Q1 2018 Financial and Operating Results
11 Maio 2018 - 6:10PM
Serinus Energy plc (“
Serinus”,
“
SEN” or the “
Company”), is
pleased to report its financial and operating results for the three
months ended March 31, 2018.
Q1 2018 Highlights
- Production in Q1 2018 was 380 boe/d
compared to 690 boe/d in Q1 2017. The decrease of 45% from Q1 2017
was primarily due to the shut-in of the Chouech Es Saida field
since February 28, 2017 and lower production from the Win-12bis
well in Sabria, after being shut-in from May 22 until early
September 2017, stemming from the social unrest in the southern
part of the country. Oil weighting was 73% in Q1 2018 compared to
75% in Q1 2017.
- During Q1 2018, Brent prices
averaged $66.80 per bbl, as compared to $53.68 per bbl in Q1 2017,
an increase of 24%, reflecting the continued climb of oil prices
since August 2017 when Brent averaged $51.70 per bbl. The Company’s
realized oil price averaged $66.00 per bbl in Q1 2018, compared to
$50.89 per bbl in Q1 2017, an increase of 30%.
- Funds from operations for the three
months ended March 31, 2018 was $2.5 million as compared to $0.2
million for the three months ended March 31, 2017, an increase of
$2.3 million. The additional funds from operations in the current
period in 2018 was primarily attributable to a $2.6 million
insurance recovery attributable to the well incident in December
2017. This increase was partially offset by $0.4 million of
transaction costs incurred during the quarter related to the
Company’s continuance to Jersey and AIM listing transaction.
- The net earnings for the three-month period ended March 31,
2018 was $1.0 million, compared to a net loss of $2.1 million in Q1
2017.
- The well incident costs of $4.0
million associated with the emergency operations in December 2017
on the Moftinu 1001 well were fully recognized in 2017.
During the first quarter of 2018, the Company submitted its first
interim insurance coverage claim related to the Moftinu 1001 well
incident and recognized $2.6 million in the statement of operations
in Q1, 2018. The Company received insurance proceeds of $1.9
million in Q1 2018, with the remaining $0.7 million reported as an
insurance receivable on the balance sheet. Subsequent to
March 31, 2018, the Company received the $0.7 million related to
its first interim insurance claim and a second interim claim is in
progress. The well incident has resulted in delays to the
construction of the gas facility, which is located on the wellsite
of the Moftinu 1001 well. First production is expected to commence
late Q2, 2018. The Company has also constructed the platform
and access roads and has secured a drilling rig and well services
for the immediate drilling of the replacement well, Moftinu 1007,
located approximately 300 metres from the Moftinu 1001 well
site. This well is expected to spud late May. The redrill
portion will form the final part of the Company’s insurance
claim.
- On March 7, 2018, the Company’s
shareholders voted in favour of the continuance to Jersey. On May
3, 2018, the Company continued to Jersey, Channel Islands. In
connection with the Continuance, the company changed its name from
Serinus Energy Inc. to Serinus Energy plc and adopted new charter
documents. The Company is proceeding with the process to list
on AIM market of the London Stock Exchange with completion planned
for mid-May 2018.
Summary Financial Results (US$
000’s unless otherwise noted)
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Three Months Ended March 31 |
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2018 |
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2017 |
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Change |
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Net Oil and
Gas Revenue (net of royalties) |
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1,998 |
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2,642 |
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(24 |
%) |
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Net Income
(Loss) |
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1,002 |
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(2,099 |
) |
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148 |
% |
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per share, basic and diluted |
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0.01 |
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(0.02 |
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Funds from
Operations |
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2,505 |
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166 |
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1409 |
% |
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per share, basic and diluted |
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0.02 |
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0.00 |
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Capital
Expenditures |
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2,148 |
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858 |
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150 |
% |
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Average
Production (net to Serinus from operations) |
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Oil |
(Bbl/d) |
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276 |
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519 |
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(47 |
%) |
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Gas
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(Mcf/d) |
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626 |
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1,025 |
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(39 |
%) |
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BOE |
(boe/d) |
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380 |
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690 |
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(45 |
%) |
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Average
Sales Price (from continuing operations) |
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Oil |
($/Bbl) |
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$ |
66.00 |
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$ |
50.89 |
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30 |
% |
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Gas
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($Mcf) |
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$ |
10.17 |
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$ |
5.85 |
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74 |
% |
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BOE |
($/boe) |
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$ |
64.63 |
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$ |
46.98 |
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38 |
% |
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March 31 |
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December 31 |
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2018 |
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2017 |
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Cash &
Equivalents |
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3,470 |
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7,252 |
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Working
Capital |
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(8,629 |
) |
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(6,567 |
) |
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Long Term
Debt |
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(28,113 |
) |
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(31,261 |
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Shares
Outstanding |
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150,652,138 |
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150,652,138 |
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Average for Period |
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150,652,138 |
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150,652,138 |
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General & Financial
Highlights
- Revenue, net of royalties, for
three-month period ended March 31, 2018 decreased to $2.0 million,
compared to $2.6 million in Q1 2017, due to lower production.
- Total royalties paid decreased from
$0.3 million in Q1 2017 to $0.2 million in Q1 2018.
Much of this decrease was due to lower production offset by higher
average commodity prices.
Operational Highlights
- Production volumes decreased by 45%
in the first quarter of 2018 to 380 boe/d compared to 690 boe/d in
the first quarter of 2017. The decrease in production in Q1 2018
was attributable to the shut-in of the Chouech Es Saida field since
February 28, 2017 and lower volumes from the WIN-12bis well in
Sabria arising from the prolonged shut-in of the Sabria field from
May to September 2017. The production volumes at Chouech Es Saida
in the prior period were additionally impacted by lower production
due to the CS-3 and CS-1 wells which went down in the middle of
December 2016 and remained off-line in the first quarter of 2017
pending pump replacement and workovers.
- In Romania, the Company incurred
capital expenditures of $2.1 million for the three months ended
March 31, 2018. The expenditures consisted of the construction of
the Moftinu gas facilities in the period of $1.6 million and costs
associated with the Bucharest office of $0.6 million.
Outlook
The Company is focusing on Romania as the
impetus for growth over the next several years. The Moftinu gas
development project is a near-term project that is expected to
begin producing from the gas discovery well Moftinu-1000 and the
Moftinu 1007 well which is scheduled for to be drilled, completed
and ready for production by late Q2, 2018. Construction of the gas
processing facility with 15 Mmcf/d of operational capacity is in
its final phase with expected first gas production late Q2
2018.
The Company is also progressing the drilling
program to meet work commitments for the extension to October 2019
and plans to drill two additional development wells, Moftinu-1003
and Moftinu-1004 during the latter half of 2018. The European
Bank for Reconstruction and Development is the loss payee under the
relevant insurance policy and if it insists on allocating all
insurance proceeds relating to the replacement well, Moftinu-1007,
toward repaying the Company’s indebtedness to the EBRD, the Company
will delay the drilling of the Moftinu 1004 well until early 2019.
Combined with the production of the Moftinu 1000 and Moftinu 1007
wells, the Corporation expects the gas plant to be operating at
full capacity by early 2019.
In Tunisia, the Company is currently focusing on
improving production from Sabria following the shut-in and plans to
focus on carrying out low cost incremental work programs to
increase production from existing wells, including the Sabria N-2
re-entry and installing artificial lift on another Sabria well,
having determined that production at its oil field can be restarted
in a safe and secure environment with sufficient comfort that there
will be no further production disruptions for the foreseeable
future. The Corporation views Sabria as a large development
opportunity longer term.
For the Chouech Es Saida field, the Company is
evaluating the restart of the field including timing and costs to
replace the electric submersible pump for the CS-3 well. The
Company views the level of activity pursued in Tunisia as dependent
on the following thresholds being achieved and maintained. In terms
of oil prices, incremental vertical wells become economic at Brent
oil prices of ~$45 per bbl, with potential multi-leg horizontal
wells lowering the threshold to below $30 per bbl in Sabria. The
current capacity of surface facilities would only allow for 1 to 3
incremental wells for each of Sabria and Chouech Es Saida/Ech
Chouech. As well for Chouech Es Saida/Ech Chouech, the STEG El
Borma gas plant is nearly at its effective capacity. Further gas
developments from this concession may have to be delayed until the
completion of the Nawara Pipeline for material gas pipeline
capacity to come online.
Supporting Documents
The full Management Discussion and Analysis
(“MD&A”) and Financial Statements have been
filed in English on www.sedar.com and in Polish and English via the
ESPI system, and will also be available on
www.serinusenergy.com.
Abbreviations
bbl |
Barrel(s) |
bbl/d |
Barrels per day |
boe |
Barrels of Oil Equivalent |
boe/d |
Barrels of Oil Equivalent per day |
Mcf |
Thousand Cubic Feet |
Mcf/d |
Thousand Cubic Feet per day |
MMcf |
Million Cubic Feet |
MMcf/d |
Million Cubic Feet per day |
Mcfe |
Thousand Cubic Feet Equivalent |
Mcfe/d |
Thousand Cubic Feet Equivalent per day |
MMcfe |
Million Cubic Feet Equivalent |
MMcfe/d |
Million Cubic Feet Equivalent per day |
Mboe |
Thousand boe |
Bcf |
Billion Cubic Feet |
MMboe |
Million boe |
Mcm |
Thousand Cubic Metres |
CAD |
Canadian Dollar |
USD |
U.S. Dollar |
Cautionary Statement:
BOEs may be misleading, particularly if used in
isolation. A BOE conversion ratio of 6 Mcf:1 bbl is
based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead.
About SerinusSerinus 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
plcCalvin BrackmanVice President, External
Relations & StrategyTel.: +1-403-264-8877
cbrackman@serinusenergy.com |
Serinus Energy plc
Jeffrey AuldChief Executive OfficerTel.:
+1-403-264-8877 jauld@serinusenergy.com |
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Translation: This news
release has been translated into Polish from the English
original.
Forward-looking
Statements 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.
Notes: Serinus prepares its financial
results on a consolidated basis. Unless otherwise noted by the
phrases “allocable to Serinus”, “net to Serinus”, “attributable to
SEN shareholders” or “SEN WI”, all values and volumes refer to the
consolidated figures. Serinus reports in US dollars; all
dollar values referred to herein, whether in dollars or per share
values are in US dollars unless otherwise noted.
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