· Revenue for the three months ended 31 March 2022 was $13.4 million (31 March 2021 – $7.6 million)
· The Company generated net income of $1.0 million (31 March 2021 – $1.0 million loss)
· EBITDA for the three months ended 31 March 2022 was $3.1 million (31 March 2021 – $2.6 million)
· Gross profit for the three months ended 31 March 2022 was $2.9 million (31 March 2021 – $0.7 million)
· The Company realised a net price of $184.57/boe for the three months ended 31 March 2022, comprising:
o Realised oil price – $90.13/bbl
o Realised natural gas price – $33.94/Mcf ($203.64/boe)
· The Group’s operating netback remained strong for the three months ended 31 March 2022 and was $148.88/boe (31 March 2021 – $23.90/boe), comprising:
o Romania operating netback – $182.79/boe (31 March 2021 – $26.23/boe)
o Tunisia operating netback – $41.88/boe (31 March 2021 – $18.33/boe)
· Capital expenditures of $1.5 million (31 March 2021 – $3.5 million), comprising:
o Romania – $1.3 million
o Tunisia – $0.2 million
· Cash balance as at 31 March 2022 was $6.2 million
· The Satu Mare 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
· Well permitting is underway and rig availability has been determined for a multi-well drilling program in the latter half of 2022 in Romania
· The Sabria W-1 wellsite has been prepared for the intervention which will install the first submersible pump for the Artificial Lift programme in the Sabria field. Tubulars and workover consumables are onsite
· The Company has signed a rig contract and is awaiting rig mobilization from another operator and the workover and pump installation at the Sabria W-1 well will commence as soon as the rig is available
· Upon completion of the workover and pump installation at Sabria W-1, the rig will move to the Sabria N-2 well to perform a workover to recomplete the well. All materials required for this intervention are sourced
· Additional pumps and long-lead items in Tunisia have been ordered, to mitigate longer lead times created by global supply chain disruptions
· Production for the period averaged 1,115 boe/d, comprising:
o Romania – 610 boe/d
o Tunisia – 505 boe/d
· The Company performed a lifting in April 2022 of 42,000 bbls of Tunisian crude oil at a price of $104.79/bbl. Revenue will be recognised in the second quarter of 2022
OPERATIONAL UPDATE AND OUTLOOK
Serinus Energy plc (LON SENX) and its subsidiaries 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.
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 operates four gas wells – Moftinu-1003, Moftinu-1004, Moftinu-1007 and Moftinu-1008 with a second compressor installed and commissioned on Moftinu-1007 in February 2022. During the three months ended 31 March 2022, the Company’s Romanian operations produced a total of 327 MMcf of gas and 417 barrels of condensate, equating to an average daily production of 610 boe/day. Production continues to decrease due to natural declines as well as water breakthrough in some producing formations within some of the producing wells. The Company has an extensive capital programme underway in Romania in 2022 to find additional gas resources that can be produced and processed through the existing capacity available at the Moftinu gas plant.
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, the 112km 2D seismic acquisition programme over high-ranked prospects was executed over this area and compliments reprocessed legacy 2D seismic and the existing Moftinu 3D data-set. The 2D seismic data has been processed. AVO analysis and interpretation has confirmed the recoverable resource potential of the highly-ranked prospects. From this interpretation, the Company has determined optimal drilling locations for the 2022 drilling programme with permitting underway. 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.
Gas pricing in Romania remained at unprecedented high levels through the first quarter of 2022, with an average realised price of $36.19/mcf. Gas prices on the Romanian Commodity Exchange (“BRM”) continue to remain strong over the second quarter of 2022 to date.
The Company currently holds three concession areas within Tunisia and all of the 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, 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.
The Sabria W-1 wellsite has been prepared for the intervention which will install the first submersible pump for the Artificial Lift programme in the Sabria field. All materials required for this intervention are in our in-country warehouse. The Company has signed a rig contract for the CTF 006 rig and is awaiting mobilization from another operator and the workover and pump installation at the Sabria W-1 well will commence as soon as the rig is available, expected in the second quarter of 2022.
Upon completion of the workover and pump installation at Sabria W-1, the rig will move to the Sabria N-2 well to perform a workover to recomplete the well. 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 the latter half of 2022.
Additional pumps and long-lead items for the Sabria field artificial lift programme have been ordered.
Ongoing workover programmes continue in the Chouech Es Saida field, installing further pumps to enhance production.