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H1 2024 Financial Results

12 Aug 2024 07:00

RNS Number : 9628Z
Serinus Energy PLC
12 August 2024
 

12 August 2024

 

Press Release

H1 2024 Interim Financial Results

Jersey, Channel Islands, 12 August 2024 -- Serinus Energy plc ("Serinus" or the "Company" or the "Group") (AIM:SENX, WSE:SEN) is pleased to announce its Interim Financial Results for the six months ended 30 June 2024.

H1 2024 Highlights

 

Financial

 

· Revenue for the six months ended 30 June 2024 was $8.8 million (30 June 2023 - $8.9 million)

· Funds from operations for the six months ended 30 June 2024 were $1.3 million (30 June 2023 - $0.4 million)

· EBITDA for the six months ended 30 June 2024 was $1.6 million (30 June 2023 - $0.5 million)

· Gross profit for the six months ended 30 June 2024 was $1.7 million (30 June 2023 - $0.8 million)

· The Company realised a net price of $80.13/boe for the six months ended 30 June 2024 comprising:

o Realised oil price - $84.07/bbl

o Realised natural gas price - $11.06/Mcf

· The Group's operating netback increased for the six months ended 30 June 2024 and was $32.43/boe (30 June 2023 - $31.18/boe), in line with lower production volumes in Romania and significantly lower realised gas prices offset by stable production in Tunisia and higher crude oil price, comprising:

o Romania operating netback - ($54.32)/boe (30 June 2023 - $12.53/boe)

o Tunisia operating netback - $39.71/boe (30 June 2023 - $36.47/boe)

· Capital expenditures of $0.2 million (30 June 2023 - $5.0 million), comprising:

o Romania - $nil million

o Tunisia - $0.2 million

· Working capital deficit was $4.2 million (31 December 2023 - deficit of $5.6 million)

 

Operational

 

· Production in Chouech Es Saida continues to perform well, benefiting from the artificial lift programme

· Long lead items for the Sabria W-1 sidetrack have been ordered and are on schedule. Discussions are on-going with Compagnie Tunisienne de Forage (CTF), the state rig company, regarding availability of rigs to perform this sidetrack

· The Group completed lifting 62,930 bbl of Tunisian crude oil in the second half of March 2024 at an average price of $82.76/bbl with the cash proceeds of $3.2 million received in April 2024 (net of $2.0 million in monthly prepayments previously received)

· The Group has scheduled the next lifting and expects to perform this lifting in August 2024

· The Moftinu Gas Field continues to produce at naturally declining rates

· Production for the period averaged 607 boe/d, comprising:

o Romania - 48 boe/d

o Tunisia - 559 boe/d

· The Group continued its excellent safety record with no Lost Time Incidents in the first half of 2024

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

Jeffrey Auld, Chief Executive Officer

Calvin Brackman, Vice President, External Relations & Strategy

+44 204 541 7859

Shore Capital (Nominated Adviser & Broker)

Toby Gibbs

Lucy Bowden

 

+44 207 408 4090

 

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

 

Half Year Report and Accounts 2024

(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

In Romania the Group currently holds the 2,950 km2 Satu Mare Concession. The Satu Mare Concession area includes the Moftinu Gas Project which was brought on production in April 2019 and has produced approximately 9.5 Bcf and $93.9 million of revenue to the end of June 2024. The Moftinu gas field is nearing the end of its natural life. The field has identified existing gas in uncompleted zones that can be completed and produced with higher gas prices and reduced windfall tax.

In addition to the Moftinu Gas Development Project the Satu Mare Concession holds several highly prospective exploration plays. Serinus' block wide geological review has highlighted the potential of multiple plays that have encountered oil and gas on the block. Focus is on proven hydrocarbon systems, known productive trends that need further data, and studies of over 40 legacy wells on the concession area that have encountered oil and gas. The concession is extensively covered by legacy 2D seismic, augmented by the Group's own 3D and 2D acquisition programs that have further refined the identified prospects. Putting this extensive evidence-based analysis together in a block wide review has allowed the Group to identify a pathway towards future exploration growth.

In October 2023, the Group was granted an exploration phase extension to the Satu Mare Concession in Romania. The Moftinu gas field has been declared a Commercial Area, all other areas of the Concession remain Exploration Area.  The exploration period extension is in two phases. The first phase of the extension is mandatory and is two years in duration starting on 28 October 2023. The work commitment for the first phase is the reprocessing of 100 kilometres of legacy 2D seismic as well as a 2D seismic acquisition program of 100 kilometres including processing the acquired seismic data. The second phase of the extension is optional and is two years in duration starting on 28 October 2025 with a work commitment of drilling one well within the concession area with no total drilling depth requirement stipulated.

In 2018 and 2019, ANAF, the Romanian tax authority, refused to refund VAT amounts totalling RON 8.3 million (US$1.8 million) after a routine VAT return submissions in those years. ANAF claimed this VAT couldn't be refunded to Serinus because it related to the 40% share of a defaulted partner, OEBS. This decision disregarded the fact that Serinus paid 100% of all costs, including VAT, and that under the Joint Operating Agreement, Serinus handled all payments and distributions for the joint venture. All other VAT rebate claims both prior and post this claim have been fully paid to Serinus. In 2022 the conclusion of the ICC Arbitration affirmed that the defaulted partner had no rights subsequent to its default; this includes any claim to VAT paid on its behalf by Serinus.

In December 2023, Serinus won a court case, which ordered ANAF to refund the audited VAT amount. The court recognized the defaulted partner as determined by the 2022 ICC Arbitration award and affirmed Serinus' right to reclaim the full VAT amount. ANAF appealed this decision in April 2024 without giving a reason, and it's unclear when the appeal will be heard. Serinus is confident the VAT refund will be received, although the timing is uncertain. As of 30 June 2024, a total of US$2.5 million is due, being US$1.8 in audited VAT refund and US$0.7 million in interest and penalties.

Tunisia

The Group's Tunisian operations are comprised of two concession areas.

The largest asset in the Tunisian portfolio is the Sabria field, which is a large oilfield with an independently estimated original in-place volume of 445 million barrels-of-oil-equivalent of which 1.6% 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 Group has embarked on an artificial lift programme whereby the first pumps in the Sabria field will be installed. Independent third-party studies suggest that the use of pumps in this field can have a material impact on production volumes. 

The Chouech Es Saida concession in southern Tunisia holds a producing oilfield that produces from four wells, three of which are produced using artificial lift. Chouech Es Saida is a mature oilfield that benefits from active production management. Underlying this oilfield are significant gas prospects. These prospects lie in a structure that currently produces gas in an adjacent block. Exploration of these lower gas zones became commercially possible with the construction of gas transportation infrastructure in the region. Upon exploration success these prospects can be developed in the medium term, with the ability to access the near-by under-utilised gas transmission capacity.

 

Financial Review

Liquidity, Debt and Capital Resources

During the six months ended 30 June 2024, the Company invested a total of $0.2 million (30 June 2023 - $5.0 million) on capital expenditures before working capital adjustments. In Romania, the Group invested $nil million (30 June 2023 - $0.5 million). In Tunisia, the Company invested $0.2 million (30 June 2023 - $4.5 million).

The Company's funds from operations for the six months ended 30 June 2024 were $1.3 million (30 June 2023 - $0.4 million). Including changes in non-cash working capital, the cash flow used from operating activities in 2023 was $0.2 million (30 June 2023 - $1.0 million). The Company continues to be in a strong position to expand and continue growing production within our existing resource base. The Company is debt-free and has adequate resources available to deploy capital into both operating segments to deliver growth and shareholder returns.

($000)

30 June

31 December

Working Capital

2024

2023

Current assets

10,951

11,341

Current liabilities

(15,164)

(16,926)

Working Capital (deficit)

(4,213)

(5,585)

 

Working capital deficit at 30 June 2024 was $4.2 million (31 December 2023 - $5.6 million deficit).

Current assets as at 30 June 2024 were $11.0 million (31 December 2023 - $11.3 million), a decrease of $0.3 million. Current assets consist of:

· Cash and cash equivalents of $1.0 million (31 December 2023 - $1.3 million)

· Restricted cash of $1.1 million (31 December 2023 - $1.2 million)

· Trade and other receivables of $8.0 million (31 December 2023 - $8.1 million)

· Product inventory of $0.8 million (31 December 2023 - $0.7 million)

Current liabilities as at 30 June 2024 were $15.2 million (31 December 2023 - $16.9 million), a decrease of $1.8 million. Current liabilities consist of:

· Accounts payable of $8.7 million (31 December 2023 - $9.3 million)

· Decommissioning provision of $6.3 million (31 December 2023 - $6.7 million)

Canada - $0.8 million (31 December 2023 - $0.8 million) which is offset by restricted cash in the amount of $1.1 million (31 December 2023 - $1.2 million) in current assets

Romania - $nil (31 December 2023 - $0.6 million)

Tunisia - $5.5 million (31 December 2023 - $5.3 million)

· Income taxes payable of $Nil (31 December 2023 - $0.8 million)

· Current portion of lease obligations of $0.1 million (31 December 2023 - $0.1 million)

Non-current assets

Property, plant and equipment ("PP&E") decreased to $54.3 million (31 December 2023 - $56.0 million), primarily due to capital expenditures in PP&E of $0.2 million offset by depletion in the period of $1.8 million as well as a change in decommissioning estimates of $0.1 million which decreased due to the higher discount rates applied to the calculation during the period. Exploration and evaluation assets ("E&E") decreased to $10.6 million (31 December 2023 - $10.7 million), due to change in decommissioning estimates. Right-of-use assets increased to $0.8 million (31 December 2023 - $0.5 million) due to a new lease in Tunisia for our office and operating vehicles.

 

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:

 Six months ended 30 June

 

($000)

2024

2023

Cash flow from operations

188

967

Changes in non-cash working capital

1,146

(569)

Funds from operations

1,334

398

Funds from operations per share

0.01

0.00

 

Romania used funds in operations of $0.7 million (30 June 2023 - used funds $0.4 million) and Tunisia generated $3.6 million (30 June 2023 - $3.4 million). Funds used at the Corporate level were $1.6 million (30 June 2023 - $2.6 million) resulting in net funds from operations of $1.3 million (30 June 2023 - $0.4 million).

Production

Six months ended 30 June 2024 

Tunisia

Romania

Group

%

Crude oil (bbl/d)

471

-

471

78%

Natural gas (Mcf/d)

529

290

819

22%

Condensate (bbl/d)

-

-

-

0%

Total (boe/d)

559

48

607

100%

 

Six months ended 30 June 2023

 

Crude oil (bbl/d)

471

-

471

70%

Natural gas (Mcf/d)

373

862

1,235

30%

Condensate (bbl/d)

-

-

-

0%

Total (boe/d)

533

144

677

100%

 

During the six months ended 30 June 2024 production volumes decreased 70 boe/d to 607 boe/d against the comparative period (30 June 2023 - 677 boe/d).

Romania's production volumes decreased by 96 boe/d to 48 boe/d against the comparative period (30 June 2023 - 144 boe/d). Production continues to reflect the natural decline profile of shallow gas fields.

Tunisia's production volumes increased by 26 boe/d to 559 boe/d against the comparative period (30 June 2023 - 533 boe/d). Production increased during the first half of 2024 as a result of the Company's programme of pump installation and management.

Oil and Gas Revenue

($000) 

 

 

 

 

Six months ended 30 June 2024 

Tunisia

Romania

Group

%

 

Oil revenue

7,185

-

7,185

82%

 

Natural gas revenue

1,148

478

1,626

18%

 

Condensate revenue

-

-

-

0%

 

Total revenue

8,333

478

8,811

100%

 

 

 

Six months ended 30 June 2023 

Tunisia

Romania

Group

%

 

Oil revenue

6,162

-

6,162

77%

 

Natural gas revenue

703

2,012

2,715

23%

 

Condensate revenue

-

-

-

0%

 

Total revenue

6,865

2,012

8,877

100%

 

 

Realised Price

 

 

 

Six months ended 30 June 2024

Tunisia

Romania

Group

 

Oil ($/bbl)

84.07

-

84.07

 

Natural gas ($/Mcf)

11.93

9.43

11.06

 

Condensate ($/bbl)

-

-

-

 

Average realised price ($/boe)

82.10

56.56

80.13

 

 

Six months ended 30 June 2023

 

Oil ($/bbl)

74.75

-

74.75

 

Natural gas ($/Mcf)

10.76

13.34

12.56

 

Condensate ($/bbl)

-

-

-

 

Average realised price ($/boe)

73.56

80.01

74.93

 

During the six months ended 30 June 2024 revenue decreased by $0.1 million to $8.8 million (30 June 2023 - $8.9 million) as the Group saw production decline in Romania offset by the average realised price increase of $5.2/boe to $80.13/boe (30 June 2023 - $74.93/boe) and increased production in Tunisia.

The Group's average realised oil price increased by $9.32/bbl to $84.07/bbl (30 June 2023 - $74.75/bbl), and average realised natural gas prices decreased by $1.50/Mcf to $11.06/Mcf (30 June 2023 - $12.56/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

Six months ended 30 June

($000)

2024

2023

Tunisia

1,064

889

Romania

21

97

Total

1,085

986

Total ($/boe)

9.87

8.46

Tunisia oil royalty (% of oil revenue)

12.9%

13.5%

Romania gas royalty (% of gas revenue)

4.4%

4.8%

Total (% of revenue)

12.3%

11.1%

 

For the six months ended 30 June 2024 royalties increased to $1.1 million (30 June 2023 - $1.0 million) and the Group's royalty rate increased to 12.3% (30 June 2023 - 11.1%).

 

In Romania, the royalty is calculated using a reference price that is set by the Romanian authorities and not the realised price to the Group. The reference gas 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 six-month period of 2024, 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

Six months ended 30 June

($000)

2024

2023

Tunisia

3,238

2,572

Romania

916

1,600

Canada

5

25

Group

4,159

4,197

 

Tunisia production expense ($/boe)

31.91

27.56

Romania production expense ($/boe)

108.37

63.62

Total production expense ($/boe)

37.83

35.43

 

During the six months ended 30 June 2024 production expenses stayed the same at $4.2 million (30 June 2023 - $4.2 million), with an increase of $2.40/boe to $37.98 (30 June 2023 - $ 35.43/boe). 

Tunisia's production expenses increased by $0.7 million, to $3.2 million (30 June 2023 - $2.5 million), being an increase of $4.35/boe to $31.91/boe (30 June 2023 - $27.56/boe). 

Romania's overall operating costs decreased by $0.6 million to $1.0 million (30 June 2023 - $1.6 million), being an increase of $44.75/boe to $108.37/boe (30 June 2023 - $63.62/boe). The decrease in production costs is a result of lower production in Romania.

Canada 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)

 

 

Six months ended 30 June 2024

Tunisia

Romania

Group

Sales volume (boe/d)

558

46

604

Realised price

82.10

56.56

80.13

Royalties

(10.48)

(2.51)

(9.87)

Production expense

(31.91)

(108.37)

(37.83)

Operating netback

39.71

(54.32)

32.43

Six months ended 30 June 2023 

Tunisia

Romania

Group

Sales volume (boe/d)

516

139

655

Realised price

73.56

80.01

74.93

Royalties

(9.53)

(3.86)

(8.32)

Production expense

(27.56)

(63.62)

(35.43)

Operating netback

36.47

12.53

31.18

 

For the six months ended 30 June 2024 the Group's operating netback was $32.43 boe, an increase of $1.25/boe against the comparative period (30 June 2023 - $31.18/boe). The increase is due to higher realised prices in Tunisia, partially offset by higher production expenses.

The Company also generated a gross profit of $1.7 million (30 June 2023 - $0.8 million), partly due to an increase in the Company's netbacks.

 

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, depreciation, depletion and amortisation expense, as well as accretion on asset retirement obligations and non-operating income and expenses. EBITDA is not a standard measure under IFRS and therefore may not be comparable to similar measures reported by other entities. For the six months ended 30 June 2024, the Group's EBITDA increased by $1.1 million to $1.6 million (30 June 2023 - $ 0.5 million).

Six months ended 30 June

($000s)

2024

2023

Net income (loss)

(1,294)

(2,963)

Finance costs, including accretion

465

847

Depletion and amortization

1,750

2,352

Decommissioning provision recovery

(14)

(23)

Gain on disposal of assets

(37)

-

Tax expense

733

289

EBITDA

1,603

502

 

Windfall Tax

Six months ended 30 June

($000)

2024

2023

Windfall tax

132

564

Windfall tax ($/Mcf - Romania gas)

2.50

3.61

Windfall tax ($/boe - Romania gas)

15.60

22.41

 

For the six months ended 30 June 2024 windfall taxes were $0.1 million (30 June 2023 - $0.6 million). 

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.

 

During the last two months of the first 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.

 

Depletion and Depreciation

Six months ended 30 June

($000)

2024

2023

Tunisia

1,614

1,688

Romania

73

623

Corporate

63

41

Total

1,750

2,352

 

Tunisia ($/boe)

15.90

18.08

Romania ($/boe)

8.65

24.78

Total ($/boe)

15.92

19.86

 

For the six months ended 30 June 2024 depletion and depreciation expense was $1.8 million (30 June 2023 - $2.4 million), primarily due to a lower production during the period. Per boe, depletion and depreciation expense decreased by $3.94/boe to $15.92/boe (30 June 2023 - $19.86/boe), primarily due to lower reserves in the current period.

General and Administrative ("G&A") Expense

Six months ended 30 June

($000)

2024

2023

G&A expense

1,832

2,670

G&A expense ($/boe)

16.66

22.54

 

For the six months ended 30 June 2024 G&A expenses were $1.8 million (30 June 2023 - $ 2.7 million). Per boe, G&A expense is lower at $16.66/boe (30 June 2023 - $22.54/boe) mainly due to decreased professional services fees.

Share-Based Payment

Six months ended 30 June

($000)

2024

2023

Share-based payment

-

3

Share-based payment ($/boe)

-

0.02

 

No share-based payment expense was recognised in the first half of 2024 (30 June 2023 - $3,000) since no options were granted during the period and all previously granted option had fully vested.

Net Finance Expense

Six months ended 30 June

($000)

2024

2023

Interest on leases

62

-

Accretion on decommissioning provision

849

785

Foreign exchange and other

(446)

17

465

802

 

During the six months ended 30 June 2024 net finance expenses decreased by $0.3 million to $0.5 million (30 June 2023 - $0.8 million). 

Taxation

During the six months ended 30 June 2024 income tax expense was $0.7 million (30 June 2023 - $0.3 million). The increase in the tax expense is directly related to higher 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

2,230,000

499,084

3,993,394

 

Non-Executive Directors:

Lukasz Redziniak

-

-

302,000

Jim Causgrove

-

-

290,000

Jon Kempster [1]

-

-

60,261

2,230,000

499,084

4,645,655

As of the date of issuing this report, management is aware of the following shareholders holding more than 3% of the ordinary shares of the Group, as reported by the shareholders to the Group:

Xtellus Capital Partners Inc

13.03%

Crux Asset Management

8.22%

Michael Hennigan

7.76%

Quercus TFI SA

7.02%

Marlborough Fund Managers

4.05%

Spreadex LTD

4.01%

Jeffrey Auld

3.48%

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.

 

 

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 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 30 June 2024.

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 30 June 2024 and include a description of the major risks and uncertainties.

 

 

 

Serinus Energy plc

Consolidated Statement of Comprehensive Loss

(US$ 000s, except per share amounts)

 

 

Six months ended 30 June

 

2024

2023

 

 

Revenue

8,811

8,877

 

Cost of sales

 

Royalties

(1,085)

(986)

Windfall tax

(132)

(564)

Production expenses

(4,159)

(4,197)

Depletion and depreciation

(1,750)

(2,352)

Total cost of sales

(7,126)

(8,099)

 

Gross profit

1,685

778

 

Administrative expenses

(1,832)

(2,670)

Share-based payment expense

-

(3)

Total administrative expenses

(1,832)

(2,673)

 

Decommissioning provision recovery

14

23

Gain on disposal of assets

37

-

Operating loss

(96)

(1,872)

 

Finance expense

(465)

(802)

Net loss before tax

(561)

(2,674)

 

Tax expense

(733)

(289)

Loss after taxation attributable to equity owners of the parent

(1,294)

(2,963)

 

Other comprehensive loss

 

Other comprehensive loss to be classified to profit and loss in subsequent periods:

 

Foreign currency translation adjustment

-

(239)

 

Total comprehensive loss for the year attributable to equity owners of the parent

 

(1,294)

 

(3,202)

 

Earnings (loss) per share:

 

Basic

(0.01)

(0.03)

Diluted

(0.01)

(0.03)

 

The accompanying notes on pages 15 to 16 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

 

 30 June

 2024

 31 December

2023

 

 

Non-current assets

 

 

Property, plant and equipment

54,284

56,032

Exploration and evaluation assets

10,602

10,703

Right-of-use assets

798

498

Total non-current assets

65,684

67,233

 

Current assets

 

Restricted cash

1,163

1,171

Trade and other receivables

8,014

8,137

Product inventory

773

698

Cash and cash equivalents

1,001

1,335

Total current assets

10,951

11,341

Total assets

 

76,635

78,574

 

Equity

 

Share capital

401,426

401,426

Share-based payment reserve

25,102

25,560

Treasury shares

-

(458)

Accumulated deficit

(400,672)

(399,378)

Cumulative translation reserve

(3,372)

(3,372)

Total equity

 

22,484

23,778

 

Liabilities

 

Non-current liabilities

 

Decommissioning provision

24,507

24,004

Deferred tax liability

12,463

12,125

Lease liabilities

700

424

Other provisions

1,317

1,317

Total non-current liabilities

38,987

37,870

 

Current liabilities

 

Current portion of decommissioning provision

6,300

6,720

Current portion of lease liabilities

144

137

Accounts payable and accrued liabilities

8,720

10,069

Total current liabilities

15,164

16,926

Total liabilities

54,151

54,796

Total liabilities and equity

76,635

78,574

 

The accompanying notes on pages 15 to 16 form part of the condensed consolidated interim financial statements

 

 

 

Serinus Energy plc

Condensed Consolidated Interim Statement of Changes in Shareholder's 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 2022

401,426

25,557

(455)

(386,356)

(3,372)

36,800

Comprehensive income for the period

-

-

-

(2,963)

-

(2,963)

Other comprehensive loss for the period

-

-

-

-

(239)

(239)

Total comprehensive (income) loss for the period

-

-

-

(2,963)

(239)

(3,202)

Transactions with equity owners

 

 

 

 

 

 

Share-based payment expense

-

3

-

-

-

3

Shares purchased to be held in Treasury

-

-

(12)

-

-

(12)

Balance at 30 June 2023

401,426

25,560

(467)

(389,319)

(3,611)

33,589

 

 

 

 

 

 

 

Balance at 31 December 2023

401,426

25,560

(458)

(399,378)

(3,372)

23,778

Comprehensive loss for the period

-

-

-

(1,294)

-

(1,294)

Other comprehensive loss for the period

-

-

-

-

-

-

Total comprehensive loss for the period

-

-

-

(1,294)

-

(1,294)

Transactions with equity owners

-

-

-

-

-

-

Treasury shares issued to employees

-

(458)

458

-

-

-

Balance at 30 June 2024

401,426

25,102

-

(400,672)

(3,372)

22,484

 

The accompanying notes on pages 15 to 16 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)

 

 

Six months ended 30 June

 

2024

2023

 

 

 

Operating activities

 

Loss for the period

(1,294)

(2,963)

Items not involving cash:

 

Depletion and depreciation

1,750

2,352

Share-based payment expense

-

3

Tax expense

733

289

Accretion expense on decommissioning provision

849

785

Foreign exchange gain

(131)

(20)

Decommissioning provision recovery

(14)

(23)

Gain on disposal of asset

(37)

-

Other income

30

(25)

Income taxes paid

(552)

-

Funds from operations

1,334

398

Changes in non-cash working capital

(1,146)

569

Cashflows from operating activities

188

967

 

Financing activities

 

Lease payments

(183)

(133)

Shares purchased to be held in treasury

-

(12)

Cashflows used in financing activities

(183)

(145)

 

Investing activities

 

Capital expenditures

(296)

(3,054)

Cashflows used in investing activities

(296)

(3,054)

 

Impact of foreign currency translation on cash

(43)

(142)

 

Change in cash and cash equivalents

(334)

(2,374)

 

Cash and cash equivalents, beginning of period

1,335

4,854

Cash and cash equivalents, end of period

1,001

2,480

 

The accompanying notes on pages 15 to 16 form part of the condensed consolidated interim financial statements

 

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 2nd 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.

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 2023. There has been no change in these areas during the six months ended 30 June 2024.

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 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 2023. There has been no change to the accounting policies or the estimates and judgements which management are required to make in the period. The business is not subject to seasonal variations. Information in relation to the operating segments and material primary statement movements can be found within the management discussion at the front of this report.

4. Earnings (Loss) per share

 

Period ended 30 June 

($000's, except per share amounts)

2024

2023

Loss for the period

 

(1,294)

(2,963)

Weighted average shares outstanding

 

Basic and diluted

114,709

114,686

Loss per share

 

Basic and diluted

(0.01)

(0.03)

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. Diluted loss per share for the current and comparative periods is equivalent to basic loss per share since the effect of all dilutive potential Ordinary Shares is anti-dilutive.

 

5. Supplemental cash flow disclosure

 

Period ended 30 June

 

2024

2023

Cash provided by (used in):

Trade and other receivables

140

(54)

Product inventory

(230)

314

Accounts payable and accrued liabilities

(997)

306

Restricted cash

(59)

3

Changes in non-cash working capital from operating activities

(1,146)

569

The following table reconciles capital expenditures to the cash flow statement:

 

Period ended 30 June

 

2024

2023

PP&E additions

192

4,963

E&E additions

-

-

Total capital additions

192

4,963

Changes in non-cash working capital from investing activities

104

(1,909)

Total capital expenditures

296

3,054

 

 


[1] Jon Kempster resigned as a director on 2 July 2024, shares are held by Catherine Kempster (the spouse of Jon Kempster)

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