Serinus Energy plc (LON:SENX, WSE:SEN) has announced the release of its interim results for the nine months ended 30th September 2020.
HIGHLIGHTS
Operational
· Serinus Energy plc, has continued to operate safely and effectively through the COVID-19 pandemic, with the successful implementation of operational and monitoring protocols in line with the recommendations of local jurisdictions to ensure the health and safety of our employees.
· For the nine months ended 30 September 2020, average production (boe/d) increased by 1,247 or 107% to 2,415 (2019 – 1,168), consisting of 1,841 (2019 – 814) in Romania and 574 (2019 – 354) in Tunisia, an increase of 1,027 or 126% and 220 or 62%, respectively.
· The production exit rate (boe/d) at 30 September 2020 was 2,211 consisting of 1,730 in Romania and 481 in Tunisia.
· The Company performed routine maintenance on the Moftinu Gas Plant in September, which was completed ahead of schedule, safely and on-budget, and production restarted with no issues.
· Due to the effects of the COVID-19 pandemic, the Company was unable to fulfil its existing work commitment to complete a 3D seismic acquisition programme by 28 October 2020. The Company worked closely with the Romanian National Agency for Mineral Resources (“NAMR”) to agree to a programme that would satisfy the Company’s commitment and could be completed given the restrictions imposed by the pandemic.
· Subsequent to the third quarter, the Company received approval from NAMR to amend the last outstanding work commitment for the third exploration phase of the Satu Mare Concession and was granted a 12-month concession licence extension until 27 October 2021.
· The amendment replaces the previous seismic commitment with a modified work commitment to drill two wells, one to be drilled to a depth of 1,000 metres and the second to be drilled to a depth of 1,600 metres.
· The Company has permitted and finalised plans to drill the M-1008 development well, which is anticipated to be spud in January 2021. M-1008 will qualify as one of the commitment wells under the licence extension and amended work commitment as announced on 13 October 2020.
· The Company filed a Request for Arbitration with the Secretariat of the International Court of Arbitration of the International Chamber of Commerce seeking a declaration affirming the Company’s rightful claim of ownership of Oilfield Exploration Business Solutions S.A.’s (“OEBS”) 40% participating interest (“40% Interest”) in the Satu Mare Concession and an order to formally compel OEBS to take all necessary steps to transfer the 40% Interest to the Company as a result of OEBS’ failure to carry out its obligations under the Joint Operating Agreement.
Financial
· For the nine months ended 30 September 2020 the Company generated $18.2 million (2019 – $15.5 million) in gross revenue or $16.9 million (2019 – $14.3 million) net of royalties. This consisted of $12.8 million (2019 – $9.8 million) in Romania and $5.4 million (2019 – $5.7 million) in Tunisia.
· For the nine months ended 30 September 2020 funds from operations amounted to $5.9 million (2019 – $5.6 million).
· For the nine months ended 30 September 2020 realised crude oil price per barrel (“bbl”) averaged $34.81 (2019 – $61.20) and realised natural gas price per thousand cubic feet (“mcf”) averaged $4.28 (2019 – $7.45).
· Capital expenditure for the nine months ended 30 September 2020 of $3.7 million (2019 – $3.0 million). This was largely related to the successful drilling of the M-1004 producing well in January 2020.
· The Company has continued to focus on cost management and has lowered the production expense per barrel for the nine months ended 30 September 2020 to $8.96 (2019 – $11.96). This cost reduction allows the Company to successfully manage the significant decline in commodity prices.
· The Company is currently in ongoing discussions with the European Bank of Reconstruction and Development (“EBRD”) with regards to the renegotiation of the current debt and has received a waiver from the EBRD, as announced on 2 November 2020, formally waiving compliance with the debt service coverage ratio for the period ending 31 December 2020 together with a waiver to complete the restructuring of the terms and conditions of the Convertible Loan which has been deferred until 26 February 2021.
Serinus Energy is an international upstream oil and gas exploration and production company that owns and operates projects in Tunisia and Romania.
