
---------------------------------------- ----- -------- --------
Cash and cash equivalents, end
of period 3,193 3,470
---------------------------------------- ----- -------- --------
The accompanying notes on pages 13 to 22 form part of the condensed consolidated interim financial statements
Serinus Energy plc
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended 31 March 2019 and 2018
(US 000s, unless otherwise noted)
1. General information
Serinus Energy plc (the "Company") and its subsidiaries ("Serinus" or the "Group") is principally engaged in the exploration for and development of oil and gas properties in Tunisia and Romania. The Company is incorporated under the Companies (Jersey) Law 1991. The Company's head office and registered office is located at 28 Esplanade, St. Helier, Jersey, JE1 8SB.
Serinus is a publicly listed company whose ordinary shares are traded under the symbol "SENX" on AIM and "SEN" on the WSE. Kulczyk Investments, S.A. ("KI") holds a 38.77% investment in Serinus as of 31 March 2019.
The condensed consolidated interim financial statements for Serinus include the accounts of the Company and its subsidiaries for the three months ended 31 March 2019 and 2018. These condensed consolidated interim financial statements have not been audited or reviewed by the Group's auditor.
2. Basis of presentation
The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and their interpretations issued by the International Accounting Standards Board ("IASB") as adopted by the European Union ("EU") but do not include all information required for full annual financial statements.
These consolidated financial statements are expressed in U.S. dollars unless otherwise indicated. All references to US$ are to U.S. dollars. All financial information is rounded to the nearest thousands, except per share amounts and when otherwise indicated.
Going concern
These consolidated financial statements have been prepared on a going concern basis, which assumes that Serinus will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations.
The Group meets its day-to-day working capital requirements from net operating cash flows, cash balances, equity, and fully drawn debt facilities (Senior and Convertible loans from the EBRD of $2.7 million and $29.9 million respectively (see note 14)). As at 30 April 2019 the Group had cash balances of $2.4 million.
The Group is faced with financial difficulties stemming from the delay in commencing production in Romania. Due to the continued focus on finalization of the gas plant, the reopening of the Chouech Es Saida field in southern Tunisia has been delayed with the process commencing late in the first quarter of 2019. The resulting impact of the delay in the Romanian production and the delay in Tunisian plans has severely impacted the Group's planned cash flows.
Equity was issued in March 2019, raising net proceeds of $2.8 million, to bridge a short-term financing need to fund a scheduled debt repayment on the Senior loan, which was paid on 29 March 2019.
The Group's $2.7 million Senior loan is due to be repaid on 30 September 2019. The Group's $29.9 million convertible loan accumulates interest to 30 June 2020 at which point the outstanding amount is repayable in four equal instalments on 30 June 2020, 2021, 2022 and 2023 and interest after 30 June 2020 is to be paid annually on the loan repayment dates. Both loans are subject to covenants. As at 31 March 2019, the Group was not in compliance with the consolidated debt to EBITDA covenant or the debt service coverage ratio for the three months ended 31 March 2019. On 29 March 2019, the Group received a waiver from the EBRD formally waiving compliance with these covenants for the period ended 31 March 2019. The implication of this waiver is that the debt repayments will follow their original scheduled repayment terms and the bank will not be acting on its security as a result of the breach.
In assessing the Group's ability to continue as a going concern, the Directors have prepared base and sensitized cash flow forecasts for a period in excess of 12 months from the date of authorization of these financial statements. The key assumptions in the base case forecasts are the performance of the gas facility and wells in Romania, the timing and performance of the Chouech Es Saida field in Tunisia once reopened, and commodity prices
Base case forecasts indicate that the Group will breach the EBRD covenants in future quarters, the result of which is that the Senior and Convertible loans will become repayable on demand at the discretion of the bank. The Directors intend to seek waiver of those covenants and the continued availability of those existing loan facilities represents a material uncertainty.
Given the above noted delays there are material uncertainties as to whether the Group can meet all its cash obligations as they come due. The Group's ability to settle its obligations as they come due is dependent on its ability to generate future cash flows from operations and/or obtain the necessary financing.
The Directors consider that the the ability to generate sufficient future cash flows from operations to meet obligations as they come due and the continued availability of the existing facilities, but with forecast potential breaches of loan covenants, represents material uncertainties that may cast significant doubt on the ability of the Group to continue as a going concern. These condensed consolidated interim financial statements do not reflect the adjustments and classifications of assets, liabilities, revenues and expenses which would be necessary if the Group were unable to continue as a going concern.
3. Significant accounting policies
Except as described below, the condensed consolidated interim financial statements have been prepared following the same basis of measurement, functional currency and accounting policies and methods of computation as described in the notes to the consolidated financial statements for the year ended 31 December 2018.
Changes to accounting policies
IFRS 16 Leases
In January 2016, the IASB issued IFRS 16 Leases ("IFRS 16"), which requires entities to recognize assets and lease obligations in the statement of financial position. For lessees, IFRS 16 removes the classification of leases as either operating leases or finance leases, effectively treating all leases as finance leases. Certain short-term leases (less than 12 months) and leases of low-value assets (less than $5,000) are exempt from the requirements and may continue to be treated as operating leases. Lessors will continue with a dual lease classification model. Classification will determine how and when a lessor will recognize lease revenue and what assets would be recorded.
Serinus adopted IFRS 16 on 1 January 2019, using the modified retrospective transition approach. Under the modified retrospective approach, the measurement of the right-of-use assets are equal to the lease liabilities immediately before the transition date with no impact on retained earnings. The cumulative effect is recognized at the initial transition date with no comparative information. The main changes are explained below.
i. Significant accounting policies
Leases
Contracts that convey the right to control the use of an identified asset for a period of time in exchange for consideration are classified as leases. Upon initial recognition, right-of-use assets are measured at cost, which comprises the amount of the initial measurement of the lease liability, lease payments made at or before the commencement date, any initial direct costs and an estimate of dismantling and restoration costs. Lease liabilities are measured at the present value of the lease payments using the interest rate implicit in the lease, or the lessee's incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.
Serinus has taken recognition exemptions for leases that are short-term and leases for which the underlying asset is of low value. Short-term leases are defined as a lease that, at the commencement date, has a lease term of 12 months or less. An underlying asset can only be of low value if the lessee can benefit from the use of the underlying asset on its own, the underlying asset is not highly dependent or interrelated with other assets and the underlying asset has a value, when new, of $5,000 or less. Lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term in the statement of comprehensive income.
ii. Impact from change in accounting policy
Operating lease payments were previously recorded in administrative expenses in the statement of comprehensive income. Under IFRS 16, right-of-use assets and lease liabilities are recognized in the statement of financial position for contracts that are classified as leases. Right-of-use assets are included in property, plant and equipment and depreciated on a straight-line basis over the lease term. Depreciation of the right-of-use assets is included in depletion and depreciation expense in the statement of comprehensive income. Lease liabilities are included in other provisions at their net present value and accreted until the end of the lease term. Accretion of lease liabilities is recorded as interest expense and included in finance expense in the statement of comprehensive income.
4. Use of estimates and judgments
Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the condensed consolidated interim financial statements are described in note 4 to the consolidated financial statements for the year ended 31 December 2018. There has been no change in these areas during the three months ended 31 March 2019.
5. Revenue, net of royalties
Three months
ended
31 March
--------------------------- ---- ---------------
2019 2018
--------------------------- --- ------- ------
Petroleum and natural gas
revenues 1,703 2,211
Royalties (165) (213)
Revenue, net of royalties 1,538 1,998
--------------------------------- ------- ------
The Group's revenue was entirely generated in Tunisia for the three months ended 31 March 2019 and 2018 and was based on Brent crude oil index pricing. For the three months ended 31 March 2019 and 2018 the Group had three customers. The Group's contract with Shell is for a period of five years beginning 2016, while the Group's contracts for local sales in Tunisia are generally for the period of the concession.
As at 31 March 2019, the receivable balance related to contracts with customers, included within "accounts receivable" is $1.7 million (31 December 2018 - $1.9 million). The disaggregation of revenue by major products and geographical market is included in the segment note (see note 9).
6. Share-based payment expense
A summary of the changes to the option plans are presented below:
(a) CAD denominated options
Three months ended Year ended
31 March 2019 31 December 2018
-------------------- ------------------------- ---------------------------
Weighted Weighted
average average
Number of exercise Number of exercise
options price (CAD) options price (CAD)
-------------------- ---------- ------------- ------------ -------------
Balance, beginning
of year 300,000 0.37 9,933,000 0.36
Forfeited - - (1,043,000) 0.37
Converted to GBP - - (8,590,000) 0.36
-------------------- ---------- ------------- ------------ -------------
Balance, end of
period 300,000 0.37 300,000 0.37
-------------------- ---------- ------------- ------------ -------------
As at 31 March 2019 there were 300,000 options outstanding to non-executive directors with a weighted average contractual life of 3.3 years and a weighted average exercise price of CAD $0.37. As at 31 December 2018 there were 300,000 options outstanding to non-executive directors with a weighted average contractual life of 3.6 years and a weighted average exercise price of $0.37.
(b) GBP denominated options
Three months ended Year ended
31 March 2019 31 December 2018
-------------------- -------------------------- --------------------------
Weighted Weighted
average average
Number of exercise Number of exercise
options price (GBP) options price (GBP)
-------------------- ----------- ------------- ----------- -------------
Balance, beginning
of year 14,793,000 0.18 - -
Granted - - 6,203,000 0.15
Converted from
CAD - - 8,590,000 0.20
-------------------- ----------- ------------- ----------- -------------
Balance, end of
period 14,793,000 0.18 14,793,000 0.18
-------------------- ----------- ------------- ----------- -------------
Weighted average
Exercise price contractual
(GBP) Options outstanding Options exercisable life (years)
------------------- -------------------- -------------------- -----------------
GBP0.14 - GBP1.00 14,743,000 6,081,001 6.2
GBP1.01 - GBP2.00 50,000 50,000 0.6
------------------- -------------------- -------------------- -----------------
14,793,000 6,131,001 6.2
------------------- -------------------- -------------------- -----------------
7. Finance expense
Three months ended
31 March
------------------------------ ----- ---------------------
Note 2019 2018
------------------------------ ----- ---------- ---------
Interest expense on debt 16 857 714
Accretion on decommissioning
provision 307 260
Amortization of debt
costs 16 63 65
Amortization of debt
modification 16 11 11
Interest expense on lease
liabilities 15 30 -
Bank charges 3 3
Interest income (6) (17)
Foreign exchange loss
(gain) 162 (308)
1,427 728
------------------------------ ----- ---------- ---------
8. Loss per share
Three months ended
31 March
------------------------------------- ---- ---------------------
(US 000s, except per share
amounts) 2019 2018
------------------------------------- --- ---------- ---------
(Loss) profit for the period (2,331) 1,002
Weighted average shares outstanding
- basic 220,193 150,652
Effect of dilutive securities
(1) - 130
------------------------------------------- ---------- ---------
Weighted average shares outstanding
- diluted 220,193 150,782
(Loss)/ earnings per share
- basic and dilutive (0.01) 0.01
------------------------------------------- ---------- ---------
(1) For the three months ended 31 March 2019, there were 6.1 million options exercisable and 2.3 million warrants that were excluded from the calculation as the impact was anti-dilutive (for the three months ended 31 March 2018 - 1.1 million options).
9. Segment information
The Group's reportable segments are organized by geographical areas and consist of the exploration, development and production of oil and natural gas in Romania and Tunisia. The Corporate segment includes all corporate activities and items not allocated to reportable operating segments and therefore includes Brunei.
Romania Tunisia Corporate Total
------------------------------------ -------- -------- ---------- --------
As at 31 March 2019
Total assets 45,409 71,238 3,696 120,343
------------------------------------ -------- -------- ---------- --------
For the three months ended
31 March 2019
Petroleum and natural gas revenues
Crude oil - 1,260 - 1,260
Natural gas - 443 - 443
------------------------------------ -------- -------- ---------- --------
- 1,703 - 1,703
Royalties - (165) - (165)
------------------------------------ -------- -------- ---------- --------
Revenue, net of royalties - 1,538 - 1,538
------------------------------------ -------- -------- ---------- --------
Cost of sales
Production expenses - (629) (12) (641)
Depletion and depreciation (25) (371) (166) (562)
------------------------------------ -------- -------- ---------- --------
Total cost of sales (25) (1,000) (178) (1,203)
------------------------------------ -------- -------- ---------- --------
Gross (loss) profit (25) 538 (178) 335
General and administrative - - (673) (673)
Share-based payment expense - - (219) (219)
Operating (loss) profit (25) 538 (1,070) (557)
Finance expense 27 (361) (1,093) (1,427)
Profit (loss) before income
taxes 2 177 (2,163) (1,984)
Current income tax expense - (59) (1) (60)
Deferred income tax expense - (287) - (287)
------------------------------------ -------- -------- ---------- --------
Profit (loss) for the period 2 (169) (2,164) (2,331)
------------------------------------ -------- -------- ---------- --------
Capital expenditures (1) 1,067 34 - 1,101
------------------------------------ -------- -------- ---------- --------
As at 31 December 2018
Total assets 44,095 71,473 5,453 121,021
------------------------------------ -------- -------- ---------- --------
For the three months ended
31 March 2018
Petroleum and natural gas revenues
Crude oil - 1,638 - 1,638
Natural gas - 573 - 573
------------------------------------ -------- -------- ---------- --------
- 2,211 - 2,211
Royalties - (213) - (213)
------------------------------------ -------- -------- ---------- --------
Revenue, net of royalties - 1,998 - 1,998
------------------------------------ -------- -------- ---------- --------
Cost of sales
Production expenses - (728) (11) (739)
Depletion and depreciation (1) (414) (40) (455)
------------------------------------ -------- -------- ---------- --------
Total cost of sales (1) (1,142) (51) (1,194)
------------------------------------ -------- -------- ---------- --------
Gross (loss) profit (1) 856 (51) 804
General and administrative - - (698) (698)
Share-based payment expense - - (129) (129)
Well incident recovery 2,592 - - 2,592
Listing costs - - (386) (386)
------------------------------------ -------- -------- ---------- --------
Operating profit (loss) 2,591 856 (1,264) 2,183
Finance expense 207 (221) (714) (728)
------------------------------------ -------- -------- ---------- --------
Profit (loss) before income
taxes 2,798 635 (1,978) 1,455
Current income tax expense - (132) - (132)
Deferred income tax expense - (321) - (321)
------------------------------------ -------- -------- ---------- --------
Profit (loss) for the period 2,798 182 (1,978) 1,002
------------------------------------ -------- -------- ---------- --------
Capital expenditures (1) 1,996 12 84 2,092
------------------------------------ -------- -------- ---------- --------
(1) Capital expenditures exclude the impact of changes in non-cash working capital.
10. Property, plant and equipment
Oil and Corporate Right-of-use
Note gas interests assets assets Total
----------------------------------------- ----- --------------- ---------- ------------ ----------
Cost:
Balance as at 31 December
2017 254,090 2,489 - 256,579
Additions 10,668 90 - 10,758
Change in decommissioning
provision (994) - - (994)
Disposals (3,500) - - (3,500)
----------------------------------------- ----- --------------- ---------- ------------ ----------
Balance as at 31 December
2018 260,264 2,579 - 262,843
Adjustment on initial application
of
IFRS 16 3 - - 874 874
Additions 1,092 9 - 1,101
Balance as at 31 March
2019 261,356 2,588 874 264,818
----------------------------------------- ----- --------------- ---------- ------------ ----------
Accumulated depletion and
depreciation:
Balance as at 31 December
2017 (155,305) (1,696) - (157,001)
Depletion and depreciation (1,560) (241) - (1,801)
Disposals 3,500 - - 3,500
Balance as at 31 December
2018 (153,365) (1,937) - (155,302)
Depletion and depreciation (367) (82) (113) (562)
Balance as at 31 March
2019 (153,732) (2,019) (113) (155,864)
----------------------------------------- ----- --------------- ---------- ------------ ----------
Net book value
----------------------------------------- ----- --------------- ---------- ------------ ----------
Balance as at 31 December
2018 106,899 642 - 107,541
----------------------------------------- ----- --------------- ---------- ------------ ----------
Balance as at 31 March
2019 107,624 569 761 108,954
----------------------------------------- ----- --------------- ---------- ------------ ----------
The following table reconciles capital expenditures to the property, plant and equipment expenditures in the cash flow statement:
Three months ended
31 March
-------------------------------- ---- ---------------------
2019 2018
-------------------------------- --- ---------- ---------
Property, plant and equipment
expenditures 1,101 2,092
Changes in non-cash working
capital 579 944
-------------------------------------- ---------- ---------
Property, plant and equipment,
cash payments 1,680 3,036
-------------------------------------- ---------- ---------
Future development costs associated with the proved plus probable reserves of $55.0 million (2018 - $55.6 million) were included in the depletion calculation for the Tunisia operating segment.
As at 31 March 2019, there were no impairment indicator triggers or triggers for reversals indicating the need for an impairment test, or a reversal, as such, no additional impairment or reversals have been recorded.
Right-of-use assets
The Group's right-of-use assets consist of leases for office space in Calgary, Canada and Bucharest, Romania, and vehicle leases in Romania. At 31 March 2019, the office leases had a carrying value of $726 thousand and vehicle leases had a carrying value of $35 thousand.
11. Trade receivables and other
31 March 31 December
As at 2019 2018
-------------------------- --------- ------------
Trade receivables 2,907 2,930
Commodity tax receivable 2,690 2,701
Corporate tax receivable 1,333 1,357
Prepaids and other 187 274
Insurance receivable - 2,881
7,117 10,143
-------------------------- --------- ------------
12. Shareholders' capital
Authorized
The Company is authorized to issue an unlimited number of ordinary shares without nominal or par value.
Changes in issued ordinary shares are as follows:
Three months ended Year ended
31 March 2019 31 December 2018
----------------------- ----------------------- -----------------------
Number of Amount Number of Amount
shares ($000s) shares ($000s)
----------------------- ------------ --------- ------------ ---------
Balance, beginning of
the period/year 217,318,805 375,208 150,652,138 362,534
Shares issued 21,553,583 2,903 66,666,667 13,475
Issuance costs, net
of tax - (190) - (801)
----------------------- ------------ --------- ------------ ---------
Balance, end of the
period/year 238,872,388 377,921 217,318,805 375,208
----------------------- ------------ --------- ------------ ---------
On 19 March 2019, the Company issued 21,553,583 ordinary shares at 10.5 pence per ordinary share. Attached to each share issued is 0.105 share purchase warrants ("warrants") (note 13). Gross proceeds totaled $3.0 million and were allocated between share capital ($2.9 million) and warrants ($0.1 million) (note 13).
13. Warrants
Three months ended Year ended
31 March 2019 31 December 2018
----------------------- --------------------- ---------------------
Number of Amount Number of Amount
warrants ($000s) warrants ($000s)
----------------------- ---------- --------- ---------- ---------
Balance, beginning of
the year - - - -
Warrants issued 2,263,126 97 - -
Balance, end of the
period 2,263,126 97 - -
----------------------- ---------- --------- ---------- ---------
Every one warrant entitles the holder to purchase one ordinary share at an exercise price of 10.5 pence per ordinary share, exercisable for a period of 24 months after admission of the ordinary shares to trading on AIM, subject to approval by a special resolution of the Company's shareholders at the upcoming Annual General Meeting being held on 16 May 2019.
14. Long-term debt
31 March 31 December
As at 2019 2018
------------------------ --------- ------------
Senior loan (1) 2,701 5,521
Convertible loan (2) 29,853 29,111
-------------------------- --------- ------------
Debt-principal balance 32,554 34,632
Unamortized discounts
and debt costs (288) (351)
Modification gain (979) (990)
-------------------------- --------- ------------
31,287 33,291
------------------------ --------- ------------
Current portion 2,793 5,624
Long-term portion 28,494 27,667
-------------------------- --------- ------------
(1) Includes loan principal of $2.7 million (31 December 2018 - $5.4 million) plus accrued interest.
(2) Includes loan principal of $20.0 million (31 December 2018 - $20.0 million) plus accrued interest.
As at 31 March 2019, the Group had $31.3 million in total debt with the European Bank for Reconstruction and Development ("EBRD") consisting of a $2.7 million Senior Loan plus accrued interest and a $20.0 million Convertible Loan plus accrued interest, net of unamortized discounts and costs, and a debt modification gain.
As at 31 March 2019, the Group was not in compliance with the consolidated debt to EBITDA covenant or the debt service coverage ratio for the three months ended 31 March 2019. On 29 March 2019, the Group received a waiver from the EBRD formally waiving compliance with these covenants for the period ended 31 March 2019. The implication of this waiver is that the debt repayments will follow their original scheduled repayment terms and the bank will not be acting on its security as a result of the breach.
The Senior Loan agreement contains a prepayment clause whereby EBRD has the option to request prepayment in the event that the annual reserves coverage ratio for Tunisian reserves is less than 1.5, in an amount to bring the ratio back on side. The Group did not meet the reserves coverage ratio as at 31 December 2018 based on the Tunisia reserves. The waiver received from the EBRD on 29 March 2019 also waived compliance with this clause for the period ended 31 December 2018.
15. Other provisions
31 March 31 December
As at 2019 2018
----------------------- --------- ------------
Lease liabilities (a) 775 -
JV audit 1,148 1,148
Severance 219 219
------------------------- --------- ------------
2,142 1,367
----------------------- --------- ------------
Current 435 -
Non-current 1,707 1,367
------------------------- --------- ------------
(a) Lease liabilities
31 March 31 December
As at Note 2019 2018
----------------------------------- ----- --------- ------------
Balance, beginning of year - -
Adjustment on initial application
of IFRS 16 3 874 -
Liabilities settled (129) -
Interest expense 30 -
Balance, end of period 775 -
----------------------------------- ----- --------- ------------
Current 435 -
Non-current 340 -
----------------------------------- ----- --------- ------------
The Group's minimum lease payments are as follows:
Within
1 Year 2-5 Years Thereafter Total
------------------------ -------- ---------- ----------- ------
Minimum lease payments 518 359 - 877
------------------------ -------- ---------- ----------- ------
16. Supplemental cash flow disclosures
Three months ended
31 March
--------------------------------- ---------------------
2019 2018
--------------------------------- --------- ----------
Cash provided by (used in):
Trade receivables and other 2,981 (1,110)
Accounts payable and accrued
liabilities (71) (2,458)
---------------------------------- --------- ----------
2,910 (3,568)
--------------------------------- --------- ----------
Changes in non-cash working
capital relating to:
Operating 2,910 (3,568)
---------------------------------- --------- ----------
The following table reconciles long-term debt(1) to cash flows arising from financing activities:
Three months ended
31 March
------------------------------------ ---------------------
2019 2018
------------------------------------ ---------- ---------
Balance, beginning of the year 33,291 31,261
Cash changes:
Principal payment on senior
loan (2,700) -
Interest payments on senior
loan (235) (204)
Non-cash changes:
Modification gain upon adoption
of IFRS 9 - (1,034)
Amortization of discounts and
debt costs 63 65
Amortization of modification
gain 11 11
Accrued interest on senior loan 115 102
Accrued interest on convertible
loan 742 612
Balance, end of the year 31,287 30,813
------------------------------------- ---------- ---------
(1) Includes the current portion of long-term debt.
17. Commitments and contingencies
Commitments
Future payments for the Group's commitments as at 31 March 2019 are below. A commitment is an enforceable and legally binding agreement to make a payment in the future for the purchase of goods and services. These items exclude amounts recorded on the balance sheet.
Within
1 Year 2-3 Years 4-5 Years Thereafter Total
------------------ -------- ---------- ---------- ----------- ------
Operating leases 134 - - - 134
------------------ -------- ---------- ---------- ----------- ------
The Group's commitments are all in the ordinary course of business and include the work commitments for Tunisia and Romania.
Romania
The work obligations pursuant to the Phase 3 extension, approved on 28 October 2016, include the drilling of two wells, and, at the Group's option, either the acquisition of 120 km2 of new 3D seismic data or drill a third well. The two firm wells must be drilled to minimum depths of 1,000 and 1,600 meters respectively, and if so elected, the third well to a depth of 2,000 meters. The term of the Phase 3 extension is for three years, expiring on 28 October 2019. On 5 May 2017, the Group signed a letter of guarantee with the National Agency for Mineral Resources in Romania for up to $12 million to cover the necessary expenses for the fulfillment of the minimal commitments for the Phase 3 extension. This guarantee was made net of any amounts already spent by the Group since the time of the extension's approval. The Group has completed the work obligations for drilling the first two wells, the Moftinu-1007 and Moftinu-1003 wells. During 2019 the Group intends to acquire 120 km2 of new seismic in order to meet its third and final commitment.
Contingencies
Tunisia
The Tunisian state oil and gas company, ETAP, has the right to back into up to a 50% working interest in the Chouech Es Saida concession if, and when, the cumulative crude oil sales, net of royalties and shrinkage, from the concession exceeds 6.5 million barrels. As at 31 March 2019, cumulative liquid hydrocarbon sales net of royalties and shrinkage was 5.2 million barrels.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
QRFUVSVRKUAVAAR
(END) Dow Jones Newswires
May 16, 2019 02:00 ET (06:00 GMT)
1 Year Serinus Energy Chart |
1 Month Serinus Energy Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
