Serinus Announces 2016 Financial and Operating Results

CALGARY, ALBERTA -- (Marketwired) -- 03/16/17 -- Serinus Energy Inc. ("Serinus", "SEN" or the "Company") (TSX: SEN)(WARSAW: SEN) is pleased to report its financial and operating results for the year ended December 31, 2016.

2016 Highlights

--  In 2016, Serinus achieved average production (SEN WI) in Tunisia was
    1,124 boe/d, down from 1,348 boe/d during 2015. Lower production during
    2016 was due to natural declines and various technical issues including
    a blockage at WIN-12bis and ESP pump failures and subsequent un-planned
    workovers required at CS-1, CS-9 and CS-3.
--  The netback for Tunisia in 2016 was $11.41 per boe, compared to $20.86
    per boe in 2015. The lower netback was driven by lower commodity prices
    for most of the year partially offset by decreased production expenses.
--  Funds from operations was an outflow of $1.6 million for the year ended
    December 31, 2016 (2015: inflow of $16.8 million). Funds from operations
    from Tunisia were $4.4 million, the corporate loss was $9.0 million and
    offsetting this loss from continuing operations were the funds from
    operations from Ukraine of $3.0 million. In 2016, the sale of Ukraine in
    February 2016, lower production and lower commodity prices contributed
    to the decrease in funds from operations. The principle drivers were the
    lower production and netbacks described above.
--  The net loss from continuing operations for the year ended December 31,
    2016 was $27.5 million ($0.35 per share), compared to a net loss from
    continuing operations of $52.2 million ($0.66 per share) in 2015.
    Included within this loss was asset impairment of $16.8 million (2015:
    $51.4 million) as a result of negative technical reserve revisions and
    declining oil and natural gas prices.
--  Subsequent to year end, the Company filed a short form prospectus, dated
    February 21, 2017, which qualified for distribution 72 million common
    shares of the Company at CAD$0.35 per share for aggregate gross proceeds
    of CAD$25.2 million (net CAD$24.3 million, after agents fees of CAD$0.9
    million)("the Offering"). The Offering closed on February 24, 2017, and
    the net proceeds will be used by the Company to fund the development of
    the Moftinu Gas Development Project and pre-work for the 2018 drilling
    program in the Satu Mare Concession in Romania, production enhancement
    in the Sabria block in Tunisia, and for general corporate purposes.
--  In Q1 2016, Serinus announced the closing of the sale of its 70%
    interest in Ukraine to Resano Trading Ltd. for total cash consideration
    of $33.2 million including all working capital and inter-company
    adjustments. Net proceeds of the sale were used to repay $19.2 million
    of debt and interest outstanding with the European Bank for
    Reconstruction and Development ("EBRD") against the Romania and Tunisia
    debt facilities. The balance of the proceeds will be used for general
    corporate purposes and to help fund development of the Moftinu gas
    discovery in Romania. The results of operations of Ukraine are included
    in the consolidated results of Serinus up to the date the sale closed
    and are reflected as discontinued operations in the statement of
    operations.
--  As at December 31, 2016, the outstanding principal on EBRD debt was
    $27.1 million, reflecting prepayments made as a result of the
    disposition of Ukraine, regular scheduled repayments made in March and
    September, and a repayment under the excess cash sweep provision in May
    2016.

Summary Financial Results (US$ 000's unless otherwise noted)

                      Three Months Ending
                          December 31            Year Ending December 31
                  ----------------------------------------------------------

                       2016      2015  Change       2016      2015  Change
                  ----------------------------------------------------------
Net Oil and Gas
 Revenue              4,456     4,794      (7%)   15,947    25,975     (39%)

Net Income from
 Continuing
 Operations         (14,419)  (14,333)      1%   (27,521)  (52,150)     47%
  per share, basic
   and diluted        (0.18)    (0.18)             (0.35)    (0.66)

Funds from
 Continuing
 Operations            (368)   (2,192)    (83%)   (4,652)      935    (598%)
  per share, basic
   and diluted        (0.01)    (0.03)    (47%)    (0.06)     0.01

Capital
 Expenditures           975       563      73%     3,651    13,233     (72%)

Average Production
 (net to Serinus
 from continuing
 operations)
  Oil (Bbl/d)           842     1,001     (16%)      853     1,055     (19%)
  Gas (Mcf/d)         1,733     1,655       5%     1,628     1,755      (7%)
                  --------------------         --------------------
  BOE (boe/d)         1,131     1,277     (11%)    1,124     1,348     (17%)

Average Sales
 Price (from
 continuing
 operations)
  Oil ($/Bbl)      $  47.40  $  41.85      13%  $  42.10  $  52.75     (20%)
  Gas ($Mcf)       $   4.91  $   6.17     (20%) $   4.71  $   8.81     (47%)
                  --------------------         --------------------
  BOE ($/boe)      $  42.82  $  40.81       5%  $  38.75  $  52.77     (27%)

                           December 31                    December 31
                     ------------------------       ------------------------
                            2016        2015               2016        2015
                     ------------------------       ------------------------
Cash & Equivalents         4,297       6,594              4,297       6,594
Working Capital          (38,475)    (11,243)           (38,475)    (11,243)
Long Term Debt                             -                              -

Shares Outstanding    78,629,941  78,629,941         78,629,941  78,629,941
  Average for Period  78,629,941  78,629,941         78,629,941  78,629,941

General & Financial Highlights

--  Revenue, net of royalties, from Tunisia for year ended December 31, 2016
    decreased to $14.0 million, compared to $23.0 million in 2015, due to
    lower commodity prices and lower production.
--  For the three months ended December 31, 2016, revenue net of royalties
    decreased to $3.7 million, from $4.2 million in the comparative period
    of 2015, due to lower production, partially offset by higher commodity
    prices.
--  Total royalties paid decreased from $3.0 million in 2015 to $2.0
    million.in 2016. Much of this decrease was due to lower production and
    lower commodity prices.
--  Serinus made capital expenditures of $3.6 million in 2016, of which $1.9
    million and $1.7 million were in Tunisia and Romania respectively.
--  Due to the continued decline in oil prices and technical reserve
    revisions, Serinus took a further impairment charge of $16.8 million at
    December 31, 2016 against its Tunisian assets versus $51.4 million for
    2015.
--  In 2016, $7.6 million of the EBRD Senior Loan, including interest, was
    repaid from proceeds of the sale of Ukraine, scheduled semi-annual
    installments were paid in March and September 2016 of $1.7 million each
    and a repayment of $3.4 million was made in May 2016 under the cash
    sweep mechanism. As at December 31, 2016, the principle outstanding
    under the Senior Loan was $7.1 million.
--  At December 31, 2016, the Company was not in compliance with the
    financial debt to EBITDA ratio financial covenant at the corporate level
    on its debt held with the EBRD. The EBRD subsequently waived compliance
    with this ratio for the year ended December 31, 2016. Debt repayments
    will follow their original scheduled repayment terms and the bank will
    not be acting on its security. However, given the covenant was breached
    as at December 31, 2016, Serinus has reclassified its long-term debt to
    current in the financial statements, as required under accounting
    standards.

Operational Highlights

--  During 2016, production from Tunisia averaged 1,124 boe/d, down from
    1,348 boe/d during 2015, a decline of 17%. Lower production during 2016
    was due to natural declines and various technical issues including a
    blockage at WIN-12bis, ESP pump failures and subsequent un-planned
    workovers required at CS-1, CS-9 and CS-3.
--  In Q4 2016, production volumes decreased 11% to 1,131 boe per day,
    compared to 1,277 boe per day in the comparable period of 2015. The
    decreased production was due to natural declines and lower production in
    Chouech Es Saida as CS-3 and CS-1 wells went down in the middle of
    December. These two wells remain off-line in Q1 2017 pending pump
    replacement and workovers. CS-3 is anticipated to be back on stream in
    the second quarter of 2017 pending resolution of the shut-in of the
    Chouech Es Saida field announced February 28, 2017. The decline in
    production in the Chouech Es Saida field was offset by increased
    production in Sabria due to increased production from WIN12-bis as
    compared to 2015, due to a blockage in September and October restricting
    October 2015 production.
--  Minimal capital activity was undertaken in 2016 due to the low commodity
    prices restricting capital spend in Tunisia. In Romania, the National
    Agency for Mineral Resources ("NAMR"), the Romanian regulator, granted
    its final approval for the Phase 3 Extension Addendum for the Satu Mare
    Concession ("Satu Mare") in northwest Romania. The term is for three
    years and expires on October 28, 2019.

Outlook

Serinus will concentrate on the development of the Moftinu Gas Development Project in Romania which will include building surface facilities. This is a near-term project that is expected to begin producing from the gas discovery wells Moftinu-1001 and Moftinu-1000 in early 2018. The Corporation has obtained all necessary approvals for, and will soon commence, the construction of a gas plant with 15 MMcf/d of operational capacity. Construction of the project will proceed over 2017 with expected first gas from this project in Q1 2018. The Company is also developing the drilling program to meet work commitments for the extension.

Average working interest production in 2017 in Tunisia to the end of February was approximately 727 boe/d (556 bbl/d of oil, 1,030 MMcf/d of gas).

The Company's production has been significantly curtailed in the first quarter of 2017 as a result of the shut-in of the Chouech Es Saida field in Tunisia, which is expected to continue for the duration of the first quarter. Assuming the continued shut-in, production is projected to be approximately 650 boe/d for the first quarter of 2017. Full year production for 2017 is dependent on the successful resolution of the sit-in at the Chouech Es Saida field and associated security and safety issues, as well as the timing of the above mentioned capital program in Sabria.

Executive Appointment

The Company is pleased to announce the appointment of Mr. Calvin Brackman as Vice President, External Relations & Strategy. Mr. Brackman has a wealth of external relations and strategic planning experience, including being Director of Government Relations at PetroKazakhstan Inc. from 2003 to 2005. For the past 10 years Mr. Brackman has worked as a consultant and advised numerous international oil companies. Mr. Brackman has been Director of External Relations with Serinus since December, 2016.

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           Mcfe/d   Thousand Cubic Feet Equivalent
       Equivalent                             per day
----------------------------------------------------------------------------
MMcfe  Million Cubic Feet            MMcfe/d  Million Cubic Feet Equivalent
       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 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).

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.

Contacts:
Serinus Energy Inc.
Calvin Brackman
Vice President, External Relations & Strategy
+1-403-264-8877
[email protected]

Serinus Energy Inc.
Jeffrey Auld
Chief Executive Officer
+1-403-264-8877
[email protected]
www.serinusenergy.com

Source: Serinus Energy Inc.

You May Also Be Interested In

• SanDisk stock target lifted by Citi on continued demand strength
• Zhongchao to execute 1-for-3 share consolidation on Nasdaq
• Vesper Energy Breaks Ground on Nazareth Solar, Adding 201 MW to Its Growing Operating Portfolio