Interim Results for Six Months Ended 30 June 2023
14/08/2023 07:00
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RNS Number : 1423J Serinus Energy PLC 14 August 2023
14 August 2023
Press Release
Interim Results for the Six Months Ended 30 June 2023
Jersey, Channel Islands, 14 August 2023 -- Serinus Energy plc ("Serinus" or
the "Company") (AIM:SENX, WSE:SEN) is pleased to announce its interim results
for the six months ended 30 June 2023.
Financial
· Revenue for the six months ended 30 June 2023 was $8.9 million
(30 June 2022 - $29.3 million)
· Funds from operations for the six months ended 30 June 2023
were $0.4 million (30 June 2022 - $8.2 million)
· EBITDA for the six months ended 30 June 2023 was $0.5 million
(30 June 2022 - $8.7 million)
· Gross profit for the six months ended 30 June 2023 was $0.8
million (30 June 2022 - $8.0 million)
· The Company realised a net price of $74.93/boe for the six
months ended 30 June 2023 comprising:
o Realised oil price - $74.75/bbl
o Realised natural gas price - $12.56/Mcf
· The Group's operating netback decreased, in line with the
commodity prices, for the six months ended 30 June 2023 and was $31.18/boe (30
June 2022 - $113.38/boe), comprising:
o Romania operating netback - $12.53/boe (30 June 2022 - $171.01/boe)
o Tunisia operating netback - $36.47/boe (30 June 2022 - $63.49/boe)
· Capital expenditures of $5.0 million (30 June 2022 - $4.2
million), comprising:
o Romania - $0.5 million
o Tunisia - $4.5 million
· Working capital deficit was $4.2 million (31 December 2022 -
surplus of $0.1 million)
· Cash balance as at 30 June 2023 was $2.5 million (31 December
2023 - $4.9 million)
Operational
· The Sabria N-2 workover commenced on 02 May and was
successfully completed on 05 June 2023
· The Sabria N-2 well is currently flowing to surface and is
dewatering in line with behaviour the Company has observed in other wells on
the Sabria field
· Subject to the progress during the dewatering phase the
company is considering acidizing the N-2 well to enhance the flow performance
of the well
· The Company commenced the Sabria W-1 workover in the
period. The workover was intended to allow for the first installation of
artificial lift in the Sabria field. The workover was suspended when
obstructions in the well made progress more expensive than returning to the
well at a later date and side-tracking to the target
· The Company is currently working to design the optimal
parameters of the W-1 side-track
· Production in Chouech es Saida continues with no pump
downtime in the period
· Serinus has engaged the services of a geological and
geophysical consultancy firm with the aim of identifying the most suitable
location for two future wells in the Sabria field
· In May 2023, the Company performed a lifting of 50,344 bbls
of Tunisian crude oil at a price of $74.91/bbl
· The Company has scheduled the next lifting and expects to
perform this lifting in September 2023
· Production for the period averaged 677 boe/d, comprising:
o Romania - 144 boe/d
o Tunisia - 533 boe/d
About Serinus
Serinus is an international upstream oil and gas exploration and production
company that owns and operates projects in Tunisia and Romania.
For further information, please refer to the Serinus website
(www.serinusenergy.com) or contact the following:
Serinus Energy plc +44 204 541 7859
Jeffrey Auld, Chief Executive Officer
Calvin Brackman, Vice President, External Relations & Strategy
Shore Capital (Nominated Adviser & Broker) +44 207 408 4090
Toby Gibbs
Lucy Bowden
Camarco (Financial PR - London) +44 203 781 8334
Owen Roberts
TBT i Wspólnicy (Financial PR - Warsaw) +48 602 214 353
Katarzyna Terej
Forward Looking Statement Disclaimer
This release may contain forward-looking statements made as of the date of
this announcement with respect to future activities that either are not or may
not be historical facts. Although the Company believes that its expectations
reflected in the forward-looking statements are reasonable as of the date
hereof, any potential results suggested by such statements involve risk and
uncertainties and no assurance can be given that actual results will be
consistent with these forward-looking statements. Various factors that could
impair or prevent the Company from completing the expected activities on its
projects include that the Company's projects experience technical and
mechanical problems, there are changes in product prices, failure to obtain
regulatory approvals, the state of the national or international monetary, oil
and gas, financial , political and economic markets in the jurisdictions where
the Company operates and other risks not anticipated by the Company or
disclosed in the Company's published material. Since forward-looking
statements address future events and conditions, by their very nature, they
involve inherent risks and uncertainties, and actual results may vary
materially from those expressed in the forward-looking statement. The Company
undertakes no obligation to revise or update any forward-looking statements in
this announcement to reflect events or circumstances after the date of this
announcement, unless required by law.
Translation: This news release has been translated into Polish from the
English original.
Serinus Energy plc
Half Year Report and Accounts 2023
(US dollars)
Operational UPDATE and Outlook
Serinus Energy plc and its subsidiaries ("Serinus", the "Company" or the
"Group") is an oil and gas exploration, appraisal and development company.
The Group is the operator of all its assets and has operations in two business
units: Romania and Tunisia.
ROMANIA
The Group's Romanian operating subsidiary holds the licence to the Satu Mare
concession area, covering approximately 3,000 km(2) in the north-west of
Romania. The Moftinu Gas Development project began production in 2019. The
development project includes the Moftinu gas plant, and currently has four gas
production wells - Moftinu-1003, Moftinu-1004, Moftinu-1007 and
Moftinu-1008. During the six months ended 30 June 2023, the Company's
Romanian operations produced a total of 156 MMcf of gas, equating to an
average daily production of 144 boe/day.
The Canar-1 well has been converted into a water injection well and is
currently injecting our produced water volumes from the Moftinu wells into
Canar-1. The use of Canar-1 as a water injection well is delivering
significant cost savings in operating expenses due to the elimination of the
high costs of trucking produced water volumes for disposal off-site.
The Company completed the block wide geological review during the first six
months of 2023 which has combined the extensive technical information into a
block wide exploration model. This will refocus future exploration on
attractive, identified play systems including the potential appraisal of
existing discoveries and extrapolating productive trends onto the Satu Mare
block.
The Company has completed all of its commitments under the third exploration
phase of the Satu Mare Concession Agreement, and in October 2021, received an
additional two-year evaluation phase on the Satu Mare Concession until 27
October 2023. The Company is in routine conversations with the National
Agency for Mineral Resources ("NAMR") regarding the further extension of this
concession and will apply for a further period during 2023. The greater
Moftinu gas field area has been declared a commercial field and is exempt from
this routine licence extension procedure.
The Company announced on 15 February 2023 that the ICC had awarded a decision
in favour of Serinus, confirming that as a result of OEBS default under the
Joint Operating Agreement ("JOA") between OEBS and Serinus, OEBS' 40%
participating interest in the Satu Mare Concession in Romania will be
transferred to Serinus.
Tunisia
The Company currently holds two concession areas within Tunisia - Sabria and
Chouech Es Saida. These concession areas both contain discovered oil and gas
reserves and are currently producing. The largest asset is the Sabria field,
which is a large, conventional oilfield. The Company's independent reservoir
engineers have estimated to have approximately 445 million barrels of oil
equivalent originally in place. Of this oil in place only 1.6% has been
produced to date due to a low rate of development on the field. Serinus has
spent extensive time studying the best means of further developing this field
and considers this to be an excellent asset for remedial work to increase
production and, on completion of ongoing reservoir studies, to conduct further
development operations. The Company had applied to extend the Ech Chouech
licence prior to its expiry in June 2022 and the Company intends to continue
its application once the licence application process is formalised.
The workover to install a pump into the Sabria W-1 well commenced in December
2022 and initially progressed as expected, with two of three tubing strings
being successfully removed to a depth of 3,433 metres. However unexpected
conditions were subsequently encountered in the wellbore as a result of old
drilling mud and tubulars left in the well, previously unrecorded from
operations in 1998. This impeded progress with the removal of the final
1.5-inch coiled tubing below a depth of 2,889 metres. More than 85% of the
1.5-inch tubing was recovered, however an excess layer of old debris and
drilling mud prevented the removal of further 1.5-inch tubing. As a result,
the Company and its partner, ETAP, determined to suspend the workover pending
investigations of alternative means of completing the programme.
Throughout the workover programme, Sabria production remained constant and
uninterrupted.
In the meantime, the Company and its partner elected to proceed with
operations on the Sabria N-2 well to perform a workover to recomplete the
well. The workover operations on the Sabria N-2 well were completed in early
June 2023. The workover was completed on time and within budget despite 3.5
days non-productive time caused by high winds. This well was drilled in 1980
but was damaged during completion and, although in proximity to producing
wells, in particular the prolific WIN-12bis well, was not able to flow oil to
surface. The Sabria N-2 well is currently flowing to surface and is dewatering
in line with behaviour the Company has observed in other wells on the Sabria
field. Subject to the progress during the dewatering phase the company is
considering acidizing the N-2 well to enhance the flow performance of the
well. The Company's engineering analysis estimates that a successful workover
and recompletion will initially increase gross production from the Sabria
field by approximately 420 boe/d.
Financial Review
Liquidity, Debt and Capital Resources
During the six months ended 30 June 2023, the Company invested a total of $5.0
million (30 June 2022 - $4.2 million) on capital expenditures before working
capital adjustments. In Romania, the Group invested $0.5 million (30 June
2022 - $3.5 million) on Canar-1 water injection pump, solar powered radio
telecommunication system to the Moftinu gas plant, and further extension of
the Satu Mare Concession. In Tunisia, the Company invested $4.5 million (30
June 2022 - $0.7 million) of which $3.4 million was invested in workovers on
wells and $1.1 million was for capitalized inventory purchases.
The Company's funds from operations for the six months ended 30 June 2023 were
$0.4 million (30 June 2022 - $8.2 million). Including changes in non-cash
working capital, the cash flow generated from operating activities in 2023 was
$1.0 million (30 June 2022 - $3.4 million). The Company continues to be in a
strong position to expand and continue growing production within our existing
resource base. The Company is debt-free and has adequate resources available
to deploy capital into both operating segments to deliver growth and
shareholder returns.
($000) 30 June 31 December
Working Capital 2023 2022
Current assets 14,306 16,654
Current liabilities (18,522) (16,571)
Working Capital (deficit) (4,216) 83
Working capital deficit at 30 June 2023 was $4.2 million (31 December 2022 -
$0.1 million surplus). The decrease in working capital is primarily due to
lower commodity prices as well as an increase in accounts payable due to
ongoing well workover operations in Tunisia.
Current assets as at 30 June 2023 were $14.3 million (31 December 2022 - $16.7
million), a decrease of $2.4 million. Current assets consist of:
· Cash and cash equivalents of $2.5 million (31 December 2022 -
$4.9 million)
· Restricted cash of $1.1 million (31 December 2022 - $1.1 million)
· Trade and other receivables of $10.1 million (31 December 2022 -
$10.0 million)
· Product inventory of $0.6 million (31 December 2022 - $0.7
million)
Current liabilities as at 30 June 2023 were $18.5 million (31 December 2022 -
$16.6 million), an increase of $1.9 million. Current liabilities consist of:
· Accounts payable of $13.4 million (31 December 2022 - $9.3
million)
· Decommissioning provision of $4.9 million (31 December 2022 -
$5.1 million)
o Canada - $0.8 million (31 December 2022 - $0.8 million) which is offset by
restricted cash in the amount of $1.1 million (31 December 2022 - $1.1
million) in current assets
o Romania - $nil (31 December 2023 - $0.5 million)
o Tunisia - $4.1 million (31 December 2022 - $3.8 million)
· Income taxes payable of $nil (31 December 2022 - $1.9 million)
· Current portion of lease obligations of $0.2 million (31 December
2022 - $0.3 million)
Non-current assets
Property, plant and equipment ("PP&E") increased to $64.7 million (31
December 2022 - $62.3 million), primarily due to capital expenditures in
PP&E of $5.0 million offset by depletion in the period of $2.4 million as
well as a change in decommissioning estimates of $0.2 million which decreased
due to the higher discount rates applied to the calculation during the
period. Exploration and evaluation assets ("E&E") increased to $10.7
million (31 December 2022 - $10.5 million), due to change in decommissioning
estimates. Right-of-use assets decreased to $0.4 million (31 December 2022 -
$0.7 million) due to depreciation in the period.
Financial Review - six months ended 30 June 2023
Funds from Operations
The Group uses funds from operations as a key performance indicator to measure
the ability of the Group to generate cash from operations to fund future
exploration and development activities. The following table is a
reconciliation of funds from operations to cash flow from operating
activities:
Six months ended 30 June
($000) 2023 2022
Cash flow from operations 967 3,394
Changes in non-cash working capital (569) 4,782
Funds from operations 398 8,176
Funds from operations per share 0.00 0.07
Romania used funds in operations of $0.4 million (30 June 2022 - generated
$5.3 million) and Tunisia generated $3.4 million (30 June 2022 - $6.0
million). Funds used at the Corporate level were $2.6 million (30 June 2022
- $3.1 million) resulting in net funds from operations of $0.4 million (30
June 2022 - $8.2 million). Changes in non-cash working capital increased by
$5.4 million to $0.6 million (30 June 2022 - $4.8 million), due to an increase
in accounts receivable for oil sales on contract, as well as an increase in
prepaid expenditures, timing of payments, and is consistent with the prior
quarter.
Production
Six months ended 30 June 2023 Tunisia Romania Group %
Crude oil (bbl/d) 471 - 471 70%
Natural gas (Mcf/d) 373 862 1,235 30%
Condensate (bbl/d) - - - 0%
Total (boe/d) 533 144 677 100%
Six months ended 30 June 2022
Crude oil (bbl/d) 454 - 454 45%
Natural gas (Mcf/d) 398 2,894 3,292 54%
Condensate (bbl/d) - 3 3 1%
Total (boe/d) 521 485 1,006 100%
During the six months ended 30 June 2023 production volumes decreased 329
boe/d to 677 boe/d against the comparative period (30 June 2022 - 1,006
boe/d).
Romania's production volumes decreased by 341 boe/d to 144 boe/d against the
comparative period (30 June 2022 - 485 boe/d). Production continues to
reflect the natural decline profile of shallow gas fields.
Tunisia's production volumes increased by 12 boe/d to 533 boe/d against the
comparative period (30 June 2022 - 521 boe/d). Production increased during
the first half of 2023 as a result of the Company's programme of pump
installation and maintenance. The recently completed N-2 workover was
successful in removing the well bore restrictions and the well is flowing in
the de-watering phase. Ongoing workover programmes continue in the Chouech
Es Saida field, with the aim to optimize production.
Oil and Gas Revenue
($000)
Six months ended 30 June 2023 Tunisia Romania Group %
Oil revenue 6,162 - 6,162 77%
Natural gas revenue 703 2,012 2,715 23%
Condensate revenue - - - 0%
Total revenue 6,865 2,012 8,877 100%
Six months ended 30 June 2022 Tunisia Romania Group %
Oil revenue 9,043 - 9,043 31%
Natural gas revenue 927 19,248 20,175 68%
Condensate revenue - 43 43 1%
Total revenue 9,970 19,291 29,261 100%
Realised Price
Six months ended 30 June 2023 Tunisia Romania Group
Oil ($/bbl) 74.75 - 74.75
Natural gas ($/Mcf) 10.76 13.34 12.56
Condensate ($/bbl) - - -
Average realised price ($/boe) 73.56 80.01 74.93
Six months ended 30 June 2022
Oil ($/bbl) 101.63 - 101.63
Natural gas ($/Mcf) 12.86 36.67 33.80
Condensate ($/bbl) - 82.21 82.21
Average realised price ($/boe) 98.72 219.22 154.83
During the six months ended 30 June 2023 revenue decreased by $20.4 million to
$8.9 million (30 June 2022 - $29.3 million) as the Group saw the average
realised price decrease by $79.90/boe to $74.93/boe (30 June 2022 -
$154.83/boe) and production decline in Romania.
The Group's average realised oil price decreased by $26.88/bbl to $74.75/bbl
(30 June 2022 - $101.63/bbl), and average realised natural gas prices
decreased by $21.24/Mcf to $12.56/Mcf (30 June 2022 - $33.80/Mcf).
Under the terms of the Sabria Concession Agreement the Group is required to
sell 20% of its annual crude oil production from the Sabria concession into
the local market, which is sold at an approximate 10% discount to the price
obtained on its other crude sales. The remaining crude oil production was
sold to the international market.
Royalties
Six months ended 30 June
($000) 2023 2022
Tunisia 889 1,119
Romania 97 629
Total 986 1,748
Total ($/boe) 8.46 9.25
Tunisia oil royalty (% of oil revenue) 13.5% 11.2%
Romania gas royalty (% of gas revenue) 4.8% 3.3%
Total (% of revenue) 11.1% 6.0%
For the six months ended 30 June 2023 royalties decreased to $1.0 million (30
June 2022 - $1.7 million) and the Group's royalty rate increased to 11.1% (30
June 2022 - 6.0%).
In Romania, in the first half of 2023, the Company incurred a 3.5% royalty
rate for gas (first half of 2022 - 3.5%). The royalty is calculated using a
reference price that is set by the Romanian authorities and not the realised
price to the Company. The reference gas prices in the interim period remained
higher than the realised prices by 40%. Romanian royalty rates vary based on
the level of production during the quarter. Natural gas royalty rates range
from 3.5% to 13.0% and condensate royalty rates range from 3.5% to 13.5%.
In Tunisia, royalties vary based on individual concession agreements. Sabria
royalty rates vary depending on a calculation of cumulative revenues, net of
taxes, as compared to cumulative investment in the concession, known as the "R
factor". As the R factor increases, so does the royalty percentage to a
maximum rate of 15%. During the first quarter of 2023, the royalty rate
remained unchanged in Sabria at 10% for oil and 8% for gas. Chouech Es Saida
royalty rates are flat at 15% for both oil and gas.
Production Expenses
Six months ended 30 June
($000) 2023 2022
Tunisia 2,572 2,439
Romania 1,600 3,613
Canada 25 32
Group 4,197 6,085
Tunisia production expense ($/boe) 27.56 24.15
Romania production expense ($/boe) 63.62 41.06
Total production expense ($/boe) 35.43 32.20
During the six months ended 30 June 2023 production expenses decreased by $1.9
million to $4.2 million (30 June 2022 - $6.1 million), being an increase of
$3.23/boe to $35.43 (30 June 2022 - $ 32.20/boe).
Tunisia's production expenses increased by $0.1 million, to $2.5 million (30
June 2022 - $2.4 million), being an increase of $3.41/boe to $27.56/boe (30
June 2022 - $24.15/boe). The increase in production expenses against the
comparative period reflects that production expenses in the first half of 2022
were recorded in inventory as incurred, and subsequently recognized in the
statement of comprehensive income (loss) at the time of each lifting.
Following signing of a new oil marketing agreement with OMV in April 2022,
revenues and associated production expenses have since been recognized on a
monthly basis.
Romania's overall operating costs decreased by $2.0 million to $1.6 million
(30 June 2022 - $3.6 million), being an increase of $22.56/boe to $63.62/boe
(30 June 2022 - $41.06/boe). The decrease in production costs is a result of
lower production in Romania.
Canada production expenses relate to the Sturgeon Lake assets, which are not
producing and are incurring minimal operating costs to maintain the property.
Operating Netback
Serinus uses operating netback as a key performance indicator to assist
management in understanding Serinus' profitability relative to current market
conditions and as an analytical tool to benchmark changes in operational
performance against prior periods. Operating netback consists of petroleum
and natural gas revenues less direct costs consisting of royalties and
production expenses. Netback is not a standard measure under IFRS and
therefore may not be comparable to similar measures reported by other
entities.
($/boe)
Six months ended 30 June 2023 Tunisia Romania Group
Sales volume (boe/d) 516 139 655
Realised price 73.56 80.01 74.93
Royalties (9.53) (3.86) (8.32)
Production expense (27.56) (63.62) (35.43)
Operating netback 36.47 12.53 31.18
Six months ended 30 June 2022 Tunisia Romania Group
Sales volume (boe/d) 558 485 1,043
Realised price 98.72 219.22 154.83
Royalties (11.08) (7.15) (9.25)
Production expense (24.15) (41.06) (32.20)
Operating netback 63.49 171.01 113.38
For the six months ended 30 June 2023 the Group's operating netback was
$31.18/boe, a decrease of $82.20/boe against the comparative period (30 June
2022 - $113.38/boe). The decrease is due to lower realised prices, partially
offset by higher production expenses.
The Company also generated a gross profit of $0.8 million (30 June 2022 - $8.0
million), largely due to a significant decrease in the Company's netbacks.
Earnings Before Interest, Taxes, Depreciation and Amortization ("ebitda")
Serinus uses EBITDA as a key performance indicator to assist management in
understanding Serinus' cash profitability. EBITDA is computed as net
profit/loss and adding back interest, taxation, depreciation, depletion and
amortisation expense, as well as accretion on asset retirement obligations and
non-operating income and expenses. EBITDA is not a standard measure under
IFRS and therefore may not be comparable to similar measures reported by other
entities. For the six months ended 30 June 2023, the Group's EBITDA
decreased by $8.2 million to $0.5 million (30 June 2022 - $ 8.7 million).
Six months ended 30 June
($000s) 2023 2022
Net income (loss) (2,963) 1,827
Finance costs, including accretion 847 682
Depletion and amortization 2,352 3,704
Decommissioning provision recovery (23) (48)
Tax expense 289 2,522
EBITDA 502 8,687
Windfall Tax
Six months ended 30 June
($000) 2023 2022
Windfall tax 564 9,734
Windfall tax ($/Mcf - Romania gas) 3.61 18.55
Windfall tax ($/boe - Romania gas) 22.41 111.29
For the six months ended 30 June 2023 windfall taxes were $0.6 million (30
June 202 - $9.7 million).
In Romania, the Group is subject to a windfall tax on its natural gas
production which is applied to supplemental income once natural gas prices
exceed 47.53 RON/Mwh. This supplemental income is taxed at a rate of 60%
between 47.53 RON/Mwh and 85.00 RON/Mwh and at a rate of 80% above 85.00
RON/Mwh. Expenses deductible in the calculation of the windfall tax include
royalties and capital expenditures limited to 30% of the supplemental income
below the 85.00 RON/Mwh threshold.
During the last two months of the first quarter, sales were under a regulated
price with no windfall tax incurred during that time. Unregulated pricing and
windfall taxes will apply in the second quarter onwards.
Depletion and Depreciation
Six months ended 30 June
($000) 2023 2022
Tunisia 1,688 1,421
Romania 623 2,217
Corporate 41 66
Total 2,352 3,704
Tunisia ($/boe) 18.08 14.07
Romania ($/boe) 24.78 25.19
Total ($/boe) 19.86 19.60
For the six months ended 30 June 2023 depletion and depreciation expense was
$2.4 million (30 June 2022 - $3.7 million), primarily due to a lower
production during the period. Per boe, depletion and depreciation expense
increased by $0.26/boe to $19.86/boe (30 June 2022 - $19.60/boe), primarily
due to lower reserves in the current period.
General and Administrative ("G&A") Expense
Six months ended 30 June
($000) 2023 2022
G&A expense 2,670 2,963
G&A expense ($/boe) 22.54 15.68
For the six months ended 30 June 2023 G&A expenses were $2.7 million (30
June 2022 - $ 3.0 million). Per boe, G&A expense is higher at $22.54/boe
(30 June 2022 - $15.68/boe) due to increased personnel expenses and lower
sales volumes in the period.
Share-Based Payment
Six months ended 30 June
($000) 2023 2022
Share-based payment 3 44
Share-based payment ($/boe) 0.02 0.24
For the six months ended 30 June 2023 share-based compensation decreased to
$3,000 (30 June 2022 - $44,000) due to lower stock options granted in the
preceding 12 months.
Net Finance Expense
Six months ended 30 June
($000) 2023 2022
Interest on leases - 18
Accretion on decommissioning provision 785 451
Foreign exchange and other 17 213
802 682
During the six months ended 30 June 2023 net finance expenses increased by
$0.1 million to $0.8 million (30 June 2022 - $0.7 million).
Taxation
During the six months ended 30 June 2023 income tax expense was $0.3 million
(30 June 2022 - $2.5 million). The decrease in the tax expense is directly
related to lower taxable income in Tunisia during the period.
Share Data
As at the date of issuing this report, the following are the Directors stock
options outstanding, LTIP awards, and shares owned up to the date of this
report.
Share Options LTIP Awards Shares
Executive Directors:
Jeffrey Auld 2,580,000 1,656,355 448,875
Andrew Fairclough 1 (#_ftn1) 175,000 903,631 108,053
Non-Executive Directors:
Jim Causgrove 10,000 - 40,000
Lukasz Redziniak - - 72,000
Jon Kempster 2 (#_ftn2) - - 60,261
2,765,000 2,559,986 729,189
As of the date of issuing this report, management is aware of the following
shareholders holding more than 5% of the ordinary shares of the Group, as
reported by the shareholders to the Group: Inthallo 11.47%, CRUX Asset
Management 8.33%, and Quercus TFI SA 7.18%.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information on the Group's website. Legislation in
Jersey governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Foreign Currency Translation
Foreign currency translation occurs from the revaluation from fluctuations in
the foreign exchange rates in entities with a different functional currency
than the reporting currency (USD). The revaluation of the condensed
consolidated interim statement of financial position to the period-end rates
resulted in a loss of $0.2 million (30 June 2022 - loss of $2.0 million)
through Other comprehensive income (loss).
Going Concern
The Group's business activities, together with the factors likely to affect
its future development and performance are set out in the Operational Update
and Outlook. The financial position of the Group is described in these
condensed consolidated interim financial statements and in the Financial
Review.
The Directors have given careful consideration to the appropriateness of the
going concern assumption, including cashflow forecasts through the going
concern period and beyond, planned capital expenditure and the principal risks
and uncertainties faced by the Group. This assessment also considered
various downside scenarios including oil and gas commodity prices and
production rates. Following this review, the Directors are satisfied that
the Group has sufficient resources to operate and meet its commitments as they
come due in the normal course of business for at least 12 months from the date
of these condensed consolidated interim financial statements. Accordingly,
the Directors continue to adopt the going concern basis for the preparation of
these condensed consolidated interim financial statements.
Declarations of the Board of Directors Concerning Accounting Policies
The Board of Directors of the Company confirms that, to the best of their
knowledge, the condensed consolidated interim financial statements together
with comparative figures have been prepared in accordance with applicable
accounting standards and give a true and fair view of the state of affairs and
the financial result of the Group for the period ended 30 June 2023.
The Financial Review in this report gives a true and fair view of the
situation on the reporting date and of the developments during the period
ended 30 June 2023 and include a description of the major risks and
uncertainties.
Serinus Energy plc
Consolidated Statement of Comprehensive Loss
(US$ 000s, except per share amounts)
Six months ended 30 June
2023 2022
Revenue 8,877 29,261
Cost of sales
Royalties (986) (1,748)
Windfall tax (564) (9,734)
Production expenses (4,197) (6,085)
Depletion and depreciation (2,352) (3,704)
Total cost of sales (8,099) (21,271)
Gross profit 778 7,990
Administrative expenses (2,670) (2,963)
Share-based payment expense (3) (44)
Total administrative expenses (2,673) (3,007)
Decommissioning provision recovery 23 48
Operating income (loss) (1,872) 5,031
Finance expense (802) (682)
Net income (loss) before tax (2,674) 4,349
Tax expense (289) (2,522)
Income (loss) after taxation attributable to equity owners of the parent (2,963) 1,827
Other comprehensive loss
Other comprehensive loss to be classified to profit and loss in subsequent
periods:
Foreign currency translation adjustment (239) (1,956)
Total comprehensive loss for the year attributable to equity owners of the
parent
(3,202) (129)
Earnings (loss) per share:
Basic (0.03) 0.02
Diluted (0.03) 0.02
The accompanying notes on pages 15 to 16 form part of the condensed
consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Financial Position
(US$ 000s, except per share amounts)
As at 30 June 31 December
2023 2022
Non-current assets
Property, plant and equipment 64,729 62,311
Exploration and evaluation assets 10,680 10,529
Right-of-use assets 433 688
Total non-current assets 75,842 73,528
Current assets
Restricted cash 1,137 1,088
Trade and other receivables 10,063 10,007
Product inventory 626 705
Cash and cash equivalents 2,480 4,854
Total current assets 14,306 16,654
Total assets 90,148 90,182
Equity
Share capital 401,426 401,426
Share-based payment reserve 25,560 25,557
Treasury shares (467) (455)
Accumulated deficit (389,319) (386,356)
Cumulative translation reserve (3,611) (3,372)
Total equity 33,589 36,800
Liabilities
Non-current liabilities
Decommissioning provision 25,029 24,046
Deferred tax liability 11,225 10,942
Lease liabilities 425 465
Other provisions 1,358 1,358
Total non-current liabilities 38,037 36,811
Current liabilities
Current portion of decommissioning provision 4,883 5,085
Current portion of lease liabilities 209 280
Accounts payable and accrued liabilities 13,430 11,206
Total current liabilities 18,522 16,571
Total liabilities 56,559 53,382
Total liabilities and equity 90,148 90,182
The accompanying notes on pages 15 to 16 form part of the condensed
consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Changes in Shareholder's Equity
(US$ 000s, except per share amounts)
Share capital Share-based payment reserve Treasury Accumulated deficit Accumulated other comprehensive loss Total
Shares
Balance at 31 December 2021 401,426 25,487 (121) (387,986) (1,374) 37,432
Comprehensive income for the period - - - 1,827 - 1,827
Other comprehensive loss for the period - - - - (1,956) (1,956)
Total comprehensive (income) loss for the period - - - 1,827 (1,956) (129)
Transactions with equity owners
Share-based payment expense - 44 - - - 44
Shares purchased to be held in Treasury (202) - - (202)
Balance at 30 June 2022 401,426 25,531 (323) (386,159) (3,330) 37,145
Balance at 31 December 2022 401,426 25,557 (455) (386,356) (3,372) 36,800
Comprehensive loss for the period - - - (2,963) - (2,963)
Other comprehensive loss for the period - - - - (239) (239)
Total comprehensive loss for the period - - - (2,963) (239) (3,202)
Transactions with equity owners
Share-based payment expense - 3 - - - 3
Shares purchased to be held in Treasury - - (12) - - (12)
Balance at 30 June 2023 401,426 25,560 (467) (389,319) (3,611) 33,589
The accompanying notes on pages 15 to 16 form part of the condensed
consolidated interim financial statements
Serinus Energy plc
Condensed Consolidated Interim Statement of Cash Flows
(US$ 000s, except per share amounts)
Six months ended 30 June
2023 2022
Operating activities
Income (loss) for the year (2,963) 1,827
Items not involving cash:
Depletion and depreciation 2,352 3,704
Share-based payment expense 3 44
Tax expense 289 2,522
Accretion expense on decommissioning provision 785 451
Foreign exchange (gain) loss (20) 36
Decommissioning provision recovery (23) (48)
Other income (25) (3)
Income taxes paid - (357)
Funds from operations 398 8,176
Changes in non-cash working capital 569 (4,782)
Cashflows from operating activities 967 3,394
Financing activities
Lease payments (133) (213)
Shares purchased to be held in treasury (12) (202)
Cashflows used infinancing activities (145) (415)
Investing activities
Capital expenditures (3,054) (3,798)
Cashflows used in investing activities (3,054) (3,798)
Impact of foreign currency translation on cash (142) (383)
Change in cash and cash equivalents (2,374) (1,202)
Cash and cash equivalents, beginning of period 4,854 8,429
Cash and cash equivalents, end of period 2,480 7,227
The accompanying notes on pages 15 to 16 form part of the condensed
consolidated interim financial statements
Serinus Energy plc
Notes to the Condensed Consolidated Interim Financial Statements
(US$ 000s, except per share amounts, unless otherwise noted)
1. General information
Serinus Energy plc and its subsidiaries are principally engaged in the
exploration and development of oil and gas properties in Tunisia and Romania.
Serinus is incorporated under the Companies (Jersey) Law 1991. The Group's
head office and registered office is located at 2(nd) Floor, The Le Gallais
Building, 54 Bath Street, St. Helier, Jersey, JE1 1FW.
Serinus is a publicly listed company whose ordinary shares are traded under
the symbol "SENX" on AIM and "SEN" on the WSE.
2. Basis of presentation
The condensed consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS") and their
interpretations issued by the International Accounting Standards Board
("IASB") as adopted by the United Kingdom applied in accordance with the
provisions of the Companies (Jersey) Law 1991.
These condensed consolidated interim financial statements are expressed in
U.S. dollars unless otherwise indicated. All references to US$ are to U.S.
dollars. All financial information is rounded to the nearest thousands,
except per share amounts and when otherwise indicated.
Information about significant areas of estimation uncertainty and critical
judgements in applying accounting policies that have the most significant
effect on the amounts recognised in the condensed consolidated interim
financial statements are described in Note 5 to the consolidated financial
statements for the year ended 31 December 2022. There has been no change in
these areas during the six months ended 30 June 2023.
Going concern
The Group's business activities, together with the factors likely to affect
its future development and performance are set out in the Operational Update
and Outlook. The financial position of the Group is described in these
condensed consolidated interim financial statements and in the Financial
Review.
The Directors have given careful consideration to the appropriateness of the
going concern assumption, including cashflow forecasts through the going
concern period and beyond, planned capital expenditure and the principal risks
and uncertainties faced by the Group. This assessment also considered
various downside scenarios including oil and gas commodity prices and
production rates. Following this review, the Directors are satisfied that
the Group has sufficient resources to operate and meet its commitments as they
come due in the normal course of business for at least 12 months from the date
of these condensed consolidated interim financial statements. Accordingly,
the Directors continue to adopt the going concern basis for the preparation of
these condensed consolidated interim financial statements.
3. Significant accounting policies
The condensed consolidated interim financial statements have been prepared
following the same basis of measurement, accounting policies and methods of
computation as described in the notes to the consolidated financial statements
for the year ended 31 December 2022. There has been no change to the
accounting policies or the estimates and judgements which management are
required to make in the period. The business is not subject to seasonal
variations. Information in relation to the operating segments and material
primary statement movements can be found within the management discussion at
the front of this report.
4. Earnings (Loss) per share
Period ended 30 June
($000's, except per share amounts) 2023 2022
Income (loss) for the period (2,963) 1,827
Weighted average shares outstanding
Basic and diluted 114,686 114,728
Income (loss) per share
Basic and diluted (0.03) 0.02
In determining diluted net loss per share, the Group assumes that the proceeds
received from the exercise of "in-the-money" stock options are used to
repurchase ordinary shares at the average market price.
5. Supplemental cash flow disclosure
Period ended 30 June
2023 2022
Cash provided by (used in):
Trade and other receivables (54) (3,492)
Product inventory 314 (98)
Accounts payable and accrued liabilities 306 (1,190)
Restricted cash 3 (2)
Changes in non-cash working capital from operating activities 569 (4,782)
The following table reconciles capital expenditures to the cash flow
statement:
Period ended 30 June
2023 2022
PP&E additions 4,963 1,184
E&E additions - 3,055
Total capital additions 4,963 4,239
Changes in non-cash working capital from investing activities (1,909) (441)
Total capital expenditures 3,054 3,798
1 (#_ftnref1) Andrew Fairclough resigned as CFO and Director on 1 June 2023
2 (#_ftnref2) Shares held by Catherine Kempster (the spouse of Jon Kempster)
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