REG - Serinus Energy PLC - Interim Results for 3 months ended 31 March 2023
11/05/2023 07:00
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RNS Number : 0301Z Serinus Energy PLC 11 May 2023
11 May 2023
Press Release
Interim Results for the three months ended 31 March 2023
Jersey, Channel Islands, 11 May 2023 - Serinus Energy plc ("Serinus" or the
"Company") (AIM:SENX, WSE:SEN), is pleased to announce its interim results for
the three months ended 31 March 2023.
Financial
· Revenue for the three months ended 31 March 2023 was $4.9 million
(31 March 2022 - $13.4 million)
· Gross profit for the three months ended 31 March 2023 was $0.9
million (31 March 2022 - $2.9 million)
· EBITDA for the three months ended 31 March 2023 was $0.4 million
(31 March 2022 - $3.1 million)
· Net loss for the three months ended 31 March 2023 was $1.3
million (31 March 2022 - net income $1.0 million)
· The Company realised a net price of $78.87/boe for the three
months ended 31 March 2023 (31 March 2022 - $184.57/boe), comprising:
o Realised oil price - $80.07/bbl
o Realised natural gas price - $12.72/Mcf ($76.33/boe)
· The Group's operating netback decreased, in line with commodity
prices, for the three months ended 31 March 2023 and was $39.52/boe (31 March
2022 - $148.88/boe), comprising:
o Romania operating netback - $26.59/boe (31 March 2022 - $182.79/boe)
o Tunisia operating netback - $43.92/boe (31 March 2022 - $41.88/boe)
· Capital expenditures of $2.4 million for the three months ended
31 March 2023 (31 March 2022 - $1.5 million), comprising:
o Romania - $0.6 million
o Tunisia - $1.8 million
· Cash balance as at 31 March 2023 was $2.7 million (31 December
2022 - $4.9 million)
Operational
· In Tunisia, production has remained stable in the first three
months of 2023. The Company is expecting to perform a lifting in the latter
half of May 2023 of 50,344 bbls of Tunisian crude oil
· The CTF-004 rig has completed rig-up and commenced workover
operations on the Sabria N-2 well in Tunisia. The workover and recompletion
is expected to take approximately 30-40 days, as announced on 2 May 2023
· The workover of the Sabria W-1 well was suspended despite good
initial progress resulting in the successful removal of two of three tubing
strings to a depth of 3,433 metres. However unexpected conditions were
subsequently encountered in the wellbore as a result of old debris and
drilling mud left in the well from operations in 1998 which prevented the
further removal of the 1.5-inch tubing below 2,889 metres
· The Company has undertaken work to design a side track to
complete the Sabria W-1 pump installation. Long lead items and rig
availability are being determined
· The Company has engaged a local geological and geophysical
consultant to assist Serinus' technical team to identify locations for two new
wells in the Sabria field
· In Romania, the Company completed the block wide review during
the first quarter of 2023 which has combined the extensive technical
information into a block wide exploration model. This will refocus future
exploration on attractive, identified play systems including the potential
appraisal of existing discoveries and extrapolating productive trends onto the
Satu Mare block
· The International Chamber of Commerce ("ICC") awarded a decision
in favour of Serinus, confirming that the 40% participating interest of its
former partner on the Satu Mare Concession, Oilfield Exploration Business
Solutions S.A.'s ("OEBS"), will be transferred to Serinus
· Production for the period averaged 691 boe/d, comprising:
o Romania - 163 boe/d
o Tunisia - 528 boe/d
About Serinus
Serinus is an international upstream oil and gas exploration and production
company that owns and operates projects in Tunisia and Romania.
For further information, please refer to the Serinus website
(www.serinusenergy.com) or contact the following:
Serinus Energy plc +44 204 541 7859
Jeffrey Auld, Chief Executive Officer
Andrew Fairclough, Chief Financial Officer
Calvin Brackman, Vice President, External Relations & Strategy
Shore Capital (Nominated Adviser & Broker) +44 207 408 4090
Toby Gibbs
John More
Rachel Goldstein
Camarco (Financial PR - London) +44 203 781 8334
Owen Roberts
Charlotte Hollinshead
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
First Quarter Report and Accounts 2023
(us dollars)
Operational Update and outlook
Serinus Energy plc and its subsidiaries ("Serinus", the "Company" or the
"Group") is an oil and gas exploration, appraisal and development company.
The Group is the operator of all its assets and has operations in two business
units: Romania and Tunisia.
ROMANIA
The Group's Romanian operating subsidiary holds the licence to the Satu Mare
concession area, covering approximately 3,000 km(2) in the north-west of
Romania. The Moftinu Gas Development project began production in 2019. The
development project includes the Moftinu gas plant, and currently has four gas
production wells - Moftinu-1003, Moftinu-1004, Moftinu-1007 and
Moftinu-1008. During the three months ended 31 March 2023, the Company's
Romanian operations produced a total of 88 MMcf of gas, equating to an average
daily production of 163 boe/day.
The Canar-1 well has been converted into a water injection well and is
currently injecting our produced water volumes from the Moftinu wells into
Canar-1. The use of Canar-1 as a water injection well is delivering
significant cost savings in operating expenses due to the elimination of the
high costs of trucking produced water volumes for disposal off-site.
The Company completed the block wide geological review during the first
quarter of 2023 which has combined the extensive technical information into a
block wide exploration model. This will refocus future exploration on
attractive, identified play systems including the potential appraisal of
existing discoveries and extrapolating productive trends onto the Satu Mare
block.
The Company has completed all of its commitments under the third exploration
phase of the Satu Mare Concession Agreement, and in October 2021, received an
additional two-year evaluation phase on the Satu Mare Concession until 27
October 2023. The Company is in routine conversations with the National
Agency for Mineral Resources ("NAMR") regarding the further extension of this
concession and will apply for a further period during 2023. The greater
Moftinu gas field area has been declared a commercial field and is exempt from
this routine licence extension procedure.
The Company announced on 15 February 2023 that the ICC had awarded a decision
in favour of Serinus, confirming that as a result of OEBS default under the
Joint Operating Agreement ("JOA") between OEBS and Serinus, OEBS' 40%
participating interest in the Satu Mare Concession in Romania will be
transferred to Serinus.
Tunisia
The Company currently holds two concession areas within Tunisia - Sabria and
Chouech Es Saida. These concession areas both contain discovered oil and gas
reserves and are currently producing. The largest asset is the Sabria field,
which is a large, conventional oilfield. The Company's independent reservoir
engineers have estimated to have approximately 445 million barrels of oil
equivalent originally in place. Of this oil in place only 1.6% has been
produced to date due to a low rate of development on the field. Serinus has
spent extensive time studying the best means of further developing this field
and considers this to be an excellent asset for remedial work to increase
production and, on completion of ongoing reservoir studies, to conduct further
development operations. The Company had applied to extend the Ech Chouech
licence prior to its expiry in June 2022 and the Company intends to continue
its application once the licence application process is formalised.
The workover to install a pump into the Sabria W-1 well commenced in December
2022 and initially progressed as expected, with two of three tubing strings
being successfully removed to a depth of 3,433 metres. However unexpected
conditions were subsequently encountered in the wellbore as a result of old
drilling mud and tubulars left in the well from operations in 1998. This
impeded progress with the removal of the final 1.5-inch coiled tubing below a
depth of 2,889 metres. More than 85% of the 1.5-inch tubing was recovered,
however an excess layer of old debris and drilling mud prevented the removal
of further 1.5-inch tubing. As a result, the Company and its partner, ETAP,
determined to suspend the workover pending investigations of alternative means
of completing the programme.
Throughout the workover programme, Sabria production remained constant and
uninterrupted.
In the meantime, the Company and its partner have elected to proceed with
operations on the Sabria N-2 well to perform a workover to recomplete the
well. The CTF-004 rig has completed rig-up and commenced operations on the
N-2 well. The workover program is designed to recomplete the well and remove
any wellbore restrictions and is expected to take approximately 30-40 days.
This well was drilled in 1980 but was damaged during completion and, although
in proximity to producing wells, in particular the prolific WIN-12bis well,
was not able to flow oil to surface. The Company's engineering analysis
estimates that a successful workover and recompletion will initially increase
gross production from the Sabria field by approximately 420 boe/d. Upon
recompletion of the N-2 well, the rig will be released.
Financial Review
Liquidity, Debt and Capital Resources
During the three months ended 31 March 2023, the Company invested a total of
$2.4 million (2022 - $1.5 million) on capital expenditures before working
capital adjustments, out of which Romania incurred $0.6 million (2022 - $1.3
million) and Tunisia invested $1.8 million (2022 - $0.2 million) primarily on
Sabria W-1 operations.
The Company's funds used in operations for the three months ended 31 March
2023 were $0.8 million (2022 -funds from operations of $2.9 million).
Including changes in non-cash working capital, the cash flow from operating
activities in 2023 was $0.01 million (2022 - cash flow used in operating
activities of $0.6 million). The Company is debt-free and has adequate
resources available to deploy capital into both operating segments.
(US$ 000s) 31 March 31 December 2022
Working Capital
2023
Current assets 16,036 16,654
Current liabilities 16,893 16,571
Working Capital (857) 83
The working capital deficit at 31 March 2023 was $0.9 million (31 December
2022 - $0.1 million). The decrease in working capital is primarily a result
of continued investment into operating activities.
Current assets as at 31 March 2023 were $16.0 million (31 December 2022 -
$16.7 million), a decrease of $0.7 million. Current assets consist of:
· Cash and cash equivalents of $2.7 million (31 December 2022 -
$4.9 million)
· Restricted cash of $1.1 million (31 December 2022 - $1.1 million)
· Trade and other receivables of $11.4 million (31 December 2022 -
$10.0 million)
· Product inventory of $0.8 million (31 December 2022 - $0.7
million)
Current liabilities as at 31 March 2023 were $16.9 million (31 December 2022 -
$16.6 million), an increase of $0.3 million. Current liabilities consist of:
· Accounts payable of $12.0 million (31 December 2022 - $9.3
million)
· Decommissioning provision of $4.6 million (31 December 2022 -
$5.1 million)
o Canada - $0.8 million (31 December 2022 - $0.8 million) which is offset by
restricted cash in the amount of $1.1 million (31 December 2022 - $1.1
million) in current assets
o Romania - $nil (31 December 2022 - $0.5 million)
o Tunisia - $3.8 million (31 December 2022 - $3.8 million)
· Income taxes payable of $nil (31 December 2022 - $1.9 million)
· Current portion of lease obligations of $0.3 million (31 December
2022 - $0.3 million)
Non-current assets
Property, plant and equipment ("PP&E") increased to $63.2 million (31
December 2022 - $62.3 million), as a result of capital expenditures in
PP&E of $2.4 million partially offset by depletion in the period of $1.3
million as well as a change in decommissioning estimates of $0.2 million.
There were no additions or adjustments to exploration and evaluation assets
("E&E") in the period (31 December 2022 - $10.5 million). Right-of-use
assets ("ROU") decreased to $0.5 million (31 December 2022 - $0.7 million) due
to depreciation of assets.
Funds from Operations
The Group uses funds from operations as a key performance indicator to measure
the ability of the Group to generate cash from operations to fund future
exploration and development activities. The following table is a
reconciliation of funds from operations to cash flow from operating
activities:
Period ended 31 March
(US$ 000s) 2023 2022
Cash flows from (used in) operations 14 (587)
Changes in non-cash working capital (813) 3,534
Funds (used in) from operations (799) 2,947
Funds from operations per share (0.00) 0.00
Romania generated funds from operations of $0.1 million (2022 - $4.0 million)
and Tunisia generated $0.5 million (2022 - $0.4 million). Funds used at the
Corporate level were $1.4 million (2022 - $1.5 million) resulting in net funds
used in operations of $0.8 million (2022 funds from operations - $2.9
million).
Production
Period ended 31 March 2023 Tunisia Romania Group %
Crude oil (bbl/d) 468 - 468 68%
Natural gas (Mcf/d) 361 979 1,340 32%
Condensate (bbl/d) - - - 0%
Total production (boe/d) 528 163 691 100%
Period ended 31 March 2022 Tunisia Romania Group %
Crude oil (bbl/d) 441 - 441 39%
Natural gas (Mcf/d) 381 3,630 4,011 60%
Condensate (bbl/d) - 5 5 1%
Total production (boe/d) 505 610 1,115 100%
For the three months ended 31 March 2023 production volumes were 691 boe/d, a
decrease of 424 boe/d against the comparative period (31 March 2022 - 1,115
boe/d).
Romania's production volumes were 163 boe/d in the period (31 March 2022 - 610
boe/d). Production continues to decrease due to natural declines as well as
water breakthrough in some producing formations within some of the producing
wells.
Tunisia's production volumes increased to 528 boe/d against comparative period
(31 March 2022 - 505 boe/d).
Oil and Gas Revenue
(US$ 000s)
Period ended 31 March 2023 Tunisia Romania Group %
Oil revenue 3,360 - 3,360 69%
Natural gas revenue 305 1,210 1,515 31%
Condensate revenue - - - 0%
Total revenue 3,665 1,210 4,875 100%
Period ended 31 March 2022 Tunisia Romania Group %
Oil revenue 1,045 - 1,045 7%
Natural gas revenue 429 11,846 12,275 92%
Condensate revenue - 43 43 1%
Total revenue 1,474 11,889 13,363 100%
REALISED PRICE
Period ended 31 March 2023 Tunisia Romania Group
Oil ($/bbl) 80.07 - 80.07
Natural gas ($/Mcf) 9.39 13.97 12.72
Condensate ($/bbl) - - -
Average realised price ($/boe) 77.36 83.83 78.87
Period ended 31 March 2022 Tunisia Romania Group
Oil ($/bbl) 90.13 - 90.13
Natural gas ($/Mcf) 12.47 36.19 33.94
Condensate ($/bbl) - 82.21 82.21
Average realised price ($/boe) 85.06 215.86 184.57
For the three months ended 31 March 2023 revenue was $4.9 million, a decrease
of $8.5 million against the comparative period (31 March 2022 - $13.4 million)
as the Group saw the average realised price decrease by $105.70/boe to
$78.87/boe (31 March 2022 - $184.57/boe).
The Group's average realised oil price decreased by $10.06/bbl to $80.07/bbl
(31 March 2022 - $90.13/bbl), and average realised natural gas prices
decreased by $21.22/Mcf to $12.72/Mcf (31 March 2022 - $33.94/Mcf).
Under the terms of the Sabria concession agreement the Group is required to
sell 20% of its annual crude oil production from the Sabria concession into
the local market, which is sold at an approximate 10% discount to the price
obtained on its other crude sales. The remaining crude oil production was
sold to the international market.
Royalties
Period ended 31 March
(US$ 000s) 2023 2022
Tunisia 457 149
Romania 63 377
Total 520 526
Total ($/boe) 8.42 7.26
Tunisia oil royalty (% of oil revenue) 12.9% 10.1%
Romania gas royalty (% of gas revenue) 5.8% 3.2%
Total (% of revenue) 10.7% 3.9%
For the three months ended 31 March 2023 royalties remained consistent at $0.5
million and the Group's royalty rate increased to 10.7% (2022 - 3.9%).
In Romania, in the first quarter of 2023, the Company incurred a 3.5% royalty
rate for gas (2022 - 3.5%). The royalty is calculated using a reference
price that is set by the Romanian authorities and not the realised price to
the Company. The reference prices in the first quarter were higher than the
realised prices. Romanian royalty rates vary based on the level of production
during the quarter. Natural gas royalty rates range from 3.5% to 13.0% and
condensate royalty rates range from 3.5% to 13.5%.
In Tunisia, royalties vary based on individual concession agreements. Sabria
royalty rates vary depending on a calculation of cumulative revenues, net of
taxes, as compared to cumulative investment in the concession, known as the "R
factor". As the R factor increases, so does the royalty percentage to a
maximum rate of 15%. During the first quarter of 2023, the royalty rate
remained unchanged in Sabria at 10% for oil and 8% for gas. Chouech Es Saida
royalty rates are flat at 15% for both oil and gas.
Production Expenses
Period ended 31 March
(US$ 000s) 2023 2022
Tunisia 1,127 599
Romania 764 1,445
Canada 21 14
Group 1,912 2,058
Tunisia production expense ($/boe) 23.79 34.58
Romania production expense ($/boe) 52.88 26.23
Total production expense ($/boe) 30.93 28.43
For the three months ended 31 March 2023 production expenses were $1.9
million, a decrease of $0.1 million against the comparative period (31 March
2022 - $2.0 million). Per unit production expenses increased by $2.50/boe to
$30.93/boe (31 March 2022 - $28.43/boe).
Tunisia's production expenses were $1.1 million, an increase of $0.5 million
compared to the comparative period (31 March 2022 - $0.6 million), however
this equated to a decrease of $10.79/boe to $23.79/boe (2022 - $34.58/boe).
The increase in production expenses against the comparative period reflects
that production expenses in the first quarter of 2022 were recorded in
inventory as incurred, and subsequently recognized in the statement of
comprehensive income at the time of each lifting. Following signing of a new
oil marketing agreement with OMV in April 2022, revenues and associated
production expenses have since been recognized on a monthly basis.
Romania's production expense decreased by $0.6 million to $0.8 million against
the comparative period (31 March 2022 - $1.4 million), due to reduced water
handling costs, however there was an increase of $26.65/boe to $52.88/boe
(2022 - $26.23/boe) due to lower production volumes.
Canadian production expenses relate to the Sturgeon Lake assets, which are not
producing and are incurring minimal operating costs to maintain the property.
Operating Netback
Serinus uses operating netback as a key performance indicator to assist
management in understanding Serinus' profitability relative to current market
conditions and as an analytical tool to benchmark changes in operational
performance against prior periods. Operating netback consists of petroleum
and natural gas revenues less direct costs consisting of royalties and
production expenses. Netback is not a standard measure under IFRS and
therefore may not be comparable to similar measures reported by other
entities.
($/boe)
Period ended 31 March 2023 Tunisia Romania Group
Sales volume (boe/d) 526 160 687
Realised price 77.36 83.83 78.87
Royalties (9.65) (4.36) (8.42)
Production expense (23.79) (52.88) (30.93)
Operating netback 43.92 26.59 39.52
Period ended 31 March 2022 Tunisia Romania Group
Sales volume (boe/d) 192 612 804
Realised price 85.06 215.86 184.57
Royalties (8.60) (6.84) (7.26)
Production expense (34.58) (26.23) (28.43)
Operating netback 41.88 182.79 148.88
For the three months ended 31 March 2023 the Group's operating netback was
$39.52/boe, a decrease of $109.36/boe against the comparative period (31
March 2022 - $148.88/boe). The decrease is due to lower realised prices and
production volumes in Romania.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")
Serinus uses EBITDA as a key performance indicator to assist management in
understanding Serinus' cash profitability. EBITDA is computed as net
profit/loss and adding back interest, taxation, depletion & depreciation,
and amortisation expense. EBITDA is not a standard measure under IFRS and
therefore may not be comparable to similar measures reported by other
entities. For the three months ended 31 March 2023, the Group's EBITDA was
$0.4 million (31 March 2022 - $3.1 million). The decrease is mainly due to
lower netbacks in the current period.
Period ended 31 March
(US$ 000s) 2023 2022
Net income (loss) (1,269) 1,045
Interest expense - 13
Depletion and amortization 1,289 1,795
Decommissioning provision recovery (17) -
Tax expense 372 210
EBITDA 375 3,063
Windfall Tax
Period ended 31 March
(US$ 000s) 2023 2022
Windfall tax 286 6,035
Windfall tax ($/Mcf - Romania gas) 3.24 18.44
Windfall tax ($/boe - Romania gas) 19.79 110.63
For the three months ended 31 March 2023 windfall taxes were $0.3 million (31
March 2022 - $6.0 million).
During the last two months of the quarter, sales were under a regulated price
with no windfall tax incurred during that time. Unregulated pricing and
windfall taxes will apply in the second quarter onwards.
In Romania, the Group is subject to a windfall tax on its natural gas
production which is applied to supplemental income once natural gas prices
exceed 47.53 RON/Mwh. This supplemental income is taxed at a rate of 60%
between 47.53 RON/Mwh and 85.00 RON/Mwh and at a rate of 80% above 85.00
RON/Mwh. Expenses deductible in the calculation of the windfall tax include
royalties and capital expenditures limited to 30% of the supplemental income
below the 85.00 RON/Mwh threshold.
Depletion and Depreciation
Period ended 31 March
(US$ 000s) 2023 2022
Tunisia 864 322
Romania 394 1,435
Corporate 31 38
Total 1,289 1,795
Tunisia ($/boe) 18.25 18.58
Romania ($/boe) 27.27 26.06
Total ($/boe) 20.85 24.79
For the three months ended 31 March 2023 depletion and depreciation expense
were $1.3 million (31 March 2022 - $1.8 million), primarily due to lower
production during the period. Per boe, depletion and depreciation expense
decreased by $3.94/boe to $20.85/boe (2022 - $24.79/boe), primarily due to
lower reserves in the current period.
General and Administrative ("G&A") Expense
Period ended 31 March
(US$ 000s) 2023 2022
G&A expense 1,360 1,388
G&A expense ($/boe) 22.01 19.16
For the three months ended 31 March 2023 G&A expenses were $1.3 million
(31 March 2022 - $1.4 million). Per boe, G&A expense is slightly higher
at $22.01/boe (31 March 2022 - $19.16/boe) due to lower sales volumes in the
period.
Share-Based Payment
Period ended 31 March
(US$ 000s) 2023 2022
Share-based payment 1 26
Share-based payment ($/boe) 0.02 0.36
For the three months ended 31 March 2023 share-based compensation decreased to
$1,200 (31 March 2022 - $26,000).
Net Finance Expense
Period ended 31 March
(US$ 000s) 2023 2022
Interest on leases - 8
Accretion on decommissioning provision 387 190
Foreign exchange and other 34 107
421 305
For the three months ended 31 March 2023 net finance expenses increased by
$0.1 million to $0.4 million against the comparative period (31 March 2022 -
$0.3 million). This increase is mainly due to higher accretion on
decommissioning provision as a result of higher discount rates.
Taxation
For the three months ended 31 March 2023 tax expense was nil (31 March 2022 -
$0.2 million). The decrease in the tax expense is directly related to lower
taxable income in Tunisia during the period.
Share Data
As at the date of issuing this report, the following are the Directors stock
options outstanding, Long Term Incentive Program ("LTIP") awards, and shares
owned up to the date of this report.
Share Options LTIP Awards Shares
Executive Directors:
Jeffrey Auld 2,580,000 1,656,355 488,875
Andrew Fairclough 175,000 903,631 108,053
Non-Executive Directors:
Lukasz Redziniak - - 72,000
Jim Causgrove - - 40,000
Jon Kempster 1 (#_ftn1) - - 60,261
2,755,000 2,559,986 769,189
As of the date of issuing this report, management is aware of the following
shareholders holding more than 5% of the ordinary shares of the Group, as
reported by the shareholders to the Group: Richard Sneller 11.60%, CRUX Asset
Management 8.42%, and Quercus TFI SA 7.26%.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information on the Group's website. Legislation in
Jersey governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Foreign Currency Translation
Foreign currency translation occurs from the revaluation from fluctuations in
the foreign exchange rates in entities with a different functional currency
than the reporting currency (USD). The revaluation of the condensed
consolidated interim statement of financial position to the period-end rates
resulted in a loss of $0.2 million (2022 - loss of $0.4 million) through Other
comprehensive income (loss).
Going Concern
The Group's business activities, together with the factors likely to affect
its future development and performance are set out in the Operational Update
and Outlook. The financial position of the Group is described in these
condensed consolidated interim financial statements and in and in the
Financial Review.
The Directors have given careful consideration to the appropriateness of the
going concern assumption, including cashflow forecasts through the going
concern period and beyond, planned capital expenditure and the principal risks
and uncertainties faced by the Group. This assessment also considered
various downside scenarios including oil and gas commodity prices and
production rates. Following this review, the Directors are satisfied that
the Group has sufficient resources to operate and meet its commitments as they
come due in the normal course of business for at least 12 months from the date
of these condensed consolidated interim financial statements. Accordingly,
the Directors continue to adopt the going concern basis for the preparation of
these condensed consolidated interim financial statements.
Declarations of the Board of Directors Concerning Accounting Policies
The Board of Directors of the Company confirms that, to the best of their
knowledge, the condensed consolidated interim financial statements together
with comparative figures have been prepared in accordance with applicable
accounting standards and give a true and fair view of the state of affairs and
the financial result of the Group for the period ended 31 March 2023.
The Financial Review in this report gives a true and fair view of the
situation on the reporting date and of the developments during the period
ended 31 March 2023, and include a description of the major risks and
uncertainties.
Serinus Energy plc
Condensed Consolidated Interim Statement of Comprehensive Loss
(US$ 000s, except per share amounts)
Three months ended
31 March
Note 2023 2022
Revenue 4,875 13,363
Cost of sales
Royalties (520) (526)
Windfall tax (286) (6,035)
Production expenses (1,912) (2,058)
Depletion and depreciation (1,289) (1,795)
Total cost of sales (4,007) (10,414)
Gross profit 868 2,949
Administrative expenses (1,360) (1,388)
Share-based payment expense (1) (26)
Total administrative expenses (1,361) (1,414)
Decommissioning provision recovery 17 25
Operating income (loss) (476) 1,560
Finance expense (421) (305)
Net income (loss) before tax (897) 1,255
Taxation expense (372) (210)
Income (loss) after taxation attributable to equity owners of the parent (1,269) 1,045
Other comprehensive (loss) income
Other comprehensive (loss) income to be classified to profit and loss in
subsequent periods:
Foreign currency translation adjustment (211) (423)
Total comprehensive income (loss) for the period attributable to equity owners (1,480) 622
of the parent
Income (loss) per share:
Basic 4 (0.01) 0.01
Diluted 4 (0.01) 0.01
The accompanying notes form part of the condensed consolidated interim
financial statements.
Serinus Energy plc
Condensed Consolidated Interim Statement of Financial Position
(US$ 000s, except per share amounts)
As at 31 March 31 December 2022
2023
Non-current assets
Property, plant and equipment 63,154 62,311
Exploration and evaluation assets 10,572 10,529
Right-of-use assets 497 688
Total non-current assets 74,223 73,528
Current assets
Restricted cash 1,105 1,088
Trade and other receivables 11,413 10,007
Product inventory 798 705
Cash and cash equivalents 2,720 4,854
Total current assets 16,036 16,654
Total assets 90,259 90,182
Equity
Share capital 401,426 401,426
Share-based payment reserve 25,558 25,557
Treasury shares (467) (455)
Accumulated deficit (387,625) (386,356)
Cumulative translation reserve (3,583) (3,372)
Total Equity 35,309 36,800
Liabilities
Non-current liabilities
Decommissioning provision 24,935 24,046
Deferred tax liability 11,314 10,942
Lease liabilities 450 465
Other provisions 1,358 1,358
Total non-current liabilities 38,057 36,811
Current liabilities
Current portion of decommissioning provision 4,610 5,085
Current portion of lease liabilities 258 280
Accounts payable and accrued liabilities 12,025 11,206
Total current liabilities 16,893 16,571
Total liabilities 54,950 53,382
Total liabilities and equity 90,259 90,182
The accompanying notes form part of the condensed consolidated interim
financial statements.
These condensed consolidated interim financial statements were approved by the
Board of Directors and authorised for issue on 10 May 2023.
Serinus Energy plc
Condensed Consolidated Interim Statement of Changes in Equity
(US$ 000s, except per share amounts)
Share capital Share-based payment reserve Treasury Shares Accumulated deficit Accumulated other comprehensive loss Total
Balance at 31 December 2021 401,426 25,487 (121) (387,986) (1,374) 37,432
Comprehensive income for the period - - - 1,045 - 1,045
Other comprehensive loss for the period - - - - (423) (423)
Total comprehensive loss for the period - - - 1,045 (423) 622
Transactions with equity owners
Share-based payment expense - 26 - - - 26
Shares purchased to be held in Treasury (202) - - (202)
Balance at 31 March 2022 401,426 25,513 (323) (386,941) (1,797) 37,878
Balance at 31 December 2022 401,426 25,557 (455) (386,356) (3,372) 36,800
Comprehensive loss for the period - - - (1,269) - (1,269)
Other comprehensive loss for the period - - - - (211) (211)
Total comprehensive loss for the period - - (1,269) (211) (1,480)
Transactions with equity owners
Share-based payment expense - 1 - - - 1
Shares purchased to be held in Treasury - - (12) - - (12)
Balance at 31 March 2023 401,426 25,558 (467) (387,625) (3,583) 35,309
The accompanying notes form part of the condensed consolidated interim
financial statements.
Serinus Energy plc
Condensed Consolidated Interim Statement of Cash Flows
(US$ 000s, except per share amounts)
Three months ended
31 March
2023 2022
Operating activities
Income (loss) for the period (1,269) 1,045
Items not involving cash:
Depletion and depreciation 1,289 1,795
Accretion expense on decommissioning provision 387 190
Share-based payment expense 1 26
Decommissioning provision (recovery) expense (17) (25)
Unrealised foreign exchange gain - (10)
Other income (19) -
Taxation 372 210
Income taxes paid (1,543) (284)
Funds (used in) from operations (799) 2,947
Changes in non-cash working capital 5 813 (3,534)
Cashflows from (used in) operating activities 14 (587)
Financing activities
Lease payments (49) (69)
Shares purchased to be held in treasury (12) (202)
Cashflows used in financing activities (61) (271)
Investing activities
Capital expenditures 5 (2,084) (1,269)
Cashflows used in investing activities (2,084) (1,269)
Change in cash and cash equivalents (2,131) (2,127)
Cash and cash equivalents, beginning of period 4,854 8,429
Impact of foreign currency translation on cash (3) (147)
Cash and cash equivalents, end of period 2,720 6,155
The accompanying notes form part of the condensed consolidated interim
financial statements.
Serinus Energy plc
Notes to the Condensed Consolidated Interim Financial Statements
(US$ 000s, except per share amounts)
1. General information
Serinus Energy plc and its subsidiaries are principally engaged in the
exploration and development of oil and gas properties in Tunisia and
Romania. Serinus is incorporated under the Companies (Jersey) Law 1991.
The Group's head office and registered office is located at 2(nd) Floor, The
Le Gallais Building, 54 Bath Street, St. Helier, Jersey, JE1 1FW.
Serinus is a publicly listed company whose ordinary shares are traded under
the symbol "SENX" on AIM and "SEN" on the WSE.
2. Basis of presentation
The condensed consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS") and their
interpretations issued by the International Accounting Standards Board
("IASB") as adopted by the United Kingdom applied in accordance with the
provisions of the Companies (Jersey) Law 1991. The directors have elected to
prepare accounts under IFRS as adopted by the United Kingdom for all purposes
except for the financial statements for the purposes of the Warsaw Stock
Exchange filing which are prepared under European Union ("EU") endorsed
IFRS. No material differences have been noted between EU IFRS and UK IFRS
for the period ended 31 March 2023.
These condensed consolidated interim financial statements are expressed in
U.S. dollars unless otherwise indicated. All references to US$ are to U.S.
dollars. All financial information is rounded to the nearest thousands,
except per share amounts and when otherwise indicated.
Information about significant areas of estimation uncertainty and critical
judgements in applying accounting policies that have the most significant
effect on the amounts recognised in the condensed consolidated interim
financial statements are described in Note 5 to the consolidated financial
statements for the year ended 31 December 2022. There has been no change in
these areas during the three months ended 31 March 2023.
Going concern
The Group's business activities, together with the factors likely to affect
its future development and performance are set out in the Operational Update
and Outlook. The financial position of the Group is described in these
condensed consolidated interim financial statements and in and in the
Financial Review.
The Directors have given careful consideration to the appropriateness of the
going concern assumption, including cashflow forecasts through the going
concern period and beyond, planned capital expenditure and the principal risks
and uncertainties faced by the Group. This assessment also considered
various downside scenarios including oil and gas commodity prices and
production rates. Following this review, the Directors are satisfied that
the Group has sufficient resources to operate and meet its commitments as they
come due in the normal course of business for at least 12 months from the date
of these condensed consolidated interim financial statements. Accordingly,
the Directors continue to adopt the going concern basis for the preparation of
these condensed consolidated interim financial statements.
3. Significant accounting policies
The condensed consolidated interim financial statements have been prepared
following the same basis of measurement, accounting policies and methods of
computation as described in the notes to the consolidated financial statements
for the year ended 31 December 2022.
4. Earnings (Loss) per share
Period ended 31 March
(US$ 000s, except per share amounts) 2023 2022
Income (loss) for the period (1,269) 1,045
Weighted average shares outstanding:
Basic and diluted shares (000s) 114,686 114,752
Income (loss) per share:
Basic and dilutive (0.01) 0.01
In determining diluted net loss per share, the Group assumes that the proceeds
received from the exercise of "in-the-money" stock options are used to
repurchase ordinary shares at the average market price.
5. Supplemental Cash Flow Disclosure
Period ended 31 March
2023 2022
Cash provided by (used in):
Trade and other receivables (1,402) (1,428)
Product inventory 127 (841)
Accounts payable and accrued liabilities 2,082 (1,265)
Restricted cash 7 -
Changes in non-cash working capital from operating activities 813 (3,534)
The following table reconciles capital expenditures to the cash flow
statement:
Period ended 31 March
2023 2022
PP&E additions 2,373 884
E&E additions - 628
ROU additions - 220
Total capital additions 2,373 1,732
Changes in non-cash working capital from investing activities (289) (463)
Total capital expenditure 2,084 1,269
1 (#_ftnref1) Shares held by Catherine Kempster (the spouse of Jon Kempster)
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