Serinus Energy reports revenue for the year was $40.0 million

Serinus Energy plc (LON:SENX, WSE:SEN) has announced its Annual Financial Results for 2021.



·       Revenue for the year ended 31 December 2021 was $40.0 million (31 December 2020 – $24.0 million)

·       The Company generated net income of $8.4 million (31 December 2020 – loss of $9.3 million)

·       EBITDA for the year ended 31 December 2021 was $12.3 million (31 December 2020 – $6.6 million)

·       The Company realised a net price of $66.82/boe for the year ended 31 December 2021, comprising:

o   Realised oil price – $65.19/bbl

o   Realised natural gas price – $11.25/Mcf

·       The Group’s operating netback remained strong for the year ended 31 December 2021 and was $44.60/boe (31 December 2020 – $14.55/boe), comprising:

o   Romania operating netback – $52.44/boe (31 December 2020 – $16.44/boe)

o   Tunisia operating netback – $29.77/boe (31 December 2020 – $8.71/boe)

·       Capital expenditures of $10.7 million (31 December 2020 – $5.5 million), comprising:

o   Romania – $9.5 million

o   Tunisia – $1.2 million

·           Cash balance as at 31 December 2021 was $8.4 million


·       Successfully drilled two wells in Romania in 2021, bringing the Moftinu-1008 well into production in February 2021 and discovering gas at the Sancrai-1 well, which has subsequently been suspended

·       The first of two compressors at the Moftinu field was commissioned in the fourth quarter of 2021 with the second installed and commissioned in February 2022.  It is expected that compression on the wells will stabilise production and extend overall field life

·       A new 2D seismic acquisition programme has been completed and interpretation work to support the drilling of up to three prospects adjacent to the Moftinu field, is underway 

·       Subject to well permitting approvals, the Company intends to begin a multi-well drilling programme in the latter half of 2022 in Romania

·       In Tunisia, the first submersible pump for the Artificial Lift programme has been delivered to the Sabria field. The Company is awaiting rig mobilization for the workover and pump installation at the Sabria W-1 well to commence.  Plans for additional pumps in the Sabria field are being progressed

·       Workovers in the Chouech Es Saida field has resulted in increased production from wells CS-3 and CS-1

·       Production for the year averaged 1,649 boe/d, comprising:

o   Romania – 1,078 boe/d

o   Tunisia – 571 boe/d

·       Serinus has continued to operate safely and effectively through the COVID-19 pandemic, with the successful implementation of operational and monitoring protocols to ensure the health and safety of our employees and achieved 1,000 accident-free days of continuous operation at the Moftinu gas plant.


Serinus is an oil and gas exploration, appraisal and development company.  The Group acts as the operator for all of its assets and has operations in two business units: Romania and Tunisia.


In Romania the Company currently holds one large concession area, Satu Mare, approximately 3,000km2, located in a highly sought-after hydrocarbon province.  The Moftinu Gas Project was brought on production in April 2019 and has produced approximately 8.4 Bcf to the end of 2021.  The Company has identified numerous additional shallow gas prospects near the Moftinu field that it hopes to discover and develop in the near-term.  The concession is extensively covered by legacy 2D seismic, augmented by the Company’s own 3D and 2D acquisition programs that have further refined the identified prospects.


The Company’s Tunisian operations are comprised of three concession areas.  The Company’s Tunisian concessions all have discovered oil and gas reserves and all are currently producing.  The largest asset in the Tunisian portfolio is the Sabria field, which is a large oilfield play with an estimated original oil in place of 445 million barrels-of-oil-equivalent of which 1.0% of this volume has been produced to date.  Serinus considers this historically under-developed field to be an excellent asset for development work to significantly increase production in the near-term.  The Chouech Es Saida and Ech Chouech concessions in southern Tunisia have significant gas prospectivity that can be developed in the medium term, with the ability to access near-by under-utilised gas transmission capacity.



The elimination of the Company’s legacy debt in 2020 allows Serinus to focus its operating cashflow on high-return investments that position the Company for significant near-term growth.  For the year to 31 December 2021, the Company generated cashflow from operating activities of $14.1 million and invested $10.7 million of capital expenditure.  It has also eliminated its working capital deficit.

The Company has proactively managed its production, stabilising natural declines in Romania and adding incremental production in Tunisia through workovers on its Chouech assets.  The Company is well-advanced on the implementation of its artificial lift programme in the Sabria field in Tunisia, beginning with the Sabria-W1 well.  In 2021, the Company’s capital programme was concentrated on the two wells drilled in Romania, the installation of the first of two compressors onto the Moftinu field, and the acceleration of the design and permitting of a new 2D seismic programme.  The new 2D seismic will complement legacy 2D seismic and tie to existing 3D seismic data to refine the high-rank prospects adjacent to the Moftinu gas field.

The Company, under the authority granted by the shareholders at the 2020 Annual General Meeting, executed the purchase of its own shares.  The Board believes that the share price at the time of its purchases did not reflect the intrinsic value of the business and will continue to evaluate the investment return of share buybacks as part of its allocation of capital across the Group (note 17).


The Group’s Romanian operating subsidiary holds the licence to the Satu Mare concession area, covering approximately 3,000 km2 in the north-west of Romania.  The Moftinu Gas Development project began production in 2019.  The development project includes the Moftinu gas plant, and currently produces gas from four wells – Moftinu -1003, Moftinu-1004, Moftinu-1007 and Moftinu-1008.  During 2021, the Company’s Romanian operations produced a total of 2.3 Bcf of gas and 3,311 barrels of condensate, equating to an average daily production of 1,078 boe/day.

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 has agreed to the following work commitments over the term of this evaluation phase:

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

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

During the year the Company successfully drilled two wells, a production well on the Moftinu gas field (Moftinu-1008) and the first exploration well on the Satu Mare concession since 2015, the Sancrai-1 exploration well.  The Moftinu-1008 well, was drilled to a total depth of 1,000 metres, completed and tied into the Moftinu gas plant with an initial flow rate of 4.0 MMscf/d (approximately 667 boe/d) in February.  The Sancrai-1 exploration well was originally budgeted to be drilled towards the end of 2021 but as a result of the Company’s unlevered balance sheet and strong cash generation, it was able to accelerate this project and commenced drilling on 29 June 2021.  Sancrai-1 was drilled to a depth of 1,600 metres and discovered gas, however the testing programme was unable to record the flow of gas in the selected zones and the well was suspended pending further technical evaluation.  The technical review identified a range of potential factors preventing the flow of gas; however, it was determined that the additional capital expenditure required to re-enter the well and pursue further investigation, would be better allocated to new wells.

Serinus conducted a thorough review of the Satu Mare exploration portfolio and high-graded the area and prospects to the immediate north and east of the Moftinu field.  In February 2022, a new 105km 2D seismic acquisition programme over high-ranked prospects was executed over this area and will complement reprocessed legacy 2D seismic and the existing Moftinu 3D data-set.  The programme objective is to further de-risk the prospects, confirm their extent and potential gas volumes in place, and determine the optimal drilling locations for a near-term multi-well drilling programme expected to commence in the latter half of 2022.  Additional interpretation work is also being conducted on the Santau 3D area with a view to confirming drilling locations on prospects that will form the basis for future multi-well drilling campaigns.

The first compressor was installed and commissioned onto the Moftinu-1003 gas well in November 2021.  The first compressor installation occurred at the same time as the routine gas plant maintenance to minimise the impact on production.  The second compressor was successfully installed and commissioned in February 2022.

The Company incorporated a new gas trading subsidiary, Serinus Energy Romania Trading S.r.l. in October 2021, which has commenced trading the Company’s Romanian gas production not committed under its marketing agreement into the Romanian market.  Serinus Energy Romania Trading S.r.l was created to allow our licensed gas traders to directly access the Romanian gas market and to capture the full value of gas prices in Romania through the ability to access all available types of contracts of various durations and respond accordingly to the price signals of these contracts that are not available under the formulaic-determined pricing of the marketing agreement.  Gas pricing in Romania has recovered significantly since a low realised price in July 2020 of $2.77/mcf to an average realised price of $11.45/mcf for 2021, with an average realised gas price of $31.58/mcf in the fourth quarter of 2021.  Gas prices on the Romanian Commodity Exchange (“BRM”) remains strong over the first quarter of 2022.

Serinus has continued to operate safely and effectively in Romania throughout the period and despite local COVID-19 restrictions which have during periods of high case rates impacted the movement of goods and personnel internally and across national borders.  Subsequent to the year-end, the Company announced that the Moftinu gas project had achieved 1,000 accident-free days of continuous operation which was a testament to the professionalism and hard work of our team in Romania.

The Company has a deemed 100% working interest in the concession as its partner has defaulted on its obligations under the Joint Operating Agreement.  The Company has 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 its defaulted partner’s 40% participating interest and to compel transfer of that interest to the Company.


The Company currently holds three concession areas within Tunisia.  During the course of 2021 the Zinnia and the Sanrhar, non-producing concession areas, expired and were relinquished by the Company.  All of the remaining Tunisian licence areas have discovered oil and gas reserves and are currently producing; Sabria, Chouech Es Saida, and Ech Chouech.  The largest asset is the Sabria field.  Sabria is a large, conventional oilfield which the Company’s independent reservoir engineers have estimated to have approximately 445 million barrels of oil originally in place.  Of this oil in place only 1.0% 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.

A major project for the operations in Tunisia in 2022 is the introduction of the first Artificial Lift programme to be implemented on the W-1 well in the Sabria field.  The W-1 is a currently suspended well that was identified as a candidate to benefit from the installation of a pump.  Long lead items have been ordered and the first submersible pump has been delivered.  This is a significant achievement by our procurement team who have had to work hard given the effects of COVID-19 on supply chains and workplace restrictions.  The Company is now awaiting the mobilization of the rig to commence the workover and pump installation in the second quarter 2022.  Following this, the Company will follow a programme to install artificial lift in the remaining candidate wells in Sabria.

The Company has also accelerated the re-entry workover of the N-2 well in Sabria.  This well was drilled in 1980 but was damaged during completion and, although in proximity to producing wells, was not able to flow oil to surface due to damage during completion.  The workover program will re-complete the well and remove any wellbore restrictions.  The Company anticipates that the N-2 well will be on-production in mid-2022.

During the year, the Company conducted further workover operations in the Chouech Es Saida area to replace and standardise pumps in order to increase production and efficiency.  This was completed despite a difficult operating environment in Tunisia due to the impact of COVID-19 which, as a result of travel restrictions for extended periods, delayed our vendor’s technical personnel entering the country to work on our workover programmes.  Further workovers are planned in 2022.


The Company continues to place the health, safety and wellbeing of all our staff as our top priority.  The Company continues to follow government recommendations such as enhanced sanitation of work sites, social distancing and wearing masks.  Where government advice has required, the Company has closed or reduced the presence of staff in our Head Office, Administration Office and our Business Unit Offices.  Our field operations continue to modify daily tasks and routines to ensure safe practices for all staff.  Existing operations have remained in production and our producing assets have seen no significant operational setbacks resulting from the COVID-19 pandemic.


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

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

In Tunisia, the Company’s operations are focused on the Sabria, Chouech Es Saida (“Chouech”) and Ech Chouech fields.  Sabria is a very large conventional oilfield where our independent reservoir engineers have accessed a field with 445 million barrels of oil equivalent originally in place.  Of that number approximately 1.0% has been recovered to date.  This is a very low recovery factor for a conventional oilfield and the Company expects to increase that recovery factor materially.  The Chouech and Ech Chouech fields in southern Tunisia offer excellent opportunities to increase production from existing oilfields through the application of standard oilfield practices.  Serinus’ Tunisian assets can be typified as existing discovered and producing oilfields where field optimisation provides the path to production, revenue and cash flow growth with no exploration risk.

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



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


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

1.   Leverage Land Position:

·    One concession in Romania with two work commitments remaining in the current evaluation phase

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

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

2.   Commitment to Shareholders:

·    Cohesive management team with a commitment to enhancing shareholder value

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

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

3.   Manage Risks:

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

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

·    Operator of all concessions allows for cost control

4.   Focus on Growth:

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

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


Dear shareholders,

I hope to find you in good health.

It is again my pleasure to address our valued shareholders on the achievements and challenges of the Company in 2021 and to highlight the significant activities that will help direct it onto a sustainable path of growth in 2022 and beyond.  This past year saw the Company recover from the pandemic-induced difficulties it faced in 2020.  The Company’s successful restructuring of its legacy debt in December 2020 provided us with the ability to allocate the Company’s cash flow to capital investments that can grow production and, in consequence, shareholder value.

While Covid-related disruptions continued to impact us in all our locations, particularly with respect to global logistics and the supply chain, the Company successfully drilled two wells in Romania, the Moftinu-1008 development well and Sancrai-1 exploration well.  The Moftinu-1008 well was a success and began producing in March 2021, the Sancrai-1 well discovered gas but it failed to flow it to the surface.  While the Sancrai-1 result was not what we were hoping for, we were able to drill this well six months ahead of schedule due to the performance of our assets and the strong commodity prices.  It is important to remember that this is the first discovered gas field outside of Moftinu and validates the view that there are significant gas resources on the Satu Mare concession. 

Our ability to generate significant cash flow in 2021 has continued into 2022 and has allowed the Company to initiate an intensive capital investment program for 2022, including a multi-well drilling program in Romania and the artificial lift and well workover programs in Tunisia.  We expect these programs to increase the Company’s production by the end of 2022.  Further opportunities to invest capital and increase production exist beyond 2022.

With the anticipated production growth and expected continuing strong commodity prices in the years to come, the Company can further exploit its sizable land acreage.  I have full confidence in the strategy and plans being proposed by management and the ability of our Romanian and Tunisian teams to execute and deliver for shareholders.

We are very disappointed in our share price performance over the past year, as I am sure you are as well.  It defies logic as to how we saw no transfer of value to equity when we completed the debt restructuring and no response to our strong growth in cash flow.  However, I firmly believe that this value will soon be recognised by investors as we firmly continue with our growth strategy this coming year and beyond.  I hope all our patience is duly rewarded.

ESG is an increasingly important factor to consider in all our investment decisions.  Given our historic banking arrangements we have complied with the most stringent of ESG reporting and compliance requirements for over a decade.  We have continued and enhanced our monitoring programs and formalised ESG oversight through the creation of our ESG committee.  Over the past year, the board and management carried out a comprehensive review of our ESG compliance outputs with the intention to enhance our already significant ESG disclosures.   

In closing, I wish to pass on my sincere appreciation of the senior management team and all employees of the Company.  I have witnessed first-hand the hard work they have put in over the last year, often under trying and demanding circumstances.  Through their dedication and focus on excellence, the Company is positioned for significant growth that equity markets will soon be unable to ignore.

Yours sincerely,

Lukasz Rędziniak, Chairman of the Board of Directors

18 March 2021


Dear fellow shareholders,

2021 has been a busy year for your Company.  The year began on an optimistic note with the expectations of a waning pandemic and the Company newly re-energised through the redemption of debt held by the European Bank for Reconstruction and Development.  2021 also marked the first year in more than ten years where the cash flow generated by the successful developments of the Company could be fully and freely applied to future growth opportunities.  A capital plan to reflect the ability to apply our operating cash flow to growth reflected that new opportunity.  Key capital plans included the receipt of partner approvals and the initiation of workflows to install the first pumps into the Sabria field in Tunisia.  The drilling of another production well in Romania and the drilling of the Company’s first exploration well since 2015, the Sancrai-1 well in Romania.

Critical to the execution of these plans was the Company’s goal of matching its operational and capital spending with its operating cash flow generation.  As the year progressed and commodity prices strengthened, especially in Romania where gas prices reached record highs, the Company was able to accelerate its capital plans.  Most critically the plans to drill the Sancrai-1 well were accelerated by approximately six months and drilling commenced on this target in July of 2021.  The Sancrai-1 well was drilled on time and under budget.  The well discovered gas but disappointingly the Company has not been able to get the discovered gas to flow to surface.  This is clearly not the result that was desired, but it is important to recognise that the Sancrai-1 well is by no means a failure.  The well discovered gas.  This is the first gas discovered outside of the Moftinu gas field and validates our view that there are many gas fields surrounding Moftinu.  The Company sought to determine why the well would not flow and whilst there are many plausible technical explanations no one explanation was certain, and this meant that further work on the well was not certain to resolve the issues.  The decision was made to keep the well suspended for potential re-entry in the future and continue to explore our extensive and attractive prospect inventory.

Whilst the operating cash flow allowed the acceleration of capital plans the Company continued to be impacted by the effects of the Covid pandemic on global supply chains.  In the planning of any project, it is imperative to identify and manage the procurement of long lead items which act as gating items to the execution of the programme.  This has been increasingly difficult as supply chains around the world became disrupted.  Critically, for example, items that would normally have taken four weeks to procure began to have procurement times of many months.  Equally the approvals of the results of tendering were drawn out as the pandemic affected the ability of procurement and tendering audits to occur in person.  The effect of these disruptions meant that the pumps for the W1 well in Sabria were delayed from the fourth quarter of 2021 to the first quarter of 2022.

It has been frustrating to have the Company move to a position where it is free to allocate its operating cash flow to its growth projects only to have procurement, partner approvals and supply chain issues delay these projects, but it has been encouraging to see the dynamism of our teams as they have implemented creative solutions to solve the issues caused by these unprecedented operating hurdles.  As an example, our Tunisian teams have cut the procurement time for a tubing hanger in half by working with our Romanian colleagues and using the facilities and relationships in Romanian to expedite the procurement process. 

In the face of a challenging year, Serinus has advanced the business.  This year marks the first full year of positive earnings in the Company’s history.  The Company is generating strong cash flow, has a deep portfolio of exploration and development opportunities, and is excited for the future.

In closing I would like to thank our shareholders for their continued support.  Serinus looks forward to growing the business by investing prudently in our high return projects.

Yours sincerely,

Jeffery Auld, Chief Executive Officer

18 March 2021

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