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| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.05 | 3.00 | 3.10 | 3.05 | 3.05 | 3.05 | 222,015 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Oil & Gas Field Services,nec | 15.84M | -13.02M | -0.1151 | -0.26 | 3.45M |
From Apr 2022 to Apr 2024
TIDMSENX
RNS Number : 6965H
Serinus Energy PLC
28 November 2022
28 November 2022
Press Release
Interim Results for the nine months ended 30 September 2022
Jersey, Channel Islands, 28 November 2022 - Serinus Energy plc ("Serinus" or the "Company") (AIM:SENX, WSE:SEN), is pleased to announce its interim results for the nine months ended 30 September 2022.
Financial
-- Revenue for the nine months ended 30 September 2022 was $41.8 million (30 September 2021 - $25.7 million)
-- During the period Moftinu Gas Plant surpassed produced revenues of $87.0 million since first gas in 2019
-- Net income for the nine months ended 30 September 2022 was $3.4 million (30 September 2021 - $0.8 million)
-- Funds from operations for the nine months ended 30 September 2022 were $ 11.1 million (30 September 2021 - $ 7.8 million)
-- EBITDA for the nine months ended 30 September 2022 was $11.4 million ( 30 September 2021 - $8.9 million)
-- Gross profit for the nine months ended 30 September 2022 was $11.8 million (30 September 2021 - $4.4 million)
-- The Company realised a net price of $162.18/boe for the nine months ended 30 September 2022 comprising:
o Realised oil price - $101.04/bbl
o Realised natural gas price - $36.66/Mcf
-- The Group's operating netback remained strong for the nine months ended 30 September 2022 and was $120.13/boe ( 30 September 2021 - $34.13/boe), comprising:
o Romania operating netback - $195.73/boe ( 30 September 2021 - $37.79/boe)
o Tunisia operating netback - $59.11/boe ( 30 September 2021 - $26.05/boe)
-- Capital expenditures of $8.6 million for the nine months ended 30 September 2022 ( 30 September 2021 - $9.3 million), comprising:
o Romania - $6.9 million
o Tunisia - $1.7 million
-- Working capital surplus increased to $0.8 million (31 December 2021 - $0.6 million) -- Cash balance as at 30 September 2022 was $8.8 million (31 December 2021 - $8.4 million)
Operational
-- The Canar-1 well was drilled to a total depth of 1,570 metres, targeting three prospective hydrocarbon zones. Well logging and gas show readings determined that these zones had indications of gas, but they do not contain sufficient gas resources to justify proceeding with the testing and completion program for the well. The Canar-1 well has been completed as a water disposal well and test injection is ongoing
-- The Moftinu Nord-1 well was drilled to a total depth of 1,000 metres, targeting four prospective hydrocarbon zones. Well logging and gas show readings determined that these zones had indications of residual gas, but they do not contain sufficient estimated gas resources to justify proceeding with the testing and completion program for the well. The well is now suspended
-- Drilling operations on both the wells (Canar-1 and Moftinu Nord-1) were performed within budget and without incident
-- The Company has initiated a geological and geophysical review of the Satu Mare concession to high rank the management-estimated 181 million barrels of oil equivalent prospects
-- In Tunisia, production has remained stable in the first three quarters of 2022. All material and consumables for the artificial lift programme at the Sabria W-1 well have been received in-field and the Company is awaiting mobilisation of the rig. Having previously defaulted on the rig contract, La Compagnie Tunisienne de Forage ("CTF"), the Tunisia state-owned drilling company, has confirmed the availability of its CTF 004 rig to perform the workover and installation of artificial lift for the W-1 well in Sabria. The rig is currently being demobilised from another operator and is expected to be operational at the well site in December 2022. Workover and installation operations are expected to take 60 days to complete
-- Workover at the CS-9 well at Chouech Es Saida was completed in August 2022
-- Immediately following the completion of the W-1 workover and artificial lift installation, the CTF 004 rig will move to the Sabria N-2 well to perform a workover to recomplete the well
-- The Company anticipates, subject to partner approval, proceeding with the workover and installation of artificial lift on the WIN-12bis well in Sabria in 2023
-- Production for the period averaged 938 boe/d, comprising:
o Romania - 421 boe/d
o Tunisia - 517 boe/d
-- In August 2022, the Company performed a lifting of 50,344 bbls of Tunisian crude oil at a price of $99.51/bbl
About Serinus
Serinus is an international upstream oil and gas exploration and production company that owns and operates projects in Tunisia and Romania.
For further information, please refer to the Serinus website (www.serinusenergy.com) or contact the following:
Serinus Energy plc Jeffrey Auld, Chief Executive Officer Andrew Fairclough, Chief Financial Officer Calvin Brackman, Vice President, External Relations & Strategy +4 4 204 541 7859 Shore Capital (Nominated Adviser & Joint Broker) Toby Gibbs John More +44 207 408 4090 A rden Partners plc (Joint Broker) Ruari McGirr Alexandra Campbell-Harris +44 207 614 5900 Camarco (Financial PR - London) Owen Roberts Phoebe Pugh +44 203 781 8334 TBT i Wspólnicy (Financial PR - Warsaw) Katarzyna Terej +48 602 214 353
Forward Looking Statement Disclaimer
This release may contain forward-looking statements made as of the date of this announcement with respect to future activities that either are not or may not be historical facts. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable as of the date hereof, any potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors that could impair or prevent the Company from completing the expected activities on its projects include that the Company's projects experience technical and mechanical problems, there are changes in product prices, failure to obtain regulatory approvals, the state of the national or international monetary, oil and gas, financial , political and economic markets in the jurisdictions where the Company operates and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties, and actual results may vary materially from those expressed in the forward-looking statement. The Company undertakes no obligation to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement, unless required by law.
Translation : This news release has been translated into Polish from the English original.
Serinus Energy plc
Third Quarter Report and Accounts 2022
(US dollars)
Third quarter 2022 Highlights
Financial
-- Revenue for the nine months ended 30 September 2022 was $41.8 million (30 September 2021 - $25.7 million)
-- During the period Moftinu Gas Plant surpassed produced revenues of $87.0 million since first gas in 2019
-- Net income for the nine months ended 30 September 2022 was $3.4 million (30 September 2021 - $0.8 million)
-- Funds from operations for the nine months ended 30 September 2022 were $ 11.1 million (30 September 2021 - $ 7.8 million)
-- EBITDA for the nine months ended 30 September 2022 was $11.4 million ( 30 September 2021 - $8.9 million)
-- Gross profit for the nine months ended 30 September 2022 was $11.8 million (30 September 2021 - $4.4 million)
-- The Company realised a net price of $ 162.18 /boe for the nine months ended 30 September 2022 comprising:
o Realised oil price - $101.04/bbl o Realised natural gas price - $36.66/Mcf
-- The Group's operating netback remained strong for the nine months ended 30 September 2022 and was $120.13/boe ( 30 September 2021 - $34.13/boe), comprising:
o Romania operating netback - $195.73/boe ( 30 September 2021 - $37.79/boe) o Tunisia operating netback - $59.11/boe ( 30 September 2021 - $26.05/boe)
-- Capital expenditures of $8.6 million for the nine months ended 30 September 2022 ( 30 September 2021 - $9.3 million), comprising:
o Romania - $6.9 million o Tunisia - $1.7 million -- Working capital surplus increased to $0.8 million (31 December 2021 - $0.6 million) -- Cash balance as at 30 September 2022 was $8.8 million (31 December 2021 - $8.4 million)
Operational
-- The Canar-1 well was drilled to a total depth of 1,570 metres, targeting three prospective hydrocarbon zones. Well logging and gas show readings determined that these zones had indications of gas, but they do not contain sufficient gas resources to justify proceeding with the testing and completion program for the well. The Canar-1 well has been completed as a water disposal well and test injection is ongoing
-- The Moftinu Nord-1 well was drilled to a total depth of 1,000 metres, targeting four prospective hydrocarbon zones. Well logging and gas show readings determined that these zones had indications of residual gas, but they do not contain sufficient estimated gas resources to justify proceeding with the testing and completion program for the well. The well is now suspended
-- Drilling operations on both the wells (Canar-1 and Moftinu Nord-1) were performed within budget and without incident
-- The Company has initiated a geological and geophysical review of the Satu Mare concession to high rank the management-estimated 181 million barrels of oil equivalent prospects
-- In Tunisia, production has remained stable in the first three quarters of 2022. All material and consumables for the artificial lift programme at the Sabria W-1 well have been received in-field and the Company is awaiting mobilisation of the rig. Having previously defaulted on the rig contract, La Compagnie Tunisienne de Forage ("CTF"), the Tunisia state-owned drilling company, has confirmed the availability of its CTF 004 rig to perform the workover and installation of artificial lift for the W-1 well in Sabria. The rig is currently being demobilised from another operator and is expected to be operational at the well site in December 2022. W orkover and installation operations are expected to take 60 days to complete
-- Workover at the CS-9 well at Chouech Es Saida was completed in August 2022
-- Immediately following the completion of the W-1 workover and artificial lift installation, the CTF 004 rig will move to the Sabria N-2 well to perform a workover to recomplete the well
-- The Company anticipates, subject to partner approval, proceeding with the workover and installation of artificial lift on the WIN-12bis well in Sabria in 2023
-- Production for the period averaged 938 boe/d, comprising: o Romania - 421 boe/d o Tunisia - 517 boe/d
-- In August 2022, the Company performed a lifting of 50,344 bbls of Tunisian crude oil at a price of $99.51/bbl
Operational UPDATE and Outlook
Serinus Energy plc and its subsidiaries ("Serinus", the "Company" or the "Group") is an oil and gas exploration, appraisal and development company. The Group is the operator of all its assets and has operations in two business units: Romania and Tunisia.
ROMANIA
The Group's Romanian operating subsidiary holds the licence to the Satu Mare concession area, covering approximately 3,000 km(2) in the north-west of Romania. The Moftinu Gas Development project began production in 2019. The development project includes the Moftinu gas plant, and currently operates four gas wells - Moftinu-1003, Moftinu-1004, Moftinu-1007 and Moftinu-1008 with a second compressor installed and commissioned on Moftinu-1007 in February 2022. During the nine months ended 30 September 2022, the Company's Romanian operations produced a total of 687 MMcf of gas and 527 barrels of condensate, equating to an average daily production of 421 boe/day. Production continues to reflect the natural decline profile of shallow gas fields. The installation of compression has stabilised production from those wells. The Company is reviewing the production performance versus the prognosed production as determined by the Company's technical staff and the Company's independent reserve engineers and is considering additional production wells on the Moftinu structure to maximise reservoir drainage.
The Company has completed drilling of two exploration wells in the period in Romania. The Canar-1 well was drilled to a total depth of 1,570 metres, targeting three prospective hydrocarbon zones. The Moftinu Nord-1 well was drilled to a total depth of 1,000 metres, targeting four prospective hydrocarbon zones. Well logging and gas show readings for both wells determined that the prospective zones in each well had indications of residual gas but they did not contain sufficient gas resources to justify proceeding with the testing and completion programs for the wells. Each of the prospects exhibit several AVO anomalies of a type that strongly indicates the presence of gas. However, other formation characteristics may also contribute to such signals, including low gas saturations. Seal risk is a component of the ongoing bloc-wide review of exploration potential in the block.
The Canar-1 well underwent initial tests to assess its suitability for disposal of produced water from the Moftinu field and has subsequently been completed to enable longer term water injection which has the potential for substantial savings in operating cost.
Serinus has also initiated a block-wide geological and geophysical study to verify and enhance our understanding of the exploration portfolio beyond the Moftinu area. Management has estimated the exploration potential of the block to be 181 million barrels of oil equivalent, on a mean unrisked recoverable resource. These additional studies will look to high rank future exploration prospects.
Gas pricing in Romania remained at high levels through the first nine months of 2022, with an average realised price of $40.54/Mcf. Gas prices on the Romanian Commodity Exchange continued to remain strong over the third quarter of 2022.
Tunisia
The Company currently operates two concession areas within Tunisia, Sabria and Chouech Es Saida, which have discovered oil and gas reserves and are currently producing. The Ech Chouech licence, which can only be produced through the Chouech Es Saida facilities, expired in May 2022. The Company has followed the regulatory process to seek an extension of this licence with the Tunisian authorities, but no progress has been forthcoming to date. The largest asset is the Sabria field ; a large, conventional oilfield which the Company's independent reservoir engineers have estimated to have approximately 445 million barrels of oil-originally-in-place. Of this oil-in-place only 1.0% has been produced to date due to a low rate of development on the field.
The Sabria W-1 wellsite has been prepared for the intervention which will install the first submersible pump for the Artificial Lift programme in the Sabria field. All materials required for this intervention are in our in-country warehouse. The Company signed a rig contract for the CTF 006 rig and was awaiting mobilization from another operator and the workover and pump installation at the Sabria W-1 well due to commence as soon as the rig was available. CTF notified the Company that it was unable to deliver the CTF 006 rig as contractually agreed. The Company worked with CTF, its partner, ETAP, and the Ministry of Energy to procure an alternative rig as per the terms of the previously agreed CTF rig contract. CTF has now agreed to provide the CTF 004 rig to perform the well workovers. This is currently being demobilised from another operator and will begin workover operations in December 2022. The completion of the planned operations is expected to take 60 days.
Upon completion of the workover and pump installation at Sabria W-1, the rig will move to the Sabria N-2 well to perform a workover to recomplete the well. This well was drilled in 1980 but was damaged during completion and, although in proximity to producing wells, was not able to flow oil to surface due to damage during completion. The workover program will re-complete the well and remove any wellbore restrictions.
All long-lead items for the Sabria field artificial lift programme have been delivered to the Sabria field.
Production remained stable in the third quarter of 2022 at the Chouech Es Saida field as a result of the Company's programme of pump installation and maintenance.
Financial Review
Liquidity, Debt and Capital Resources
During the nine months ended 30 September 2022, the Company invested a total of $8.6 million (2021 - $9.3 million) on capital expenditures before working capital adjustments. In Romania, the Group invested $6.9 million (2021 - $8.5 million) on the drilling campaign related to the exploration wells. In Tunisia, the Company invested $1.6 million (2021 - $0.8 million) for workovers on wells.
The Company's funds from operations for the nine months ended 30 September 2022 were $11.1 million (2021 - $7.8 million). Including changes in non-cash working capital, the cash flow generated from operating activities in 2022 was $8.7 million (2021 - $10.5 million). The Company continues to be in a strong position to expand and continue growing production within our existing resource base. The Company is debt-free and has adequate resources available to deploy capital into both operating segments to deliver growth and shareholder returns.
($000) 30 September 31 December Working Capital 2022 2021 --------------------- ------------- ------------ Current assets 20,043 17,625 Current liabilities (19,279) (16,994) --------------------- ------------- ------------ Working Capital 764 631 --------------------- ------------- ------------
Working capital at 30 September 2022 is relatively stable at $0.8 million (31 December 2021 - $0.6 million).
Current assets as at 30 September 2022 were $20.0 million (31 December 2021 - $17.6 million), an increase of $2.4 million. Current assets consist of:
-- Cash and cash equivalents of $8.8 million (31 December 2021 - $8.4 million) -- Restricted cash of $1.1 million (31 December 2021 - $1.1 million) -- Trade and other receivables of $9.6 million (31 December 2021 - $7.4 million) -- Product inventory of $0.5 million (31 December 2021 - $0.6 million)
Current liabilities as at 30 September 2022 were $19.3 million (31 December 2021 - $17.0 million), an increase of $2.3 million. Current liabilities consist of:
-- Accounts payable of $11.2 million (31 December 2021 - $9.7 million) -- Decommissioning provision of $6.6 million (31 December 2021 - $6.6 million)
o Brunei - $1.6 million (31 December 2021 - $1.6 million)
o Canada - $1.0 million (31 December 2021 - $1.0 million) which is offset by restricted cash in the amount of $1.1 million (31 December 2021 - $1.1 million) in current assets
o Romania - $nil million (31 December 2021 - $0.3 million)
o Tunisia - $4.0 million (31 December 2021 - $3.7 million)
-- Income taxes payable of $1.3 million (31 December 2021 - $0.5 million) -- Current portion of lease obligations of $0.2 million (31 December 2021 - $0.2 million)
Non-current assets
Property, plant and equipment ("PP&E") decreased to $64.3 million (31 December 2021 - $71.7 million), as a result of depletion expense in the period of $4.7 million, a change in decommissioning estimates of $4.6 million and a foreign currency impact of $3.0 million. The decrease from depletion, decommissioning estimates and foreign currency was partially offset by capital expenditures in PP&E of $4.8 million. Exploration and evaluation assets ("E&E") increased to $8.5 million (31 December 2021 - $5.0 million), primarily due to expenditures incurred on the 2D seismic acquisition programme and exploration drilling programme in Romania . Right-of-use assets increased to $0.5 million (31 December 2021 - $0.3 million) due to expenditures incurred on corporate assets.
Financial Review - NINE months ended 30 SEPTEMBER 2022
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:
Hot Features
Premium
Nine months ended 30
September
($000) 2022 2021
------------------------------------ ---------------------- ----------
Cash flow from operations 8,713 10,464
Changes in non-cash working capital 2,342 (2,636)
------------------------------------ ---------------------- ----------
Funds from operations 11,055 7,828
------------------------------------ ---------------------- ----------
Funds from operations per share 0.10 0.01
------------------------------------ ---------------------- ----------
Romania generated funds from operations of $8.4 million (2021 - $5.8 million) and Tunisia generated $7.1 million (2021 - $1.8 million). Funds used at the Corporate level were $4.4 million (2021 - $2.3 million) resulting in net funds from operations of $11.1 million (2021 - $5.3 million). Changes in non-cash working capital increased by $4.9 million to $2.3 million (2021 - $2.6 million).
Production
Nine months ended 30 September 2022 Tunisia Romania Group % ------------------------ -------- -------- ------ ----- Crude oil (bbl/d) 451 - 451 48% Natural gas (Mcf/d) 395 2,518 2,913 52% Condensate (bbl/d) - 2 2 0% ------------------------ -------- -------- ------ ----- Total (boe/d) 517 422 938 100% ------------------------ -------- -------- ------ ----- Nine months ended 30 September 2021 Crude oil (bbl/d) 465 - 465 25% Natural gas (Mcf/d) 618 7,392 8,010 74% Condensate (bbl/d) - 10 10 1% ------------------------ -------- -------- ------ ----- Total (boe/d) 568 1,242 1,810 100% ------------------------ -------- -------- ------ -----
During the nine months ended 30 September 2022 production volumes decreased by 872 boe/d (48%) to 938 boe/d against the comparative period (2021 - 1,810 boe/d).
Romania's production volumes decreased by 821 boe/d (66%) to 422 boe/d against the comparative period (2021 - 1,242 boe/d). Production continues to reflect the natural decline profile of shallow gas fields. In February 2022, a second compressor was installed and commissioned on Moftinu-1007. The installation of compression has stabilised production from those wells with compression.
Tunisia's production volumes decreased by 51 boe/d (9%) to 517 boe/d against the comparative period (2021 - 568 boe/d). Production remains stable during the nine months of 2022 as a result of the Company's programme of pump installation and maintenance. The CTF-004 rig is being demobilised from another operator and workover operations are due to start in December 2022. Ongoing workover programmes continue in the Chouech Es Saida field to enhance production.
Oil and Gas Revenue
($000) Nine months ended 30 September 2022 Tunisia Romania Group % Oil revenue 12,569 - 12,569 30% Natural gas revenue 1,280 27,888 29,168 69% Condensate revenue - 57 57 1% --------------------------------- -------- ---------- --------- ------- Total revenue 13,849 27,945 41,794 100% --------------------------------- -------- ---------- --------- ------- Nine months ended 30 September 2021 Tunisia Romania Group % ------------------------------------- -------- -------- ------------ ------- Oil revenue 7,473 - 7,473 29% Natural gas revenue 1,482 16,581 18,063 70% Condensate revenue - 162 162 1% ------------------------------------- -------- -------- ------------ ------- Total revenue 8,955 16,743 25,698 100% ------------------------------------- -------- -------- ------------ ------- Realised Price [1] Nine months ended 30 September 2022 Tunisia Romania Group ----------------------------------------------- -------- ------------ ------- Oil ($/bbl) 101.04 - 101.04 Natural gas ($/Mcf) 11.88 40.54 36.66 Condensate ($/bbl) - 81.33 81.33 ----------------------------------------------- -------- ------------ ------- Average realised price ($/boe) 97.29 242.25 162.18 ----------------------------------------------- -------- ------------ ------- Nine months ended 30 September 2021 ----------------------------------------------- -------- ------------ ------- Oil ($/bbl) 61.69 - 61.69 Natural gas ($/Mcf) 8.79 8.22 8.26 Condensate ($/bbl) - 57.72 57.72 ----------------------------------------------- -------- ------------ ------- Average realised price ($/boe) 60.01 49.37 52.62 ----------------------------------------------- -------- ------------ -------
During the nine months ended 30 September 2022 revenue increased by $16.1 million (63%) to $41.8 million (2021 - $25.7 million) as the Group saw the average realised price increase by $109.56/boe (208%) to $162.18/boe (2021 - $52.62/boe).
The Group's average realised oil price increased by $39.35/bbl (64%) to $101.04/bbl (2021 - $$61.69/bbl), and average realised natural gas prices increased by $28.40/Mcf (344%) to $36.66/Mcf (2021 - $$8.26/Mcf).
Under the terms of the Sabria Concession Agreement 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 was sold to the international market.
Royalties
Nine months ended
30 September
($000) 2022 2021
----------------------- ---------- --------
Tunisia 1,714 1,198
Romania 943 1,282
----------------------- ---------- --------
Total 2,657 2,480
Total ($/boe) 10.31 5.08
Tunisia (% of revenue) 12.4 % 13.4%
Romania (% of revenue) 3.5 % 7.7%
----------------------- ---------- --------
Total (% of revenue) 6.4 % 9.7%
----------------------- ---------- --------
During the nine months ended 30 September 2022 royalties increased by $ 0.2 million (7%) to $2.7 million (2021- $ 2.5 million) while the Group's average royalty rate decreased to 6.4 % (2021 - 9.7 %).
In Romania, the royalty rate dropped to 3.5% in the nine months ended 2022 (2021 - 7.7%) as a result of a decrease in the level of production. In addition to the decrease in production, the Company saw an increase in the realised price, which exceeded the royalty reference price in 2022, compared to 2021 where the royalty reference price exceeded the realised price. The Company incurred a 3.5% royalty for gas (2021 - 7.5%) and 3.5% royalty for condensate (2021 - 3.5%). The royalty is calculated using a reference price that is set by the Romanian authorities and not the realised price to the Company. Romanian royalty rates vary based on the level of production during the quarter. Natural gas royalty rates range from 3.5% to 13.0% and condensate royalty rates range from 3.5% to 13.5%.
In Tunisia, royalties vary based on individual concession agreements. Sabria royalty rates vary 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 the nine months of 2022, the royalty rate remained unchanged in Sabria at 10% for oil and 8% for gas. Chouech Es Saida and Ech Chouech royalty rates are flat at 15% for both oil and gas.
Production Expenses
Nine months ended
30 September
($000) 2022 2021
----------------------------------- --------- ---------
Tunisia 3,720 3,870
Romania 4,424 2,647
Canada 40 34
----------------------------------- --------- ---------
Group 8,184 6,551
Tunisia production expense ($/boe) 26.14 25.93
Romania production expense ($/boe) 38.35 7.80
----------------------------------- --------- ---------
Total production expense ($/boe) 31.74 13.41
----------------------------------- --------- ---------
During the nine months ended 30 September 2022 production expenses increased by $ 1.6 million ( 25 %) to $8.2 million (2021 - $6.6 million). Per unit production expenses increased by $ 18.33 /boe ( 137 %) to $ 31.74 (2021 - $ 13.41/boe ).
Tunisia's production expenses decreased by $ 0.2 million ( 4 %) to $ 3.7 million (2021 - $3.9 million), however per unit production expenses increased to $26.14/boe (2021 - $25.93/boe) due to lower production. The decrease in production expenses is due to a lower number of workover programs initiated in the period and the inclusion of historic mining taxes of $0.3 million related to Sanrhar and Zinnia in the comparative period in 2021.
Romania's overall operating costs increased by $ 1.9 million ( 67 %) to $ 4.5 million (2021 - $ 2.6 million), with per unit production expenses increasing by $ 30.55 /boe ( 392 %) to $ 38.35 /boe (2021 - $ 7.80 /boe) due to lower production. The increase in production costs is primarily a result of higher water disposal costs and the impact of inflation in Romania.
Canada 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 .
($/boe) Nine months ended 30 September 2022 Tunisia Romania Group Sales volume (boe/d) 521 422 944 Realised price 97.29 242.25 162.18 Royalties (12.04) (8.17) (10.31) Production expense (26.14) (38.35) (31.74) --------------------------------- -------- -------- -------- Operating netback 59.11 195.73 120.13 --------------------------------- -------- -------- -------- Nine months ended 30 September 2021 Tunisia Romania Group Sales volume (boe/d) 568 1,242 1,810 Realised price 60.01 49.37 52.62 Royalties (8.03) (3.78) (5.08) Production expense (25.93) (7.80) (13.41) --------------------------------- -------- -------- -------- Operating netback 26.05 37.79 34.13 --------------------------------- -------- -------- --------
During the nine months ended 30 September 2022 the Group's operating netback increased by $ 86.00/ boe ( 252% ) to $ 120.13 /boe (2021 - $ 34.13 /boe). The increase is due to increased realised prices, partially offset by higher royalties and higher production expenses.
The Company also generated a gross profit of $ 11.8 million (2021 - $ 4.4 million), largely due to a significant increase in the Company's netbacks as well as a decrease to depletion as described below.
Earnings Before Interest, Taxes, Depreciation and Amortization ("ebitda")
Serinus uses EBITDA as a key performance indicator to assist management in understanding Serinus' cash profitability. EBITDA is computed as net profit/loss and adding back interest, taxation, depletion and depreciation, and amortisation expense. EBITDA is not a standard measure under IFRS and therefore may not be comparable to similar measures reported by other entities. During the nine months ended 30 September 2022 , the Group's EBITDA increased by $ 2.5 million to $ 11.4 million (2021 - $ 8.9 million).
Nine months ended 30
September
($000) 2022 2021
--------------------------- ------------ ---------
Net income 3,367 836
Interest expense 45 51
Depletion and amortization 4,924 8,066
Tax expense 3,079 (54)
--------------------------- ------------ ---------
EBITDA 11,415 8,899
--------------------------- ------------ ---------
Windfall Tax
Nine months ended 30
September
($000) 2022 2021
----------------------------------- ------------ ---------
Windfall tax 14,233 4,190
Windfall tax ($/Mcf - Romania gas) 20.68 2.08
Windfall tax ($/boe - Romania gas) 124.05 12.46
During the nine months ended 30 September 2022 windfall taxes in Romania increased by $10.0 million (246%) to $14.2 million (2021 - $4.2 million). This increase is directly related to higher realised gas prices in Romania which increased from $8.22/Mcf to $40.54/Mcf.
In Romania, the Group is subject to a windfall tax on its natural gas production which is applied to supplemental income once natural gas prices exceed 47.53 RON/Mwh. This supplemental income is taxed at a rate of 60% between 47.53 RON/Mwh and 85.00 RON/Mwh and at a rate of 80% above 85.00 RON/Mwh. Expenses deductible in the calculation of the windfall tax include royalties and capital expenditures limited to 30% of the supplemental income below the 85.00 RON/Mwh threshold.
Depletion and Depreciation
Nine months ended
30 September
($000) 2022 2021
---------------- --------- ---------
Tunisia 2,067 2,801
Romania 2,763 5,153
Corporate 94 112
---------------- --------- ---------
Total 4,924 8,066
Tunisia ($/boe) 14.52 18.77
Romania ($/boe) 23.95 15.19
---------------- --------- ---------
Total ($/boe) 19.11 16.52
---------------- --------- ---------
During the nine months ended 30 September 2022 depletion and depreciation expense decreased by $3.2 million (39%) to $4.9 million (2021 - $8.1 million), primarily due to lower production during the period. Per boe, depletion and depreciation expense increased by $2.59/boe (16%) to $19.11/boe (2021 - $16.52/boe), primarily due to lower reserves in the current period.
General and Administrative ("G&A") Expense
Nine months ended 30
September
($000) 2022 2021
-------------------- ----------- ----------
G&A expense 4,050 3,180
G&A expense ($/boe) 15.72 6.49
During the nine months ended 30 September 2022 G&A costs increased by $0.9 million (27%) to $4.1 million (2021 - $ 3.2 million), being an increase of $9.23/boe (140%) to $15.72/boe (2021 - $6.49/boe) due to higher compliance expenses and impact of foreign exchange rates in the current period.
Share-Based Payment
Nine months ended
30 September
($000) 2022 2021
---------------------------- --------- ---------
Share-based payment 59 119
Share-based payment ($/boe) 0.23 0.24
During the nine months ended 30 September 2022 share-based compensation decreased to $0.06 million (2021 - $0.1 million) due to lower stock options granted in the preceding 12 months.
Net Finance Expense
Nine months ended
30 September
($000) 2022 2021
--------------------------------------- ---------- --------
Interest on leases 28 41
Accretion on decommissioning provision 753 255
Foreign exchange and other 532 16
--------------------------------------- ---------- --------
1,313 312
--------------------------------------- ---------- --------
During the nine months ended 30 September 2022 net finance expenses increased by $1.0 million (321%) to $1.3 million (2021 - $0.3 million). This increase is mainly due to foreign exchange losses due to the strengthening of the US dollar, as well as higher accretion on decommissioning provision which increased due to the higher discount rates applied to the calculation during the period.
Taxation
During the nine months ended 30 September 2022 income tax expense was $3.4 million (2021 - $0.1 million). The increase in the tax expense is directly related to higher taxable income in Tunisia during the period.
Share Data
As at the date of issuing this report, the following are the Directors stock options outstanding, LTIP awards, and shares owned up to the date of this report.
Share Options LTIP Awards Shares
Executive Directors:
Jeffrey Auld 2,580,000 1,656,355 488,875
Andrew Fairclough 175,000 903,631 108,053
Non-Executive Directors:
Jim Causgrove 10,000 - 40,000
Lukasz Redziniak - - 72,000
Jon Kempster [2] - - 60,261
-------------------------- -------------- ------------ --------
2,765,000 2,559,986 769,189
-------------------------- -------------- ------------ --------
As of the date of issuing this report, management is aware of the following shareholders holding more than 3% of the ordinary shares of the Group, as reported by the shareholders to the Group: Richard Sneller 11.59%, CRUX Asset Management 8.41%, Quercus TFI SA 7.26%, Canccord (Marlborough Fund Managers) 4.19%, and Spreadex LTD 3.02%.
The Directors are responsible for the maintenance and integrity of the corporate and financial information on the Group's website. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Foreign Currency Translation
Foreign currency translation occurs from the revaluation from fluctuations in the foreign exchange rates in entities with a different functional currency than the reporting currency (USD). The revaluation of the condensed consolidated interim statement of financial position to the period-end rates resulted in a loss of $3.4 million (2021 - loss of $1.8 million) through Other comprehensive loss.
Going Concern
The Group's business activities, together with the factors likely to affect its future development and performance are set out in the Operational Update and Outlook. The financial position of the Group is described in these condensed consolidated interim financial statements.
The Directors have given careful consideration to the appropriateness of the going concern assumption, including cashflow forecasts through the going concern period and beyond, planned capital expenditure and the principal risks and uncertainties faced by the Group. This assessment also considered various downside scenarios including oil and gas commodity prices and production rates. Following this review, the Directors are satisfied that the Group has sufficient resources to operate and meet its commitments as they come due in the normal course of business for at least 12 months from the date of these condensed consolidated interim financial statements. Accordingly, the Directors continue to adopt the going concern basis for the preparation of these condensed consolidated interim financial statements.
Declarations of the Board of Directors Concerning Accounting Policies
The Board of Directors of the Company confirms that, to the best of their knowledge, the condensed consolidated interim financial statements together with comparative figures have been prepared in accordance with applicable accounting standards and give a true and fair view of the state of affairs and the financial result of the Group for the period ended 30 September 2022.
The Financial Review in this report gives a true and fair view of the situation on the reporting date and of the developments during the period ended 30 September 2022 and include a description of the major risks and uncertainties.
Serinus Energy plc
Consolidated Interim Statement of Comprehensive Loss
(US$ 000s, except per share amounts)
Nine months ended 30
September
------------------------------------------------------ ----- -----------------------
Note 2022 2021
------------------------------------------------------ ----- ----------- ----------
Revenue 41,794 25,698
------------------------------------------------------ ----- ----------- ----------
Cost of sales
Royalties (2,657 ) (2,480)
Windfall tax (14,223) (4,190)
Production expenses (8,184) (6,551)
Depletion and depreciation (4,924) (8,066)
Total cost of sales (29,988) (21,287)
------------------------------------------------------ ----- ----------- ----------
Gross profit 11,806 4,411
Administrative expenses (4,050) (3,180)
Share-based payment expense (59) (119)
Total administrative expenses (4,109) (3,299)
Decommissioning provision recovery (expense) 62 (18)
Operating income 7,759 1,094
Finance expense (1,313) (312)
------------------------------------------------------ ----- ----------- ----------
Net income before tax 6,446 782
Tax (expense) recovery (3,079) 54
------------------------------------------------------ ----- ----------- ----------
Income after taxation attributable to equity
owners of the parent 3,367 836
Other comprehensive loss
Other comprehensive loss to be classified
to profit and loss in subsequent periods:
Foreign currency translation adjustment (3,441) (1,828)
------------------------------------------------------ ----- ----------- ----------
Total comprehensive loss for the period attributable
to equity owners of the parent (74) (992)
------------------------------------------------------ ----- ----------- ----------
Earnings per share:
Basic 4 0.03 0.00
Diluted 4 0.03 0.00
------------------------------------------------------ ----- ----------- ----------
The accompanying notes on pages 15 to 16 form part of the condensed consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Financial Position
(US$ 000s, except per share amounts)
30 September 31 December
As at 2022 2021
---------------------------------------------- -------------- -------------
Non-current assets
Property, plant and equipment 64,322 71,747
Exploration and evaluation assets 8,453 5,042
Right-of-use assets 483 370
----------------------------------------------- -------------- -------------
Total non-current assets 73,258 77,159
----------------------------------------------- -------------- -------------
Current assets
Restricted cash 1,064 1,144
Trade and other receivables 9,669 7,396
Product inventory 525 656
Cash and cash equivalents 8,785 8,429
----------------------------------------------- -------------- -------------
Total current assets 20,043 17,625
----------------------------------------------- -------------- -------------
Total assets 93,301 94,784
----------------------------------------------- -------------- -------------
Equity
Share capital 401,426 401,426
Share-based payment reserve 25,546 25,487
Treasury shares (323) (121)
Accumulated deficit (384,619) (387,986)
Cumulative translation reserve (4,815) (1,374)
Total equity 37,215 37,432
----------------------------------------------- -------------- -------------
Liabilities
Non-current liabilities
Decommissioning provision 23,866 28,232
Deferred tax liability 11,416 10,516
Lease liabilities 167 252
Other provisions 1,358 1,358
----------------------------------------------- -------------- -------------
Total non-current liabilities 36,802 40,358
----------------------------------------------- -------------- -------------
Current liabilities
Current portion of decommissioning provision 6,572 6,636
Current portion of lease liabilities 167 193
Accounts payable and accrued liabilities 12,540 10,165
----------------------------------------------- -------------- -------------
Total current liabilities 19,279 16,994 ----------------------------------------------- -------------- ------------- Total liabilities 56,086 57,352 ----------------------------------------------- -------------- ------------- Total liabilities and equity 93,301 94,784 ----------------------------------------------- -------------- -------------
The accompanying notes on pages 15 to 16 form part of the condensed consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Changes in Shareholder's Equity
(US$ 000s, except per share amounts)
Share-based Accumulated
Share payment Treasury Accumulated other comprehensive
capital reserve Shares deficit loss Total
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Balance at 31 December
2020 401,426 25,274 - (396,410) 1,089 31,379
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Loss for the period - - - (660) - (660)
Other comprehensive loss
for the period - - - - (1,076) (1,076)
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Total comprehensive loss
for the period - - - (397,070) 13 29,643
Transactions with equity
owners
Share-based payment expense - 104 - - - 104
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Balance at 30 September
2021 401,426 25,378 - (397,070) 13 29,747
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Balance at 31 December
2021 401,426 25,487 (121) (387,986) (1,374) 37,432
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Comprehensive income for
the period - - - 3,367 - 3,367
Other comprehensive loss
for the period - - - - (3,441) (3,441)
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Total comprehensive (income)
loss for the period - - - 3,367 (3,441) (74)
Transactions with equity
owners
Share-based payment expense - 59 - - - 59
Shares purchased to be
held in Treasury (202) - - (202)
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Balance at 30 September
2022 401,426 25,546 (323) (384,619) (4,815) 37,215
------------------------------ --------- ------------ --------- ------------ --------------------- --------
The accompanying notes on pages 15 to 16 form part of the condensed consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Cash Flows
(US$ 000s, except per share amounts)
Nine months ended 30
September
Note 2022 2021
--------------------------------------------------- ----- ------------ ---------
Operating activities
Income for the period 3,367 836
Items not involving cash:
Depletion and depreciation 4,924 8,066
Share-based payment expense 59 119
Tax expense 3,079 (54)
Accretion expense on decommissioning provision 753 255
Change in other provisions - 70
Foreign exchange loss (gain) 68 (23)
Other income (3) (5)
Decommissioning provision (recovery) expense (62) 18
Income taxes paid (1,130) (1,132)
Funds from operations 11,055 7,828
Changes in non-cash working capital 5 (2,342) 2,636
--------------------------------------------------- ----- ------------ -----------
Cashflows from operating activities 8,713 10,464
--------------------------------------------------- ----- ------------ -----------
Financing activities
Lease payments (355) (217)
Shares purchased to be held in treasury (202) -
Cashflows used in financing activities (557) (217)
--------------------------------------------------- ----- ------------ ---------
Investing activities
Capital expenditures 5 (7,476) (9,865)
Proceeds on disposition of property, plant
and equipment - 8
--------------------------------------------------- ----- ------------ ---------
Cashflows used in investing activities (7,476) (9,857)
--------------------------------------------------- ----- ------------ ---------
Impact of foreign currency translation on
cash (324) (23)
--------------------------------------------------- ----- ------------ ---------
Change in cash and cash equivalents 356 367
Cash and cash equivalents, beginning of period 8,429 6,002
--------------------------------------------------- ----- ------------ ---------
Cash and cash equivalents, end of period 8,785 6,369
--------------------------------------------------- ----- ------------ ---------
The accompanying notes on pages 15 to 16 form part of the condensed consolidated interim financial statements
1. General information
Serinus Energy plc and its subsidiaries are principally engaged in the exploration and development of oil and gas properties in Tunisia and Romania. Serinus is incorporated under the Companies (Jersey) Law 1991. The Group's head office and registered office is located at 2(nd) Floor, The Le Gallais Building, 54 Bath Street, St. Helier, Jersey, JE1 1FW.
Serinus is a publicly listed company whose ordinary shares are traded under the symbol "SENX" on AIM and "SEN" on the WSE.
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 United Kingdom applied in accordance with the provisions of the Companies (Jersey) Law 1991.
These condensed consolidated interim 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.
Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the condensed consolidated interim financial statements are described in Note 5 to the consolidated financial statements for the year ended 31 December 2021. There has been no change in these areas during the nine months ended 30 September 2022.
Going concern
The Group's business activities, together with the factors likely to affect its future development and performance are set out in the Operational Update and Outlook. The financial position of the Group is described in these condensed consolidated interim financial statements and in the Report from the CFO.
The Directors have given careful consideration to the appropriateness of the going concern assumption, including cashflow forecasts through the going concern period and beyond, planned capital expenditure and the principal risks and uncertainties faced by the Group. This assessment also considered various downside scenarios including oil and gas commodity prices and production rates. Following this review, the Directors are satisfied that the Group has sufficient resources to operate and meet its commitments as they come due in the normal course of business for at least 12 months from the date of these condensed consolidated interim financial statements. Accordingly, the Directors continue to adopt the going concern basis for the preparation of these condensed consolidated interim financial statements.
3. Significant accounting policies
The condensed consolidated interim financial statements have been prepared following the same basis of measurement, accounting policies and methods of computation as described in the notes to the consolidated financial statements for the year ended 31 December 2021. There has been no change to the accounting policies or the estimates and judgements which management are required to make in the period. The business is not subject to seasonal variations. Information in relation to the operating segments and material primary statement movements can be found within the management discussion at the front of this report.
4. Earnings per share
Period ended 30
September
($000's, except per share amounts) 2022 2021
-------------------------------------- ------------ ------------
Income for the period 3,367 836
Weighted average shares outstanding:
Basic 114,714,372 116,316,068
Diluted 114,714,372 117,445,549
-------------------------------------- ------------ ------------
Income per share - Basic and diluted 0.03 0.00
-------------------------------------- ------------ ------------
In determining diluted net loss per share, the Group assumes that the proceeds received from the exercise of "in-the-money" stock options are used to repurchase ordinary shares at the average market price. In calculating the weighted-average number of diluted ordinary shares outstanding for the period ended 30 September 2022, the Group excluded 3.4 million stock options (2021 - 3.2 million) as they were non-dilutive.
5. Supplemental cash flow disclosure
Period ended 30
September
2022 2021
------------------------------------------- -------- ------
Cash provided by (used in):
Trade and other receivables (3,085) 2,466
Product inventory (19) -
Accounts payable and accrued liabilities 764 154
Restricted cash (2) 16
------------------------------------------- -------- ------
Changes in non-cash working capital from
operating activities (2,342) 2,636
------------------------------------------- -------- ------
The following table reconciles capital expenditures to the cash flow statement:
Period ended 30
September
2022 2021
------------------------------------------ ---------- ------
PP&E additions 4,402 4,604
E&E additions 4,221 4,706
------------------------------------------ ---------- ------
Total capital additions 8,623 9,310
Changes in non-cash working capital from
investing activities (1,147) 555
------------------------------------------ ---------- ------
Total capital expenditures 7,476 9,865
------------------------------------------ ---------- ------
6. Prior year comparatives
The prior year comparatives have been reclassified to align with the current year disclosure. These reclassifications are immaterial.
7. Subsequent event
On 5 October 2022, the Company announced that it had the Moftinu Nord-1 well was drilled to a total depth of 1,000 metres, targeting four prospective hydrocarbon zones. Well logging and gas show readings determined that these zones had indications of residual gas, but they do not contain sufficient gas resources to justify proceeding with the testing and completion program for the well. Drilling operations were performed without incident.
[1] For the nine months ended 30 September 2022, Tunisia realised oil prices are calculated using oil sales volumes of 456 bbl/d (31 December 2021 - 461 bbl/d). As at 30 September 2022 there were 9,117 bbls of oil in inventory (31 December 2021 - 12,229 bbls).
[2] Shares held by Catherine Kempster (the spouse of Jon Kempster)
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