TIDMSENX
RNS Number : 1423J
Serinus Energy PLC
14 August 2023
14 August 2023
Press Release
Interim Results for the Six Months Ended 30 June 2023
Jersey, Channel Islands, 14 August 2023 -- Serinus Energy plc
("Serinus" or the "Company") (AIM:SENX, WSE:SEN) is pleased to
announce its interim results for the six months ended 30 June
2023.
Financial
-- Revenue for the six months ended 30 June 2023 was $8.9
million (30 June 2022 - $29.3 million)
-- Funds from operations for the six months ended 30 June 2023
were $0.4 million (30 June 2022 - $8.2 million)
-- EBITDA for the six months ended 30 June 2023 was $0.5 million
(30 June 2022 - $8.7 million)
-- Gross profit for the six months ended 30 June 2023 was $0.8
million (30 June 2022 - $8.0 million)
-- The Company realised a net price of $ 74.93 /boe for the six
months ended 30 June 2023 comprising:
o Realised oil price - $74.75/bbl
o Realised natural gas price - $12.56/Mcf
-- The Group's operating netback decreased, in line with the
commodity prices, for the six months ended 30 June 2023 and was
$31.18/boe (30 June 2022 - $113.38/boe), comprising:
o Romania operating netback - $12.53/boe (30 June 2022 - $171.01/boe)
o Tunisia operating netback - $36.47/boe (30 June 2022 - $63.49/boe)
-- Capital expenditures of $5.0 million (30 June 2022 - $4.2 million), comprising:
o Romania - $0.5 million
o Tunisia - $4.5 million
-- Working capital deficit was $4.2 million (31 December 2022 - surplus of $0.1 million)
-- Cash balance as at 30 June 2023 was $2.5 million (31 December 2023 - $4.9 million)
Operational
-- The Sabria N-2 workover commenced on 02 May and was
successfully completed on 05 June 2023
-- The Sabria N-2 well is currently flowing to surface and is
dewatering in line with behaviour the Company has observed in other
wells on the Sabria field
-- Subject to the progress during the dewatering phase the
company is considering acidizing the N-2 well to enhance the flow
performance of the well
-- The Company commenced the Sabria W-1 workover in the period.
The workover was intended to allow for the first installation of
artificial lift in the Sabria field. The workover was suspended
when obstructions in the well made progress more expensive than
returning to the well at a later date and side-tracking to the
target
-- The Company is currently working to design the optimal parameters of the W-1 side-track
-- Production in Chouech es Saida continues with no pump downtime in the period
-- Serinus has engaged the services of a geological and
geophysical consultancy firm with the aim of identifying the most
suitable location for two future wells in the Sabria field
-- In May 2023, the Company performed a lifting of 50,344 bbls
of Tunisian crude oil at a price of $74.91/bbl
-- The Company has scheduled the next lifting and expects to
perform this lifting in September 2023
-- Production for the period averaged 677 boe/d, comprising:
o Romania - 144 boe/d
o Tunisia - 533 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
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
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
Half Year 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 six months ended 30 June 2023, the Company's Romanian
operations produced a total of 156 MMcf of gas, equating to an
average daily production of 144 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 six months 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, previously unrecorded
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 elected to proceed
with operations on the Sabria N-2 well to perform a workover to
recomplete the well. The workover operations on the Sabria N-2 well
were completed in early June 2023. The workover was completed on
time and within budget despite 3.5 days non-productive time caused
by high winds. 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 Sabria N-2 well is currently flowing to surface and is
dewatering in line with behaviour the Company has observed in other
wells on the Sabria field. Subject to the progress during the
dewatering phase the company is considering acidizing the N-2 well
to enhance the flow performance of the well. 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 six months ended 30 June 2023, the Company invested a
total of $5.0 million (30 June 2022 - $4.2 million) on capital
expenditures before working capital adjustments. In Romania, the
Group invested $0.5 million (30 June 2022 - $3.5 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 $4.5 million (30
June 2022 - $0.7 million) of which $3.4 million was invested in
workovers on wells and $1.1 million was for capitalized inventory
purchases.
The Company's funds from operations for the six months ended 30
June 2023 were $0.4 million (30 June 2022 - $8.2 million).
Including changes in non-cash working capital, the cash flow
generated from operating activities in 2023 was $1.0 million (30
June 2022 - $3.4 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 June 31 December
Working Capital 2023 2022
--------------------------- --------- ------------
Current assets 14,306 16,654
Current liabilities (18,522) (16,571)
--------------------------- --------- ------------
Working Capital (deficit) (4,216) 83
--------------------------- --------- ------------
Working capital deficit at 30 June 2023 was $4.2 million (31
December 2022 - $ 0.1 million surplus ). The decrease in working
capital is primarily due to lower commodity prices as well as an
increase in accounts payable due to ongoing well workover
operations in Tunisia.
Current assets as at 30 June 2023 were $14.3 million (31
December 2022 - $16.7 million), a decrease of $2.4 million. Current
assets consist of:
-- Cash and cash equivalents of $ 2.5 million (31 December 2022 - $ 4.9 million)
-- Restricted cash of $ 1.1 million (31 December 2022 - $ 1.1 million)
-- Trade and other receivables of $ 10.1 million (31 December 2022 - $ 10.0 million)
-- Product inventory of $ 0.6 million (31 December 2022 - $ 0.7 million)
Current liabilities as at 30 June 2023 were $18.5 million (31
December 2022 - $16.6 million), an increase of $1.9 million.
Current liabilities consist of:
-- Accounts payable of $ 13.4 million (31 December 2022 - $ 9.3 million)
-- Decommissioning provision of $ 4.9 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 2023 - $ 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 $64.7
million (31 December 2022 - $ 62.3 million), primarily due to
capital expenditures in PP&E of $ 5.0 million offset by
depletion in the period of $ 2.4 million as well as a change in
decommissioning estimates of $ 0.2 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 - six months ended 30 June 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:
Six months ended 30
June
($000) 2023 2022
------------------------------------ --------------------- --------
Cash flow from operations 967 3,394
Changes in non-cash working capital (569) 4,782
------------------------------------ --------------------- --------
Funds from operations 398 8,176
------------------------------------ --------------------- --------
Funds from operations per share 0.00 0.07
------------------------------------ --------------------- --------
Romania used funds in operations of $ 0.4 million (30 June 2022
- generated $5.3 million) and Tunisia generated $ 3.4 million (30
June 2022 - $6.0 million). Funds used at the Corporate level were $
2.6 million (30 June 2022 - $3.1 million) resulting in net funds
from operations of $ 0.4 million (30 June 2022 - $8.2 million).
Changes in non-cash working capital increased by $5.4 million to $
0.6 million (30 June 2022 - $4.8 million), due to an increase in
accounts receivable for oil sales on contract, as well as an
increase in prepaid expenditures, timing of payments, and is
consistent with the prior quarter.
Production
Six months ended 30
June 2023 Tunisia Romania Group %
----------------------- -------- -------- ------ -----
Crude oil (bbl/d) 471 - 471 70%
Natural gas (Mcf/d) 373 862 1,235 30%
Condensate (bbl/d) - - - 0%
----------------------- -------- -------- ------ -----
Total (boe/d) 533 144 677 100%
----------------------- -------- -------- ------ -----
Six months ended 30
June 2022
Crude oil (bbl/d) 454 - 454 45%
Natural gas (Mcf/d) 398 2,894 3,292 54%
Condensate (bbl/d) - 3 3 1%
----------------------- -------- -------- ------ -----
Total (boe/d) 521 485 1,006 100%
----------------------- -------- -------- ------ -----
During the six months ended 30 June 2023 production volumes
decreased 329 boe/d to 677 boe/d against the comparative period (30
June 2022 - 1,006 boe/d).
Romania's production volumes decreased by 341 boe/d to 144 boe/d
against the comparative period (30 June 2022 - 485 boe/d).
Production continues to reflect the natural decline profile of
shallow gas fields.
Tunisia's production volumes increased by 12 boe/d to 533 boe/d
against the comparative period (30 June 2022 - 521 boe/d).
Production increased during the first half of 2023 as a result of
the Company's programme of pump installation and maintenance. The
recently completed N-2 workover was successful in removing the well
bore restrictions and the well is flowing in the de-watering phase.
Ongoing workover programmes continue in the Chouech Es Saida field,
with the aim to optimize production.
Oil and Gas Revenue
($000)
Six months ended 30 June
2023 Tunisia Romania Group %
Oil revenue 6,162 - 6,162 77%
Natural gas revenue 703 2,012 2,715 23%
Condensate revenue - - - 0%
--------------------------- -------- ---------- -------- -------
Total revenue 6,865 2,012 8,877 100%
--------------------------- -------- ---------- -------- -------
Six months ended 30 June
2022 Tunisia Romania Group %
-------------------------------- -------- -------- ------------ -------
Oil revenue 9,043 - 9,043 31%
Natural gas revenue 927 19,248 20,175 68%
Condensate revenue - 43 43 1%
-------------------------------- -------- -------- ------------ -------
Total revenue 9,970 19,291 29,261 100%
-------------------------------- -------- -------- ------------ -------
Realised Price
Six months ended 30 June 2023 Tunisia Romania Group
------------------------------------------ -------- ------------ -------
Oil ($/bbl) 74.75 - 74.75
Natural gas ($/Mcf) 10.76 13.34 12.56
Condensate ($/bbl) - - -
------------------------------------------ -------- ------------ -------
Average realised price ($/boe) 73.56 80.01 74.93
------------------------------------------ -------- ------------ -------
Six months ended 30 June 2022
------------------------------------------ -------- ------------ -------
Oil ($/bbl) 101.63 - 101.63
Natural gas ($/Mcf) 12.86 36.67 33.80
Condensate ($/bbl) - 82.21 82.21
------------------------------------------ -------- ------------ -------
Average realised price ($/boe) 98.72 219.22 154.83
------------------------------------------ -------- ------------ -------
During the six months ended 30 June 2023 revenue decreased by
$20.4 million to $8.9 million (30 June 2022 - $29.3 million) as the
Group saw the average realised price decrease by $79.90/boe to
$74.93/boe (30 June 2022 - $154.83/boe) and production decline in
Romania.
The Group's average realised oil price decreased by $26.88/bbl
to $74.75/bbl (30 June 2022 - $101.63/bbl), and average realised
natural gas prices decreased by $21.24/Mcf to $12.56/Mcf (30 June
2022 - $33.80/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
Six months ended
30 June
($000) 2023 2022
--------------------------------------- --------- --------
Tunisia 889 1,119
Romania 97 629
--------------------------------------- --------- --------
Total 986 1,748
Total ($/boe) 8.46 9.25
Tunisia oil royalty (% of oil revenue) 13.5% 11.2%
Romania gas royalty (% of gas revenue) 4.8% 3.3%
--------------------------------------- --------- --------
Total (% of revenue) 11.1% 6.0%
--------------------------------------- --------- --------
For the six months ended 30 June 2023 royalties decreased to
$1.0 million (30 June 2022 - $1.7 million) and the Group's royalty
rate increased to 11.1% (30 June 2022 - 6.0%).
In Romania, in the first half of 2023, the Company incurred a
3.5% royalty rate for gas (first half of 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 in the interim period 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 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
Six months ended
30 June
($000) 2023 2022
----------------------------------- --------- --------
Tunisia 2,572 2,439
Romania 1,600 3,613
Canada 25 32
----------------------------------- --------- --------
Group 4,197 6,085
Tunisia production expense ($/boe) 27.56 24.15
Romania production expense ($/boe) 63.62 41.06
----------------------------------- --------- --------
Total production expense ($/boe) 35.43 32.20
----------------------------------- --------- --------
During the six months ended 30 June 2023 production expenses
decreased by $ 1.9 million to $4.2 million (30 June 2022 - $6.1
million), being an increase of $3.23/boe to $ 35.43 (30 June 2022 -
$ 32.20/boe ).
Tunisia's production expenses increased by $ 0.1 million, to $
2.5 million (30 June 2022 - $2.4 million), being an increase of $
3.41 /boe to $ 27.56 /boe (30 June 2022 - $ 24.15 /boe). The
increase in production expenses against the comparative period
reflects that production expenses in the first half of 2022 were
recorded in inventory as incurred, and subsequently recognized in
the statement of comprehensive income (loss) 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 overall operating costs decreased by $ 2.0 million to
$ 1.6 million (30 June 2022 - $ 3.6 million), being an increase of
$ 22.56 /boe to $ 63.62 /boe (30 June 2022 - $ 41.06 /boe). The
decrease in production costs is a result of lower production 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)
Six months ended 30 June 2023 Tunisia Romania Group
Sales volume (boe/d) 516 139 655
Realised price 73.56 80.01 74.93
Royalties (9.53) (3.86) (8.32)
Production expense (27.56) (63.62) (35.43)
-------------------------------- -------- -------- --------
Operating netback 36.47 12.53 31.18
-------------------------------- -------- -------- --------
Six months ended 30 June 2022 Tunisia Romania Group
Sales volume (boe/d) 558 485 1,043
Realised price 98.72 219.22 154.83
Royalties (11.08) (7.15) (9.25)
Production expense (24.15) (41.06) (32.20)
-------------------------------- -------- -------- --------
Operating netback 63.49 171.01 113.38
-------------------------------- -------- -------- --------
For the six months ended 30 June 2023 the Group's operating
netback was $ 31.18 /boe, a decrease of $82.20/boe against the
comparative period (30 June 2022 - $ 113.38 /boe). The decrease is
due to lower realised prices, partially offset by higher production
expenses.
The Company also generated a gross profit of $ 0.8 million (30
June 2022 - $ 8.0 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,
depreciation, depletion and amortisation expense, as well as
accretion on asset retirement obligations and non-operating income
and expenses. EBITDA is not a standard measure under IFRS and
therefore may not be comparable to similar measures reported by
other entities. For the six months ended 30 June 2023, the Group's
EBITDA decreased by $8.2 million to $0.5 million (30 June 2022 - $
8.7 million).
Six months ended 30
June
($000s) 2023 2022
----------------------------------- ------------ --------
Net income (loss) (2,963) 1,827
Finance costs, including accretion 847 682
Depletion and amortization 2,352 3,704
Decommissioning provision recovery (23) (48)
Tax expense 289 2,522
----------------------------------- ------------ --------
EBITDA 502 8,687
----------------------------------- ------------ --------
Windfall Tax
Six months ended
30 June
($000) 2023 2022
----------------------------------- -------- ---------
Windfall tax 564 9,734
Windfall tax ($/Mcf - Romania gas) 3.61 18.55
Windfall tax ($/boe - Romania gas) 22.41 111.29
For the six months ended 30 June 2023 windfall taxes were $0.6
million (30 June 202 - $9.7 million).
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.
During the last two months of the first 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.
Depletion and Depreciation
Six months ended
30 June
($000) 2023 2022
---------------- --------- --------
Tunisia 1,688 1,421
Romania 623 2,217
Corporate 41 66
---------------- --------- --------
Total 2,352 3,704
Tunisia ($/boe) 18.08 14.07
Romania ($/boe) 24.78 25.19
---------------- --------- --------
Total ($/boe) 19.86 19.60
---------------- --------- --------
For the six months ended 30 June 2023 depletion and depreciation
expense was $2.4 million (30 June 2022 - $3.7 million), primarily
due to a lower production during the period. Per boe, depletion and
depreciation expense increased by $0.26/boe to $19.86/boe (30 June
2022 - $19.60/boe), primarily due to lower reserves in the current
period.
General and Administrative ("G&A") Expense
Six months ended 30
June
($000) 2023 2022
-------------------- ---------- ----------
G&A expense 2,670 2,963
G&A expense ($/boe) 22.54 15.68
For the six months ended 30 June 2023 G&A expenses were $2.7
million (30 June 2022 - $ 3.0 million). Per boe, G&A expense is
higher at $22.54/boe (30 June 2022 - $15.68/boe) due to increased
personnel expenses and lower sales volumes in the period.
Share-Based Payment
Six months ended
30 June
($000) 2023 2022
---------------------------- --------- --------
Share-based payment 3 44
Share-based payment ($/boe) 0.02 0.24
For the six months ended 30 June 2023 share-based compensation
decreased to $3,000 (30 June 2022 - $44,000) due to lower stock
options granted in the preceding 12 months.
Net Finance Expense
Six months ended
30 June
($000) 2023 2022
--------------------------------------- --------- --------
Interest on leases - 18
Accretion on decommissioning provision 785 451
Foreign exchange and other 17 213
--------------------------------------- --------- --------
802 682
--------------------------------------- --------- --------
During the six months ended 30 June 2023 net finance expenses
increased by $0.1 million to $0.8 million (30 June 2022 - $0.7
million).
Taxation
During the six months ended 30 June 2023 income tax expense was
$0.3 million (30 June 2022 - $2.5 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 2,580,000 1,656,355 448,875
Andrew Fairclough [1] 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 2,559,986 729,189
-------------------------- -------------- ------------ --------
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:
Inthallo 11.47%, CRUX Asset Management 8.33%, and Quercus TFI SA
7.18%.
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 (30 June 2022 - loss of $2.0 million) through Other
comprehensive income (loss).
Going Concern
The Group's business activities, together with the factors
likely to affect its future development and performance are set out
in the Operational Update and Outlook. The financial position of
the Group is described in these condensed consolidated interim
financial statements and in the Financial Review.
The Directors have given careful consideration to the
appropriateness of the going concern assumption, including cashflow
forecasts through the going concern period and beyond, planned
capital expenditure and the principal risks and uncertainties faced
by the Group. This assessment also considered various downside
scenarios including oil and gas commodity prices and production
rates. Following this review, the Directors are satisfied that the
Group has sufficient resources to operate and meet its commitments
as they come due in the normal course of business for at least 12
months from the date of these condensed consolidated interim
financial statements. Accordingly, the Directors continue to adopt
the going concern basis for the preparation of these condensed
consolidated interim financial statements.
Declarations of the Board of Directors Concerning Accounting
Policies
The Board of Directors of the Company confirms that, to the best
of their knowledge, the condensed consolidated interim financial
statements together with comparative figures have been prepared in
accordance with applicable accounting standards and give a true and
fair view of the state of affairs and the financial result of the
Group for the period ended 30 June 2023.
The Financial Review in this report gives a true and fair view
of the situation on the reporting date and of the developments
during the period ended 30 June 2023 and include a description of
the major risks and uncertainties.
Serinus Energy plc
Consolidated Statement of Comprehensive Loss
(US$ 000s, except per share amounts)
Six months ended 30
June
----------------------------------------------------- ----------------------------------------------
2023 2022
----------------------------------------------------- ---------- ----------------------------------
Revenue 8,877 29,261
------------------------------------------------------ ---------- ----------------------------------
Cost of sales
Royalties (986) (1,748 )
Windfall tax (564) (9,734)
Production expenses (4,197) (6,085)
Depletion and depreciation (2,352) (3,704)
Total cost of sales (8,099) (21,271)
------------------------------------------------------ ---------- ----------------------------------
Gross profit 778 7,990
Administrative expenses (2,670) (2,963)
Share-based payment expense (3) (44)
Total administrative expenses (2,673) (3,007)
Decommissioning provision recovery 23 48
Operating income (loss) (1,872) 5,031
Finance expense (802) (682)
------------------------------------------------------ ---------- ----------------------------------
Net income (loss) before tax (2,674) 4,349
Tax expense (289) (2,522)
------------------------------------------------------ ---------- ----------------------------------
Income (loss) after taxation attributable to equity
owners of the parent (2,963) 1,827
Other comprehensive loss
Other comprehensive loss to be classified to profit
and loss in subsequent periods:
Foreign currency translation adjustment (239) (1,956)
------------------------------------------------------ ---------- ----------------------------------
Total comprehensive loss for the year attributable
to equity owners of the parent (3,202) (129)
------------------------------------------------------ ---------- ----------------------------------
Earnings (loss) per share:
Basic (0.03) 0.02
Diluted (0.03) 0.02
------------------------------------------------------ ---------- ----------------------------------
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 June 31 December
As at 2023 2022
---------------------------------------------- ---------- -------------
Non-current assets
Property, plant and equipment 64,729 62,311
Exploration and evaluation assets 10,680 10,529
Right-of-use assets 433 688
----------------------------------------------- ---------- -------------
Total non-current assets 75,842 73,528
----------------------------------------------- ---------- -------------
Current assets
Restricted cash 1,137 1,088
Trade and other receivables 10,063 10,007
Product inventory 626 705
Cash and cash equivalents 2,480 4,854
----------------------------------------------- ---------- -------------
Total current assets 14,306 16,654
----------------------------------------------- ---------- -------------
Total assets 90,148 90,182
----------------------------------------------- ---------- -------------
Equity
Share capital 401,426 401,426
Share-based payment reserve 25,560 25,557
Treasury shares (467) (455)
Accumulated deficit (389,319) (386,356)
Cumulative translation reserve (3,611) (3,372)
Total equity 33,589 36,800
----------------------------------------------- ---------- -------------
Liabilities
Non-current liabilities
Decommissioning provision 25,029 24,046
Deferred tax liability 11,225 10,942
Lease liabilities 425 465
Other provisions 1,358 1,358
----------------------------------------------- ---------- -------------
Total non-current liabilities 38,037 36,811
----------------------------------------------- ---------- -------------
Current liabilities
Current portion of decommissioning provision 4,883 5,085
Current portion of lease liabilities 209 280
Accounts payable and accrued liabilities 13,430 11,206
----------------------------------------------- ---------- -------------
Total current liabilities 18,522 16,571
----------------------------------------------- ---------- -------------
Total liabilities 56,559 53,382
----------------------------------------------- ---------- -------------
Total liabilities and equity 90,148 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
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Comprehensive income for
the period - - - 1,827 - 1,827
Other comprehensive loss
for the period - - - - (1,956) (1,956)
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Total comprehensive (income)
loss for the period - - - 1,827 (1,956) (129)
Transactions with equity
owners
Share-based payment expense - 44 - - - 44
Shares purchased to be
held in Treasury (202) - - (202)
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Balance at 30 June 2022 401,426 25,531 (323) (386,159) (3,330) 37,145
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Balance at 31 December
2022 401,426 25,557 (455) (386,356) (3,372) 36,800
Comprehensive loss for
the period - - - (2,963) - (2,963)
Other comprehensive loss
for the period - - - - (239) (239)
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Total comprehensive loss
for the period - - - (2,963) (239) (3,202)
Transactions with equity
owners
Share-based payment expense - 3 - - - 3
Shares purchased to be
held in Treasury - - (12) - - (12)
------------------------------ --------- ------------ --------- ------------ --------------------- --------
Balance at 30 June 2023 401,426 25,560 (467) (389,319) (3,611) 33,589
------------------------------ --------- ------------ --------- ------------ --------------------- --------
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)
Six months ended 30
June
2023 2022
-------------------------------------------------- ---------- ----------
Operating activities
Income (loss) for the year (2,963) 1,827
Items not involving cash:
Depletion and depreciation 2,352 3,704
Share-based payment expense 3 44
Tax expense 289 2,522
Accretion expense on decommissioning provision 785 451
Foreign exchange (gain) loss (20) 36
Decommissioning provision recovery (23) (48)
Other income (25) (3)
Income taxes paid - (357)
Funds from operations 398 8,176
Changes in non-cash working capital 569 (4,782)
--------------------------------------------------- ---------- ----------
Cashflows from operating activities 967 3,394
--------------------------------------------------- ---------- ----------
Financing activities
Lease payments (133) (213)
Shares purchased to be held in treasury (12) (202)
Cashflows used infinancing activities (145) (415)
--------------------------------------------------- ---------- ----------
Investing activities
Capital expenditures (3,054) (3,798)
Cashflows used in investing activities (3,054) (3,798)
--------------------------------------------------- ---------- ----------
Impact of foreign currency translation on
cash (142) (383)
--------------------------------------------------- ---------- ----------
Change in cash and cash equivalents (2,374) (1,202)
Cash and cash equivalents, beginning of period 4,854 8,429
--------------------------------------------------- ---------- ----------
Cash and cash equivalents, end of period 2,480 7,227
--------------------------------------------------- ---------- ----------
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 six months ended 30 June 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.
4. Earnings (Loss) per share
Period ended 30
June
($000's, except per share amounts) 2023 2022
------------------------------------- -------- --------
Income (loss) for the period (2,963) 1,827
Weighted average shares outstanding
Basic and diluted 114,686 114,728
------------------------------------- -------- --------
Income (loss) per share
Basic and diluted (0.03) 0.02
------------------------------------- -------- --------
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 30
June
2023 2022
------------------------------------------- ----- --------
Cash provided by (used in):
Trade and other receivables (54) (3,492)
Product inventory 314 (98)
Accounts payable and accrued liabilities 306 (1,190)
Restricted cash 3 (2)
------------------------------------------- ----- --------
Changes in non-cash working capital from
operating activities 569 (4,782)
------------------------------------------- ----- --------
The following table reconciles capital expenditures to the cash
flow statement:
Period ended 30
June
2023 2022
------------------------------------------ ---------- ------
PP&E additions 4,963 1,184
E&E additions - 3,055
------------------------------------------ ---------- ------
Total capital additions 4,963 4,239
Changes in non-cash working capital from
investing activities (1,909) (441)
------------------------------------------ ---------- ------
Total capital expenditures 3,054 3,798
------------------------------------------ ---------- ------
[1] Andrew Fairclough resigned as CFO and Director on 1 June
2023
[2] Shares held by Catherine Kempster (the spouse of Jon
Kempster)
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