TIDMSENX
RNS Number : 0301Z
Serinus Energy PLC
11 May 2023
11 May 2023
Press Release
Interim Results for the three months ended 31 March 2023
Jersey, Channel Islands, 11 May 2023 - Serinus Energy plc
("Serinus" or the "Company") (AIM:SENX, WSE:SEN), is pleased to
announce its interim results for the three months ended 31 March
2023.
Financial
-- Revenue for the three months ended 31 March 2023 was $4.9
million (31 March 2022 - $13.4 million)
-- Gross profit for the three months ended 31 March 2023 was
$0.9 million (31 March 2022 - $2.9 million)
-- EBITDA for the three months ended 31 March 2023 was $0.4
million (31 March 2022 - $3.1 million)
-- Net loss for the three months ended 31 March 2023 was $1.3
million (31 March 2022 - net income $1.0 million)
-- The Company realised a net price of $78.87/boe for the three
months ended 31 March 2023 (31 March 2022 - $184.57/boe),
comprising:
o Realised oil price - $80.07/bbl
o Realised natural gas price - $12.72/Mcf ($76.33/boe)
-- The Group's operating netback decreased, in line with
commodity prices, for the three months ended 31 March 2023 and was
$39.52/boe (31 March 2022 - $148.88/boe), comprising:
o Romania operating netback - $26.59/boe (31 March 2022 -
$182.79/boe)
o Tunisia operating netback - $43.92/boe (31 March 2022 -
$41.88/boe)
-- Capital expenditures of $2.4 million for the three months
ended 31 March 2023 (31 March 2022 - $1.5 million), comprising:
o Romania - $0.6 million
o Tunisia - $1.8 million
-- Cash balance as at 31 March 2023 was $2.7 million (31 December 2022 - $4.9 million)
Operational
-- In Tunisia, production has remained stable in the first three
months of 2023. The Company is expecting to perform a lifting in
the latter half of May 2023 of 50,344 bbls of Tunisian crude
oil
-- The CTF-004 rig has completed rig-up and commenced workover
operations on the Sabria N-2 well in Tunisia. The workover and
recompletion is expected to take approximately 30-40 days, as
announced on 2 May 2023
-- The workover of the Sabria W-1 well was suspended despite
good initial progress resulting in the successful removal of two of
three tubing strings to a depth of 3,433 metres. However unexpected
conditions were subsequently encountered in the wellbore as a
result of old debris and drilling mud left in the well from
operations in 1998 which prevented the further removal of the
1.5-inch tubing below 2,889 metres
-- The Company has undertaken work to design a side track to
complete the Sabria W-1 pump installation. Long lead items and rig
availability are being determined
-- The Company has engaged a local geological and geophysical
consultant to assist Serinus' technical team to identify locations
for two new wells in the Sabria field
-- In Romania, the Company completed the block wide review
during the first quarter of 2023 which has combined the extensive
technical information into a block wide exploration model. This
will refocus future exploration on attractive, identified play
systems including the potential appraisal of existing discoveries
and extrapolating productive trends onto the Satu Mare block
-- The International Chamber of Commerce ("ICC") awarded a
decision in favour of Serinus, confirming that the 40%
participating interest of its former partner on the Satu Mare
Concession, Oilfield Exploration Business Solutions S.A.'s
("OEBS"), will be transferred to Serinus
-- Production for the period averaged 691 boe/d, comprising:
o Romania - 163 boe/d
o Tunisia - 528 boe/d
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 & Broker)
Toby Gibbs
John More
Rachel Goldstein +44 207 408 4090
Camarco (Financial PR - London)
Owen Roberts
Charlotte Hollinshead +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
First Quarter Report and Accounts 2023
(us dollars)
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 has four gas production wells -
Moftinu-1003, Moftinu-1004, Moftinu-1007 and Moftinu-1008. During
the three months ended 31 March 2023, the Company's Romanian
operations produced a total of 88 MMcf of gas, equating to an
average daily production of 163 boe/day.
The Canar-1 well has been converted into a water injection well
and is currently injecting our produced water volumes from the
Moftinu wells into Canar-1. The use of Canar-1 as a water injection
well is delivering significant cost savings in operating expenses
due to the elimination of the high costs of trucking produced water
volumes for disposal off-site.
The Company completed the block wide geological review during
the first quarter of 2023 which has combined the extensive
technical information into a block wide exploration model. This
will refocus future exploration on attractive, identified play
systems including the potential appraisal of existing discoveries
and extrapolating productive trends onto the Satu Mare block.
The Company has completed all of its commitments under the third
exploration phase of the Satu Mare Concession Agreement, and in
October 2021, received an additional two-year evaluation phase on
the Satu Mare Concession until 27 October 2023. The Company is in
routine conversations with the National Agency for Mineral
Resources ("NAMR") regarding the further extension of this
concession and will apply for a further period during 2023. The
greater Moftinu gas field area has been declared a commercial field
and is exempt from this routine licence extension procedure.
The Company announced on 15 February 2023 that the ICC had
awarded a decision in favour of Serinus, confirming that as a
result of OEBS default under the Joint Operating Agreement ("JOA")
between OEBS and Serinus, OEBS' 40% participating interest in the
Satu Mare Concession in Romania will be transferred to Serinus.
Tunisia
The Company currently holds two concession areas within Tunisia
- Sabria and Chouech Es Saida. These concession areas both contain
discovered oil and gas reserves and are currently producing. The
largest asset is the Sabria field, which is a large, conventional
oilfield. The Company's independent reservoir engineers have
estimated to have approximately 445 million barrels of oil
equivalent originally in place. Of this oil in place only 1.6% has
been produced to date due to a low rate of development on the
field. Serinus has spent extensive time studying the best means of
further developing this field and considers this to be an excellent
asset for remedial work to increase production and, on completion
of ongoing reservoir studies, to conduct further development
operations. The Company had applied to extend the Ech Chouech
licence prior to its expiry in June 2022 and the Company intends to
continue its application once the licence application process is
formalised.
The workover to install a pump into the Sabria W-1 well
commenced in December 2022 and initially progressed as expected,
with two of three tubing strings being successfully removed to a
depth of 3,433 metres. However unexpected conditions were
subsequently encountered in the wellbore as a result of old
drilling mud and tubulars left in the well from operations in 1998.
This impeded progress with the removal of the final 1.5-inch coiled
tubing below a depth of 2,889 metres. More than 85% of the 1.5-inch
tubing was recovered, however an excess layer of old debris and
drilling mud prevented the removal of further 1.5-inch tubing. As a
result, the Company and its partner, ETAP, determined to suspend
the workover pending investigations of alternative means of
completing the programme.
Throughout the workover programme, Sabria production remained
constant and uninterrupted.
In the meantime, the Company and its partner have elected to
proceed with operations on the Sabria N-2 well to perform a
workover to recomplete the well. The CTF-004 rig has completed
rig-up and commenced operations on the N-2 well. The workover
program is designed to recomplete the well and remove any wellbore
restrictions and is expected to take approximately 30-40 days. This
well was drilled in 1980 but was damaged during completion and,
although in proximity to producing wells, in particular the
prolific WIN-12bis well, was not able to flow oil to surface. The
Company's engineering analysis estimates that a successful workover
and recompletion will initially increase gross production from the
Sabria field by approximately 420 boe/d. Upon recompletion of the
N-2 well, the rig will be released.
Financial Review
Liquidity, Debt and Capital Resources
During the three months ended 31 March 2023, the Company
invested a total of $2.4 million (2022 - $1.5 million) on capital
expenditures before working capital adjustments, out of which
Romania incurred $0.6 million (2022 - $1.3 million) and Tunisia
invested $1.8 million (2022 - $0.2 million) primarily on Sabria W-1
operations.
The Company's funds used in operations for the three months
ended 31 March 2023 were $0.8 million (2022 -funds from operations
of $2.9 million). Including changes in non-cash working capital,
the cash flow from operating activities in 2023 was $0.01 million
(2022 - cash flow used in operating activities of $0.6 million).
The Company is debt-free and has adequate resources available to
deploy capital into both operating segments.
(US$ 000s) 31 March 31 December
Working Capital 2023 2022
--------------------- --------- ------------
Current assets 16,036 16,654
Current liabilities 16,893 16,571
--------------------- --------- ------------
Working Capital (857) 83
--------------------- --------- ------------
The working capital deficit at 31 March 2023 was $0.9 million
(31 December 2022 - $0.1 million). The decrease in working capital
is primarily a result of continued investment into operating
activities.
Current assets as at 31 March 2023 were $16.0 million (31
December 2022 - $16.7 million), a decrease of $0.7 million. Current
assets consist of:
-- Cash and cash equivalents of $2.7 million (31 December 2022 - $4.9 million)
-- Restricted cash of $1.1 million (31 December 2022 - $1.1 million)
-- Trade and other receivables of $11.4 million (31 December 2022 - $10.0 million)
-- Product inventory of $0.8 million (31 December 2022 - $0.7 million)
Current liabilities as at 31 March 2023 were $16.9 million (31
December 2022 - $16.6 million), an increase of $0.3 million.
Current liabilities consist of:
-- Accounts payable of $12.0 million (31 December 2022 - $9.3 million)
-- Decommissioning provision of $4.6 million (31 December 2022 - $5.1 million)
o Canada - $0.8 million (31 December 2022 - $0.8 million) which
is offset by restricted cash in the amount of $1.1 million (31
December 2022 - $1.1 million) in current assets
o Romania - $nil (31 December 2022 - $0.5 million)
o Tunisia - $3.8 million (31 December 2022 - $3.8 million)
-- Income taxes payable of $nil (31 December 2022 - $1.9 million)
-- Current portion of lease obligations of $0.3 million (31 December 2022 - $0.3 million)
Non-current assets
Property, plant and equipment ("PP&E") increased to $ 63.2
million (31 December 2022 - $62.3 million), as a result of capital
expenditures in PP&E of $ 2.4 million partially offset by
depletion in the period of $ 1.3 million as well as a change in
decommissioning estimates of $ 0.2 million. There were no additions
or adjustments to exploration and evaluation assets ("E&E") in
the period (31 December 2022 - $10.5 million). Right-of-use assets
("ROU") decreased to $ 0.5 million (31 December 2022 - $0.7
million) due to depreciation of assets.
Funds from Operations
The Group uses funds from operations as a key performance
indicator to measure the ability of the Group to generate cash from
operations to fund future exploration and development activities.
The following table is a reconciliation of funds from operations to
cash flow from operating activities:
Period ended 31
March
(US$ 000s) 2023 2022
-------------------------------------- --------- -------
Cash flows from (used in) operations 14 (587)
Changes in non-cash working capital (813) 3,534
-------------------------------------- --------- -------
Funds (used in) from operations (799) 2,947
-------------------------------------- --------- -------
Funds from operations per share (0.00) 0.00
-------------------------------------- --------- -------
Romania generated funds from operations of $0.1 million (2022 -
$4.0 million) and Tunisia generated $0.5 million (2022 - $0.4
million). Funds used at the Corporate level were $1.4 million (2022
- $1.5 million) resulting in net funds used in operations of $0.8
million (2022 funds from operations - $2.9 million).
Production
Period ended 31 March 2023 Tunisia Romania Group %
---------------------------- -------- -------- ------ -----
Crude oil (bbl/d) 468 - 468 68%
Natural gas (Mcf/d) 361 979 1,340 32%
Condensate (bbl/d) - - - 0%
---------------------------- -------- -------- ------ -----
Total production (boe/d) 528 163 691 100%
---------------------------- -------- -------- ------ -----
Period ended 31 March 2022 Tunisia Romania Group %
Crude oil (bbl/d) 441 - 441 39%
Natural gas (Mcf/d) 381 3,630 4,011 60%
Condensate (bbl/d) - 5 5 1%
---------------------------- -------- -------- ------ -----
Total production (boe/d) 505 610 1,115 100%
---------------------------- -------- -------- ------ -----
For the three months ended 31 March 2023 production volumes were
691 boe/d, a decrease of 424 boe/d against the comparative period
(31 March 2022 - 1,115 boe/d).
Romania's production volumes were 163 boe/d in the period (31
March 2022 - 610 boe/d). Production continues to decrease due to
natural declines as well as water breakthrough in some producing
formations within some of the producing wells.
Tunisia's production volumes increased to 528 boe/d against
comparative period (31 March 2022 - 505 boe/d).
Oil and Gas Revenue
(US$ 000s)
Period ended 31 March 2023 Tunisia Romania Group %
Oil revenue 3,360 - 3,360 69%
Natural gas revenue 305 1,210 1,515 31%
Condensate revenue - - - 0%
-------------------------------- -------- -------- ------- -----
Total revenue 3,665 1,210 4,875 100%
-------------------------------- -------- -------- ------- -----
Period ended 31 March 2022 Tunisia Romania Group %
-------------------------------- -------- -------- ------- -----
Oil revenue 1,045 - 1,045 7%
Natural gas revenue 429 11,846 12,275 92%
Condensate revenue - 43 43 1%
-------------------------------- -------- -------- ------- -----
Total revenue 1,474 11,889 13,363 100%
-------------------------------- -------- -------- ------- -----
REALISED PRICE
Period ended 31 March 2023 Tunisia Romania Group
-------------------------------- -------- -------- --------------
Oil ($/bbl) 80.07 - 80.07
Natural gas ($/Mcf) 9.39 13.97 12.72
Condensate ($/bbl) - - -
-------------------------------- -------- -------- --------------
Average realised price ($/boe) 77.36 83.83 78.87
-------------------------------- -------- -------- --------------
Period ended 31 March 2022 Tunisia Romania Group
-------------------------------- -------- -------- --------------
Oil ($/bbl) 90.13 - 90.13
Natural gas ($/Mcf) 12.47 36.19 33.94
Condensate ($/bbl) - 82.21 82.21
-------------------------------- -------- -------- --------------
Average realised price ($/boe) 85.06 215.86 184.57
-------------------------------- -------- -------- --------------
For the three months ended 31 March 2023 revenue was $4.9
million, a decrease of $8.5 million against the comparative period
(31 March 2022 - $13.4 million) as the Group saw the average
realised price decrease by $105.70/boe to $78.87/boe (31 March 2022
- $184.57/boe).
The Group's average realised oil price decreased by $10.06/bbl
to $80.07/bbl (31 March 2022 - $90.13/bbl), and average realised
natural gas prices decreased by $21.22/Mcf to $12.72/Mcf (31 March
2022 - $33.94/Mcf).
Under the terms of the Sabria concession agreement the Group is
required to sell 20% of its annual crude oil production from the
Sabria concession into the local market, which is sold at an
approximate 10% discount to the price obtained on its other crude
sales. The remaining crude oil production was sold to the
international market.
Royalties
Period ended 31
March
(US$ 000s) 2023 2022
---------------------------------------- -------- --------
Tunisia 457 149
Romania 63 377
---------------------------------------- -------- --------
Total 520 526
Total ($/boe) 8.42 7.26
Tunisia oil royalty (% of oil revenue) 12.9% 10.1%
Romania gas royalty (% of gas revenue) 5.8% 3.2%
---------------------------------------- -------- --------
Total (% of revenue) 10.7% 3.9%
---------------------------------------- -------- --------
For the three months ended 31 March 2023 royalties remained
consistent at $0.5 million and the Group's royalty rate increased
to 10.7% (2022 - 3.9%).
In Romania, in the first quarter of 2023, the Company incurred a
3.5% royalty rate for gas (2022 - 3.5%). The royalty is calculated
using a reference price that is set by the Romanian authorities and
not the realised price to the Company. The reference prices in the
first quarter were higher than the realised prices. Romanian
royalty rates vary based on the level of production during the
quarter. Natural gas royalty rates range from 3.5% to 13.0% and
condensate royalty rates range from 3.5% to 13.5%.
In Tunisia, royalties vary based on individual concession
agreements. Sabria royalty rates vary depending on a calculation of
cumulative revenues, net of taxes, as compared to cumulative
investment in the concession, known as the "R factor". As the R
factor increases, so does the royalty percentage to a maximum rate
of 15%. During the first quarter of 2023, the royalty rate remained
unchanged in Sabria at 10% for oil and 8% for gas. Chouech Es Saida
royalty rates are flat at 15% for both oil and gas.
Production Expenses
Period ended 31
March
(US$ 000s) 2023 2022
------------------------------------ -------- --------
Tunisia 1,127 599
Romania 764 1,445
Canada 21 14
------------------------------------ -------- --------
Group 1,912 2,058
------------------------------------ -------- --------
Tunisia production expense ($/boe) 23.79 34.58
Romania production expense ($/boe) 52.88 26.23
------------------------------------ -------- --------
Total production expense ($/boe) 30.93 28.43
------------------------------------ -------- --------
For the three months ended 31 March 2023 production expenses
were $1.9 million, a decrease of $0.1 million against the
comparative period (31 March 2022 - $2.0 million). Per unit
production expenses increased by $2.50/boe to $30.93/boe (31 March
2022 - $28.43/boe).
Tunisia's production expenses were $1.1 million, an increase of
$0.5 million compared to the comparative period (31 March 2022 -
$0.6 million), however this equated to a decrease of $10.79/boe to
$23.79/boe (2022 - $34.58/boe). The increase in production expenses
against the comparative period reflects that production expenses in
the first quarter of 2022 were recorded in inventory as incurred,
and subsequently recognized in the statement of comprehensive
income at the time of each lifting. Following signing of a new oil
marketing agreement with OMV in April 2022, revenues and associated
production expenses have since been recognized on a monthly
basis.
Romania's production expense decreased by $0.6 million to $0.8
million against the comparative period (31 March 2022 - $1.4
million), due to reduced water handling costs, however there was an
increase of $26.65/boe to $52.88/boe (2022 - $26.23/boe) due to
lower production volumes.
Canadian production expenses relate to the Sturgeon Lake assets,
which are not producing and are incurring minimal operating costs
to maintain the property.
Operating Netback
Serinus uses operating netback as a key performance indicator to
assist management in understanding Serinus' profitability relative
to current market conditions and as an analytical tool to benchmark
changes in operational performance against prior periods. Operating
netback consists of petroleum and natural gas revenues less direct
costs consisting of royalties and production expenses. Netback is
not a standard measure under IFRS and therefore may not be
comparable to similar measures reported by other entities .
($/boe)
Period ended 31 March 2023 Tunisia Romania Group
Sales volume (boe/d) 526 160 687
Realised price 77.36 83.83 78.87
Royalties (9.65) (4.36) (8.42)
Production expense (23.79) (52.88) (30.93)
---------------------------- -------- -------- --------
Operating netback 43.92 26.59 39.52
---------------------------- -------- -------- --------
Period ended 31 March 2022 Tunisia Romania Group
Sales volume (boe/d) 192 612 804
Realised price 85.06 215.86 184.57
Royalties (8.60) (6.84) (7.26)
Production expense (34.58) (26.23) (28.43)
---------------------------- -------- -------- --------
Operating netback 41.88 182.79 148.88
---------------------------- -------- -------- --------
For the three months ended 31 March 2023 the Group's operating
netback was $39.52/boe, a decrease of $109.36/boe against the
comparative period (31 March 2022 - $148.88/boe). The decrease is
due to lower realised prices and production volumes in Romania.
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 & 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 . For the
three months ended 31 March 2023, the Group's EBITDA was $0.4
million (31 March 2022 - $3.1 million). The decrease is mainly due
to lower netbacks in the current period.
Period ended 31
March
(US$ 000s) 2023 2022
------------------------------------ ---------- ------
Net income (loss) (1,269) 1,045
Interest expense - 13
Depletion and amortization 1,289 1,795
Decommissioning provision recovery (17) -
Tax expense 372 210
------------------------------------ ---------- ------
EBITDA 375 3,063
------------------------------------ ---------- ------
Windfall Tax
Period ended 31
March
(US$ 000s) 2023 2022
------------------------------------ -------- --------
Windfall tax 286 6,035
Windfall tax ($/Mcf - Romania gas) 3.24 18.44
Windfall tax ($/boe - Romania gas) 19.79 110.63
For the three months ended 31 March 2023 windfall taxes were
$0.3 million (31 March 2022 - $6.0 million).
During the last two months of the quarter, sales were under a
regulated price with no windfall tax incurred during that time.
Unregulated pricing and windfall taxes will apply in the second
quarter onwards.
In Romania, the Group is subject to a windfall tax on its
natural gas production which is applied to supplemental income once
natural gas prices exceed 47.53 RON/Mwh. This supplemental income
is taxed at a rate of 60% between 47.53 RON/Mwh and 85.00 RON/Mwh
and at a rate of 80% above 85.00 RON/Mwh. Expenses deductible in
the calculation of the windfall tax include royalties and capital
expenditures limited to 30% of the supplemental income below the
85.00 RON/Mwh threshold.
Depletion and Depreciation
Period ended 31
March
(US$ 000s) 2023 2022
----------------- -------- --------
Tunisia 864 322
Romania 394 1,435
Corporate 31 38
----------------- -------- --------
Total 1,289 1,795
Tunisia ($/boe) 18.25 18.58
Romania ($/boe) 27.27 26.06
----------------- -------- --------
Total ($/boe) 20.85 24.79
----------------- -------- --------
For the three months ended 31 March 2023 depletion and
depreciation expense were $1.3 million (31 March 2022 - $1.8
million), primarily due to lower production during the period. Per
boe, depletion and depreciation expense decreased by $3.94/boe to
$20.85/boe (2022 - $24.79/boe), primarily due to lower reserves in
the current period.
General and Administrative ("G&A") Expense
Period ended 31
March
(US$ 000s) 2023 2022
--------------------- -------- --------
G&A expense 1,360 1,388
G&A expense ($/boe) 22.01 19.16
For the three months ended 31 March 2023 G&A expenses were
$1.3 million (31 March 2022 - $1.4 million). Per boe, G&A
expense is slightly higher at $22.01/boe (31 March 2022 -
$19.16/boe) due to lower sales volumes in the period.
Share-Based Payment
Period ended 31
March
(US$ 000s) 2023 2022
----------------------------- -------- --------
Share-based payment 1 26
Share-based payment ($/boe) 0.02 0.36
For the three months ended 31 March 2023 share-based
compensation decreased to $1,200 (31 March 2022 - $26,000).
Net Finance Expense
Period ended 31
March
(US$ 000s) 2023 2022
---------------------------------------- -------- --------
Interest on leases - 8
Accretion on decommissioning provision 387 190
Foreign exchange and other 34 107
---------------------------------------- -------- --------
421 305
---------------------------------------- -------- --------
For the three months ended 31 March 2023 net finance expenses
increased by $0.1 million to $0.4 million against the comparative
period (31 March 2022 - $0.3 million). This increase is mainly due
to higher accretion on decommissioning provision as a result of
higher discount rates.
Taxation
For the three months ended 31 March 2023 tax expense was nil (31
March 2022 - $0.2 million). The decrease in the tax expense is
directly related to lower 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, Long Term Incentive Program
("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:
Lukasz Redziniak - - 72,000
Jim Causgrove - - 40,000
Jon Kempster [1] - - 60,261
-------------------------- -------------- ------------ --------
2,755,000 2,559,986 769,189
-------------------------- -------------- ------------ --------
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 Group, as reported by the shareholders to the Group:
Richard Sneller 11.60%, CRUX Asset Management 8.42%, and Quercus
TFI SA 7.26%.
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
$0.2 million (2022 - loss of $0.4 million) through Other
comprehensive income (loss).
Going Concern
The Group's business activities, together with the factors
likely to affect its future development and performance are set out
in the Operational Update and Outlook. The financial position of
the Group is described in these condensed consolidated interim
financial statements and in and in the Financial Review.
The Directors have given careful consideration to the
appropriateness of the going concern assumption, including cashflow
forecasts through the going concern period and beyond, planned
capital expenditure and the principal risks and uncertainties faced
by the Group. This assessment also considered various downside
scenarios including oil and gas commodity prices and production
rates. Following this review, the Directors are satisfied that the
Group has sufficient resources to operate and meet its commitments
as they come due in the normal course of business for at least 12
months from the date of these condensed consolidated interim
financial statements. Accordingly, the Directors continue to adopt
the going concern basis for the preparation of these condensed
consolidated interim financial statements.
Declarations of the Board of Directors Concerning Accounting
Policies
The Board of Directors of the Company confirms that, to the best
of their knowledge, the condensed consolidated interim financial
statements together with comparative figures have been prepared in
accordance with applicable accounting standards and give a true and
fair view of the state of affairs and the financial result of the
Group for the period ended 31 March 2023.
The Financial Review in this report gives a true and fair view
of the situation on the reporting date and of the developments
during the period ended 31 March 2023, and include a description of
the major risks and uncertainties.
Serinus Energy plc
Condensed Consolidated Interim Statement of Comprehensive
Loss
(US$ 000s, except per share amounts)
Three months ended
31 March
Note 2023 2022
------------------------------------------- ----- --------- ----------
Revenue 4,875 13,363
------------------------------------------- ----- --------- ----------
Cost of sales
Royalties (520) (526)
Windfall tax (286) (6,035)
Production expenses (1,912) (2,058)
Depletion and depreciation (1,289) (1,795)
Total cost of sales (4,007) (10,414)
------------------------------------------- ----- --------- ----------
Gross profit 868 2,949
Administrative expenses (1,360) (1,388)
Share-based payment expense (1) (26)
Total administrative expenses (1,361) (1,414)
Decommissioning provision recovery 17 25
Operating income (loss) (476) 1,560
Finance expense (421) (305)
------------------------------------------- ----- --------- ----------
Net income (loss) before tax (897) 1,255
Taxation expense (372) (210)
------------------------------------------- ----- --------- ----------
Income (loss) after taxation attributable
to equity owners of the parent (1,269) 1,045
Other comprehensive (loss) income
Other comprehensive (loss) income
to be classified to profit and loss
in subsequent periods:
Foreign currency translation adjustment (211) (423)
------------------------------------------- ----- --------- ----------
Total comprehensive income (loss)
for the period attributable to equity
owners of the parent (1,480) 622
------------------------------------------- ----- --------- ----------
Income (loss) per share:
Basic 4 (0.01) 0.01
Diluted 4 (0.01) 0.01
------------------------------------------- ----- --------- ----------
The accompanying notes 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)
31 March 31 December
As at 2023 2022
------------------------------------------ ---------- ------------
Non-current assets
Property, plant and equipment 63,154 62,311
Exploration and evaluation assets 10,572 10,529
Right-of-use assets 497 688
------------------------------------------- ---------- ------------
Total non-current assets 74,223 73,528
------------------------------------------- ---------- ------------
Current assets
Restricted cash 1,105 1,088
Trade and other receivables 11,413 10,007
Product inventory 798 705
Cash and cash equivalents 2,720 4,854
------------------------------------------- ---------- ------------
Total current assets 16,036 16,654
------------------------------------------- ---------- ------------
Total assets 90,259 90,182
------------------------------------------- ---------- ------------
Equity
Share capital 401,426 401,426
Share-based payment reserve 25,558 25,557
Treasury shares (467) (455)
Accumulated deficit (387,625) (386,356)
Cumulative translation reserve (3,583) (3,372)
Total Equity 35,309 36,800
------------------------------------------- ---------- ------------
Liabilities
Non-current liabilities
Decommissioning provision 24,935 24,046
Deferred tax liability 11,314 10,942
Lease liabilities 450 465
Other provisions 1,358 1,358
------------------------------------------- ---------- ------------
Total non-current liabilities 38,057 36,811
------------------------------------------- ---------- ------------
Current liabilities
Current portion of decommissioning
provision 4,610 5,085
Current portion of lease liabilities 258 280
Accounts payable and accrued liabilities 12,025 11,206
------------------------------------------- ---------- ------------
Total current liabilities 16,893 16,571
------------------------------------------- ---------- ------------
Total liabilities 54,950 53,382
------------------------------------------- ---------- ------------
Total liabilities and equity 90,259 90,182
------------------------------------------- ---------- ------------
The accompanying notes form part of the condensed consolidated
interim financial statements.
These condensed consolidated interim financial statements were
approved by the Board of Directors and authorised for issue on 10
May 2023.
Serinus Energy plc
Condensed Consolidated Interim Statement of Changes in
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
2021 401,426 25,487 (121) (387,986) (1,374) 37,432
Comprehensive income
for the period - - - 1,045 - 1,045
Other comprehensive loss
for the period - - - - (423) (423)
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Total comprehensive loss
for the period - - - 1,045 (423) 622
Transactions with equity
owners
Share-based payment expense - 26 - - - 26
Shares purchased to be
held in Treasury (202) - - (202)
Balance at 31 March
2022 401,426 25,513 (323) (386,941) (1,797) 37,878
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Balance at 31 December
2022 401,426 25,557 (455) (386,356) (3,372) 36,800
Comprehensive loss for
the period - - - (1,269) - (1,269)
Other comprehensive loss
for the period - - - - (211) (211)
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Total comprehensive loss
for the period - - (1,269) (211) (1,480)
Transactions with equity
owners
Share-based payment expense - 1 - - - 1
Shares purchased to be
held in Treasury - - (12) - - (12)
Balance at 31 March
2023 401,426 25,558 (467) (387,625) (3,583) 35,309
----------------------------- --------- ------------ --------- ------------ --------------------- --------
The accompanying notes 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)
Three months ended
31 March
2023 2022
------------------------------------------- ---------- ---------
Operating activities
Income (loss) for the period (1,269) 1,045
Items not involving cash:
Depletion and depreciation 1,289 1,795
Accretion expense on decommissioning
provision 387 190
Share-based payment expense 1 26
Decommissioning provision ( recovery)
expense (17) (25)
Unrealised foreign exchange gain - (10)
Other income (19) -
Taxation 372 210
Income taxes paid (1,543) (284)
Funds (used in) from operations (799) 2,947
Changes in non-cash working capital 5 813 (3,534)
------------------------------------------- ---------- ---------
Cashflows from (used in) operating
activities 14 (587)
------------------------------------------- ---------- ---------
Financing activities
Lease payments (49) (69)
Shares purchased to be held in treasury (12) (202)
Cashflows used in financing activities (61) (271)
------------------------------------------- ---------- ---------
Investing activities
Capital expenditures 5 (2,084) (1,269)
Cashflows used in investing activities (2,084) (1,269)
Change in cash and cash equivalents (2,131) (2,127)
Cash and cash equivalents, beginning
of period 4,854 8,429
------------------------------------------- ---------- ---------
Impact of foreign currency translation
on cash (3) (147)
------------------------------------------- ---------- ---------
Cash and cash equivalents, end of
period 2,720 6,155
------------------------------------------- ---------- ---------
The accompanying notes form part of the condensed consolidated
interim financial statements.
Serinus Energy plc
Notes to the Condensed Consolidated Interim Financial
Statements
(US$ 000s, except per share amounts)
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. The directors have elected to prepare
accounts under IFRS as adopted by the United Kingdom for all
purposes except for the financial statements for the purposes of
the Warsaw Stock Exchange filing which are prepared under European
Union ("EU") endorsed IFRS. No material differences have been noted
between EU IFRS and UK IFRS for the period ended 31 March 2023.
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 2022. There has been no change in these areas
during the three months ended 31 March 2023.
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 and in the Financial Review.
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 2022.
4. Earnings (Loss) per share
Period ended 31
March
(US$ 000s, except per share amounts) 2023 2022
-------------------------------------- -------- --------
Income (loss) for the period (1,269) 1,045
Weighted average shares outstanding:
Basic and diluted shares (000s) 114,686 114,752
-------------------------------------- -------- --------
Income (loss) per share:
Basic and dilutive (0.01) 0.01
-------------------------------------- -------- --------
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.
5. Supplemental Cash Flow Disclosure
Period ended 31
March
2023 2022
------------------------------------------ -------- --------
Cash provided by (used in):
Trade and other receivables (1,402) (1,428)
Product inventory 127 (841)
Accounts payable and accrued liabilities 2,082 (1,265)
Restricted cash 7 -
------------------------------------------ -------- --------
Changes in non-cash working capital from
operating activities 813 (3,534)
------------------------------------------ -------- --------
The following table reconciles capital expenditures to the cash
flow statement:
Period ended 31
March
2023 2022
------------------------------------------ -------- --------
PP&E additions 2,373 884
E&E additions - 628
ROU additions - 220
Total capital additions 2,373 1,732
Changes in non-cash working capital from
investing activities (289) (463)
------------------------------------------ -------- --------
Total capital expenditure 2,084 1,269
------------------------------------------ -------- --------
[1] Shares held by Catherine Kempster (the spouse of Jon
Kempster)
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END
IR DZGMKMGDGFZZ
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