Serinus at a Glance

Serinus Energy plc (the "Company" or "Serinus") is an oil and gas exploration, appraisal and development company which is incorporated under the Companies (Jersey) Law 1991.  The Company, through its subsidiaries (together the "Group"), acts as the operator for all of its assets and has operations in two business units: Romania and Tunisia.

Romania

In Romania the Group currently holds the 2,950 km² Satu Mare Concession.  The Satu Mare Concession area includes the Moftinu Gas Project which was brought on production in April 2019 and has produced approximately 9.5 Bcf and $94.5 million of revenue to the end of 2024.  In addition to the Moftinu Gas Development Project the Satu Mare Concession holds several highly prospective exploration plays.  Serinus' recently completed block wide geological review has highlighted the potential of multiple plays that have encountered oil and gas on the block.  Focus is on proven hydrocarbon systems, known productive trends that need further data, and studies of over 40 legacy wells on the concession area that have encountered oil and gas.  The Concession is extensively covered by legacy 2D seismic, augmented by the Group's own 3D and 2D seismic acquisition programs that have further refined the identified prospects.  Putting this extensive evidence-based analysis together in a block wide review has allowed the Group to identify a pathway towards future exploration growth.

Tunisia

The Group's Tunisian operations are comprised of two concession areas.

The largest asset in the Tunisian portfolio is the Sabria field, which is a large oilfield with an independently estimated original in-place volume of 445 million barrels-of-oil-equivalent of which 1.7% has been produced to date.  Serinus considers this historically under-developed field to be an excellent asset for development work to significantly increase production in the near-term.  The Group has embarked on an artificial lift programme whereby the first pumps in the Sabria field will be installed.  Independent third-party studies suggest that the use of pumps in this field can have a material impact on production volumes. 

The Chouech Es Saida concession in southern Tunisia holds a producing oilfield that produces from four wells, three of which are produced using artificial lift.  Chouech Es Saida is a mature oilfield that benefits from active production management.  Underlying this oilfield are significant gas prospects.  These prospects lie in a structure that currently produces gas in an adjacent block.  Exploration of these lower gas zones became commercially possible with the recent construction of gas transportation infrastructure in the region.  Upon exploration success these prospects can be developed in the medium term, with the ability to access the near-by under-utilised gas transmission capacity.

 

Operational Summary and Outlook

Corporate

The Group is focused on developing its existing assets and enhancing production by active reservoir management.  A critical foundation to the advancement of these projects is the cash flow generation inherent in our production assets.  For the year to 31 December 2024, the Group generated cashflow from operating activities of $0.9 million and invested $1.1 million of capital expenditure.

The Group is currently focused on enhancing production from its Tunisian assets.  The large underdeveloped Sabria field offers significant opportunities in a well identified oilfield.  Investments in artificial lift and, in time, new wells offer near term production growth.  The Satu Mare Concession in Romania has excellent exploration potential that can offer the Company another Moftinu style shallow gas development.  Work continues and exploration targets have been identified.  The Moftinu gas field is a shallow gas field that has initial high production rates followed by natural declines.  Managing these declines to extract the most value from the gas in place has allowed the Group to extract $94.5 million of revenue from this field since production began in 2019. 

Romania

The Group's Romanian operating subsidiary, Serinus Energy Romania S.A. ("Serinus Romania"), holds the licence to the Satu Mare concession area, covering approximately 2,950 km² 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 - M-1003, M-1004, M-1007 and M-1008.  During 2024, the Group's Romanian operations produced a total of 121 MMcf of gas, equating to an average daily production of 55 boe/day (2023 - 103 boe/day).

The Moftinu gas field is nearing the end of its natural life.  The field has identified existing gas in uncompleted zones that can be completed and produced with higher gas prices and reduced windfall tax. The Group has recognised an impairment of $1.5 million related to Moftinu gas field.

The Group has identified additional gas volumes in uncompleted zones in M-1003 and M-1007.  During initial drilling and completion of these wells gas was encountered and logged.  The decision was made to complete and produce lower zones until such time as those zones were depleted.  Upon depletion of the lower zones the Group can return to these wells, complete the higher zones and produce the incremental gas.

In October 2023, the Group was granted an exploration phase extension to the Satu Mare Concession in Romania. The Moftinu gas field has been declared a Commercial Area, all other areas of the Concession remain Exploration areas.  The exploration period extension is in two phases. The first phase of the extension is mandatory and 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 extension is optional and is two years in duration starting on 28 October 2025 with a work commitment of drilling one well within the concession area with no total drilling depth requirement stipulated.

The Canar-1 water injection well is currently disposing of 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 Sancrai-1 exploration well, drilled in 2021, encountered gas, however, the Group was unable to achieve measurable gas flow across the three perforated zones, leading to the well's suspension. Following a comprehensive analysis in 2024, which assessed the up-dip potential, the Group decided to abandon the well. As a result, the Sancrai-1 well was impaired, with an impairment expense of $4.2 million recognised for the exploration asset.

Serinus continued to operate safely and effectively in Romania throughout the year.  As at the year-end 2024, the Group had achieved 2,078 accident-free days of continuous operation which is a testament to the professionalism and hard work of our team in Romania.

In February 2023, the International Chamber of Commerce ("ICC") released the final merits award in respect of Serinus Romania arbitration case against its former partner in the Satu Mare Concession in Romania, Oilfield Exploration Business Solutions S.A. ("OEBS"), and has awarded in favour of Serinus.

The decision of the arbitral tribunal has confirmed that, as a result of OEBS' default under the Joint Operating Agreement between the parties ("JOA"), OEBS' 40% participating interest in the Satu Mare Concession in Romania will be transferred to Serinus as of the notification to the parties of the approval by the Romanian Government and the National Agency of Fiscal Administration ("ANAF"). The arbitral tribunal has also directed OEBS to take all necessary actions to formally transfer the 40% participating interest to Serinus. Validity of the ICC Award was acknowledged by the Romanian Court of Appeal in June 2024.

Tunisia

The Group currently holds two concession areas within Tunisia, through its operating subsidiary in Tunisia, Serinus Tunisia B.V. ("Serinus Tunisia").  These concession areas both contain discovered oil and gas reserves and are currently producing.  The largest asset is the Sabria field.  Sabria is a large, conventional oilfield which the Group's independent reservoir engineers have estimated to have approximately 445 million barrels of oil equivalent originally in place.  Of this oil in place only 1.7% 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 including new wells.  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.

During 2024, the Group's Tunisian operations produced a total of 155 Mbbl of oil and 167 MMcf of gas, equating to an average daily production of 500 boe/day (2023 - 539 boe/day).

The workover to install a pump into the Sabria W-1 well in 2023 encountered unexpected conditions as a result of old drilling mud and tubulars left in the well from operations in 1998. The Group 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 long lead items have been ordered and received in country.

The Group and ETAP also conducted workover operations on the Sabria N-2 well in first half of 2023. 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 Group's engineering analysis estimates that a successful workover and recompletion will initially increase gross production from the Sabria field by approximately 420 boe/d.

Production from the Chouech Es Saida area increased during 2024. This was the result of the Group's active management of the artificial lift systems, optimising production rates.  In addition, the active life of the pumping units has been extended, this has increased the pump life from seven months in 2019 to almost four years in 2024.

The Group applied to extend the Ech Chouech licence which expired in June 2022.  The Group is continuing its application to regain the licence once the licence process is formalised.  The Group remains the only feasible operator for the Ech Chouech concession due to the proximity of the existing Group's facilities at Chouech Es Saida to the Ech Chouech oil field and legal privileges which the Group enjoys as a former title holder granting the Group pre-emptive rights for this concession.

Serinus has operated safely and efficiently in Tunisia throughout the year. By year-end 2024, the Group had reached 3,313 accident-free days without a lost-time injury in Tunisia, demonstrating the professionalism and commitment of our team in Tunisia.

 

 

Serinus Investment Thesis

Investment in Serinus offers shareholders an ability to access international oil and gas upstream operations with strong cash flow generation through the oil and gas commodity cycle.  Our low-cost onshore asset base provides significant near-term production growth opportunities.  The size of the existing asset base allows for significant organic growth without incremental asset acquisition cost in areas where our technical knowledge has been refined over the years that Serinus has operated these concession areas.  Serinus offers a compelling growth opportunity where risks are mitigated by our extensive experience in our operating areas and the low-cost nature of our assets.   The Group's existing assets also include large exploration prospects within close proximity of existing infrastructure.  The Group allocates capital to these exploration prospects which if successful can add meaningful production and cash flow to the Group.

Serinus' operations in Romania are focused on the large Satu Mare Concession Area.  The Satu Mare Concession Area is located in the northwest of Romania along-side the Hungarian border.  This large block contains the Moftinu gas field, and the Group believes that numerous shallow gas opportunities with similar characteristics to the Moftinu field are present in the immediate surrounding area.  In addition, the southern portion of the concession offers excellent exploration opportunities for large oil prospects as across the southern boundary of the Satu Mare concession is the Suplacu de Barcau oil field (held by OMV Petrom).  This is a significant oilfield estimated to have produced in excess of 100 million barrels.

In Tunisia, the Group's operations are focused on the Sabria and Chouech Es Saida fields.  Sabria is a very large conventional oilfield where our independent reservoir engineers have accessed a field with 445 million barrels of oil equivalent originally in place.  Of that number approximately 1.7% has been recovered to date.  This is a very low recovery factor for a conventional oilfield and the Group expects to increase that recovery factor materially.  The Chouech field in southern Tunisia offers attractive opportunities to increase production from existing oilfields through the application of standard oilfield practices.  Serinus' Tunisian assets can be typified as existing discovered and producing oilfields where field optimisation provides the path to production, revenue and cash flow growth with no exploration risk.  Underlying the Chouech field is the prospective Acacus gas zone.  Gas has been discovered and produced from this zone in nearby concessions and recent gas infrastructure developments make this exploration opportunity commercially attractive.

In addition to the strong asset base Serinus has a strong and experienced management team.  Within each jurisdiction, we have local professionals managing the operations.  Within the Group we have significant technical and commercial experience and are able to apply that experience across our business units.

 

Serinus' Strategy

Vision

The Group's goal is to transform the potential of its extensive land base in Romania and Tunisia into enhanced shareholder value through the efficient allocation of capital.

Strategy

Serinus is focused on significant growth potential within its existing concession and license holdings in Romania and Tunisia through the development of low cost, high return projects, as follows:

1.   Leverage Land Position:

·    One concession in Romania with multiple play types and prospects

·    Two exploration and production concessions in Tunisia with all work commitments completed

·    Extensive oil and natural gas exploration and development potential within multiple play horizons

 

2.   Commitment to Shareholders:

·    Cohesive management team with a commitment to enhancing shareholder value

·    Abide by the highest thresholds of disclosure for an AIM-listed Group

·    Extensive experience and a proven track record of the allocation of shareholder capital

 

3.   Manage Risks:

·    Managing surface and subsurface risks through constant evaluation and introduction of new technologies

·    Allocate capital to projects with attractive returns at relatively low risk profiles

·    Operator of all concessions allows for cost control

 

4.   Focus on Growth:

·    Leverage cash flow to grow through expanded exploration and development of the existing asset base

·    Seek acquisitions that will provide synergies at a cost that is accretive to shareholders

Chairman's Letter

 

Dear shareholders,

2024 was a year defined by our employees.  In a year that the Group spent in preparations for drilling operations in 2025 our teams engaged and enthusiastically developed the knowledge and capital required to execute our future operations.

Corporately our teams work diligently to control and reduce costs to maximise the operating cash flow available to our growth plans.  Significant reductions in general and administrative costs allow more of our generated cash flow to be allocated to operations which drive value creation.

In Romania our highly capable team maintained the production at the Moftinu gas field and work tirelessly to navigate the often complicated Romanian legal and fiscal environment.  Health and safety have always been a priority, and it is admirable that our Romanian team has built and operated the Moftinu gas plant with no lost time injuries for the productive life of the field.  Since we first flowed gas from the Moftinu gas field the team has been diligently focused on health and safety.  In addition, the team has sought ways to reduce reliance on the Romanian electrical grid by installing solar panels on many of our facilities. Costs savings have been generated by using creative solutions.  No better is that illustrated than using the Canar-1 exploration well as a water injection well thereby eliminating the need to truck produced water but rather injecting that water back into the lower reservoirs.  This initiative has generated significant cost savings.

The team in Tunisia has been very busy with maintenance of our facilities and upgrading those facilities.  Rigorous monitoring of production parameters and pump frequency has allowed for a significant increase in pump life.  The longer a pump is able to produce the fewer replacements are required thus adding to the efficiency of capital allocated to our production.  The team in Tunisia has been focused on ensuring that all the long-lead items required for the side-tracking of the Sabria W-1 well are in place.  This is logistically challenging but critical.  Should materials not be in place when a rig becomes available the rig slot could be lost and delays created.  I am pleased to say that the team has been diligent in their efforts and all long-lead items are in country ready to begin operations in 2025.

It is reassuring to know that we have been able to develop such a driven and competent team within our Company.  It is also impressive to see the collaboration between the technical and financial functions of our business units.  Skills that may be common in one of our business units may not be common in another and the collaborative and efficient transfer of those skills is most impressive.  This skills transfer is a key feature of the synergies between our operating areas.

In closing I look forward to operations in 2025 safe in the knowledge that our people are diligently working to ensure the best chance of success.

 

Yours sincerely,

Łukasz Rędziniak, Chairman of the Board of Directors

14 March 2025

 

Letter from the CEO

 

Dear Fellow Shareholders,

As we look back at 2024 we can reflect that the progress that has been made has been significant.  Our 2024 results reflect both the challenges and opportunities as we navigate a complex energy landscape in both of our business units. 

Operationally 2024 was a year where the Group accrued cash, refined its drilling and development plans and put in place the equipment, manpower and technical knowledge to progress developments in 2025.  Critical to our growth plans is the drilling of a side-track on the Sabria W-1 well.  This well is the first candidate for the installation of artificial lift in the Sabria field.  Initially plans focused on working over this well and installing a pump in the existing bottom hole section.  These plans were delayed when, upon entering the lower sections of the well, it was found that the conditions in the well were unsuitable for the installation of a pump.  Rather than continue with the work the Group made the decision to perform a side-track.  This work will provide the company with a new, clean section in which to install the pump.  Work in 2024 continued on design and technical analysis of this project whilst the Group waited for a suitable rig to become available.  The rig has been contracted and subject to the performance of drilling ahead of the Group's rig-slot will be active in 2025.

Pump performance in Chouech Es Saida continued to improve demonstrating the positive effect that artificial lift can have on these types of fields.  In late 2024 pumps were replaced in the CS-3 and CS-7 wells.  These pumps had been in place for almost four years, a dramatic increase in pump life attributable to close monitoring and maintenance. Continued optimisation of pump and well performance has allowed the extraction of material quantities of oil and gas.

In Romania the Moftinu gas field is nearing the end of its natural life. The field has exceeded all third-party engineering estimates of recoverable gas and has allowed the Group to showcase how developments in Romania can be cash flow accretive.  Romania is currently politically dynamic with Presidential elections expected in 2025.  Work on further projects in Romania will depend on the outcomes of this political situation, however there are considerable opportunities for growth within this concession area. The Group has been engaged with the Romanian authorities in efforts to assist Romania in creating an environment where the vast potential of gas development in Romania can be realised.

Financially the Group continues to provide positive news.  Revenue for the full year 2024 was US$15.4 million demonstrating stable production and commodity prices.  The Group showed strong cost control and was able to realise EBITDA of US$1.4 million.  Reductions in general and administrative costs from US$4.9 million in 2023 to US$3.6 million in 2024 have more than offset the slight decrease in production related to the natural declines in Romania.

Looking ahead we are eager to commence the well side-track at the Sabria W-1 well.  We expect this well to demonstrate the efficacy of artificial lift in the Sabria field.  Third-party estimates suggest that incremental gross production from the introduction of this pump could exceed 400 boe/d.  The potential for additional pumps in the Sabria field is very exciting.

In summary I would like to thank our shareholders for their continued support.  Serinus enjoys an asset position that offers excellent opportunities for growth.  Our team is engaged and energised and looks optimistically to the future growth of our business.

 

Yours sincerely,

Jeffrey Auld, Chief Executive Officer

14 March 2025

Report from the CFO

Liquidity, Debt and Capital Resources

During the year the Group invested a total of $1.1 million (2023 - $5.5 million) on capital expenditures before working capital adjustments.  In Tunisia, the Group invested $1.1 million (2023 - $5.0 million) performing workovers and purchasing long lead items for the Sabria artificial lift programme.  In Romania, the Group invested $nil million (2023 - $0.5 million) during the year.

The Group's funds from operations for the year ended 31 December 2024 were $1.1 million (2023 - $1.9 million).  Including changes in non-cash working capital, the cash flow generated from operating activities in 2024 was $0.9 million (2023 - $1.9 million).  The Group is debt-free and continues to pursue opportunities to expand and continue growing production within our existing resource base to deliver shareholder returns.

	Year ended 31 December
($000)	2024	2023
Current assets	8,558	11,341
Current liabilities	(17,890)	(16,926)
Working Capital	(9,332)	(5,585)

 

The working capital deficit at 31 December 2024 was $9.3 million (2023 - $5.6 million deficit).   

Current assets as at 31 December 2024 were $8.6 million (31 December 2023 - $11.3 million), a decrease of $2.7 million.  Current assets consist of:

·      Cash and cash equivalents of $1.4 million (2023 - $1.3 million)

·      Restricted cash of $1.1 million (2023 - $1.2 million)

·      Trade and other receivables of $5.4 million (2023 - $8.1 million).

·      Product inventory of $0.7 million (2023 - $0.7 million)

Current liabilities as at 31 December 2024 were $17.9 million (2023 - $16.9 million), an increase of $1.0 million. Current liabilities consist of:

·      Accounts payable and accrued liabilities of $7.4 million (2023 - $9.3 million)

·      Decommissioning provision of $9.4 million (2023 - $6.7 million)

o  Tunisia - $7.7 million (2023 - $5.3 million)

o  Romania - $0.9 million (2023 - $0.6 million)

o  Canada - $0.8 million (2023 - $0.8 million) which are offset by restricted cash in the amount of $1.1 million (2023 - $1.2 million) in current assets

·      Income taxes payable of $0.9 million (2023- $0.8 million)

·      Current portion of lease obligations of $0.2 million (2023 - $0.1 million)

Non-current assets

Property, plant and equipment ("PP&E") decreased to $44.4 million (2023 - $56.0 million). The decrease is due to depletion expense of $3.2 million, a change in the estimate of asset retirement assets of $3.7 million, and an impairment expense of $1.5 million in Moftinu due to natural depletion of the gas field. Also, Santau was reclassified to exploration and evaluation assets resulting in a reduction in PP&E of $4.3 million. The Santau assets, initially transferred from Exploration and Evaluation ("E&E") assets to PP&E in 2017, have been reclassified back to E&E assets to align with IAS 1 requirements, with no impact on the Group's total assets, as Santau relative value has increased due to impairments and depletion of Romania's main producing oil and gas assets (see Notes 11 and 12 of the Financial Statements). The reductions in PP&E were partially offset by capital additions of $1.1 million.  E&E assets increased by the Santau reclassification of $4.3 million but this was offset by the $4.2 million impairment of the Sancrai-1 well and totalled $10.7 million (2023 - $10.7 million).

Financial Review - Year ended 31 December 2024

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:

	Year ended 31 December
($000)	2024	2023
Cash flow from operations	865	1,875
Changes in non-cash working capital	243	66
Funds from operations	1,108	1,941
Funds from operations per share	0.01	0.02

 

Tunisia generated funds from operations of $4.9 million (2023 - $7.9 million) and Romania used funds in operations of $0.9 million (2023 - $1.3 million).  Funds used at the Corporate level were $2.9 million (2023 - $4.7 million) resulting in net funds from operations of $1.1 million (2023 - $1.9 million).

Production

Year ended 31 December 2024	Tunisia	Romania	Group	%
Crude oil (bbl/d)	423	-	423	76%
Natural gas (Mcf/d)	457	331	788	24%
Condensate (bbl/d)	-	-	-	-
Total (boe/d)	500	55	555	100%
Year ended 31 December 2023
Crude oil (bbl/d)	458	-	458	71%
Natural gas (Mcf/d)	484	617	1,101	29%
Condensate (bbl/d)	-	-	-	-
Total (boe/d)	539	103	642	100%

 

During the year, production volumes decreased by 87 boe/d (14%) to 555 boe/d (2023 - 642 boe/d) primarily due to a combination of natural production declines and the shut-in of wells in Moftinu.  Romania's production volumes decreased by 48 boe/d (47%) to 55 boe/d (2023 - 103 boe/d) while production in Tunisia decreased by 39 boe/d (7%) to 500 boe/d as result of the oil fields' maintenance programme. Ongoing workover programmes continue in the Chouech Es Saida field as part of active production management.

 

Oil and Gas Revenue

($000)
Year ended 31 December 2024	Tunisia	Romania	Group	%
Oil revenue	12,345	-	12,345	80%
Gas revenue	1,972	1,084	3,056	20%
Condensate revenue	-	-	-	-
Total revenue	14,317	1,084	15,401	100%
Year ended 31 December 2023
Oil revenue	13,313	-	13,313	74%
Gas revenue	1,879	2,683	4,562	26%
Condensate revenue	-	-	-	-
Total revenue	15,192	2,683	17,875	100%

 

Realised Price
Year ended 31 December 2024	Tunisia		Romania		Group
Oil ($/bbl)	79.92		-		79.92
Gas ($/Mcf)	11.79		10.72		11.39
Condensate ($/bbl)	-		-		-
Average realised price ($/boe)	78.51		64.34		77.31
Year ended 31 December 2023
Oil ($/bbl)	79.85		-		79.85
Gas ($/Mcf)	10.65		13.05		11.94
Condensate ($/bbl)	-		-		-
Average realised price ($/boe)	77.45		78.30		77.58

Revenue during the year decreased to $15.4 million (2023 - $17.9 million) as the Group saw the average realised price decrease to $77.31/boe (2023 - $77.58/boe) and production decline in Romania.

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 is sold to the international market through periodic liftings.  In 2024, the Group completed three oil liftings (2023 - two liftings).

Royalties

	Year ended 31 December
($000)	2024	2023
Tunisia	1,831	1,929
Romania	48	125
Total	1,879	2,054
Total ($/boe)	9.43	8.91
Tunisia oil royalty (% of oil revenue)	12.8%	12.7%
Romania gas royalty (% of gas revenue)	4.4%	4.7%
Total (% of revenue)	12.2%	11.5%

 

Royalties decreased to $1.9 million (2023 - $2.1 million) while the Group's average royalty rate increased to 12.2% (2023 - 11.5%). 

In Romania the royalty is calculated using a reference price that is set by the Romanian authorities and not the realised price to the Group.  The reference gas prices during 2024 remained higher than the realised price by 40%. Romanian royalty rates vary based on the level of production during a quarter.  Natural gas royalty rates range from 3.5% to 13.0%.

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 2024, the royalty rate remained unchanged in Sabria at 10% for oil and 8% for gas.  Chouech Es Saida royalty rate was flat at 15% for both oil and gas.

Production Expenses

	Year ended 31 December
($000)	2024	2023
Tunisia	6,453	5,349
Romania	1,665	2,633
Canada	12	31
Group	8,130	8,013
Tunisia production expense ($/boe)	35.38	27.27
Romania production expense ($/boe)	98.87	76.84
Total production expense ($/boe)	40.81	34.78

 

During the year production expenses increased by $0.1 million (1%) to $8.1 million (2023 - $8.0 million).  Per unit production expenses increased by $6.03/boe (17%) to $40.81 (2023 - $34.78).

Tunisia's production expenses increased from the prior year by $1.2 million to $6.5 million (2023 - $5.3 million), with per unit production increasing to $35.38/boe (2023 - $27.27/boe) mainly due to the increase of roads maintenance in Chouech Es Saida field as consequence of weather condition changes resulting in increased frequency of sandstorms.

Romania's overall operating costs decreased to $1.7 million (2023 - $2.6 million), with per unit production expenses increasing to $98.87/boe (2023 - $76.84/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.

	Year ended 31 December 2024
($/boe)	Tunisia	Romania	Group
Sales volume (boe/d)	498	46	544
Realised price	78.51	64.34	77.31
Royalties	(10.04)	(2.86)	(9.43)
Production expense	(35.38)	(98.87)	(40.81)
Operating netback	33.09	(37.39)	27.07
	Year ended 31 December 2023
($/boe)	Tunisia	Romania	Group
Sales volume (boe/d)	537	94	631
Realised price	77.45	78.30	77.58
Royalties	(9.83)	(3.65)	(8.91)
Production expense	(27.27)	(76.84)	(34.78)
Operating netback	40.35	(2.19)	33.89

 

The Group operating netback decreased to $27.07/boe (2023 - $33.89/boe) due to lower realised prices in Romania and higher per unit production expenses.

The Group generated a gross profit of $1.4 million (2023 - $2.5 million) due to increased average realised price in Tunisia offset by increased production costs.

Earning before interest, taxes, depreciation and amortisation ("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 year ended 31 December 2024, the Group's EBITDA decreased to $1.4 million (2023 - $2.1 million).

Windfall Tax

	Year ended 31 December
($000)	2024	2023
Windfall tax	340	783
Windfall tax ($/Mcf - Romania gas)	3.36	3.81
Windfall tax ($/boe - Romania gas)	20.17	22.84

 

During 2024, the Group incurred windfall taxes in Romania of $0.3 million (2023 - $0.8 million), a decrease of $0.5 million.  This decrease is directly related to decreased production and lower realised gas prices which decreased from an average realised price of $13.05/Mcf in 2023 to $10.72/Mcf in 2024. 

 

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

	Year ended 31 December
($000)	2024	2023
Tunisia	3,188	3,582
Romania	340	866
Corporate	125	124
Total	3,653	4,572
Tunisia ($/boe)	17.48	18.26
Romania ($/boe)	20.16	25.27
Total ($/boe)	18.34	19.84

 

Depletion and depreciation expense decreased by $0.9 million (20%) to $3.7 million (2023 - $4.6 million), being a per unit decrease of $1.50/boe to $18.34/boe (2023 - $19.84/boe).  The decrease in expense is primarily due to a lower depletable base on the Group's assets and declining production in Romania.

General and Administrative ("G&A") Expense

	Year ended 31 December
($000)	2024	2023
G&A expense	3,409	4,928
G&A expense ($/boe)	17.12	21.39

 

G&A costs decreased during the year by $1.5 million (31%), totalling $3.4 million (2023 - $4.9 million). This reduction was driven by lower personnel expenses, decreased professional services fees, and the implementation of cost control measures across the Group.

Share-Based Payment

	Year ended 31 December
($000)	2024	2023
Share-based payment	221	3
Share-based payment ($/boe)	1.11	0.01

 

Share-based compensation increased to $221 thousand (2023 - $3 thousand) due to the Company granting 6,537,280 ordinary shares of nil par value to directors and senior management under the Company's long term incentive plan.

Net Finance Expense

	Year ended 31 December
($000)	2024	2023
Interest on leases	126	76
Accretion on decommissioning provision	1,667	1,801
Foreign exchange and other	(1,000)	46
	793	1,923

 

Net finance expense for 2024 decreased to $0.8 million (2023 - $1.9 million) predominantly due to foreign exchange gains and other income.

Impairment

At 31 December 2024, the Group completed an impairment assessment to determine if there were any indicators of impairment or impairment reversals.  In Tunisia, there were no indicators of impairment or impairment reversals identified at Sabria or South Tunisia.  The Group had applied to extend the Ech Chouech licence but this expired in June 2022.  The Group intends to continue its application to regain the licence once the licence application process is formalised.  No indication has been received that the Group will not be successful once the process to re-apply becomes available and as such has made the judgement that it will be able to regain the Ech Chouech licence and therefore no impairment has been charged to this asset. 

In Moftinu, the Group determined that there were indicators of impairment and recognised an impairment expense of $1.5 million. The primary impairment indicators in Romania during 2024 included reduced gas prices throughout the year, natural depletion of the Moftinu gas field reflecting on life of shallow gas fields and the fiscal regime in Romania.

The Sancrai-1 exploration well was drilled in 2021 and encountered gas; however, the Group was unable to achieve a measurable gas flow across the three perforated zones. As a result, the well was suspended. Following a comprehensive analysis at the 2024 year-end, which included assessment of up-dip potential, the decision was made to abandon the well. Consequently, the Sancrai-1 well was impaired, and the Group recognised an impairment expense of $4.2 million related to the exploration asset.

Taxation

For the year ended 31 December 2024, income tax expense amounted to $1.1 million (31 December 2023 - $1.7 million).  The decrease was driven by lower taxable income and the recovery of tax basis in Tunisia during the year.

Solidarity tax

On 29 December 2022, the Government of Romania published Emergency Ordinance no.186/2022 detailing measures to implement Council Regulation (EU) 2022/1854 regarding the emergency intervention to introduce a solidarity contribution for companies that carry out activities in the oil, natural gas, coal and refinery sectors.  This additional tax in Romania is calculated at a rate of 60% applied to the Group's annual profit, in excess of 20% of its average profits for the financial years 2018-2021.  The solidarity tax applies for the financial year 2022 only.

The Group does not believe that the solidarity tax is applicable to its operations in Romania, has received legal advice to support that position and will continue challenging the legality of this additional tax.  Throughout 2024 and early 2025, the Group has continued contesting the Romanian tax authority's decision to impose a Solidarity Tax, arguing that the tax is not applicable to its 2022 profits due to retroactivity, excessive taxation, and violations of legal principles. Despite filing administrative and legal challenges, including a preliminary claim and suspension request, both were denied, the Group is currently awaiting the Romanian court's reasoning before pursuing further appeals, possible constitutional challenge, and international arbitration.

If the Group were to consider the tax applicable for 2022, then the amount due is estimated to be approximately $0.76 million, while for 2023 and 2024 there is no solidarity tax since the operations in Romania are in annual loss position. Consistent with the requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the Group has assessed that the Solidarity Tax is not applicable and, accordingly, has not recognised a provision for this tax in its financial statements.

Foreign Currency Translation

Foreign currency translation occurs from fluctuations in the foreign exchange rates in entities with a different functional currency than the reporting currency (USD).  Functional currency of Serinus Tunisia remained USD and the management do not envisage any triggers which could lead for its change in foreseeable future. Functional currency of Serinus Romania was Romanian Leu (RON) up to 31 December 2022 subsequent to which management considered changed circumstances and economic environment in Romania and concluded that functional currency of the Group's Romanian business unit should be changed from RON to USD in 2023. In making this conclusion, management considered all primary and secondary indicators for determination of the functional currency in accordance with IAS 21 The Effects of Changes in Foreign Currency Exchange Rates. Particularly, management considered cash flow indictors of Serinus Romania, its sales price and sales market indicators, expense indicators, financing indicators, degree of autonomy, as well as intra-Group transactions and arrangements.

Going Concern

The Directors have considered the going concern of the Group and are satisfied that the Group has sufficient resources to operate and to meet its commitments in the normal course of business for not less than 12 months from the date of these consolidated financial statements.  Directors have considered the Group's net liability position and the mitigating factors, which support the Group's ability to continue as a going concern (see Note 2 of the Financial Statements). On that basis, the Directors consider it appropriate to prepare the consolidated financial statements on a going concern basis.

 

 

Vlad Ryabov, Chief Financial Officer

14 March 2025

Review of Operations

 

Romania

·      Satu Mare Block - 2,950 km² of onshore land.

·      Located within the Pannonian Basin on trend with discovered and producing oil and gas fields and close to infrastructure.

·      Multiple play types that have produced or are producing along the same trend, including shallow amplitude-supported gas reservoirs; conventional siliciclastic oil reservoirs; and fractured-basement oil and gas reservoirs.

·      Serinus operates with a 100% working interest which is owned and operated through the wholly owned subsidiary Serinus Energy Romania S.A.  The Group has completed all of its commitments under the fourth exploration phase of the Satu Mare Concession Agreement. In October 2023, the Group received a four year exploration period extension divided into two phases. The first phase of the extension is mandatory and 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 extension is optional and is two years in duration starting on 28 October 2025 with a work commitment of drilling one well within the concession area with no total drilling depth requirement stipulated.

 

Satu Mare Concession - History

·      Serinus farmed-in to the Satu Mare Concession in 2008 and earned 60% working interest by funding 100% of work commitments for Exploration Phases 1 and 2.

·      The Group has a 100% working interest in the concession as its partner has defaulted on its obligations under the Joint Operating Agreement.  The Group filed a Request for Arbitration with the Secretariat of the International Court of Arbitration of the International Chamber of Commerce ("ICC") seeking a declaration affirming the Group's rightful claim of ownership of its defaulted partners' 40% participating interest and to compel transfer of that interest to the Group.  In 2023 Serinus announced that it had received confirmation from the ICC that as a result of its partners' default under the Joint Operating Agreement, the defaulted partners' 40% participating interest in the Satu Mare concession will be transferred to Serinus Romania, directing the defaulted partner to take all necessary actions to formally transfer the 40% participating interest to Serinus.

·      Serinus has completed all the phase 1 and 2 work commitments, as follows:

o  Acquired two 3D seismic surveys covering a total of 260 km² (80 km² Moftinu & 180 km² Santau Surveys).

o  Drilled four wells resulting in Moftinu gas discovery (Madaras-109, Moftinu 1000, 1001 & 1002bis wells).

·      Completion of Phase 2 entitled Serinus to enter Exploration Phase 3.

·      The Phase 3 work program included the following commitments:

o  To drill two wells: one well to a depth of 1,000m and one well to a depth of 1,600m.

§  Serinus drilled M-1007 (a re-drill of M-1001) and M-1003 (1,600m).

o  Renegotiated commitment - to drill two exploration wells: one well to a depth of 1,000m and one well to a depth of 1,600m.  These wells replaced the previous commitment of 120 km² of 3D seismic.

§  The M-1008 well was drilled in February 2021 and qualified as the 1,000m commitment well and the Sancrai well was drilled in the second half of 2021 which qualified as the 1,600m well.

·      The Group 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 Group agreed to the following work commitments over the term of this evaluation phase:

o   Phase 1: From 28 October 2021 to 27 October 2022, the Group was required to reprocess 160.9 km 2D seismic in the Madaras area at an estimated cost of $100,000; and

o   Phase 2: From 28 October 2022 to 27 October 2023, the Group was required to reprocess 30.1 km 2D seismic in the Santau-Nusfalau area at an estimated cost of $50,000.

·    The Phase 1 work commitment was completed in 2022 and Phase 2 was completed early in 2023.

·    The greater Moftinu gas field area has been declared a commercial field.

·    In October 2023, the Group has received an additional exploration phase extension of the Satu Mare Concession in Romania. The extension is in two phases. The first phase of the extension is mandatory and 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 extension is optional and is two years in duration starting on 28 October 2025 with a work commitment of drilling one well within the concession area with no total drilling depth requirement stipulated.

 

Serinus generated the first gas production in the region in April 2019, after the successful completion of the Moftinu Gas Plant. The Moftinu Gas Project is the development of the shallow (800-1,000m), multi-zone Moftinu gas field. The field has relatively low drilling and completion costs, with strong initial well production rates.  Serinus also built a three-kilometre sales line that ties-in the Moftinu Gas Plant into the Transgaz pipeline, Abramut.  The infrastructure created by Serinus in the Satu Mare area represents a very important addition and investment which has established the Group as one of the most significant investors in the area.

 

The Moftinu gas plant was designed at a capacity of 15 MMcf/d and can accommodate up to six flowlines.  During 2024, production was predominantly comprised from well M-1004 averaging 0.3 MMcf/day (2023 - 0.6 MMcf/d). The Group continues to explore future drilling locations both within the existing field of Moftinu, and throughout the rest of the Satu Mare concession.  The Group believes there are similar shallow gas fields to the Moftinu gas field, providing Serinus with additional low-cost shallow gas reserves.

 

Tunisia

The Group currently holds two Tunisia concessions, each of which currently produces oil and gas (Sabria and Chouech Es Saida).  This production has been sustained with a low-cost, low-risk development program, but has significant growth opportunities over the medium to long-term.  The Group has no outstanding work commitments.

 

License	Serinus Working Interest	Approximate Gross Area (acres)	Expiry
Sabria	45% (ETAP 55%)	26,196	November 2028
Chouech Es Saida	100%	42,526	December 2027
Ech Chouech	100%	35,139	Expired June 2022
Sanrhar	100%	36,879	Relinquished 2021
Zinnia	100%	17,471	Relinquished 2021

 

The Group applied to extend the Ech Chouech licence which expired in June 2022.  The Group is continuing its application to regain the licence once the licence process is formalised.  The Group remains the only feasible operator for the Ech Chouech concession due to the proximity of the existing Group's facilities at Chouech Es Saida to the Ech Chouech oil field and legal privileges which the Group enjoys as a former title holder granting the Group pre-emptive rights for this concession.

 

Sabria

·      Produced over 7.2 million boe (gross) to date.

·      Large Ordovician light oil field with stable production from its large reserve base and long reserves life index.

·      The Ordovician reservoir at Sabria contains 445 million bbl OIIP (P50), into which only eight wells (12 including re-entries) have been drilled.  The reservoir comprises a large stratigraphic trap with a continuous oil column that spans the Upper Hamra, Lower Hamra and the El Atchane formations.

·      Installation of artificial lift in the Sabria W-1 well will require a sidetrack. The sidetrack design has been completed and the procurement process for the long lead items was finalised. Plans for additional production enhancement through artificial lift are in place for other wells in the field.

Chouech Es Saida

·      Produced over 4.0 million boe to date from the TAGI Formation in the Triassic reservoir.

·      The deeper Silurian Acacus sands and the Tannezuft fan, which have been penetrated successfully and produced hydrocarbons from two wells in the concession, hold enormous growth potential for Serinus.

·      The Silurian Acacus sands, which are hydrocarbon-charged in the Chouech block, are emerging in Southern Tunisia as a major new oil, condensate and gas play with exploration success rates of nearly 100%.

·      The Group continued to optimise the performance of the pumps in Chouech Es Saida wells in 2024, resulting in steadily improving performance from the field.

 

Reserves

Group NET 1P & 2P Reserves - Using Forecast Prices

			2024						2023
		Oil & Liquids		Gas		Boe		Oil & Liquids		Gas		Boe		Change
		(Mbbl)		(MMcf)		(Mboe)		(Mbbl)		(MMcf)		(Mboe)
Tunisia
Proved (1P)		2,900		6,710		4,018		2,220		4,070		2,898		38.65%
Probable		2,360		5,260		3,237		1,910		4,930		2,732		18.48%
Proved & Probable (2P)		5,260		11,970		7,255		4,130		9,000		5,630		28.86%
Romania
Proved (1P)		0.95		1,310		219		0.4		1,100		183		19.67%
Probable		0.66		910		152		0.2		1,080		180		-15.56%
Proved & Probable (2P)		1.61		2,220		371		0.6		2,180		363		2.20%
Group
Proved (1P)		2,901		8,020		4,238		2,220		5,170		3,081		37.54%
Probable		2,361		6,170		3,389		1,910		6,010		2,912		16.38%
Proved & Probable (2P)		5,262		14,190		7,627		4,130		11,180		5,993		27.26%

The upward revision in Group reserves was attributable to reclassification of certain volumes in Tunisia from Contingent Resources to Reserves and increased commodity prices that more than offset 2024 production.  Given that the Ech Chouech licence had expired in June 2022, the Group reserves for the year ended 31 December 2024 and 2023 do not include reserves attributed to Ech Chouech.  The Group had applied to extend the Ech Chouech licence but this expired and the Group intends to continue its application to regain the licence once the licence application process is formalised.  No indication has been received that its application would not be successful once the process to re-apply becomes available and as such the Group has made the judgement that it will be able to regain the Ech Chouech licence and therefore no impairment has been charged to this asset.  For the year ended 31 December 2021, the reserves report attributed 253Mboe of 2P Reserves to Ech Chouech.

Contingent Resources

The Tunisian contingent resources are related to two further potential development wells.  Currently the specific contingency which would convert these contingent resources to reserves is the Group committing to the development program and setting out a development plan.

The Romanian contingent resources consist of the resources in two specific reservoir sand layers which are expected to be recovered from existing wells, but which will require additional completion work or future recompletion prior to the start of production.  The specific contingency which would convert these resources to reserves is the Group's decision to recomplete the producing wells to access recovery of the gas resources from these sands, which is forecast to occur once production from the current producing sands have become depleted.

Group Gross Unrisked Contingent Resources - Using Forecast Prices

		2024			2023
	Oil & Liquids	Gas	Boe	Oil & Liquids	Gas	Boe	Change
	(Mbbl)	(MMcf)	(Mboe)	(Mbbl)	(MMcf)	(Mboe)
Tunisia
1C Contingent Resources	400	1,000	567	500	1,500	750	-24.44%
2C Contingent Resources	1,000	2,900	1,483	1,600	4,300	2,316	-35.95%
3C Contingent Resources	1,900	5,300	2,783	2,800	7,900	4,116	-32.38%
Romania
1C Contingent Resources	-	2,500	417	-	2,500	417	0.0%
2C Contingent Resources	-	4,300	717	-	4,300	717	0.0%
3C Contingent Resources	-	7,000	1,167	-	7,000	1,167	0.0%
Group
1C Contingent Resources	400	3,500	983	500	4,000	1,167	-15.74%
2C Contingent Resources	1,000	7,200	2,200	1,600	8,600	3,033	-27.46%
3C Contingent Resources	1,900	12,300	3,950	2,800	14,900	5,283	-25.23%

 

 

Environmental, Social and Governance

Serinus is an oil and gas exploration, development and production Group whose strategic purpose is to develop and produce hydrocarbon natural resources.  These business activities provide the energy essential to many of the processes and materials that support our daily lives but ultimately contribute to many of the environmental issues which are of concern to us today and in the future.

Climate change is an increasingly prominent issue, both globally and for our industry.  Thirty percent of our production is natural gas which we view as a transition fuel towards a low-carbon economy.  Our gas production is primarily utilised in the generation of electricity and as such displaces coal in that energy mix.  In all net-zero carbon scenarios oil and gas will remain essential elements of energy supplies for decades to come, our role in this process is to deliver our operations as cleanly and efficiently as possible.

Whilst extractive industries are essential to our modern way of life, we are strongly aware of the wider range of responsibilities that industries such as ours have.  In addition to the management and protection of the environment in those countries in which we operate we also have a clear responsibility to the welfare and the safety of our employees, our investors and stakeholders, local communities that may be impacted by our business, host governments and all of our business partners.

The COVID-19 pandemic reminds us that risk management needs to be dynamic and able to adapt to new threats and the Group quickly implemented stringent and effective protocols to protect our workforce from the risk of infection across all of its offices and operations, which included, amongst other measures, testing, on-site care and support, amended shift patterns and alternate working days.  Safety of our staff and contractors remains a key concern.

Therefore, a long-term goal of the Group is to be a positive influence in the regions in which we operate through good corporate stewardship of our assets, our people and their communities.  It is a key component of the ethos of Serinus that we maintain responsible and sustainable development while adhering to the highest operating standards and financial discipline.  We carry out our operations in full compliance with relevant regulations and comply with all safety and environmental requirements and aim to conduct our business in an environmentally responsible manner.  The Group has established an Environmental, Social and Governance ("ESG") Committee, led by the Chief Executive Officer, supported by other key personnel, and overseen by the Board, which reviews the policies and metrics under which we operate and measure ourselves and also evaluates the environmental framework being adopted and recommended, such as that of the Taskforce on Climate-Related Financial Disclosure ("TCFD"), in order to determine how we may best comply with these evolving disclosures.

Whilst the TCFD is currently voluntary for smaller companies, we are applying governance, risk management and strategy processes to manage climate-related financial risks and develop this within our ESG strategy and integrate into the corporate strategy, growth plans, capital allocation, operations and executive management key performance indicators.

The Sustainable Development Goals ("SDGs") as set out by the United Nations, particularly SDG 13 (Climate Action), are often referenced as reporting criteria for many energy companies.  Serinus will continually evaluate at the Board level, through our ESG Committee, how this may be incorporated into our ESG reporting in an appropriate and relevant manner in the future.

 

Environment

Serinus has existing concession and licence holdings in Romania and Tunisia.  Both asset portfolios cover extensive acreage but in vastly different topographic settings with the Satu Mare licence covering 2,949 km² in the north-west of Romania, across primarily agricultural farmland, while the two Tunisian concessions are located in the central and southern regions of the country in both remote desert and populated, agricultural environments.

Serinus' goal is to manage the distinct local environmental requirements of its operations in full compliance with the relevant regulations and to reduce our carbon footprint by minimising emissions and waste and mitigate the potential impact of our operations on the environment.

Romania

Serinus Energy Romania has continued to present an excellent HSE track record through 2024, with a zero-frequency rate (per one-million-man hours worked) for Total Recordable Injuries across all sites (2023 - zero for Serinus Romania employees) and in January 2025 the Moftinu Gas Plant reached 2,109 accident-free days of continuous operation.  There have been no spills or environmental incidents at the Moftinu Gas Plant since its commissioning in 2019.  Serinus Romania has maintained full compliance with all of its regulatory and environmental obligations.

Serinus Energy Romania completed its annual certification inspection and is certified for ISO 14001:2015 (Environmental Management Systems), ISO 9001:2015 (Quality Management) and ISO 45001:2018 (Occupational Health and Safety).

During 2024, energy use from grid electricity at the Moftinu Gas Plant was 314 MWh, 0.83% of the annual production of 37,827 MWh, compared with 315 MWH in 2023, which was 0.45% of that year's annual production of 69,910MWh.  Nine solar panels have been installed at the Moftinu gas plant which generated 27.44kWh of energy in 2024, offsetting the equivalent of 9.007kg of CO₂ emissions.  Serinus Energy Romania continues to assess opportunities to expand its utilisation of solar power on its available sites.

During 2024, energy use from grid electricity at the Moftinu Gas Plant was 314 MWh which was 0.83% of the annual production of 37,827 MWh, compared with 315 MWh in 2023 which was 0.45% of the annual production of 69,910 MWh, compared with  317 MWh in 2022, which was 0.12% of that year's annual production of 267,582 MWh and compared with 314 MWh in 2021, which was 0.04% of that year's annual production of 747,015 MWh.  Nine solar panels have been installed at the Moftinu gas plant which generated 27.44kWh of energy in 2024, offsetting the equivalent of 9,007kg of CO₂ emissions.  Serinus Energy Romania continues to assess opportunities to expand its utilisation of solar power on its available sites

Flue gas emissions tests are performed annually, in accordance with the requirements specified in the environmental permit.  The most recent test was undertaken in October 2024 which monitored an average CO₂ emission level of 0.55% of total flue gas, below the benchmark CO₂ threshold of 3.8%.

A Fugitive Emissions Monitoring Report was undertaken by a European accredited emission monitoring and pipeline integrity organisation, The Sniffers (www.the-sniffers.com), for the Moftinu Gas Plant in October 2024.  The Group collected data and presented its report in accordance with the Environmental Protection Agency of the United States ("US EPA") "Method 21" EPA-453/R-95-017.  The Sniffers has been accredited ISO 17025 by BELAC (the Belgian accreditation body) on 17 December 2017 for the Method: "EPA 21 Protocol for equipment leak emission estimates, 1995, EPA-453/R-95-017".  All data and calculations were generated by proprietary software designed by The Sniffers called Sniffers Full Emission Management Platform "SFEMP".  Measured parts per million values are converted to emission loss (kg/year).  These calculations are based on US EPA "Correlation factors for Petroleum Industry".  This method uses conversion factors depending on the source type and the measured value.  The monitoring exercise completed a Leak Detection and Repair programme through which it identified a total of 2,760 potential emission sources, of which 26 were not accessible (a source of emission that cannot be measured as it cannot be reached physically or safely without additional tools and is recalculated to be representative of all sources) and 2,734 were accessible. 

Of the 2,734 accessible potential emission sources identified, there were 30 registered leaks, being 1.09% of accessible sources and resulted in an emission loss of 3,025 kg/year.  22 leaks were detected above the Repair Definition threshold (the threshold concentration indicating obligatory repair of leaking sources which under the US EPA definition is 10,000 parts per million volume), amounting to 3,101 kg/year.  The report concluded that a successful repair of the leak above Repair Definition could reduce the emission loss by 2,817 kg/year, equating to 95.87% of the total emission.  The leaks have been repaired.

 

Tunisia

Serinus Tunisia maintained a strong HSE track record through 2024, with a zero-frequency rate (per one-million-man hours worked) for Total Recordable Injuries across all sites (2023 - zero for Serinus Tunisia employees).  There were no environmental incidents at Sabria and two minor incidents at Chouech Es Saida which were addressed and repaired.  Serinus Tunisia has maintained full compliance with all of its regulatory and environmental obligations.

Environmental monitoring has been undertaken across all of our Tunisian fields since 2014 in compliance with legal requirements and the Group's responsibilities to the local environment.  The annual environmental report for 2024 was submitted to the Agence Nationale de Protection de l'Environnement ("ANPE") in February 2025.

During 2024, the annual environmental monitoring was undertaken by Le Centre Mediterraneen d'Analyses ("CMA") at the Sabria and Chouech Es Saida fields, assessing: air emissions from stacks at both fields; air quality monitoring; groundwater monitoring; produced water; fresh water; soil sampling and noise pollution.  The environmental monitoring programme for remote locations is reviewed by local management and implemented at all sites.

Stack air emission analysis and air quality monitoring was conducted at Sabria and Oum Chiah in September 2024.  Analysis of the results demonstrated that the Group was in compliance with approved thresholds of groundwater and soil contaminants and required solid waste management.  The Group's own review of air emissions showed compliance in all areas, in accordance with the air quality limits set by Decree No. 2018-447 of 18 May 2018 and Decree No.2010-2519 of 28 September 2010, except for carbon monoxide ("CO") emissions from older fixed equipment.  The Group has investigated mitigation measures and a short and medium-term action plan with an enhanced preventative maintenance programme has been implemented to address this, including the refurbishment and overhaul of affected equipment.  Ground water monitoring is conducted on a yearly basis from existing water wells drilled at Sabria.  No evidence of pollution has been reported.  Five piezometer wells were drilled at Sabria to monitor the ground water table in 2014 which continue to be monitored.

The water disposal project manages produced water production at Sabria.  This formation water has high salinity (360 grams/litre) with traces of heavy metals.  Until 2015, disposal at Sabria was conducted by discharge into lined surface pits for natural evaporation of fluids. The low efficiency of natural evaporation together with the ongoing need to construct additional lined pits led to the introduction of automated fracturing evaporator technology in 2015 and which has enabled the acceleration of evaporation of produced water through an automated and a more efficient process.  At Sabria, 32,015 m³ of produced water was disposed of in 2024 (2023 - 37,581 m³) and at Chouech Es Saida 189,985 m³ of produced water was evaporated from lined surface pits in 2024 (2023 - 196,770 m³).  The Group is exploring alternative solutions for the environmentally responsible disposal of produced water.

A review of environmental management at the Sabria fields was conducted by First North African Consultancy for the Environment ("FNAC" www.fnac-environment.com), an engineering consultancy, in September 2020.  This was designed to review compliance at Sabria with Tunisian environmental regulations and analyse underground water and soil pollution in proximity to the water disposal project.  The scope of this work included: the recovery, analysis and assessment of environmental and technical documents and reports related to the evaporation ponds; the analysis of all previous waste pit treatment operations and related reports; analysis of existing red register (hazardous waste) and blue register (domestic waste); coring and sampling investigations of the potential impacted areas (soil and underground water) within the Sabria field; water sampling and laboratory analysis from existing piezometers and production water discharge; and the performance of an environmental monitoring program of the potential impacted areas within Sabria field.  The program was conducted in conjunction with representatives of ANPE and the environmental reports were submitted to ANPE.  Results from the assessment showed below threshold levels of potential pollutants set under Tunisian regulations and equivalency with both groundwater and soil control samples.  These demonstrated the efficacy of the water disposal project and the process of produced water storage in evaporation pits, with no evidence of leakage or overflow from the pits into the soil or groundwater.  Subsequent to this review, recommendations from the report have been, and continue to be, implemented.  The Group began air emissions monitoring at Sabria and Chouech in August 2015 and continues to do so. 

Waste management procedures have been implemented in all locations in Tunisia and monitor a comprehensive range of waste products including industrial waste (dry cell batteries, lead acid batteries, empty gas cylinders, oil filters, used oil, contaminated waste, used fluorescent lighting), resource waste (diesel consumption), hazardous waste (sewage, medical waste), domestic waste (food waste, plastic bottles, cooking oil, paper) and office waste (plastic bottles, paper, printer cartridges, batteries).  For example, 1,164 kg of paper and plastic bottles were recycled in the Tunis office in 2022, which decreased to 784 kg of paper and plastic bottles being recycled in 2023 and maintained at the same level 788 kg in 2024, as a result of training and greater awareness of wastage.  Electricity consumption at the Tunis office in 2024 was 92,904   kWh lower than 2023 (110,337 kWh).  At Sabria electricity consumption was 603,467 kWh (2023 - 601,259 kWh).  Chouech is not connected to the electricity grid and power at Chouech is provided by on site gas generators.  Fresh water consumption in 2024 at Sabria was 13,960 m³ (2023 - 15,820m³) and at Chouech, 21,716 m³ (2023 - 26,498 m³).  Diesel consumption across all operational locations was 143 m³ a 5 % decrease over 2024 (150m³) but remains a significant reduction from 2019 (305m³) reinforced by a combination of greater awareness of wastage, training, optimisation and more efficient transport management.

 

Social

Serinus seeks to ensure the health, safety, security and welfare of our employees and those with whom we work and to ensure that we have a workforce that is performing at its best and to contribute to the economic and social development of the countries in which we operate.  Serinus Energy Romania has been certified for ISO 45001:2018 (Occupational Health and Safety).

The safety, security and welfare of all of our colleagues is a key priority for the Group and governs the manner in which we aim to conduct our business.  Serinus has emergency response plans in place for all projects and assets. These plans are reviewed for relevance and updated by senior management annually.  The plans are communicated to the workforce and personnel receive training to ensure they are competent to carry out their emergency roles.  This is supplemented by periodic refresher training.  Drills and training exercises are routinely carried out.  Where relevant, the Group monitors the security situation at a local level and ensures that personnel are aware and appropriate measures are taken and updated as required.  In Tunisia the HSSE team ensures the effective implementation of the Emergency Preparedness and Response Procedures and maintains and updates the Security Emergency Response Plan on a regular basis.  In Romania, personnel at both the head office and on-site at the Moftinu gas plant receive monthly HSSE training for both local regulatory requirements and corporate policies.

We undertake a range of activities to continuously improve our HSE Management Plan to ensure that the Group's policy commitments are applied.  Routine monitoring is undertaken to assess and improve performance and periodic audits are conducted.  Our procedures are set out as corporate standards that define the Group expected practices within the whole organisation.  The standards have been shared across the organisation and employees and contractors are trained as required at country level.  In 2024, a total of 33 HSSE training drills and asset protection drills took place in Tunisia and 180 HSSE training sessions took place in Romania.  Regular HSSE audits are undertaken to review policies and procedures with 45 internal HSSE and regular inspections audits completed in Tunisia in 2024 (2023 - 24) and an annual audit was undertaken by Lloyds Register for ISO certifications in Romania.

The Emergency Response Plan is recirculated to the Serinus team involved, prior to the launch of any major works campaign.  These circulations are further supplemented by periodic refresher training, with drills and training exercises regularly carried out.  In Romania, there have been no accidents since commencing production in 2019.  There had been 2,078 days without accidents as at 31 December 2024.  In Tunisia, there were 3,313 days with no accidents as at 31 December 2024.  In 2024, there were no Lost Time Injuries recorded across both Tunisia and Romania operations, and we maintain a continuous focus on providing a safe working environment for our workforce.  Our goal is to maintain this high level of safety and efficiency.

Our Code and Policies commit us to providing a workplace free of discrimination where all employees can fulfil their potential based on merit and ability.  We value a diverse workforce and are committed to providing a fully inclusive workplace, which ensures we recruit and retain the highest calibre candidates while providing the right development opportunities to ensure existing staff have rewarding careers.  Both the Romanian and Tunisian business units are led and managed by Romanian and Tunisian nationals respectively, and we currently have no expatriates in either of the business units.  Our Romanian business is led by Ms. Alexandra Damascan and 17% of the staff in Romania are women, while in Tunisia 39% of the local head office are female.  We value a diverse and equal opportunities workforce, and we aim to recruit locally in all jurisdictions as we believe in the quality of our staff and the available pool of talent in each local market.

Serinus' Anti-Slavery and Human Trafficking Policy commits the Group to act ethically and with integrity in all our business dealings and relationships and to implement and enforce effective systems and controls to ensure modern slavery is not taking place anywhere in our own business or in any of our supply chains.  The Group is also committed to ensuring there is transparency in our own business and in our approach to tackling modern slavery throughout our supply chains, consistent with our disclosure obligations under the UK Modern Slavery Act 2015.  We expect the same high standards from all our contractors, suppliers and other business partners, and as part of our contracting processes, we include specific prohibitions against the use of forced, compulsory or trafficked labour, or anyone held in slavery or servitude, whether adults or children, and we expect that our suppliers will hold their own suppliers to the same high standards.  The prevention, detection and reporting of slavery in any part of our business or supply chains is the responsibility of all those working for the Group or under our control and they are encouraged to raise concerns about any issue or suspicion of slavery in accordance with our Whistleblowing policy.

Serinus Tunisia developed its Corporate Social Responsibility (CSR) program in conjunction with local communities and stakeholders to identify those areas which would make a significant impact to those groups, focussing on support for healthcare, education and culture in the local areas within which it operates.  It has managed a program since 2013 to undertake this, with support and contributions for providing medical equipment to hospitals, repairing classrooms and school facilities, providing books for school libraries, improving nurseries and sponsoring local cultural events.  Serinus Tunisia also participated in projects with local and regional authorities and other oil and gas companies operating in its areas, such as the Kébili CSR Consortium with which it has been involved with since 2015 and which promotes the regional development of the Governorate of Kébili, in collaboration with the regional authorities, the Ministry of Industry, Energy and Mines, ETAP and the oil and gas companies operating in the region (the "Kébili CSR Consortium").  Since 2015 the Kébili CSR Consortium has supported education programs, restored schools and providing facilities and infrastructure, health initiatives, purchasing medical equipment and renovations, and other social projects.  The CSR program for Kébili also includes a cultural component with a specific focus on encouraging women to preserve the local handicraft traditions amongst others by setting up and equipping a handicraft centre for women in Kébili.  This project has a training and development component and will ensure the economic empowerment of women.

Social tensions and political instability in Tunisia, particularly in the southern regions, over the past few years has impacted the ability to execute many of these initiatives and CSR programs, but these initiatives have been an important part of maintaining the Group's relationships with local stakeholders throughout this period and it is expected that with renewed stability it will become possible to resume such support in the coming years.

Governance

The Group recognises the importance of good corporate governance and is managed under the direction and supervision of the Board of Directors.  As required under the AIM Rules, we have adopted and comply with a recognised corporate governance code, being the Quoted Companies Alliance Corporate Governance Code (the "Code") and set out a summary of how we comply with it on pages 31 to 34 of the Annual Report.

Serinus currently operates in Romania and Tunisia.  Romania is allocated a mid-score on Transparency International's most recently published Corruption Perception Index ("CPI") and is ranked 65^th out of 180 countries in the 2024 CPI with a score of 46, while Tunisia is ranked 92^nd with a score of 39 on the same CPI.  Neither country is designated as high risk, Romania is within the European Union, and both have well-evolved legal systems in place, however the Group's policies, procedures and working practices need to remain fit for purpose and be regularly reviewed and updated as required.  The Group maintains internal control systems to guide and ensures that our ethical business standards for relationships with others are achieved.

Bribery is prohibited throughout the organisation, both by our employees and by those performing work on our behalf.  Our Anti-Bribery and Corruption ("ABC") programme is designed to prevent corruption and ensure systems are in place to detect, remediate and learn from any potential violations.  This includes due diligence on new vendors, annual training for all personnel, requisite compliance declarations from all associated persons, Gifts and Hospitality declaration and comprehensive 'whistleblowing' arrangements.

Risk Management Statement

The Group is subject to several potential risks and uncertainties, which could have a material impact on the long-term performance of the Group and could cause actual results to differ materially from expectation.  The management of risk is the responsibility of the Board of Directors, and the Group has developed a range of internal controls and procedures in order to manage the risks.  The following list outlines the Group's key risks and uncertainties and provides details as to how these are managed.

Political and Regulatory Risk

Operating in multiple jurisdictions poses a variety of political, regulatory and social environments, and risks, such as social unrest, political violence, corruption, expropriation, changes in the taxation environment and non-compliance with laws and regulations. Currently the Group is doing the following in order to mitigate this risk:

·      Actively monitors political developments and maintains relationships with government, authorities and industry bodies, as well as with other stakeholders.

·      Weekly reports assessing security, social unrest and political developments are provided to the Executive management team to allow for real time reaction to dynamic situations.

·      Manages compliance with laws, regulations, taxes and contractual obligations by employing the requisite skills or engaging consultants to supplement internal knowledge.

·      Internal policies and procedures, as well as monitoring of performance, help mitigate risks of non-compliance.

·      Actively involved with the regulatory bodies of both operating units to ensure commitments are agreed upon and concessions may be extended as required.

Operational and Development Risk

The nature of oil and gas operations brings risks such as equipment failure, well blow-outs, fire, pollution, performance of partners/contractors, delays in installing property, plant or equipment, unknown geological conditions and failure to achieve capital costs, operating costs, production or reserves.  Staff recruitment, development and retention is also key to managing operational risk.  Currently the Group is doing the following in order to mitigate this risk:

·      Has extensive monitoring and review of HSE and crisis management policies and procedures.

·      Follows strict tendering protocols, physical inspection of all contractor fabrication facilities and extensive financial due diligence of counterparties is designed to minimise contractor performance and counterparty credit risk.

·      Carries adequate levels of insurance.

·      Rigorous review processes when selecting vendors and contractors.  Once engaged as a contractor the Group monitors contractor performance to ensure contractor compliance with Group policies.

·      Rigorously monitors costs, actual to budget trends and adjusting forecasts on a frequent basis.

·      Employs geological and technical experts to review data and work programs and undertakes an annual reserves review.

·      Training and development opportunities are considered for all staff.

·      Executive directors and senior staff have notice periods of between six and twelve months to ensure sufficient time to transfer responsibilities in the event of departure.

·      Succession planning is considered regularly at board level.

·      The Remuneration Committee meets at least once a year and as additionally required to evaluate compensation and incentivisation plans to ensure they remain competitive.

Availability of financing

The risk that the Group will not be able to raise funds through debt or equity if required.  Currently the Group is doing the following in order to mitigate this risk:

·      Monitor the cash position by producing monthly cash projections to determine future cash flow requirements.

·      Maintain a public listing of its equity on the Alternative Investment Market of the London Stock Exchange in order to access capital, if required.

·      The Group is currently debt-free, with a low operating cost base and has continued to generate positive cashflows during 2024.

·      The Board considers the structure and differing capital costs of a variety of possible sources of funds as well as the timing and access to the various capital markets.

 

Financial Risk

The Group is subject to commodity price volatility, interest rates, foreign exchange rate volatility and credit risk of counterparties.  Currently the Group is doing the following in order to mitigate this risk:

·      Actively monitoring the business, preparing monthly forecasts with various sensitivities (commodity prices, interest rates, foreign exchange rates) to ensure the Group can sustain all macroeconomic changes.

·      Careful cost management to preserve financial flexibility in the event of economic or commodity price downturns.

·      The Group has restructured its balance sheet and is now debt-free to create greater financial flexibility.

·      Exposure to both oil and gas pricing diversifies commodity price risk.

·      The Group's financial risk policies are set out in Note 4 to the financial statements.

Environmental

Investor and lender sentiment may become adverse towards the oil and gas sector.  Longer term reduction in demand for oil and gas may result in lower oil and gas prices.  Currently the Group is doing the following in order to mitigate this risk:

·      The Group's production in Romania is 100% gas, providing exposure to a cleaner, transition fuel.

·      The Group's main source of production in Romania is a modern energy, emission efficient and highly automated gas plant limiting the environmental impact of the Group's production.

·      The Group has in place strict emissions and environmental monitoring.  Routine monitoring and third-party inspections for emissions, ground water contamination, solid waste management and soil protection are routinely performed in excess of all local government guidance.

·      The Group's strategy is to maintain a low operating cost base in order to maintain operational flexibility in the event of lower commodity prices.

 

 

Board of Directors and Management Team

Board of Directors

Łukasz Rędziniak

Chairman, Independent Director, Chair of Remuneration Committee, Member of the Environmental, Social, & Governance Committee

Appointed March 2016

Mr. Rędziniak is a graduate of the Faculty of Law and Administration of the Jagiellonian University.

Mr. Rędziniak is an Attorney and member of the District Bar Association in Warsaw.  Between 1990 and 1991 he worked as an Assistant at the Faculty of Law and Administration of the Jagiellonian University.  During the years 1991-1992 he was an in-house Lawyer at Consoft Consulting sp. z o.o.  From 1997 to 2000 he worked as an Attorney - individual practice closely co-operating with Dewey Ballantine sp. z o.o.  In the years 1993-2007 he worked in the law firm Dewey and LeBoeuf LLP and in 2001 he was appointed as a partner.  Then, in the years 2007-2009 he was Undersecretary of State in the Ministry of Justice of the Republic of Poland.  Since 2009 he was a Partner and Managing Partner at the Warsaw office at Studnicki, Płeszka, Ćwiąkalski, Górski sp. k.  In Between 2013 and 2022, he worked as a Member of the Management Board at Kulczyk Investments S.A.  He currently serves on the Management Board of Kulczyk Privatstiftung as well as Supervisory Board of Qemetica SA.

James Causgrove

Independent Director, Chair of the Reserves Committee, Member of the Audit Committee, Member of the Remuneration Committee, Member of the Environmental, Social, & Governance Committee

Appointed September 2017

Mr. Causgrove is an experienced Oil and Gas executive with over 40 years' experience. On March 31, 2019, Mr. Causgrove retired as COO of Harvest Operations Corporation and is now the President and principal consultant for Causgrove Energy West with a focus on energy opportunities in Western Canada. Mr. Causgrove offers both excellent technical engineering and business experience along with a strong track record in management and leadership in the oil and gas sector. Since 1979, working for first Chevron Corporation, then Pengrowth Energy Corporation, and finally Harvest Operations Corporation, Mr. Causgrove has gained experience and skills in virtually all facets of the oil and gas business; with a particular technical focus on drilling, production, operations, and midstream. Mr. Causgrove gained excellent field and technical experience with Chevron working in both the Canadian head office as well as many field offices and field sites. As well as his technical roles Mr. Causgrove spent time working in Joint Ventures, Human Resources, Strategic and Business Planning, and in the Midstream business. Mr. Causgrove gained valuable business insights as first a technical leader, then as a middle manager, and finally as an executive for Chevron, Pengrowth, and Harvest. In his roles as COO at Harvest and as Vice President at Pengrowth, Mr. Causgrove worked as part of the senior leadership team and worked closely with the Board of Directors.

Mr. Causgrove graduated with a Chemical Engineering degree from the University of Alberta and has earned his P. Eng designation in Alberta. Mr. Causgrove also holds the ICD.D designation from the Institute of Corporate Directors (ICD) in Canada.

Natalie Fortescue

Independent Director, Chair of the Environmental, Social, & Governance Committee, Interim Chair of the Audit Committee, Member of the Reserves Committee

Appointed March 2021

Ms. Fortescue is a chartered accountant and experienced capital markets professional with a background in corporate finance and investor relations. After a long investment banking career at Investec and as a corporate partner at Oriel Securities (now Stifel Europe), she joined Genel Energy plc to establish and lead an Investor Relations function. Following this, Ms. Fortescue spent six years at Premier Oil Plc in various corporate finance roles including capital markets transactions and debt refinancings.  Ms. Fortescue has spent over 20 years advising companies on corporate finance transactions, fundraising, strategy, debt refinancing and restructurings, investor relations and the impact of corporate transactions on stakeholders. Current directorships/partnerships: FUTH Consulting Limited, Clean Power Hydrogen plc, Trustee of GB Wheelchair Rugby.

Ms. Fortescue has an undergraduate degree in Accounting and Finance from Kingston University.

 

Jeffrey Auld

Chief Executive Officer, Executive Director

Appointed September 2016

Mr. Auld has been involved with the international oil and gas business for over 30 years.  In that time, he has managed companies and acted as an advisor to companies operating in the emerging markets oil and gas business. Mr. Auld has a depth of experience in corporate finance, mergers and acquisitions and strategic management.

Mr. Auld began his career in Canada and moved to the United Kingdom in 1995.  He was the Commercial Manager for New Ventures for Premier Oil plc.  Mr. Auld left Premier Oil and joined the Energy and Power team within the Mergers and Strategic Advisory group of Goldman, Sachs and Co.  When Mr. Auld left Goldman Sachs, he joined PetroKazakhstan, a NYSE listed Group with assets in Kazakhstan, as a Senior Vice-President.  After his time at PetroKazakhstan Mr. Auld became the Head of European Energy for Canaccord Genuity in London.  Prior to joining Serinus Mr. Auld was the Head of EMEA Oil and Gas at Macquarie Capital in London.

Mr. Auld has an undergraduate degree in Economics and Political Sciences from the University of Calgary and a Masters of Business Administration with Distinction from Imperial College, London.

 

 

 

 

Senior Management

Vladislav Ryabov

Chief Financial Officer, Serinus Energy plc

Mr. Ryabov joined Serinus Energy Plc in March 2023 as Group Financial Controller and was promoted to Chief Financial Officer in September 2023. Mr. Ryabov started his career in public practice with Deloitte CIS in 2001 where he qualified as an accountant and in November 2007 moved to Deloitte UK in London. Mr. Ryabov's experience is spanning a variety of sectors including over nine-year tenure in public practice with Deloitte and over twelve years in the natural resources sector for oil & gas exploration and production operations in emerging markets, followed by most recent finance director role in the Saudi investment Group, all contributing to his development into experienced finance professional.

Mr. Ryabov has a Masters Degree in Finance and Banking as well as Bachelor's Degree in Finance and Accounting from the Tashkent State University of Economics.

Stuart Morrison

Chief Operating Officer, Serinus Energy plc

Mr. Morrison has over 36 years of oil and gas industry operational experience in numerous senior management roles.  Early in his career he worked as a Petroleum and Reservoir Engineer with BP Research, British Gas, Sun Oil and Oryx Energy UK prior to joining Premier Oil in 1997.  At Premier, Mr. Morrison assumed a variety of technical and management positions such as Chief Petroleum Engineer, Business Development Manager and Exploration Manager in corporate roles and business units such as the Middle East and Falkland Islands.

Mr. Morrison has a Masters Degree in Petroleum Engineering and a Bachelor's Degree in Chemical Engineering, both from Heriot-Watt University (Edinburgh).

Calvin Brackman

Vice President, External Relations & Strategy

Mr. Brackman has more than 25 years' experience in the oil & gas industry, both in the public and private sector. He started his career working for the Department of Natural Resources of the Government of Canada, before moving to a senior position in the Minerals, Oil & Gas Division of the Government of the Northwest Territories.  In 2003, Mr. Brackman moved to London, UK, to join PetroKazakhstan Inc. as Director of Government Relations.  In this position he developed and implemented strategies to reduce the Group's surface risk.  Following the sale of PetroKazakhstan to CNPC in 2005, Mr. Brackman moved back to Canada and started a successful consulting practice, providing expert advice to various international companies and governments.  In December 2016, he joined Serinus in his current role, working with the Group's management team and business units to develop and implement the Group's exploration and development strategies and oversee government and stakeholder relations.

Mr. Brackman has a Masters Degree in Economics from the University of Waterloo and a Bachelor's Degree in Economics from the University of Calgary.

Alexandra Damascan

President, Serinus Energy Romania S.A.

Ms. Damascan has been with Serinus Energy Romania since 2008 and as a senior executive with expertise in all areas of the global oil and gas industry.  Ms. Damascan has been an integral piece to bringing the Romanian assets from the exploration phase to production in 2019.  Prior to joining Serinus, Ms. Damascan was a partner in a medium size Romanian Group which handled technical and legal translations and language interpretation for different journals and professional magazines.

Ms. Damascan graduated from the Oil and Gas Institute as a Petroleum Engineer.  Ms. Damascan also has a degree in Political Economics, an MBA in Business Transactions from the Academy of Economic Studies, a Law Degree and LLM in International Arbitration from the Romanian-American University and an MBA in Oil & Gas from the Oil and Gas Institute in Ploiesti, Romania. Ms. Damascan has also a Ph.D in  Mining, Oil and Gas, from the Oil and Gas Institute in Romania.

Haithem Ben Hassen

President, Serinus Energy Tunisia B.V.

Mr. Ben Hassen joined Serinus Energy Tunisia B.V. in November 2014 as a Senior Project Engineer and was then promoted to Project Manager in May 2015.  In January 2018, he was promoted to President of Serinus Energy Tunisia B.V.  He has been responsible for the completion of numerous capital projects undertaken by Serinus Energy Tunisia B.V.  He was also appointed to handle the technical aspect of the Moftinu Development Project in Romania.

Mr. Ben Hassen has over 20 years of experience in the oil and gas industry, as well as power plants and renewable energies.  He has a very well-rounded breadth of knowledge including; project management, engineering, construction, completions, handover and closeout and operating, contract review, business plan development and budgeting and forecasting.

Mr. Ben Hassen has a degree in Mechanical Engineering from the École Polytechnique of Montréal in Canada.

Corporate Governance Statement

Chairman's Introduction

The Group is managed under the direction and supervision of the Board of Directors.  Among other things, the Board sets the vision and strategy for the Group in order to effectively implement the business model which is the exploration and production of hydrocarbon resources from its current concessions in Romania and Tunisia.

Good corporate governance creates shareholder value by improving performance while reducing or mitigating risks that the Group faces as we seek to create sustainable growth over the medium to long-term.  It is the role as Chairman to lead the Board effectively and to oversee the adoption, delivery and communication of the Group's corporate governance model.  The Board has adopted the Quoted Companies Alliance Corporate Governance Code (the "Code").

The report that follows sets out in summary terms how we comply with the Code to be read in conjunction with the Statement of Compliance with QCA Corporate Governance Code available on our website at

https://serinusenergy.com/shareholder-information

As an issuer listed on the Warsaw Stock Exchange, Poland ("WSE"), the Group was subject to, and followed, the recommendations and rules contained within the "Code of Best Practice for WSE Listed Companies 2021".  These rules were adopted by the WSE Supervisory Board on 29 March 2021 (Resolution No. 13/1834/2021) and are accessible at:

https://www.gpw.pl/best-practice2021

https://www.gpw.pl/pub/GPW/files/PDF/dobre_praktyki/en/DPSN2021_EN.pdf

Principle 1: Establish a strategy and business model which promotes the long-term value for shareholders

·      The Group's strategy is defined in the "Serinus Strategy" section of this Annual Report.

·      The objective is to grow the hydrocarbon production of the Group through efficient allocation of shareholder capital to produce long-term return on investments for shareholders.

·      In order to capitalise on the available opportunities and to mitigate the key challenges facing the Group, the Group has assembled a high-quality Board of Directors, and set of advisers with relative experience in the upstream oil and gas environment.  The Group has been structured to give the Board the necessary oversight of all investment decisions of the Group.

·      The long-term commercial success of the Group, meaning the capability to generate positive net revenues on a sustainable basis, will depend on its ability to find, acquire, develop, and commercially produce oil and natural gas reserves.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Group is committed to listening and communicating openly with its shareholders to ensure that its strategy, business model, and performance are clearly understood.  Providing an open environment with investors and analysts allows us to build our relationships with these audiences, while providing the opportunity to further share our business model and allows us to drive our business forward.  The initiatives taken by the Group to keep investors and analysts informed are as follows:

·      Presenting quarterly results presentations online

·      Investor roadshows

·      Participating in online interviews

·      Attending investor conferences

·      Hosting capital markets days

·      Timely disclosure of material information

·      Regular reporting

The Directors understand the importance of building relationships with institutional shareholders and will make presentations when appropriate.  The Directors welcome all feedback and concerns from shareholders and will implement the appropriate action as required.  The Board is in active communication with the management team to ensure they are up to date on all recent corporate activities.

The Annual General Meeting ("AGM") is one forum for dialogue with shareholders and the Board.  The results of the AGM are subsequently published on the Group's website.

 

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term success

Key stakeholders are as follows:

·      Shareholders.

·      Employees.

·      Communities in which we operate (landowners, local authorities and local citizens).

Engaging with all stakeholders strengthens our relationships and allows for better business decisions to ensure the Group delivers on our commitments to all parties.

The Group also actively engages stakeholders near our operations as follows:

·      Regular meetings with local authorities and governments providing progress updates as required.

·      Town hall meetings are held with local citizens as required to discuss development plans.

·      We seek the input of the communities in identifying the funding needs of different community initiatives.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

·      The Group has a risk register that outlines the key financial and operational risks which has been circulated to all management and Board members.  A summary of these risks is included in the Risk Management Statement of this annual report.

·      The Audit Committee monitors the integrity of the financial statements.

·      The Audit Committee focuses particularly on compliance with legal requirements, accounting standards and the relevant rules for the listings the Group resides (AIM and Warsaw).

·      The Board acknowledges that the Group's international operations may give rise to possible claims of bribery and corruption.  The Board has adopted a zero-tolerance policy toward bribery and has reiterated its commitment to carry out business fairly, honestly, and openly.

·      The Group has also adopted a share dealing code, in conformity with the requirements of Rule 21 of the AIM Rules for Companies.

·      All material contracts are required to be reviewed and signed by a Director and reviewed by our external counsel.

Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

The Board comprises of a non-executive, independent Chairman, one Executive Director and two non-executive independent Directors.  The Board is satisfied that it has a well-diversified and balanced team with varying levels of expertise in different facets of the business.  This allows the Board to act effectively and efficiently in the best interests of the Group.

Directors' attendance at Board and Committee meetings during 2024 was as follows:

Director	Board	Audit Committee	Remuneration Committee	Environmental Social & Governance Committee	Reserves Committee
Total Meetings	7	4	6	2	5
Łukasz Rędziniak	6	1	6	2	1
Jeffrey Auld	6	4	1	2	5
James Causgrove	7	4	6	2	5
Natalie Fortescue	7	4	2	2	5
Jon Kempster[1]	3	2	4	-	-

 

 

Key Board activities this year included:

·      Continued an open dialogue with the investment community.

·      Discussed and evaluated strategic priorities and shareholder growth opportunities.

·      Discussed internal governance processes.

·      Reviewed the performance of the Group's advisers.

·      Reviewed the Group's risk profile.

·      Reviewed feedback from shareholders post quarterly and full year results.

The Group has effective procedures in place to monitor and deal with conflicts of interest.  Since the non-executive Directors perform their duties on a part-time basis, the Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests must be reported to and, where appropriate, agreed with the rest of the Board.  The executive director is full time with the Group.

The Group's Board has a broad range of relevant experience suitable for issues pertaining to the oversight of a publicly listed oil and gas Group.  These include financial, legal, capital markets and technical.  The Board of Directors and Management team section of this annual report contains the biographies and experience of each of the Directors and key management personnel.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

Members of the Board are listed in the Board of Directors section of this Annual Report which also details their experience, skills and personal qualities.  The Corporate Secretary of the Group during 2024 was Fairway Trust Limited.  The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including financial, legal, capital markets and technical skill sets.  As the Board is a strong believer in diversity, the Board has one female director, Natalie Fortescue, and the President of the Romanian operations is Alexandra Damascan.

All Directors receive regular and timely information on the Group's operational and financial performance.  Board members are provided with agendas and related materials in advance of all meetings.  The Group's management provides the Board with a Monthly Directors' Report that contains share price performance, key financial and operating indices, cash flow forecast, capital expenditures, budget variance reports and commentary on the opportunities and risks facing the Group.

New Directors have access to the entire management team and other Directors to further develop their understanding of the business operations and risks.  The Directors are encouraged to seek independent advice to ensure they are able to fulfil their duties at the expense of the Group.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Group is constantly assessing the individual contributions of all Board members to ensure each member:

·      Is actively contributing to the success of the Group.

·      Is fully committed.

·      Is maintaining their independence.

A process of formal Board and Committee evaluation was conducted during the last financial year by way of a comprehensive internal survey. The Board appreciates that an annual evaluation of the Board is crucial for effective governance and development of the Board's capabilities and effectiveness.

Periodically the non-Executive Directors discuss relevant succession planning with the CEO.  These discussions focus on key individual risk as well as broader succession issues.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Board believes that the promotion of a corporate culture based on sound ethical values and behaviours is essential to maximise shareholder value.  The Group maintains and annually reviews a handbook that includes clear guidance on what is expected of every employee.  Adherence to these standards is a key factor in the evaluation of performance within the Group.

 

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Board meets at least four times annually in accordance with its scheduled quarterly meeting calendar.  This may be supplemented by additional meetings if, and when required.  During the year ended 31 December 2024, the Board met for seven scheduled meetings.

The Board and the Committees are provided with the agenda and other appropriate material on a timely basis in order to prepare for each meeting.  Any Director may challenge Group proposals and after all relevant discussions, proposals are voted on.  Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors.  Any specific actions arising from such meetings are agreed by the Board or relevant committee and then followed up by the Group's management.

The Board is responsible for the long-term success of the Group.  There is a formal schedule of matters reserved for the Board.  It is responsible for overall group strategy, approval of major investments, approval of the annual and interim results, annual budgets, and Board structure.  It monitors the exposure to key business risks and reviews the annual budgets and their performance in relation to those budgets.  There is a clear division of responsibility at the head of the Group.

The Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction.  The CEO is responsible for proposing the strategic focus to the Board and implementing and overseeing the projects as they are approved by the Board.  The terms of reference for the Chairman and CEO are on the Group's website at https://serinusenergy.com/shareholder-information.

The Board is supported by the audit, remuneration, ESG and reserves committees:

·      The Audit Committee is responsible for the financial reporting and internal control principals of the Group, oversight of the CFO and the finance team and maintaining a relationship with the Group's auditors.

·      The Remuneration Committee is responsible for the consideration, development and implementation of policy on executive remuneration and fixing remuneration packages of individual directors, so that no director shall be involved in deciding his or her own remuneration.  The committee ensures remuneration is aligned to the implementation of the Group strategy and effective risk management, considering the views of shareholders, and is also assisted by executive pay consultants as and when required.

·      The ESG Committee ensures the Group maintains the highest standards in environmental, social, and governance.  The Committee is responsible for the composition of the Board of Directors and that the Board maintains proper levels of governance suitable to the size and activities of the Group.

·      The Reserves Committee is responsible for overseeing the evaluation of the Group's petroleum and natural gas reserves, requiring a "Competent Person" (as such term is defined in "Note for Mining and Oil & Gas Companies" issued by AIM) to prepare a report (the "Report") of an evaluation of the Group's petroleum and natural gas reserves, and periodically meeting with the Competent Person and management to discuss the Report's preparation and results.

Principle 10: Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Group communicates with shareholders through the Annual Report and Accounts, full-year and quarterly announcements and the AGM.  Corporate announcements, results and presentations are available on the Group's corporate website, www.serinusenergy.com.  The Board receives regular updates on the views of shareholders through briefings and reports from the CEO and the Group's brokers.  The Group communicates with institutional investors frequently through briefings with management.  In addition, analysts' notes, and brokers' briefings are reviewed to achieve a wide understanding of investors' views.

For the Group's shareholder meetings, any resolutions voted by shareholders that have a significant number of dissenting votes the Group will provide, on a timely basis, an explanation of what actions it intends to take to understand the reasons behind that vote result, and, where appropriate, any different action it has taken, or will take, as a result of the vote.

Remuneration Committee Report

This remuneration report has been prepared by the Remuneration Committee and approved by the Board.  This report sets out the details of the remuneration policy for the Directors and discloses the amounts paid during the year.

Membership

·      Łukasz Rędziniak - Chairman

·      James Causgrove

Responsibilities

The aim of the Remuneration Committee is to:

·      Attract, retain and motivate the executive management of the Group.

·      To offer the opportunity for employees to participate in share option schemes to incentivise employees to enhance shareholder value and to retain employees.

To achieve the above, the Committee considers the following categories of remuneration:

·      Annual salary and associated benefits.

·      Share option plan and long-term share-based incentive plan.

·      Performance based annual bonuses.

The terms of reference of the Remuneration Committee are set out below:

·      To determine and agree with the Board the overall remuneration policy of the Chairman of the Board, the executive directors and other members of the executive management as designated by the Board to consider.

·      Review the ongoing appropriateness and relevance of the remuneration policy.

·      Approve the design and targets for, any performance related pay schemes and approve the total annual payments made under such schemes.

·      Review the design of all share incentive plans for approval by the Board and determine whether awards will be made under the share incentive plans, including the number of awards to each individual and the performance targets to be used.

·      To review and approve any, and all, termination payments.

·      To review and monitor the remuneration trends across the Group and if required undertake a benchmarking exercise to compare against a peer group, obtaining reliable, up to date third party remuneration.

2024 Activity

The Committee met six times throughout the year (2023 - three times).  

 

 

Executive Directors' Remuneration

Compensation for the executive Directors is shown in US dollars[2] in the table below.

Director	Salaries	Benefits[3]	2024 Total	2023 Total
Jeffrey Auld	447,541	138,212	585,753	601,694

 

The 2024 compensation package above for the executive Director included salaries and benefits and are short-term in nature. 

 

Executive Directors' Share Capital

The following tables outline the share options outstanding and shares[4] owned as at 31 December 2024 for the executive Directors.  There have been no changes between 31 December 2024 and 14 March 2025.

Director	Share Options	LTIP Awards[5]	Shares
Jeffrey Auld	2,230,000	959,505	4,992,954

 

Stock Options

Director	Grant date	Strike Price	Share Options
Jeffrey Auld	22 Dec 2020	£0.02	1,880,000
Jeffrey Auld	27 May 2019	£0.02	100,000
Jeffrey Auld	03 Dec 2018	£0.02	250,000
			2,230,000

 

LTIP Awards

Director	Grant date	LTIP Awards
Jeffrey Auld	23 Oct 2024	959,505
		959,505

 

 

Non-executive Directors' Remuneration

Non-executive Directors receive a £30,000 annual fee, with each Chair receiving an additional £10,000 fee.  

 

Director	Fees[6]	Share Options	2024 Total	2023 Total
Łukasz Rędziniak	63,934	-	63,934	62,338
James Causgrove	51,148	-	51,148	49,870
Natalie Fortescue	57,541	-	57,541	49,870
Jon Kempster3	25,574	-	25,574	49,870
	198,197	-	198,197	211,948

 

 

Łukasz Rędziniak, Chairman of the Remuneration Committee

14 March 2025

Audit Committee Report

This report addresses the responsibilities, the membership and the activities of the Audit Committee in 2024 up to the approval of the 2024 Annual Report and 2024 year-end Financial Statements.

Membership

·      Natalie Fortescue - Interim Chairman

·      James Causgrove

Responsibilities

The main responsibilities of the Audit Committee are the following:

·      Monitor the integrity of the annual and interim financial statements.

·      Review the effectiveness of financial and related internal controls and associated risk management.

·      Manage the relationship with our external auditors including plans and findings, independence and assessment regarding reappointment.

2024 Activity

The Committee met four times throughout the year (2023 - four times).

The Committee, together with the CFO, is responsible for the relationship with the external auditor.  PKF Littlejohn LLP is the Group's auditor.

For the 2024 fiscal year-end, the Committee has reviewed the following significant financial reporting issues:

1.     Carrying value of E&E and PP&E Assets

2.     Decommissioning provisions

3.     Corporate Risk Register

4.     Going concern (see page 16 of this Annual Report or Note 2 of the Financial Statements)

5.     Cash flow forecasts

As part of its oversight responsibilities, the Committee reviewed the effectiveness and suitability of the external auditor, PKF Littlejohn LLP, considering the auditor's independence, objectivity, and performance. The Committee discussed key audit matters with the auditor, including significant accounting judgments, the application of critical accounting policies, and areas of audit focus such as impairment assessments, decommissioning provisions, and going concern assumptions. Additionally, the Committee considered the auditor's approach to addressing risks, their findings, and their recommendations for enhancing financial reporting processes. Based on these discussions and its overall assessment, the Committee remains satisfied with the auditor's performance and independence.

Internal Controls and Risk Management, Whistleblowing and Fraud

The Committee maintains a proactive approach to monitoring internal financial controls and risk management. During 2024, the Committee conducted a comprehensive review of internal controls within the financial reporting process, with particular emphasis on the recently implemented ERP system (Oracle NetSuite) and continued assessing the corporate risk register and whistleblowing arrangements.

 

Natalie Fortescue, Interim Chairman of the Audit Committee

14 March 2025

 

Report of the Directors

The Directors' present their report, together with the audited consolidated financial statements of Group for the year ended 31 December 2024. 

Principal Activities

The principal activity of the Group is oil and gas exploration and development.

Directors and Directors' Interests

Directors who held office during the year, their remuneration and interests held in the Group are detailed in the Remuneration Report.  Directors' biographies for those holding office at the end of the year are detailed in the Board and Management Team section of this annual report.

Substantial Shareholders

As of the date of issuing this report, management is aware of the following shareholders holding more than 3% of the ordinary shares of the Group, as reported by the shareholders to the Group:

Xtellus Capital Partners Inc	29.98%
Crux Asset Management	6.38%
Michael Hennigan	7.48%
Quercus TFI SA	6.07%
Jeffrey Auld	3.92%
Marlborough Fund Managers	3.15%
Spreadex LTD	3.20%

 

Results and Dividends

The results for the year are set out in the Consolidated Statement of Comprehensive Loss.  The results are further discussed in the CFO Report on pages 10 to 16 of this Annual Report.

The Directors do not recommend payment of a dividend in respect of these financial statements (2023 - $nil).

Statement of Directors Responsibilities in Respect of the Financial Statements

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Companies (Jersey) Law 1991 requires the directors to prepare financial statements for each financial year.  Under that law the directors have elected to prepare the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.  The directors have elected to prepare accounts under IFRS as adopted by the United Kingdom for all purposes except for the financial statements for the purposes of the Warsaw Stock Exchange filing which are prepared under European Union ("EU") endorsed IFRS.

Under Group law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and Group and of the profit or loss of the group for that period.  The directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

In preparing these financial statements, the directors are required to:

·       select suitable accounting policies and then apply them consistently

·       make judgements and accounting estimates that are reasonable and prudent

·       state whether they have been prepared in accordance with IFRSs as adopted by the United Kingdom, subject to any material departures disclosed and explained in the financial statements

·       prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business (note 2).

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the requirements of Companies (Jersey) Law 1991.  They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website.  Financial statements are published on the Group's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions.  The maintenance and integrity of the Group's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Statement of Disclosure to Auditors

As far as the Directors are aware, there is no relevant audit information of which the Group's auditor is unaware and each Director has taken all the steps that they ought to have undertaken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group's auditor is aware of that information.

Auditors

PKF Littlejohn LLP has indicated its willingness to continue in office, and a resolution that they are appointed will be proposed at the next annual general meeting.

On behalf of the Board

 

Jeffrey Auld, Chief Executive Officer

14 March 2025