Serinus Energy Interim Loss Narrows, Financing Remains Precarious

LONDON (Alliance News) - Oil and gas firm Serinus Energy PLC said Friday its interim loss ...

Alliance News 10 August, 2018 | 10:12AM
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LONDON (Alliance News) - Oil and gas firm Serinus Energy PLC said Friday its interim loss narrowed as revenue rose but it continues to face a precarious financial situation as it seeks a reprieve from its creditors.

For the six months ended June, pretax loss narrowed to USD338,000 from USD1.6 million the year prior. This was after revenue rose to USD4.7 million from USD4.3 million the year before.

The auditor for Serinus - KPMG LLP - cautioned that "continued availability of the group's existing bank facilities is uncertain." Adding that this - as well as other matters - "constitute a material uncertainty that may cast significant doubt on the group's ability to continue as a going concern."

Serinus has faced a number of issues which have crimped their operations over a number of years.

"The group has faced financial difficulties stemming from the steep fall in crude oil prices in 2014/2015 which severely impacted operating revenues in Tunisia, resulting in cash flows that were insufficient to cover the corporate costs and debt service costs of the entity," Serinus explained in a statement.

"These issues were compounded during 2017 with the shut in of both Tunisian fields as a result of social unrest and protests in the country," the firm added. "The Sabria field recommenced production in September 2017 but was significantly impacted by the shut-in with production only returning to 60% of its pre shut-in levels. The Chouech Es Saida field remains shut-in, and the group is currently working towards reopening this field in February 2019 although this is dependent on the resolution of the above mentioned issues."

The firm expects to breach its debt covenants - constituting a USD5.4 million senior loan and USD27.6 million convertible loan - at the end of September and into the "foreseeable future." It is currently seeking a waiver of these covenants from its lenders. It had already secured a waiver for this debt in December 2017.

"Equity was issued in May 2018 raising net proceeds of USD12.7 million to enable the group to complete construction of a gas plant in Romania, into which two existing wells would be tied in and produced," Serinus added. "To date, these proceeds have primarily been used to fund the completion of the gas plant and drill the Moftinu-1007 well, which replaces the Moftinu-1001 well which suffered a blow out in December 2017. The group is in the process of claiming insurance proceeds in relation to this."

At the end of the period, Serinus held USD4.7 million in cash.

Shares in Serinus were untraded at 15.75 pence on Friday.

By Ahren Lester; ahrenlester@alliancenews.com

Copyright 2018 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Serinus Energy PLC 15.50 GBX -6.06 -
Serinus Energy PLC 0.78 -
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