|By Marketwired .||
|August 13, 2013 05:59 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 08/13/13 -- Serinus Energy Inc. (TSX:SEN)(WARSAW:SEN) ("Serinus" or the "Company"), formerly named Kulczyk Oil Ventures Inc., an international upstream oil and gas exploration and production company, is pleased to announce its financial and operating results for the second quarter ended 30 June 2013 - the first reporting period to reflect the acquisition by the Company of Winstar Resources Inc. ("Winstar"). Serinus now has two sources of hydrocarbon production, being natural gas and condensate production in Ukraine and oil and natural gas production in Tunisia. The majority of natural gas production is derived from four licences in Ukraine owned and operated by KUB-Gas LLC ("KUB-Gas"), a subsidiary in which Serinus has a 70% effective ownership interest through its indirect shareholding in KUBGAS Holdings Limited.
Serinus' corporate net production, derived from its 70% net share of KUB-Gas' Ukraine production averaged 3,163 barrels of oil equivalent ("BOE's") per day for the six months ended June 30, 2013. With the acquisition of Winstar in late June 2013, the Company now has significant oil production, which will be reflected in operating results commencing in the third quarter and continue thereafter, which is derived from four concessions owned and operated in Tunisia. Winstar produced an average of 1,152 BOE's per day during the six month period ended June 30, 2013, however these operations and net revenues are not reflected in the Company's consolidated financial statements for 1H 2013, as they occurred prior to the date of the acquisition of Winstar by Serinus. All dollar amounts are expressed in United States currency.
-- Serinus completed the acquisition of Winstar effective 24 June 2013 through the issuance of 27,252,500 of its (post consolidation) common shares to which a total value of $99.5 million is ascribed. Concurrent with the Winstar acquisition, the Company's shareholders voted to approve a name change from Kulczyk Oil Ventures Inc. to Serinus Energy Inc. and to consolidate the number of issued and outstanding shares on the basis of one post-consolidation share for each ten pre-consolidation shares previously issued; -- Serinus' common shares commenced trading on the Toronto Stock Exchange under the trading symbol "SEN" on June 27, 2013, and continue to be listed for trading on the Warsaw Stock Exchange; -- Gross revenue from hydrocarbon sales by KUB-Gas for the first six months of 2013 increased 24% to $57.6 million compared to $46.5 million for the first half of 2012. Serinus' 70% share would amount to $40.3 million for 2013 versus $32.6 million for 2012; -- Funds from operations, as reported within the Condensed Consolidated Interim Statement of Cash Flows, was $18.9 million for the first six months of 2013, a slight increase from $18.0 million for the comparable period in 2012; -- Average prices received during the first six months of 2013 were $11.59 per thousand cubic feet ("Mcf") for natural gas and $92.41 per barrel for condensate; -- In the first half of 2013, the Company's earnings before income taxes, as reported within the Condensed Consolidated Statement of Operations and Comprehensive Earnings, were $11.1 million, an increase of 27% when compared to $8.8 million in for the same period in 2012; -- Natural gas netback (after royalty and production expenses) for the current period decreased by 21% to $6.36 per Mcf from $8.01 per Mcf in 1H 2012 due to an increase in the royalty payable from 18% to 25%; and -- Condensate netback decreased 11% to $56.15 per barrel for 1H 2013 from $63.22 per barrel in 1H 2012 due primarily to a lower realized price per barrel.
-- In Ukraine, gross KUB-Gas production averaged 27.2 million cubic feet (equivalents) per day ("MMcfe/d") (Serinus 70% net of 19.1 MMcfe/d) for the six month period ended June 30, 2013. This represents an increase of 27% over the average production for the first six months of 2012 of 21.3 MMcfe/d (70% net:14.9 MMcfe/d); -- Ukraine M-16 well commenced production in late May 2013 and produced an average of 3.13 MMcfe/d throughout the month of June; -- Ukraine O-15 well reached its total measured depth of 3,246 metres late in May, and commenced production in July; -- Ukraine NM-3 well, a directional well, commenced drilling in June 2013, and reached its total measured depth of 2,426 metres subsequent to the quarter end; -- Work commenced on the expansion of the Makeevskoye and Olgovskoye production and processing facilities in Ukraine; -- Brunei - Lukut-1 well in Brunei Block L commenced drilling.
Tim Elliott, President and Chief Executive Officer of Serinus, commented:
"Completing the acquisition of Winstar Resources in June represents a significant accomplishment for Serinus. Winstar's exit production rate at July 31, 2013 of 1,731 BOE's per day together with Serinus' exit production rate at the same date of 3,262 BOE's per day results in a company with a combined production base of 4,993 BOE's per day. Going forward we will be looking forward to build on this base as we continue with our development program in Ukraine and start a similar development program in Tunisia. We look forward to meeting the operational and technical challenges that face us in Tunisia."
Serinus filed its second quarter operating and financial results on 13 August 2013 in Canada by filing on SEDAR (www.sedar.com) and in Poland by filing on ESPI (www.gpwinfostefa.pl) and has posted them on its website at www.serinusenergy.com.
Production information is commonly reported in units of barrel of oil equivalent ("boe" or "BOE") or in units of natural gas equivalent ("Mcfe"). However, BOEs or Mcfes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 barrel, or an Mcfe conversion ratio of 1 barrel:6 Mcf, 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 Serinus Energy
Serinus is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Ukraine, Brunei, Tunisia, Romania and Syria and with a risk profile ranging from exploration in Brunei, Romania and Syria to production and development in Ukraine and Tunisia. The common shares of the Company trade under the trading symbol "SEN" on both the TSX and the WSE (Warsaw Stock Exchange).
In Ukraine, Serinus owns an effective 70% interest in KUB-Gas LLC, a subsidiary in which Serinus has a 70% effective ownership interest through its indirect shareholding in KUBGAS Holdings Limited. The assets of KUB-Gas LLC consist of 100% interests in five licences near to the City of Lugansk in the northeast part of Ukraine. Four of the licences are gas producing.
In Tunisia, Serinus owns a 100% working interest in the Chouech Essaida, Ech Chouech, Sanrhar and Zinnia concessions, and a 45% working interest in the Sabria concession. Four of the concessions are currently producing oil or gas.
In Brunei, Serinus owns a 90% working interest in a production sharing agreement which gives the Company the right to explore for and produce oil and natural gas from Block L, a 1,123 square kilometre area covering onshore and offshore areas in northern Brunei.
In Romania, Serinus owns an undivided 60% working interest in the onshore Satu Mare concession, a 2,949 square kilometre exploration and development block, in north western Romania.
In Syria, Serinus holds a participating interest of 50% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon the satisfaction of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometre area in northwest Syria. The Company has an agreement to assign a 5% ownership interest to a third party which is subject to the approval of Syrian authorities, and which, if approved, would leave the Company with a remaining effective interest of 45% in Syria Block 9. Serinus declared force majeure, with respect to its operations in Syria, in July 2012.
The main shareholder of the Company is Kulczyk Investments S.A., an international investment house founded by Polish businessman Dr. Jan Kulczyk.
For further information, please refer to the Serinus Energy website (www.serinusenergy.com).
Translation: This news release has been translated into Polish from the English original.
Forward-looking Statements This release contains forward-looking statements made as of the date of this announcement with respect to future activities of Serinus in Ukraine, Tunisia and Brunei that are not historical facts and to future activities of the Company in those countries. 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.
Canada Suite 1170, 700-4th Avenue S.W., Calgary, Alberta, Canada Telephone: +1-403-264-8877 Facsimile: +1-403-264-8861 Dubai Al Shafar Investment Building, Suite 123, Shaikh Zayed Road, Box 37174, Dubai, United Arab Emirates Telephone: +971-4-339-5212 Facsimile: +971-4-339-5174 Poland Nowogrodzka 18/29 00-511 Warsaw, Poland Telephone: +48 (22) 414 21 00 Facsimile: +48 (22) 412 48 60