TIDMSENX
RNS Number : 6677U
Serinus Energy PLC
27 November 2023
27 November 2023
Press Release
Interim Results for the Nine Months Ended 30 September 2023
Jersey, Channel Islands, 27 November 2023 -- 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
2023.
Financial
-- Revenue for the nine months ended 30 September 2023 was $13.3
million (30 September 2022 - $41.8 million)
-- Funds from operations for the nine months ended 30 September
2023 were $1.2 million (30 September 2022 - $ 11.1 million)
-- EBITDA for the nine months ended 30 September 2023 was $1.2
million ( 30 September 2022 - $12.6 million)
-- Gross profit for the nine months ended 30 September 2023 was
$1.8 million (30 September 2022 - $11.8 million)
-- The Company realised a net price of $ 76.84 /boe for the nine
months ended 30 September 2023 comprising:
o Realised oil price - $78.68/bbl
o Realised natural gas price - $12.03/Mcf
-- The Group's operating netback decreased, in line with
commodity prices, for the nine months ended 30 September 2023 and
was $34.15/boe ( 30 September 2022 - $120.13/boe), comprising:
o Romania operating netback - $4.22/boe ( 30 September 2022 - $195.73/boe)
o Tunisia operating netback - $40.68/boe ( 30 September 2022 - $59.11/boe)
-- Capital expenditures of $5.3 million for the nine months
ended 30 September 2023 ( 30 September 2022 - $8.6 million),
comprising:
o Romania - $0.5 million
o Tunisia - $4.8 million
-- Cash balance as at 30 September 2023 was $1.5 million (31
December 2023 - $4.9 million). As at 15 November 2023, the Group
had cash balances of $3.5 million
Operational
-- Production for nine months ended 30 September 2023 averaged 641 boe/d, comprising:
o Tunisia - 524 boe/d
o Romania - 117 boe/d
-- Production in Chouech Es Saida continues to be stable and
benefits from artificial lift programme
-- Static and dynamic reservoir models of the Sabria field are
being constructed. The study will help inform optimum reservoir
management including potential well workovers and new well
locations
-- Installation of artificial lift in the Sabria W-1 well will
require a sidetrack. The sidetrack design has been completed and
the tender process for the long lead items has commenced
-- The Sabria N-2 well is dewatering at a slow rate and the
Company is in discussions with its partner regarding stimulation
techniques to enhance the dewatering of this well
-- The Company performed a lifting of 56,600 bbls of Tunisian
crude oil at a price of $85.59/bbl in October
-- In October 2023, the Company was granted a further
exploration period on the Satu Mare Concession in Romania by
Romanian National Agency for Mineral Resources ("NAMR"). The
exploration period extension is in two phases. The first phase,
until 27 October 2025, includes the acquisition of 100 kilometres
of 2D seismic. The second optional phase of two years requires the
drilling of one well with no depth obligation
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
Calvin Brackman, Vice President, External
Relations & Strategy +4 4 204 541 7859
Shore Capital (Nominated Adviser & Broker)
Toby Gibbs
Lucy Bowden +44 207 408 4090
Camarco (Financial PR - London)
Owen Roberts +44 203 781 8334
RES Consulting (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 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 nine months ended 30 September 2023, the Company's Romanian
operations produced a total of 192 MMcf of gas, equating to an
average daily production of 117 boe/day.
The Canar-1 water injection well is currently injecting all
produced water volumes from the Moftinu field. 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 has completed all 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. In October 2023,
the Company was granted further exploration phase extension of the
Satu Mare Concession by NAMR. The extension is in two phases. The
first phase of the extension is two years in duration starting on
28 October 2023. The work commitment for the first phase is the
reprocessing of 100 kilometres of legacy 2D seismic as well as a 2D
seismic acquisition program of 100 kilometres including processing
the acquired seismic data. The second phase of the licence
extension is optional and is two years in duration starting on 28
October 2026 with a work commitment of drilling one well within the
concession area with no total drilling depth requirement
stipulated. 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 International
Chamber of Commerce ("ICC") had awarded a decision in favour of
Serinus, confirming that as a result of Oilfield Exploration
Business Solutions S.A. ("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. Furthermore, the Company has received in October 2023,
from the Romanian Courts, the recognition of the ICC award.
The Company is currently planning for the workover interventions
in M-1003 and M-1007, scheduled for the first half of 2024. These
interventions are intended to access additional gas volumes in the
Moftinu field.
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 Sabria 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 workover to install a pump into the Sabria W-1 well
encountered unexpected conditions as a result of old drilling mud
and tubulars left in the well from operations in 1998. The Company
and its partner, Enterprise Tunisienne D'Activite Petroliere
("ETAP"), suspended the workover and have determined that a
sidetrack is required to complete the operation. The sidetrack
design has been completed and the tender process for the long lead
items has commenced.
The Company and ETAP also conducted workover operations on the
Sabria N-2 well. Workover operations were completed on time and
within budget. The objectives of the workover were to remove
wellbore restrictions, install new production tubing, and remediate
reservoir damage around the wellbore. Wellbore restrictions were
removed and new production tubing was installed. The well will need
further stimulation to clean up the formation damage and
discussions are continuing with the partner on this issue. The 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.
Financial Review
Liquidity, Debt and Capital Resources
During the nine months ended 30 September 2023, the Company
invested a total of $5.3 million (2022 - $8.6 million) on capital
expenditures before working capital adjustments. In Romania, the
Group invested $0.5 million (2022 - $6.9 million) on Canar-1 water
injection pump, solar powered radio telecommunication system to the
Moftinu gas plant, and further extension of the Satu Mare
Concession. In Tunisia, the Company invested $4.8 million (2022 -
$1.6 million) of which $3.5 million was invested in workovers on
wells and $1.3 million in capital inventory additions.
The Company's funds from operations for the nine months ended 30
September 2023 were $1.2 million (2022 - $11.1 million). Including
changes in non-cash working capital, the cash flow generated from
operating activities in 2023 was $1.7 million (2022 - $8.7
million). The Company continues to be in a strong position to
expand and continue growing production within our existing resource
base. The Company remains debt-free and has adequate resources
available to deploy capital into both operating business units to
deliver growth and shareholder returns.
($000) 30 September 31 December
Working Capital 2023 2022
----------------------------------- ------------- ------------
Current assets 14,200 16,654
Current liabilities (18,468) (16,571)
----------------------------------- ------------- ------------
Working Capital surplus (deficit) (4,268) 83
----------------------------------- ------------- ------------
Working capital deficit as at 30 September 2023 is $ 4.3 million
(31 December 2022 - $ 0.1 million surplus).
Current assets as at 30 September 2023 were $14.2 million (31
December 2022 - $16.7 million), a decrease of $2.5 million. Current
assets consist of:
-- Cash and cash equivalents of $ 1.5 million (31 December 2022 - $4.9 million)
-- Restricted cash of $ 1.1 million (31 December 2022 - $1.1 million)
-- Trade and other receivables of $10.9 million (31 December 2022 - $10.0 million)
-- Product inventory of $ 0.7 million (31 December 2022 - $0.7 million)
Current liabilities as at 30 September 2023 were $18.5 million
(31 December 2022 - $16.6 million), an increase of $1.9 million.
Current liabilities consist of:
-- Accounts payable of $ 13.0 million (31 December 2022 - $9.3 million)
-- Decommissioning provision of $5.4 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 - $0.5 million (31 December 2022 - $0.5 million)
o Tunisia - $ 4.1 million (31 December 2022 - $3.8 million)
-- Income taxes payable of $nil (31 December 2022 - $1.9 million)
-- Current portion of lease obligations of $ 0.2 million (31 December 2022 - $0.3 million)
Non-current assets
Property, plant and equipment ("PP&E") increased to $ 63.0
million (31 December 2022 - $ 62.3 million), primarily due to
capital expenditures in PP&E of $ 5.3 million offset by
depletion in the period of $ 3.2 million as well as a change in
decommissioning estimates of $ 1.4 million which decreased due to
the higher discount rates applied to the calculation during the
period . Exploration and evaluation assets ("E&E") increased to
$ 10.7 million (31 December 2022 - $ 10.5 million), due to change
in decommissioning estimates. Right-of-use assets decreased to $
0.4 million (31 December 2022 - $ 0.7 million) due to depreciation
in the period.
Financial Review - NINE months ended 30 SEPTEMBER 2023
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:
Nine months ended 30
September
($000) 2023 2022
------------------------------------ ---------- -----------
Cash flow from operations 1,697 8,713
Changes in non-cash working capital (518) 2,342
------------------------------------ ---------- -----------
Funds from operations 1,179 11,055
------------------------------------ ---------- -----------
Funds from operations per share 0.01 0.10
------------------------------------ ---------- -----------
Romania used funds in operations of $ 0.7 million (2022 -
generated $8.4 million) and Tunisia generated $ 5.8 million (2022 -
$7.1 million). Funds used at the Corporate level were $ 3.9 million
(2022 - $4.4 million) resulting in net funds from operations of $
1.2 million (2022 - $11.1 million).
Production
Nine months ended 30
September 2023 Tunisia Romania Group %
------------------------ -------- -------- ------ -----
Crude oil (bbl/d) 454 - 454 71%
Natural gas (Mcf/d) 415 703 1,118 29%
Condensate (bbl/d) - - - -
------------------------ -------- -------- ------ -----
Total (boe/d) 524 117 641 100%
------------------------ -------- -------- ------ -----
Nine months ended 30
September 2022
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%
------------------------ -------- -------- ------ -----
During the nine months ended 30 September 2023 production
volumes decreased by 297 boe/d to 641 boe/d against the comparative
period (2022 - 938 boe/d).
Romania's production volumes decreased by 305 boe/d to 117 boe/d
against the comparative period (2022 - 422 boe/d). Production
continues to reflect the natural decline profile of shallow gas
fields.
Tunisia's production volumes increased by 7 boe/d to 524 boe/d
against the comparative period (2022 - 517 boe/d). Production
remains stable during the nine months of 2023 as a result of the
oil fields' maintenance programme. Ongoing workover programmes
continue in the Chouech Es Saida field, with the aim to optimize
production.
Oil and Gas Revenue
($000)
Nine months ended 30 September
2023 Tunisia Romania Group %
Oil revenue 9,732 - 9,732 73%
Natural gas revenue 1,203 2,331 3,534 27%
Condensate revenue - - - -
--------------------------------- -------- -------- ------- -------
Total revenue 10,935 2,331 13,266 100%
--------------------------------- -------- -------- ------- -------
Nine months ended 30 September
2022 Tunisia Romania Group %
-------------------------------- -------- -------- ------- -----
Oil revenue 12,569 - 12,569 30%
Natural gas revenue 1,280 27,888 29,168 69%
Condensate revenue - 57 57 1%
-------------------------------- -------- -------- ------- -----
Total revenue 13,849 27,945 41,794 100%
-------------------------------- -------- -------- ------- -----
Realised PricE
Nine months ended 30 September 2023 Tunisia Romania Group
-------------------------------------- ------------ -------- -------
Oil ($/bbl) 78.68 - 78.68
Natural gas ($/Mcf) 10.61 12.92 12.03
Condensate ($/bbl) - - -
-------------------------------------- ------------ -------- -------
Average realised price ($/boe) 76.69 77.52 76.84
-------------------------------------- ------------ -------- -------
Nine months ended 30 September 2022
-------------------------------------- ------------ -------- -------
Oil ($/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
-------------------------------------- ------------ -------- -------
During the nine months ended 30 September 2023 revenue decreased
by $ 28.5 million to $13.3 million (2022 - $41.8 million) as the
Group saw the average realised price decrease to $ 76.84 /boe (2022
- $162.18/boe) and production decline in Romania.
The Group's average realised oil price decreased to $ 78.68 /bbl
(2022 - $101.04/bbl), and average realised natural gas prices
decreased to $ 12.03 /Mcf (30 September 2022 - $36.66/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
($000) 2023 2022
--------------------------------------- ------ -------
Tunisia 1,366 1,714
Romania 111 943
--------------------------------------- ------ -------
Total 1,477 2,657
Total ($/boe) 8.55 10.31
Tunisia oil royalty (% of oil revenue) 12.5% 12.4 %
Romania gas royalty (% of gas revenue) 4.7% 3.5 %
--------------------------------------- ------ -------
Total (% of revenue) 11.1% 6.4 %
--------------------------------------- ------ -------
For the nine months ended 30 September 2023 royalties decreased
to $ 1.5 million (30 September 2022 - $ 2.7 million) while the
Group's average royalty rate increased to 11.1 % (30 September 2022
- 6.4 %).
In Romania, during nine months of 2023, the Company incurred a
3.5% royalty rate for gas (30 September 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 gas prices during nine months of 2023 remained higher
than the realised prices by 40%. 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 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
Nine months ended 30 September
($000) 2023 2022
----------------------------------- ------ ------
Tunisia 3,768 3,720
Romania 2,094 4,424
Canada 31 40
----------------------------------- ------ ------
Group 5,893 8,184
Tunisia production expense ($/boe) 26.43 26.14
Romania production expense ($/boe) 69.64 38.35
----------------------------------- ------ ------
Total production expense ($/boe) 34.14 31.74
----------------------------------- ------ ------
During the nine months ended 30 September 2023 production
expenses decreased by $ 2.3 million to $5.9 million (30 September
2022 - $8.2 million). Per unit production expenses increased to $
34.14/boe (30 September 2022 - $ 31.74/boe ).
Tunisia's production expenses increased by $0.1 million to $ 3.8
million (2022 - $3.7 million), with per unit production expenses
increasing to $ 26.43 /boe (30 September 2022 - $26.14/boe) which
is consistent with the slight increase in production during the
period.
Romania's overall operating costs decreased by $ 2.3 million to
$ 2.1 million (2022 - $ 4.4 million), however per unit production
expenses increased to $ 69.64 /boe (30 September 2022 - $ 38.35
/boe) due to naturally declining production 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
2023 Tunisia Romania Group
Sales volume (boe/d) 522 110 632
Realised price 76.69 77.52 76.84
Royalties (9.58) (3.66) (8.55)
Production expense (26.43) (69.64) (34.14)
--------------------------------- -------- -------- --------
Operating netback 40.68 4.22 34.15
--------------------------------- -------- -------- --------
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
--------------------------------- -------- -------- --------
For the nine months ended 30 September 2023 the Group's
operating netback was $ 34.15 /boe (30 September 2022 - $ 120.13
/boe). The decrease is due to lower realised prices and higher per
unit production expenses.
The Company also generated a gross profit of $ 1.8 million (30
September 2022 - $ 11.8 million), largely due to a significant
decrease in the Company's netbacks.
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 2023 , the Group's EBITDA decreased by $
11.4 million to $ 1.2 million (30 September 2022 - $ 12.6
million).
Nine months ended 30
September
($000) 2023 2022
----------------------------------- ------------ ---------
Net income (loss) (4,559) 3,367
Finance costs, including accretion 1,277 1,313
Depletion and amortization 3,432 4,924
Decommissioning provision recovery (36) (62)
Tax expense 1,112 3,079
----------------------------------- ------------ ---------
EBITDA 1,226 12,621
----------------------------------- ------------ ---------
Windfall Tax
Nine months ended 30
September
($000) 2023 2022
----------------------------------- ---------- -----------
Windfall tax 661 14,233
Windfall tax ($/Mcf - Romania gas) 3.44 20.68
Windfall tax ($/boe - Romania gas) 21.97 124.05
For the nine months ended 30 September 2023 windfall taxes were
$0.7 million (30 September 2022 - $14.2 million). This decrease is
directly related to a combination of lower production and lower
realised gas prices in Romania.
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
($000) 2023 2022
------------------- ------- ------
Tunisia 2,617 2,067
Romania 742 2,763
Corporate 73 94
------------------- ------- ------
Total 3,432 4,924
Tunisia ($/boe) 18.35 14.52
Romania ($/boe) 24.67 23.95
------------------- ------- ------
Total ($/boe) 19.88 19.11
------------------- ------- ------
For the nine months ended 30 September 2023 depletion and
depreciation expense was $3.4 million (30 September 2022 - $4.9
million). The decrease is primarily due to lower production during
the period. Per boe, depletion and depreciation expense increased
to $19.88/boe (30 September 2022 - $19.11/boe), primarily due to
lower reserves in the current period.
General and Administrative ("G&A") Expense
Nine months ended 30
September
($000) 2023 2022
-------------------- ----------- ----------
G&A expense 4,006 4,050
G&A expense ($/boe) 23.20 15.72
For the nine months ended 30 September 2023 G&A expenses
comprised $4.0 million and remained on the level consistent with
the prior year period (30 September 2022 - $4.1 million) regardless
of the current high inflationary environment.
Share-Based Payment
Nine months ended 30 September
($000) 2023 2022
---------------------------- ----- -----
Share-based payment 3 59
Share-based payment ($/boe) 0.02 0.23
During the nine months ended 30 September 2023 share-based
compensation decreased to $nil (30 September 2022 - $0.06 million)
due to lower stock options granted in the preceding 12 months.
Net Finance Expense
Nine months ended 30 September
($000) 2023 2022
--------------------------------------- ------ ------
Interest on leases 34 28
Accretion on decommissioning provision 1,272 753
Foreign exchange and other (29) 532
--------------------------------------- ------ ------
1,277 1,313
--------------------------------------- ------ ------
During the nine months ended 30 September 2023 net finance
expenses stayed constant at $1.3 million (30 September 2022 - $1.3
million).
Taxation
During the nine months ended 30 September 2023 income tax
expense was $1.1 million (30 September 2022 - $3.1 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, LTIP awards, and shares owned
up to the date of this report.
Share Options LTIP Awards Shares
Executive Directors:
Jeffrey Auld - 3,153,603 1,338,875
Non-Executive Directors:
Jim Causgrove - - 290,000
Lukasz Redziniak - - 302,000
Jon Kempster [1] - - 60,261
-------------------------- --------------- ------------ ----------
- 3,153,603 1,991,136
------------------------------------------ ------------ ----------
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:
CRUX Asset Management (8.42%), Michael Hennigan (7.94%), Xtellus
Capital Partners Inc (7.44%), Quercus TFI SA (7.18%), Marlborough
Fund Managers (5.48%), and Spreadex LTD (4.10%).
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
$0.1 million (30 September 2022 - loss of $3.4 million) through
Other comprehensive loss.
Going Concern
The Group's business activities, together with the factors
likely to affect its future development and performance are set out
in the Operational Update and Outlook. The financial position of
the Group is described in these condensed consolidated interim
financial statements.
The Directors have given careful consideration to the
appropriateness of the going concern assumption, including cashflow
forecasts through the going concern period and beyond, planned
capital expenditure and the principal risks and uncertainties faced
by the Group. This assessment also considered various downside
scenarios including oil and gas commodity prices and production
rates. Following this review, the Directors are satisfied that the
Group has sufficient resources to operate and meet its commitments
as they come due in the normal course of business for at least 12
months from the date of these condensed consolidated interim
financial statements. Accordingly, the Directors continue to adopt
the going concern basis for the preparation of these condensed
consolidated interim financial statements.
Declarations of the Board of Directors Concerning Accounting
Policies
The Board of Directors of the Company confirms that, to the best
of their knowledge, the condensed consolidated interim financial
statements together with comparative figures have been prepared in
accordance with applicable accounting standards and give a true and
fair view of the state of affairs and the financial result of the
Group for the period ended 30 September 2023.
The Financial Review in this report gives a true and fair view
of the situation on the reporting date and of the developments
during the period ended 30 September 2023 and include a description
of the major risks and uncertainties.
Serinus Energy plc
Consolidated Interim Statement of Comprehensive Loss
(US$ 000s, except per share amounts)
Nine months ended 30
September
------------------------------------------------------ ----- -----------------------
Note 2023 2022
------------------------------------------------------ ----- ----------- ----------
Revenue 13,266 41,794
------------------------------------------------------ ----- ----------- ----------
Cost of sales
Royalties (1,477) (2,657 )
Windfall tax (661) (14,223)
Production expenses (5,893) (8,184)
Depletion and depreciation (3,432) (4,924)
Total cost of sales (11,463) (29,988)
------------------------------------------------------ ----- ----------- ----------
Gross profit 1,803 11,806
General and Administrative expenses (4,006) (4,050)
Share-based payment expense (3) (59)
Total administrative expenses (4,009) (4,109)
Decommissioning provision recovery 36 62
Operating income (loss) (2,170) 7,759
Finance expense (1,277) (1,313)
------------------------------------------------------ ----- ----------- ----------
Net income before tax (3,447) 6,446
Tax expense (1,112) (3,079)
------------------------------------------------------ ----- ----------- ----------
Income (loss) after taxation attributable to
equity owners of the parent (4,559) 3,367
Other comprehensive loss
Other comprehensive loss to be classified
to profit and loss in subsequent periods:
Foreign currency translation adjustment (70) (3,441)
------------------------------------------------------ ----- ----------- ----------
Total comprehensive loss for the period attributable
to equity owners of the parent (4,629) (74)
------------------------------------------------------ ----- ----------- ----------
Earnings (loss) per share:
Basic 4 (0.04) 0.03
Diluted 4 (0.04) 0.03
------------------------------------------------------ ----- ----------- ----------
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 2023 2022
---------------------------------------------- -------------- -------------
Non-current assets
Property, plant and equipment 63,049 62,311
Exploration and evaluation assets 10,722 10,529
Right-of-use assets 369 688
----------------------------------------------- -------------- -------------
Total non-current assets 74,140 73,528
----------------------------------------------- -------------- -------------
Current assets
Restricted cash 1,128 1,088
Trade and other receivables 10,865 10,007
Product inventory 748 705
Cash and cash equivalents 1,459 4,854
----------------------------------------------- -------------- -------------
Total current assets 14,200 16,654
----------------------------------------------- -------------- -------------
Total assets 88,340 90,182
----------------------------------------------- -------------- -------------
Equity
Share capital 401,426 401,426
Share-based payment reserve 25,560 25,557
Treasury shares (458) (455)
Accumulated deficit (390,915) (386,356)
Cumulative translation reserve (3,442) (3,372)
Total equity 32,171 36,800
----------------------------------------------- -------------- -------------
Liabilities
Non-current liabilities
Decommissioning provision 23,887 24,046
Deferred tax liability 12,048 10,942
Lease liabilities 408 465
Other provisions 1,358 1,358
----------------------------------------------- -------------- -------------
Total non-current liabilities 37,701 36,811
----------------------------------------------- -------------- -------------
Current liabilities
Current portion of decommissioning provision 5,365 5,085
Current portion of lease liabilities 151 280
Accounts payable and accrued liabilities 12,952 11,206
----------------------------------------------- -------------- -------------
Total current liabilities 18,468 16,571
----------------------------------------------- -------------- -------------
Total liabilities 56,169 53,382
----------------------------------------------- -------------- -------------
Total liabilities and equity 88,340 90,182
----------------------------------------------- -------------- -------------
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
2021 401,426 25,487 (121) (387,986) (1,374) 37,432
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Loss for the period - - - 3,367 - 3,367
Other comprehensive loss
for the period - - - - (3,441) (3,441)
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Total comprehensive 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
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Balance at 31 December
2022 401,426 25,557 (455) (386,356) (3,372) 36,800
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Comprehensive loss for
the period - - - (4,559) - (4,559)
Other comprehensive loss
for the period - - - - (70) (70)
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Total comprehensive loss
for the period - - - (4,559) (70) (4,629)
Transactions with equity
owners
Share-based payment expense - 3 - - - 3
Shares purchased to be
held in Treasury - - (3) - - (3)
----------------------------- --------- ------------ --------- ------------ --------------------- --------
Balance at 30 September
2023 401,426 25,560 (458) (390,915) (3,442) 32,171
----------------------------- --------- ------------ --------- ------------ --------------------- --------
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 2023 2022
--------------------------------------------------- ----- ---------- -----------
Operating activities
Income (loss) for the period (4,559) 3,367
Items not involving cash:
Depletion and depreciation 3,432 4,924
Share-based payment expense 3 59
Tax expense 1,112 3,079
Accretion expense on decommissioning provision 1,272 753
Foreign exchange loss (gain) (20) 68
Other income (25) (3)
Decommissioning provision recovery (36) (62)
Income taxes paid - (1,130)
Funds from operations 1,179 11,055
Changes in non-cash working capital 5 518 (2,342)
--------------------------------------------------- ----- ---------- -----------
Cashflows from operating activities 1,697 8,713
--------------------------------------------------- ----- ---------- -----------
Financing activities
Lease payments (12) (355)
Shares purchased to be held in treasury (194) (202)
Cashflows used in financing activities (206) (557)
--------------------------------------------------- ----- ---------- -----------
Investing activities
Capital expenditures 5 (4,925) (7,476)
Cashflows used in investing activities (4,925) (7,476)
--------------------------------------------------- ----- ---------- -----------
Impact of foreign currency translation on
cash 39 (324)
--------------------------------------------------- ----- ---------- -----------
Change in cash and cash equivalents (3,395) 356
Cash and cash equivalents, beginning of period 4,854 8,429
--------------------------------------------------- ----- ---------- -----------
Cash and cash equivalents, end of period 1,459 8,785
--------------------------------------------------- ----- ---------- -----------
The accompanying notes on pages 15 to 16 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, unless otherwise noted)
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 2022. There has been no change in these areas
during the nine months ended 30 September 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 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. 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.
While the financial figures included within these condensed
consolidated interim financial statements have been computed in
accordance with IFRS's applicable to interim periods, this report
and financial statements do not contain sufficient information to
constitute an interim financial report as set out in IAS34 Interim
Financial Reporting.
4. Earnings per share
Nine months ended 30 September
($000's, except per share amounts) 2023 2022
-------------------------------------- -------- --------
Income (loss) for the period (4,559) 3,367
Weighted average shares outstanding:
Basic 113,097 114,714
Diluted 113,097 114,714
-------------------------------------- -------- --------
Income per share - Basic and diluted (0.04) 0.03
-------------------------------------- -------- --------
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
Nine months ended 30 September
2023 2022
------------------------------------------ ------ --------
Cash provided by (used in):
Trade and other receivables (845) (3,085)
Product inventory (43) (19)
Accounts payable and accrued liabilities 1,403 764
Restricted cash 3 (2)
------------------------------------------ ------ --------
Changes in non-cash working capital from
operating activities 518 (2,342)
------------------------------------------ ------ --------
The following table reconciles capital expenditures to the cash
flow statement:
Nine months ended 30 September
2023 2022
------------------------------------------ ------ --------
PP&E additions 5,313 4,402
E&E additions - 4,221
------------------------------------------ ------ --------
Total capital additions 5,313 8,623
Changes in non-cash working capital from
investing activities (388) (1,147)
------------------------------------------ ------ --------
Total capital expenditures 4,925 7,476
------------------------------------------ ------ --------
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 31 October 2023, the Company announced that it was granted
exploration phase extension of the Satu Mare Concession in Romania
by Romanian National Agency for Mineral Resources ("NAMR"). The
extension is in two phases with the first phase being mandatory
till 27 October 2025, and the second phase being optional for
further two years in duration.
In Romania, the Company continues to pursue its process of
challenging the non- applicability of the Solidarity Tax for the
year ended 31 December 2022. In the first quarter of 2023, the
Company has received a legal opinion detailing the legal arguments
of the non-applicability of the Solidarity Tax, has submitted a
Petition to the Romanian Government and has engaged in formal
discussions with the Romanian Fiscal Authorities, in order to
obtain a derogation of this Tax.
[1] Shares held by Catherine Kempster (the spouse of Jon
Kempster)
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END
QRTFEDSUIEDSEEF
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November 27, 2023 02:00 ET (07:00 GMT)
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