Serinus Energy Inc. ("Serinus", "SEN" or the "Company") (TSX:SEN) (WARSAW:SEN), announces the results of the 2016 year-end evaluation of its oil and gas reserves. The evaluation was prepared by RPS Energy Canada Ltd. ("RPS") in accordance with Canadian National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities, and includes the reserves in Serinus' Tunisian properties. RPS also conducted a contingent resources assessment of the Company's Satu Mare licence in Romania.
It was another challenging year for Serinus in 2016, and the petroleum industry in general. For the industry, the continuing issue was the low relative oil prices, although the price did begin to recover towards the end of 2016. The price of Brent Crude started at just under $47/bbl in early January, quickly dropping to the yearly low of $36.25/bbl on January 20, 2016. Oil prices then begin to gradually strengthen from January to the end of June, reaching $54.28 on June 28, 2016. The prices then fluctuated between a $45/bbl-$55/bbl band to the end of November, before strengthening through December, holding at prices above $50/bbl. The yearly high oil price was reached on December 28, 2016, at $58.07/bbl. The oil price has sustained levels above $50/bbl into 2017, creating more price certainty for the industry after two years of operating in a mostly sub-$50/bbl price environment.
Total corporate 1P and 2P reserves decreased from 2015 by 11% and 8%, respectively. Persistent low commodity prices were the dominant factor in 2016, especially in the first half. These reduced reserves volumes are due to earlier economic cut-offs and delays in some development plans. There were positive and negative revisions which are discussed below.
In Tunisia, 1P reserves decreased by 11%, while 2P reserves increased by 8%. The technical revisions to reserves are:
Net Present Value - After Tax, Using Forecast Prices
Net present values for Serinus' reserves declined by 79% and 20% for 1P and 2P reserves, respectively. The contributing factors to the $16.2 million decline in the 1P PV10 valuation were:
Contingent Resources - Romania
In addition to the 1P and 2P reserves assigned to the Company's properties in Tunisia, contingent resources are also assigned to the Moftinu discovery in Romania made in early 2015.
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 of the Satu Mare Concession obtained on October 28, 2016.
The above valuation results reflect the Company's 60% working interest in the Satu Mare Concession, and that the partner, Rompetrol who is currently in default will not participate in their share of capital spending. This Company WI case assumes the Company will have 100% capital interest and 60% working interest in production, revenue, operating expenses and abandonment costs. However, the Company is confident that it will be able to recover the full revenue through the project joint accounts.
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).
SOURCE: Serinus Energy Inc.
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