2024
ANNUAL REPORT
2
SERINUS ENERGY
Visit our website for more information
www.serinusenergy.com
2024 ANNUAL REPORT
STRATEGIC REPORT
03 2024 Highlights
04 Serinus at a Glance
05
Operational Summary and Outlook
07
Serinus Investment Thesis
08
Serinus' Strategy
09
Chairman's Letter
10
Letter from the CEO
12
Report from the CFO
18
Review of Operations
18
Romania
19 Tunisia
20
Reserves
22
Environmental, Social and Governance
26
Risk Management Statement
GOVERNANCE
28
Board of Directors and Management Team
30
Senior Management
31
Corporate Governance Statement
35
Remuneration Committee Report
37
Audit Committee Report
39
Report of the Directors
FINANCIAL STATEMENT
40
Independent Auditor's Report to the Members of
Serinus Energy
44
Consolidated Statement of Comprehensive Income
45
Consolidated Statement of Financial Position
46
Consolidated Statement of Shareholder's Equity
47
Consolidated Statement of Cash Flows
50
Notes to the Consolidated Financial Statements
75
Advisors
2024 ANNUAL REPORT
3
FINANCIAL
•
Revenue for the year ended 31 December 2024 was $15.4 million (2023 -
$17.9 million)
•
Cash generated from operations for the year ended 31 December 2024 was
$1.1 million (2023 - $1.9 million)
•
EBITDA for the year ended 31 December 2024 was $1.4 million (2023 - $2.1
million)
•
Gross profit for the year was $1.4 million (2023 - $2.5 million)
•
The Group recognised impairment on its Romanian assets in the amount
of $5.7 million (2023 - $7.0 million) comprising $1.5 million related to the
depletion of the Moftinu gas field (2023 - $7.0 million) and $4.2 million for the
impairment of the Sancrai-1 exploration well (2023 - $nil)
•
The Group’s production expense averaged $40.81/boe (2023 - $34.78/boe)
•
The Group realised a net price of $77.31/boe for the year ended 31 December
2024 (2023 – $77.58/boe), comprising:
•
Realised oil price - $79.92/bbl (2023 – $79.85/bbl)
•
Realised natural gas price - $11.39/Mcf (2023 – $11.94/Mcf)
•
The Group’s operating netback decreased during the year ended 31 December
2024, in line with the commodity prices and declining production in Romania,
and was $27.07/boe (2023 - $33.89/boe), comprising:
•
Tunisia operating netback – $33.09/boe (31 December 2023 - $40.35/
boe)
•
Romania operating netback – negative $37.39/boe (31 December 2023
– negative $2.19/boe)
•
Capital expenditures of $1.1 million for the year ended 31 December 2024
(2023 - $5.5 million), comprising:
•
Tunisia - $1.1 million
•
Romania - $nil million
OPERATIONAL
•
Production in Chouech Es Saida continues to be stable and benefits from
artificial lift programme
•
Workovers to replace pumps at the CS-3 and CS-7 wells in Chouech es Saida
were completed under time and under budget
•
Pump life has been extended in Chouech es Saida and the most recently
replaced pumps had in-hole lives just short of four years. Longer pump life
improves the economics of the capital allocated to the artificial lift program
•
Long lead items for the Sabria W-1 sidetrack have been ordered and received
in country. Discussions are on-going with Compagnie Tunisienne de Forage
(CTF), the state rig company, regarding availability of rigs to perform this
sidetrack
•
During 2024, the Group completed three liftings of Tunisian crude oil, the most
recent occurring in December 2024 with a volume of 37,758 bbls lifted at an
average price of $74.19/bbl. Cash proceeds of $0.7 million were received in
January 2025 (net of $2.1 million in monthly prepayments previously received
•
The Group has scheduled the next lifting for June 2025
•
Production for the year averaged 555 boe/d, comprising:
•
Tunisia - 500 boe/d
•
Romania – 55 boe/d
•
The Group continued its excellent safety record with no Lost Time Incidents
in 2024
2024 HIGHLIGHTS
4
SERINUS ENERGY
SERINUS AT A GLANCE
Serinus Energy plc (the “Company” or “Serinus”) is an oil and gas
exploration, appraisal and development company which is incorporated
under the Companies (Jersey) Law 1991. The Company, through its
subsidiaries (together the “Group”), acts as the operator for all of 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 $94.5 million of revenue to the end of 2024. In addition to the Moftinu Gas
Development Project the Satu Mare Concession holds several highly prospective
exploration plays. Serinus’ recently completed 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 seismic 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.
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 1.7% 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 recent 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.
4
SERINUS ENERGY
2024 ANNUAL REPORT
5
CORPORATE
The Group is focused on developing its existing assets and
enhancing production by active reservoir management. A critical
foundation to the advancement of these projects is the cash flow
generation inherent in our production assets. For the year to 31
December 2024, the Group generated cashflow from operating
activities of $0.9 million and invested $1.1 million of capital
expenditure.
The Group is currently focused on enhancing production from
its Tunisian assets. The large underdeveloped Sabria field offers
significant opportunities in a well identified oilfield. Investments
in artificial lift and, in time, new wells offer near term production
growth. The Satu Mare Concession in Romania has excellent
exploration potential that can offer the Company another Moftinu
style shallow gas development. Work continues and exploration
targets have been identified. The Moftinu gas field is a shallow
gas field that has initial high production rates followed by natural
declines. Managing these declines to extract the most value from
the gas in place has allowed the Group to extract $94.5 million of
revenue from this field since production began in 2019.
ROMANIA
The Group’s Romanian operating subsidiary, Serinus Energy
Romania S.A. ("Serinus Romania"), holds the licence to the Satu
Mare concession area, covering approximately 2,950 km2 in the
north-west of Romania. The Moftinu Gas Development project
began production in 2019. The development project includes
the Moftinu gas plant and currently has four gas production
wells - M-1003, M-1004, M-1007 and M-1008. During 2024, the
Group's Romanian operations produced a total of 121 MMcf of
gas, equating to an average daily production of 55 boe/day (2023
- 103 boe/day).
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. The Group has recognised an impairment of $1.5
million related to Moftinu gas field.
The Group has identified additional gas volumes in uncompleted
zones in M-1003 and M-1007. During initial drilling and completion
of these wells gas was encountered and logged. The decision was
made to complete and produce lower zones until such time as
those zones were depleted. Upon depletion of the lower zones
the Group can return to these wells, complete the higher zones
and produce the incremental gas.
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 areas. 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.
The Canar-1 water injection well is currently disposing of all
produced water volumes from the Moftinu field. The use of
Canar-1 as a water injection well is delivering significant cost
savings in operating expenses due to the elimination of the high
costs of trucking produced water volumes for disposal off-site.
The Sancrai-1 exploration well, drilled in 2021, encountered gas,
however, the Group was unable to achieve measurable gas flow
across the three perforated zones, leading to the well’s suspension.
Following a comprehensive analysis in 2024, which assessed
the up-dip potential, the Group decided to abandon the well.
As a result, the Sancrai-1 well was impaired, with an impairment
expense of $4.2 million recognised for the exploration asset.
Serinus continued to operate safely and effectively in Romania
throughout the year. As at the year-end 2024, the Group had
achieved 2,078 accident-free days of continuous operation which
is a testament to the professionalism and hard work of our team
in Romania.
In February 2023, the International Chamber of Commerce (“ICC”)
released the final merits award in respect of Serinus Romania
arbitration case against its former partner in the Satu Mare
Concession in Romania, Oilfield Exploration Business Solutions
S.A. (“OEBS"), and has awarded in favour of Serinus
The decision of the arbitral tribunal has confirmed that, as a result
of OEBS’ default under the Joint Operating Agreement between
the parties (“JOA”), OEBS’ 40% participating interest in the Satu
Mare Concession in Romania will be transferred to Serinus as of
the notification to the parties of the approval by the Romanian
Government and the National Agency of Fiscal Administration
(“ANAF”). The arbitral tribunal has also directed OEBS to take
all necessary actions to formally transfer the 40% participating
interest to Serinus. Validity of the ICC Award was acknowledged
by the Romanian Court of Appeal in June 2024.
TUNISIA
The Group currently holds two concession areas within Tunisia,
through its operating subsidiary in Tunisia, Serinus Tunisia
B.V. (“Serinus Tunisia”). These concession areas both contain
discovered oil and gas reserves and are currently producing. The
largest asset is the Sabria field. Sabria is a large, conventional
oilfield which the Group’s independent reservoir engineers
have estimated to have approximately 445 million barrels of oil
equivalent originally in place. Of this oil in place only 1.7% has
been produced to date due to a low rate of development on the
field. Serinus has spent extensive time studying the best means of
further developing this field and considers this to be an excellent
asset for remedial work to increase production and, on completion
of ongoing reservoir studies, to conduct further development
operations including new wells. Due to a low rate of development
on the field, Serinus has spent extensive time studying the best
means of further developing this field and considers this to be
an excellent asset for remedial work to increase production and,
on completion of ongoing reservoir studies, to conduct further
development operations.
During 2024, the Group's Tunisian operations produced a total of
155 Mbbl of oil and 167 MMcf of gas, equating to an average daily
production of 500 boe/day (2023 - 539 boe/day).
The workover to install a pump into the Sabria W-1 well in 2023
encountered unexpected conditions as a result of old drilling
mud and tubulars left in the well from operations in 1998. The
Group and its partner, Enterprise Tunisienne D'Activite Petroliere
(“ETAP”), suspended the workover and have determined that a
sidetrack is required to complete the operation. The sidetrack
design has been completed and the long lead items have been
ordered and received in country.
The Group and ETAP also conducted workover operations on
the Sabria N-2 well in first half of 2023. Workover operations
were completed on time and within budget. The objectives of
the workover were to remove wellbore restrictions, install new
production tubing, and remediate reservoir damage around the
OPERATIONAL SUMMARY AND OUTLOOK
6
SERINUS ENERGY
wellbore. Wellbore restrictions were removed, and new production
tubing was installed. The well will need further stimulation to clean
up the formation damage and discussions are continuing with the
partner on this issue. The well was drilled in 1980 but was damaged
during completion and, although in proximity to producing wells,
in particular the prolific WIN-12bis well, was not able to flow oil
to surface. The Group’s engineering analysis estimates that a
successful workover and recompletion will initially increase gross
production from the Sabria field by approximately 420 boe/d.
Production from the Chouech Es Saida area increased during
2024. This was the result of the Group’s active management of
the artificial lift systems, optimising production rates. In addition,
the active life of the pumping units has been extended, this has
increased the pump life from seven months in 2019 to almost four
years in 2024.
The Group applied to extend the Ech Chouech licence which
expired in June 2022. The Group is continuing its application to
regain the licence once the licence process is formalised. The
Group remains the only feasible operator for the Ech Chouech
concession due to the proximity of the existing Group’s facilities at
Chouech Es Saida to the Ech Chouech oil field and legal privileges
which the Group enjoys as a former title holder granting the Group
pre-emptive rights for this concession.
Serinus has operated safely and efficiently in Tunisia throughout
the year. By year-end 2024, the Group had reached 3,313 accident-
free days without a lost-time injury in Tunisia, demonstrating the
professionalism and commitment of our team in Tunisia.
OPERATIONAL SUMMARY AND OUTLOOK (continued)
2024 ANNUAL REPORT
7
SERINUS INVESTMENT THESIS
Investment in Serinus offers shareholders an ability to access international
oil and gas upstream operations with strong cash flow generation through
the oil and gas commodity cycle. Our low-cost onshore asset base provides
significant near-term production growth opportunities. The size of the
existing asset base allows for significant organic growth without incremental
asset acquisition cost in areas where our technical knowledge has been refined
over the years that Serinus has operated these concession areas. Serinus offers
a compelling growth opportunity where risks are mitigated by our extensive
experience in our operating areas and the low-cost nature of our assets. The
Group’s existing assets also include large exploration prospects within close
proximity of existing infrastructure. The Group allocates capital to these exploration
prospects which if successful can add meaningful production and cash flow to the
Group.
Serinus’ operations in Romania are focused on the large Satu Mare Concession Area.
The Satu Mare Concession Area is located in the northwest of Romania along-side
the Hungarian border. This large block contains the Moftinu gas field, and the Group
believes that numerous shallow gas opportunities with similar characteristics to the
Moftinu field are present in the immediate surrounding area. In addition, the southern
portion of the concession offers excellent exploration opportunities for large oil prospects
as across the southern boundary of the Satu Mare concession is the Suplacu de Barcau
oil field (held by OMV Petrom). This is a significant oilfield estimated to have produced in
excess of 100 million barrels.
In Tunisia, the Group’s operations are focused on the Sabria and Chouech Es Saida fields.
Sabria is a very large conventional oilfield where our independent reservoir engineers
have accessed a field with 445 million barrels of oil equivalent originally in place. Of that
number approximately 1.7% has been recovered to date. This is a very low recovery factor for
a conventional oilfield and the Group expects to increase that recovery factor materially. The
Chouech field in southern Tunisia offers attractive opportunities to increase production from
existing oilfields through the application of standard oilfield practices. Serinus’ Tunisian assets
can be typified as existing discovered and producing oilfields where field optimisation provides
the path to production, revenue and cash flow growth with no exploration risk. Underlying the
Chouech field is the prospective Acacus gas zone. Gas has been discovered and produced from
this zone in nearby concessions and recent gas infrastructure developments make this exploration
opportunity commercially attractive.
In addition to the strong asset base Serinus has a strong and experienced management team. Within
each jurisdiction, we have local professionals managing the operations. Within the Group we have
significant technical and commercial experience and are able to apply that experience across our
business units.
8
SERINUS ENERGY
SERINUS' STRATEGY
VISION
The Group’s goal is to transform the potential of its extensive land base in Romania and
Tunisia into enhanced shareholder value through the efficient allocation of capital.
STRATEGY
Serinus is focused on significant growth potential within its existing concession and license
holdings in Romania and Tunisia through the development of low cost, high return projects,
as follows:
1.
Leverage Land Position:
•
One concession in Romania with multiple play types and prospects
•
Two exploration and production concessions in Tunisia with all work commitments
completed
•
Extensive oil and natural gas exploration and development potential within
multiple play horizons
2.
Commitment to Shareholders:
•
Cohesive management team with a commitment to enhancing shareholder value
•
Abide by the highest thresholds of disclosure for an AIM-listed Group
•
Extensive experience and a proven track record of the allocation of shareholder
capital
3.
Manage Risks:
•
Managing surface and subsurface risks through constant evaluation and
introduction of new technologies
•
Allocate capital to projects with attractive returns at relatively low risk profiles
•
Operator of all concessions allows for cost control
4.
Focus on Growth:
•
Leverage cash flow to grow through expanded exploration and development of
the existing asset base
•
Seek acquisitions that will provide synergies at a cost that is accretive to
shareholders
2024 ANNUAL REPORT
9
Dear shareholders,
2024 was a year defined by our employees. In a year that the Group spent in preparations for drilling operations in 2025 our teams
engaged and enthusiastically developed the knowledge and capital required to execute our future operations.
Corporately our teams work diligently to control and reduce costs to maximise the operating cash flow available to our growth plans.
Significant reductions in general and administrative costs allow more of our generated cash flow to be allocated to operations which
drive value creation.
In Romania our highly capable team maintained the production at the Moftinu gas field and work tirelessly to navigate the often
complicated Romanian legal and fiscal environment. Health and safety have always been a priority, and it is admirable that our
Romanian team has built and operated the Moftinu gas plant with no lost time injuries for the productive life of the field. Since we
first flowed gas from the Moftinu gas field the team has been diligently focused on health and safety. In addition, the team has sought
ways to reduce reliance on the Romanian electrical grid by installing solar panels on many of our facilities. Costs savings have been
generated by using creative solutions. No better is that illustrated than using the Canar-1 exploration well as a water injection well
thereby eliminating the need to truck produced water but rather injecting that water back into the lower reservoirs. This initiative has
generated significant cost savings.
The team in Tunisia has been very busy with maintenance of our facilities and upgrading those facilities. Rigorous monitoring of
production parameters and pump frequency has allowed for a significant increase in pump life. The longer a pump is able to produce
the fewer replacements are required thus adding to the efficiency of capital allocated to our production. The team in Tunisia has been
focused on ensuring that all the long-lead items required for the side-tracking of the Sabria W-1 well are in place. This is logistically
challenging but critical. Should materials not be in place when a rig becomes available the rig slot could be lost and delays created.
I am pleased to say that the team has been diligent in their efforts and all long-lead items are in country ready to begin operations in
2025.
It is reassuring to know that we have been able to develop such a driven and competent team within our Company. It is also impressive
to see the collaboration between the technical and financial functions of our business units. Skills that may be common in one of our
business units may not be common in another and the collaborative and efficient transfer of those skills is most impressive. This skills
transfer is a key feature of the synergies between our operating areas.
In closing I look forward to operations in 2025 safe in the knowledge that our people are diligently working to ensure the best chance
of success.
Yours sincerely,
Łukasz Rędziniak, Chairman of the Board of Directors
14 March 2025
CHAIRMAN'S LETTER
10
SERINUS ENERGY
10
SERINUS ENERGY
Dear Fellow Shareholders,
As we look back at 2024 we can reflect that the progress that has been
made has been significant. Our 2024 results reflect both the challenges and
opportunities as we navigate a complex energy landscape in both of our
business units.
Operationally 2024 was a year where the Group accrued cash, refined its
drilling and development plans and put in place the equipment, manpower
and technical knowledge to progress developments in 2025. Critical to our
growth plans is the drilling of a side-track on the Sabria W-1 well. This well is
the first candidate for the installation of artificial lift in the Sabria field. Initially
plans focused on working over this well and installing a pump in the existing
bottom hole section. These plans were delayed when, upon entering the
lower sections of the well, it was found that the conditions in the well were
unsuitable for the installation of a pump. Rather than continue with the work
the Group made the decision to perform a side-track. This work will provide
the company with a new, clean section in which to install the pump. Work
in 2024 continued on design and technical analysis of this project whilst
the Group waited for a suitable rig to become available. The rig has been
contracted and subject to the performance of drilling ahead of the Group’s
rig-slot will be active in 2025.
Pump performance in Chouech Es Saida continued to improve demonstrating
the positive effect that artificial lift can have on these types of fields. In late
2024 pumps were replaced in the CS-3 and CS-7 wells. These pumps
had been in place for almost four years, a dramatic increase in pump life
attributable to close monitoring and maintenance. Continued optimisation
of pump and well performance has allowed the extraction of material
quantities of oil and gas.
In Romania the Moftinu gas field is nearing the end of its natural life. The field
has exceeded all third-party engineering estimates of recoverable gas and
has allowed the Group to showcase how developments in Romania can be
cash flow accretive. Romania is currently politically dynamic with Presidential
elections expected in 2025. Work on further projects in Romania will depend
on the outcomes of this political situation, however there are considerable
opportunities for growth within this concession area. The Group has been
engaged with the Romanian authorities in efforts to assist Romania in creating
an environment where the vast potential of gas development in Romania can
be realised.
Financially the Group continues to provide positive news. Revenue for the
full year 2024 was US$15.4 million demonstrating stable production and
commodity prices. The Group showed strong cost control and was able to
realise EBITDA of US$1.4 million. Reductions in general and administrative
costs from US$4.9 million in 2023 to US$3.6 million in 2024 have more than
offset the slight decrease in production related to the natural declines in
Romania.
Looking ahead we are eager to commence the well side-track at the Sabria
W-1 well. We expect this well to demonstrate the efficacy of artificial lift in the
Sabria field. Third-party estimates suggest that incremental gross production
from the introduction of this pump could exceed 400 boe/d. The potential
for additional pumps in the Sabria field is very exciting.
In summary I would like to thank our shareholders for their continued
support. Serinus enjoys an asset position that offers excellent opportunities
for growth. Our team is engaged and energised and looks optimistically to
the future growth of our business.
Yours sincerely,
Jeffrey Auld, Chief Executive Officer
14 March 2025
LETTER FROM THE CEO
2024 ANNUAL REPORT
11
12
SERINUS ENERGY
LIQUIDITY, DEBT AND CAPITAL RESOURCES
During the year the Group invested a total of $1.1 million (2023 - $5.5 million) on capital
expenditures before working capital adjustments. In Tunisia, the Group invested $1.1
million (2023 - $5.0 million) performing workovers and purchasing long lead items for
the Sabria artificial lift programme. In Romania, the Group invested $nil million (2023
- $0.5 million) during the year.
The Group’s funds from operations for the year ended 31 December 2024 were $1.1
million (2023 - $1.9 million). Including changes in non-cash working capital, the cash
flow generated from operating activities in 2024 was $0.9 million (2023 – $1.9 million).
The Group is debt-free and continues to pursue opportunities to expand and continue
growing production within our existing resource base to deliver shareholder returns.
Year ended 31 December
($000)
2024
2023
Current assets
Current liabilities
8,558
(17,890)
11,341
(16,926)
Working Capital
(9,332)
(5,585)
The working capital deficit at 31 December 2024 was $9.3 million (2023 – $5.6 million
deficit).
Current assets as at 31 December 2024 were $8.6 million (31 December 2023 - $11.3
million), a decrease of $2.7 million. Current assets consist of:
•
Cash and cash equivalents of $1.4 million (2023 - $1.3 million)
•
Restricted cash of $1.1 million (2023 - $1.2 million)
•
Trade and other receivables of $5.4 million (2023 - $8.1 million).
•
Product inventory of $0.7 million (2023 - $0.7 million)
Current liabilities as at 31 December 2024 were $17.9 million (2023 – $16.9 million), an
increase of $1.0 million. Current liabilities consist of:
•
Accounts payable and accrued liabilities of $7.4 million (2023 - $9.3 million)
•
Decommissioning provision of $9.4 million (2023 - $6.7 million)
•
Tunisia - $7.7 million (2023 - $5.3 million)
•
Romania - $0.9 million (2023 - $0.6 million)
•
Canada - $0.8 million (2023 - $0.8 million) which are offset by restricted cash
in the amount of $1.1 million (2023 - $1.2 million) in current assets
•
Income taxes payable of $0.9 million (2023- $0.8 million)
•
Current portion of lease obligations of $0.2 million (2023 - $0.1 million)
NON-CURRENT ASSETS
Property, plant and equipment (“PP&E”) decreased to $44.4 million (2023 - $56.0
million). The decrease is due to depletion expense of $3.2 million, a change in the
estimate of asset retirement assets of $3.7 million, and an impairment expense of
$1.5 million in Moftinu due to natural depletion of the gas field. Also, Santau was
reclassified to exploration and evaluation assets resulting in a reduction in PP&E of
$4.3 million. The Santau assets, initially transferred from Exploration and Evaluation
(“E&E”) assets to PP&E in 2017, have been reclassified back to E&E assets to align with
IAS 1 requirements, with no impact on the Group’s total assets, as Santau relative value
has increased due to impairments and depletion of Romania’s main producing oil and
gas assets (see Notes 11 and 12 of the Financial Statements). The reductions in PP&E
were partially offset by capital additions of $1.1 million. E&E assets increased by the
Santau reclassification of $4.3 million but this was offset by the $4.2 million impairment
of the Sancrai-1 well and totalled $10.7 million (2023 - $10.7 million)..
REPORT FROM THE CFO
2024 ANNUAL REPORT
13
FINANCIAL REVIEW – YEAR ENDED 31 DECEMBER 2024
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:
Year ended 31 December
($000)
2024
2023
Cash flow from operations
Changes in non-cash working capital
865
243
1,875
66
Funds from operations
1,108
1,941
Funds from operations per share
0.01
0.02
Tunisia generated funds from operations of $4.9 million (2023 –
$7.9 million) and Romania used funds in operations of $0.9 million
(2023 – $1.3 million). Funds used at the Corporate level were $2.9
million (2023 - $4.7 million) resulting in net funds from operations
of $1.1 million (2023 – $1.9 million).
PRODUCTION
Year ended
31 December 2024
Tunisia
Romania
Group
%
Crude oil (bbl/d)
Natural gas (Mcf/d)
Condensate (bbl/d)
423
457
-
-
331
-
423
788
-
76%
24%
-
Total (boe/d)
500
55
555
100%
Year ended
31 December 2023
Crude oil (bbl/d)
Natural gas (Mcf/d)
Condensate (bbl/d)
458
484
-
-
617
-
458
1,101
-
71%
29%
-
Total (boe/d)
539
103
642
100%
During the year, production volumes decreased by 87 boe/d (14%)
to 555 boe/d (2023 – 642 boe/d) primarily due to a combination
of natural production declines and the shut-in of wells in Moftinu.
Romania’s production volumes decreased by 48 boe/d (47%) to 55
boe/d (2023 – 103 boe/d) while production in Tunisia decreased by
39 boe/d (7%) to 500 boe/d as result of the oil fields’ maintenance
programme. Ongoing workover programmes continue in the
Chouech Es Saida field as part of active production management.
OIL AND GAS REVENUE
($000)
Year ended
31 December 2024
Tunisia
Romania
Group
%
Oil revenue
Gas revenue
Condensate revenue
12,345
1,972
-
-
1,084
-
12,345
3,056
-
80%
20%
-
Total revenue
14,317
1,084
15,401
100%
Year ended
31 December 2023
Oil revenue
Gas revenue
Condensate revenue
13,313
1,879
-
-
2,683
-
13,313
4,562
-
74%
26%
-
Total revenue
15,192
2,683
17,875
100%
REALISED PRICE
Year ended
31 December 2024
Tunisia
Romania
Group
Oil ($/bbl)
Gas ($/Mcf)
Condensate ($/bbl)
79.92
11.79
-
-
10.72
-
79.92
11.39
-
Average realised price ($/boe)
78.51
64.34
77.31
Year ended
31 December 2023
Oil ($/bbl)
Gas ($/Mcf)
Condensate ($/bbl)
79.85
10.65
-
-
13.05
-
79.85
11.94
-
Average realised price ($/boe)
77.45
78.30
77.58
Revenue during the year decreased to $15.4 million (2023 – $17.9
million) as the Group saw the average realised price decrease
to $77.31/boe (2023 - $77.58/boe) and production decline in
Romania.
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 is sold to the
international market through periodic liftings. In 2024, the Group
completed three oil liftings (2023 – two liftings).
ROYALTIES
Year ended 31 December
($000)
2024
2023
Tunisia
Romania
1,831
48
1,929
125
Total
Total ($/boe)
Tunisia oil royalty (% of oil revenue)
Romania gas royalty (% of gas revenue)
1,879
9.43
12.8%
4.4%
2,054
8.91
12.7%
4.7%
Total (% of revenue)
12.2%
11.5%
14
SERINUS ENERGY
REPORT FROM THE CFO (continued)
Royalties decreased to $1.9 million (2023 - $2.1 million) while the
Group’s average royalty rate increased to 12.2% (2023 – 11.5%).
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 during 2024 remained higher
than the realised price by 40%. Romanian royalty rates vary based
on the level of production during a quarter. Natural gas royalty
rates range from 3.5% to 13.0%.
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 2024, the royalty rate remained unchanged
in Sabria at 10% for oil and 8% for gas. Chouech Es Saida royalty
rate was flat at 15% for both oil and gas.
PRODUCTION EXPENSES
Year ended 31 December
($000)
2024
2023
Tunisia
Romania
Canada
6,453
1,665
12
5,349
2,633
31
Group
8,130
8,013
Tunisia production expense ($/boe)
Romania production expense ($/boe)
35.38
98.87
27.27
76.84
Total production expense ($/boe)
40.81
34.78
During the year production expenses increased by $0.1 million
(1%) to $8.1 million (2023 - $8.0 million). Per unit production
expenses increased by $6.03/boe (17%) to $40.81 (2023 - $34.78).
Tunisia’s production expenses increased from the prior year by
$1.2 million to $6.5 million (2023 - $5.3 million), with per unit
production increasing to $35.38/boe (2023 - $27.27/boe) mainly
due to the increase of roads maintenance in Chouech Es Saida
field as consequence of weather condition changes resulting in
increased frequency of sandstorms.
Romania’s overall operating costs decreased to $1.7 million (2023
– $2.6 million), with per unit production expenses increasing
to $98.87/boe (2023 - $76.84/boe) due to naturally declining
production and the impact of inflation in Romania.
Canada production expenses relate to the Sturgeon Lake assets,
which are not producing and are incurring minimal operating
costs to maintain the property.
OPERATING NETBACK
Serinus uses operating netback as a key performance indicator
to assist management in understanding Serinus’ profitability
relative to current market conditions and as an analytical tool to
benchmark changes in operational performance against prior
periods. Operating netback consists of petroleum and natural gas
revenues less direct costs consisting of royalties and production
expenses. Netback is not a standard measure under IFRS and
therefore may not be comparable to similar measures reported
by other entities.
Year ended 31 December 2024
($/boe)
Tunisia
Romania
Group
Sales volume (boe/d)
Realised price
Royalties
Production expense
498
78.51
(10.04)
(35.38)
46
64.34
(2.86)
(98.87)
544
77.31
(9.43)
(40.81)
Operating netback
33.09
(37.39)
27.07
Year ended 31 December 2023
($/boe)
Tunisia
Romania
Group
Sales volume (boe/d)
Realised price
Royalties
Production expense
537
77.45
(9.83)
(27.27)
94
78.30
(3.65)
(76.84)
631
77.58
(8.91)
(34.78)
Operating netback
40.35
(2.19)
33.89
The Group operating netback decreased to $27.07/boe (2023 –
$33.89/boe) due to lower realised prices in Romania and higher
per unit production expenses.
The Group generated a gross profit of $1.4 million (2023 – $2.5
million) due to increased average realised price in Tunisia offset by
increased production costs.
EARNING BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTISATION (“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,
depletion and depreciation, and amortisation expense. EBITDA
is not a standard measure under IFRS and therefore may not
be comparable to similar measures reported by other entities.
During the year ended 31 December 2024, the Group’s EBITDA
decreased to $1.4 million (2023 - $2.1 million).
WINDFALL TAX
Year ended 31 December
($000)
2024
2023
Windfall tax
Windfall tax ($/Mcf - Romania gas)
Windfall tax ($/boe - Romania gas)
340
3.36
20.17
783
3.81
22.84
During 2024, the Group incurred windfall taxes in Romania of
$0.3 million (2023 - $0.8 million), a decrease of $0.5 million. This
decrease is directly related to decreased production and lower
realised gas prices which decreased from an average realised
price of $13.05/Mcf in 2023 to $10.72/Mcf in 2024.
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.
2024 ANNUAL REPORT
15
DEPLETION AND DEPRECIATION
Year ended 31 December
($000)
2024
2023
Tunisia
Romania
Corporate
3,188
340
125
3,582
866
124
Total
3,653
4,572
Tunisia ($/boe)
Romania ($/boe)
17.48
20.16
18.26
25.27
Total ($/boe)
18.34
19.84
Depletion and depreciation expense decreased by $0.9 million (20%) to $3.7
million (2023 - $4.6 million), being a per unit decrease of $1.50/boe to $18.34/
boe (2023 - $19.84/boe). The decrease in expense is primarily due to a lower
depletable base on the Group’s assets and declining production in Romania.
GENERAL AND ADMINISTRATIVE (“G&A”) EXPENSE
Year ended 31 December
($000)
2024
2023
G&A expense
G&A expense ($/boe)
3,409
17.12
4,928
21.39
G&A costs decreased during the year by $1.5 million (31%), totalling $3.4
million (2023 - $4.9 million). This reduction was driven by lower personnel
expenses, decreased professional services fees, and the implementation of
cost control measures across the Group.
SHARE-BASED PAYMENT
Year ended 31 December
($000)
2024
2023
Share-based payment
Share-based payment ($/boe)
221
1.11
3
0.01
Share-based compensation increased to $221 thousand (2023 – $3 thousand)
due to the Company granting 6,537,280 ordinary shares of nil par value to
directors and senior management under the Company’s long term incentive
plan.
NET FINANCE EXPENSE
Year ended 31 December
($000)
2024
2023
Interest on leases
Accretion on decommissioning provision
Foreign exchange and other
126
1,667
(1,000)
76
1,801
46
793
1,923
Net finance expense for 2024 decreased to $0.8 million (2023 – $1.9 million)
predominantly due to foreign exchange gains and other income.
IMPAIRMENT
At 31 December 2024, the Group completed an impairment assessment to
determine if there were any indicators of impairment or impairment reversals.
In Tunisia, there were no indicators of impairment or impairment reversals
identified at Sabria or South Tunisia. The Group had applied to extend the
Ech Chouech licence but this expired in June 2022. The Group intends to
continue its application to regain the licence once the licence application
process is formalised. No indication has been received that the Group will not
be successful once the process to re-apply becomes available and as such has
16
SERINUS ENERGY
made the judgement that it will be able to regain the Ech Chouech licence and therefore no impairment has been
charged to this asset.
In Moftinu, the Group determined that there were indicators of impairment and recognised an impairment
expense of $1.5 million. The primary impairment indicators in Romania during 2024 included reduced gas prices
throughout the year, natural depletion of the Moftinu gas field reflecting on life of shallow gas fields and the fiscal
regime in Romania.
The Sancrai-1 exploration well was drilled in 2021 and encountered gas; however, the Group was unable to
achieve a measurable gas flow across the three perforated zones. As a result, the well was suspended. Following
a comprehensive analysis at the 2024 year-end, which included assessment of up-dip potential, the decision
was made to abandon the well. Consequently, the Sancrai-1 well was impaired, and the Group recognised an
impairment expense of $4.2 million related to the exploration asset.
TAXATION
For the year ended 31 December 2024, income tax expense amounted to $1.1 million (31 December 2023 - $1.7
million). The decrease was driven by lower taxable income and the recovery of tax basis in Tunisia during the year.
SOLIDARITY TAX
On 29 December 2022, the Government of Romania published Emergency Ordinance no.186/2022 detailing
measures to implement Council Regulation (EU) 2022/1854 regarding the emergency intervention to introduce a
solidarity contribution for companies that carry out activities in the oil, natural gas, coal and refinery sectors. This
additional tax in Romania is calculated at a rate of 60% applied to the Group’s annual profit, in excess of 20% of its
average profits for the financial years 2018-2021. The solidarity tax applies for the financial year 2022 only.
The Group does not believe that the solidarity tax is applicable to its operations in Romania, has received legal
advice to support that position and will continue challenging the legality of this additional tax. Throughout 2024
and early 2025, the Group has continued contesting the Romanian tax authority's decision to impose a Solidarity
Tax, arguing that the tax is not applicable to its 2022 profits due to retroactivity, excessive taxation, and violations of
legal principles. Despite filing administrative and legal challenges, including a preliminary claim and suspension
request, both were denied, the Group is currently awaiting the Romanian court’s reasoning before pursuing further
appeals, possible constitutional challenge, and international arbitration.
If the Group were to consider the tax applicable for 2022, then the amount due is estimated to be approximately
$0.76 million, while for 2023 and 2024 there is no solidarity tax since the operations in Romania are in annual loss
position. Consistent with the requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the
Group has assessed that the Solidarity Tax is not applicable and, accordingly, has not recognised a provision for
this tax in its financial statements.
FOREIGN CURRENCY TRANSLATION
Foreign currency translation occurs from fluctuations in the foreign exchange rates in entities with a different
functional currency than the reporting currency (USD). Functional currency of Serinus Tunisia remained USD and
the management do not envisage any triggers which could lead for its change in foreseeable future. Functional
currency of Serinus Romania was Romanian Leu (RON) up to 31 December 2022 subsequent to which management
considered changed circumstances and economic environment in Romania and concluded that functional currency
of the Group’s Romanian business unit should be changed from RON to USD in 2023. In making this conclusion,
management considered all primary and secondary indicators for determination of the functional currency in
accordance with IAS 21 The Effects of Changes in Foreign Currency Exchange Rates. Particularly, management
considered cash flow indictors of Serinus Romania, its sales price and sales market indicators, expense indicators,
financing indicators, degree of autonomy, as well as intra-Group transactions and arrangements.
GOING CONCERN
The Directors have considered the going concern of the Group and are satisfied that the Group has sufficient
resources to operate and to meet its commitments in the normal course of business for not less than 12 months
from the date of these consolidated financial statements. Directors have considered the Group’s net liability
position and the mitigating factors, which support the Group’s ability to continue as a going concern (see Note
2 of the Financial Statements). On that basis, the Directors consider it appropriate to prepare the consolidated
financial statements on a going concern basis.
Yours sincerely,
Vlad Ryabov, Chief Financial Officer
14 March 2025
REPORT FROM THE CFO (continued)
2024 ANNUAL REPORT
17
18
SERINUS ENERGY
ROMANIA
•
Satu Mare Block – 2,950 km2 of onshore land.
•
Located within the Pannonian Basin on trend with discovered and producing oil and
gas fields and close to infrastructure.
•
Multiple play types that have produced or are producing along the same trend,
including shallow amplitude-supported gas reservoirs; conventional siliciclastic oil
reservoirs; and fractured-basement oil and gas reservoirs.
•
Serinus operates with a 100% working interest which is owned and operated
through the wholly owned subsidiary Serinus Energy Romania S.A. The Group
has completed all of its commitments under the fourth exploration phase of the
Satu Mare Concession Agreement. In October 2023, the Group received a four
year exploration period extension divided into 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.
SATU MARE CONCESSION – HISTORY
•
Serinus farmed-in to the Satu Mare Concession in 2008 and earned 60% working interest by funding 100% of work commitments
for Exploration Phases 1 and 2.
•
The Group has a 100% working interest in the concession as its partner has defaulted on its obligations under the Joint Operating
Agreement. The Group filed a Request for Arbitration with the Secretariat of the International Court of Arbitration of the International
Chamber of Commerce (“ICC”) seeking a declaration affirming the Group’s rightful claim of ownership of its defaulted partners’
40% participating interest and to compel transfer of that interest to the Group. In 2023 Serinus announced that it had received
confirmation from the ICC that as a result of its partners’ default under the Joint Operating Agreement, the defaulted partners’ 40%
participating interest in the Satu Mare concession will be transferred to Serinus Romania, directing the defaulted partner to take all
necessary actions to formally transfer the 40% participating interest to Serinus.
•
Serinus has completed all the phase 1 and 2 work commitments, as follows:
•
Acquired two 3D seismic surveys covering a total of 260 km2 (80 km2 Moftinu & 180 km2 Santau Surveys).
•
Drilled four wells resulting in Moftinu gas discovery (Madaras-109, Moftinu 1000, 1001 & 1002bis wells).
•
Completion of Phase 2 entitled Serinus to enter Exploration Phase 3.
•
The Phase 3 work program included the following commitments:
•
To drill two wells: one well to a depth of 1,000m and one well to a depth of 1,600m.
•
Serinus drilled M-1007 (a re-drill of M-1001) and M-1003 (1,600m).
•
Renegotiated commitment - to drill two exploration wells: one well to a depth of 1,000m and one well to a depth of 1,600m.
These wells replaced the previous commitment of 120 km2 of 3D seismic.
•
The M-1008 well was drilled in February 2021 and qualified as the 1,000m commitment well and the Sancrai well was
drilled in the second half of 2021 which qualified as the 1,600m well.
•
The Group completed all of its commitments under the third exploration phase of the Satu Mare Concession Agreement, and in
October 2021, received an additional two-year evaluation phase on the Satu Mare Concession until 27 October 2023. The Group
agreed to the following work commitments over the term of this evaluation phase:
•
Phase 1: From 28 October 2021 to 27 October 2022, the Group was required to reprocess 160.9 km 2D seismic in the Madaras
area at an estimated cost of $100,000; and
•
Phase 2: From 28 October 2022 to 27 October 2023, the Group was required to reprocess 30.1 km 2D seismic in the Santau-
Nusfalau area at an estimated cost of $50,000.
•
The Phase 1 work commitment was completed in 2022 and Phase 2 was completed early in 2023.
•
The greater Moftinu gas field area has been declared a commercial field.
•
In October 2023, the Group has received an additional exploration phase extension of the Satu Mare Concession in Romania. The
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.
REVIEW OF OPERATIONS
2024 ANNUAL REPORT
19
Serinus generated the first gas production in the region in April 2019, after the successful completion of the Moftinu Gas Plant. The
Moftinu Gas Project is the development of the shallow (800-1,000m), multi-zone Moftinu gas field. The field has relatively low drilling and
completion costs, with strong initial well production rates. Serinus also built a three-kilometre sales line that ties-in the Moftinu Gas Plant
into the Transgaz pipeline, Abramut. The infrastructure created by Serinus in the Satu Mare area represents a very important addition and
investment which has established the Group as one of the most significant investors in the area.
The Moftinu gas plant was designed at a capacity of 15 MMcf/d and can accommodate up to six flowlines. During 2024, production was
predominantly comprised from well M-1004 averaging 0.3 MMcf/day (2023 – 0.6 MMcf/d). The Group continues to explore future drilling
locations both within the existing field of Moftinu, and throughout the rest of the Satu Mare concession. The Group believes there are
similar shallow gas fields to the Moftinu gas field, providing Serinus with additional low-cost shallow gas reserves.
TUNISIA
The Group currently holds two Tunisia concessions, each of which currently produces oil and
gas (Sabria and Chouech Es Saida). This production has been sustained with a low-cost, low-risk
development program, but has significant growth opportunities over the medium to long-term.
The Group has no outstanding work commitments.
License
Serinus Working
Interest
Approximate Gross
Area (acres)
Expiry
Sabria
Chouech Es Saida
Ech Chouech
Sanrhar
Zinnia
45% (ETAP 55%)
100%
100%
100%
100%
26,196
42,526
35,139
36,879
17,471
November 2028
December 2027
Expired June 2022
Relinquished 2021
Relinquished 2021
The Group applied to extend the Ech Chouech licence which expired in June 2022. The Group is
continuing its application to regain the licence once the licence process is formalised. The Group
remains the only feasible operator for the Ech Chouech concession due to the proximity of the
existing Group’s facilities at Chouech Es Saida to the Ech Chouech oil field and legal privileges
which the Group enjoys as a former title holder granting the Group pre-emptive rights for this concession.
Sabria
•
Produced over 7.2 million boe (gross) to date.
•
Large Ordovician light oil field with stable production from its large reserve base and long reserves life index.
•
The Ordovician reservoir at Sabria contains 445 million bbl OIIP (P50), into which only eight wells (12 including re-entries) have
been drilled. The reservoir comprises a large stratigraphic trap with a continuous oil column that spans the Upper Hamra,
Lower Hamra and the El Atchane formations.
•
Installation of artificial lift in the Sabria W-1 well will require a sidetrack. The sidetrack design has been completed and the
procurement process for the long lead items was finalised. Plans for additional production enhancement through artificial lift
are in place for other wells in the field.
Chouech Es Saida
•
Produced over 4.0 million boe to date from the TAGI Formation in the Triassic reservoir.
•
The deeper Silurian Acacus sands and the Tannezuft fan, which have been penetrated successfully and produced hydrocarbons
from two wells in the concession, hold enormous growth potential for Serinus.
•
The Silurian Acacus sands, which are hydrocarbon-charged in the Chouech block, are emerging in Southern Tunisia as a major
new oil, condensate and gas play with exploration success rates of nearly 100%.
•
The Group continued to optimise the performance of the pumps in Chouech Es Saida wells in 2024, resulting in steadily
improving performance from the field.
20
SERINUS ENERGY
RESERVES
GROUP NET 1P & 2P RESERVES – USING FORECAST PRICES
2024
2023
Oil &
Liquids
(Mbbl)
Gas
(MMcf)
Boe
(Mboe)
Oil &
Liquids
(Mbbl)
Gas
(MMcf)
Boe
(Mboe)
Change
Tunisia
Proved (1P)
Probable
2,900
2,360
6,710
5,260
4,018
3,237
2,220
1,910
4,070
4,930
2,898
2,732
38.65%
18.48%
Proved & Probable (2P)
5,260
11,970
7,255
4,130
9,000
5,630
28.86%
Romania
Proved (1P)
Probable
0.95
0.66
1,310
910
219
152
0.4
0.2
1,100
1,080
183
180
19.67%
-15.56%
Proved & Probable (2P)
1.61
2,220
371
0.6
2,180
363
2.20%
Group
Proved (1P)
Probable
2,901
2,361
8,020
6,170
4,238
3,389
2,220
1,910
5,170
6,010
3,081
2,912
37.54%
16.38%
Proved & Probable (2P)
5,262
14,190
7,627
4,130
11,180
5,993
27.26%
The upward revision in Group reserves was attributable to reclassification of certain volumes in Tunisia from Contingent Resources to
Reserves and increased commodity prices that more than offset 2024 production. Given that the Ech Chouech licence had expired in
June 2022, the Group reserves for the year ended 31 December 2024 and 2023 do not include reserves attributed to Ech Chouech. The
Group had applied to extend the Ech Chouech licence but this expired and the Group intends to continue its application to regain the
licence once the licence application process is formalised. No indication has been received that its application would not be successful
once the process to re-apply becomes available and as such the Group has made the judgement that it will be able to regain the Ech
Chouech licence and therefore no impairment has been charged to this asset. For the year ended 31 December 2021, the reserves
report attributed 253Mboe of 2P Reserves to Ech Chouech..
CONTINGENT RESOURCES
The Tunisian contingent resources are related to two further potential development wells. Currently the specific contingency which would
convert these contingent resources to reserves is the Group committing to the development program and setting out a development
plan.
The Romanian contingent resources consist of the resources in two specific reservoir sand layers which are expected to be recovered
from existing wells, but which will require additional completion work or future recompletion prior to the start of production. The
specific contingency which would convert these resources to reserves is the Group’s decision to recomplete the producing wells to
access recovery of the gas resources from these sands, which is forecast to occur once production from the current producing sands
have become depleted.
2024 ANNUAL REPORT
21
GROUP GROSS UNRISKED CONTINGENT RESOURCES – USING FORECAST PRICES
2024
2023
Oil &
Liquids
(Mbbl)
Gas
(MMcf)
Boe
(Mboe)
Oil &
Liquids
(Mbbl)
Gas
(MMcf)
Boe
(Mboe)
Change
Tunisia
1C Contingent Resources
2C Contingent Resources
3C Contingent Resources
400
1,000
1,900
1,000
2,900
5,300
567
1,483
2,783
500
1,600
2,800
1,500
4,300
7,900
750
2,316
4,116
-24.44%
-35.95%
-32.38%
Romania
1C Contingent Resources
2C Contingent Resources
3C Contingent Resources
-
-
-
2,500
4,300
7,000
417
717
1,167
-
-
-
2,500
4,300
7,000
417
717
1,167
0.0%
0.0%
0.0%
Group
1C Contingent Resources
2C Contingent Resources
3C Contingent Resources
400
1,000
1,900
3,500
7,200
12,300
983
2,200
3,950
500
1,600
2,800
4,000
8,600
14,900
1,167
3,033
5,283
-15.74%
-27.46%
-25.23%
22
SERINUS ENERGY
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Serinus is an oil and gas exploration, development and production Group whose strategic
purpose is to develop and produce hydrocarbon natural resources. These business activities
provide the energy essential to many of the processes and materials that support our daily
lives but ultimately contribute to many of the environmental issues which are of concern to
us today and in the future.
Climate change is an increasingly prominent issue, both globally and for our industry. Thirty
percent of our production is natural gas which we view as a transition fuel towards a low-
carbon economy. Our gas production is primarily utilised in the generation of electricity and
as such displaces coal in that energy mix. In all net-zero carbon scenarios oil and gas will
remain essential elements of energy supplies for decades to come, our role in this process is
to deliver our operations as cleanly and efficiently as possible.
Whilst extractive industries are essential to our modern way of life, we are strongly aware
of the wider range of responsibilities that industries such as ours have. In addition to the
management and protection of the environment in those countries in which we operate
we also have a clear responsibility to the welfare and the safety of our employees, our
investors and stakeholders, local communities that may be impacted by our business, host
governments and all of our business partners.
The COVID-19 pandemic reminds us that risk management needs to be dynamic and able to
adapt to new threats and the Group quickly implemented stringent and effective protocols to
protect our workforce from the risk of infection across all of its offices and operations, which
included, amongst other measures, testing, on-site care and support, amended shift patterns
and alternate working days. Safety of our staff and contractors remains a key concern.
Therefore, a long-term goal of the Group is to be a positive influence in the regions in
which we operate through good corporate stewardship of our assets, our people and their
communities. It is a key component of the ethos of Serinus that we maintain responsible and
sustainable development while adhering to the highest operating standards and financial
discipline. We carry out our operations in full compliance with relevant regulations and
comply with all safety and environmental requirements and aim to conduct our business
in an environmentally responsible manner. The Group has established an Environmental,
Social and Governance (“ESG”) Committee, led by the Chief Executive Officer, supported
by other key personnel, and overseen by the Board, which reviews the policies and metrics
under which we operate and measure ourselves and also evaluates the environmental
framework being adopted and recommended, such as that of the Taskforce on Climate-
Related Financial Disclosure (“TCFD”), in order to determine how we may best comply with
these evolving disclosures.
Whilst the TCFD is currently voluntary for smaller companies, we are applying governance,
risk management and strategy processes to manage climate-related financial risks and
develop this within our ESG strategy and integrate into the corporate strategy, growth plans,
capital allocation, operations and executive management key performance indicators.
The Sustainable Development Goals (“SDGs”) as set out by the United Nations, particularly
SDG 13 (Climate Action), are often referenced as reporting criteria for many energy
companies. Serinus will continually evaluate at the Board level, through our ESG Committee,
how this may be incorporated into our ESG reporting in an appropriate and relevant manner
in the future.
ENVIRONMENT
Serinus has existing concession and licence holdings in Romania and Tunisia. Both asset
portfolios cover extensive acreage but in vastly different topographic settings with the Satu
Mare licence covering 2,949 km2 in the north-west of Romania, across primarily agricultural
farmland, while the two Tunisian concessions are located in the central and southern regions
of the country in both remote desert and populated, agricultural environments.
Serinus’ goal is to manage the distinct local environmental requirements of its operations
in full compliance with the relevant regulations and to reduce our carbon footprint by
minimising emissions and waste and mitigate the potential impact of our operations on the
environment.
ROMANIA
Serinus Energy Romania has continued to present an excellent HSE track record through
2024, with a zero-frequency rate (per one-million-man hours worked) for Total Recordable
2024 ANNUAL REPORT
23
Injuries across all sites (2023 - zero for Serinus Romania
employees) and in January 2025 the Moftinu Gas Plant reached
2,109 accident-free days of continuous operation. There have
been no spills or environmental incidents at the Moftinu Gas Plant
since its commissioning in 2019. Serinus Romania has maintained
full compliance with all of its regulatory and environmental
obligations.
Serinus Energy Romania completed its annual certification
inspection and is certified for ISO 14001:2015 (Environmental
Management Systems), ISO 9001:2015 (Quality Management)
and ISO 45001:2018 (Occupational Health and Safety).
During 2024, energy use from grid electricity at the Moftinu Gas
Plant was 314 MWh, 0.83% of the annual production of 37,827
MWh, compared with 315 MWH in 2023, which was 0.45% of
that year’s annual production of 69,910MWh. Nine solar panels
have been installed at the Moftinu gas plant which generated
27.44kWh of energy in 2024, offsetting the equivalent of 9.007kg
of CO2 emissions. Serinus Energy Romania continues to assess
opportunities to expand its utilisation of solar power on its
available sites.
Flue gas emissions tests are performed annually, in accordance
with the requirements specified in the environmental permit.
The most recent test was undertaken in October 2024 which
monitored an average CO2 emission level of 0.55% of total flue
gas, below the benchmark CO2 threshold of 3.8%.
A Fugitive Emissions Monitoring Report was undertaken by a
European accredited emission monitoring and pipeline integrity
organisation,
The
Sniffers
(www.the-sniffers.com),
for
the
Moftinu Gas Plant in October 2024. The Group collected data
and presented its report in accordance with the Environmental
Protection Agency of the United States (“US EPA”) “Method 21”
EPA-453/R-95-017. The Sniffers has been accredited ISO 17025
by BELAC (the Belgian accreditation body) on 17 December 2017
for the Method: “EPA 21 Protocol for equipment leak emission
estimates, 1995, EPA-453/R-95-017”. All data and calculations
were generated by proprietary software designed by The Sniffers
called Sniffers Full Emission Management Platform “SFEMP”.
Measured parts per million values are converted to emission loss
(kg/year). These calculations are based on US EPA “Correlation
factors for Petroleum Industry”. This method uses conversion
factors depending on the source type and the measured value.
The monitoring exercise completed a Leak Detection and Repair
programme through which it identified a total of 2,760 potential
emission sources, of which 26 were not accessible (a source of
emission that cannot be measured as it cannot be reached
physically or safely without additional tools and is recalculated to
be representative of all sources) and 2,734 were accessible.
Of the 2,734 accessible potential emission sources identified,
there were 30 registered leaks, being 1.09% of accessible sources
and resulted in an emission loss of 3,025 kg/year. 22 leaks were
detected above the Repair Definition threshold (the threshold
concentration indicating obligatory repair of leaking sources
which under the US EPA definition is 10,000 parts per million
volume), amounting to 3,101 kg/year. The report concluded that a
successful repair of the leak above Repair Definition could reduce
the emission loss by 2,817 kg/year, equating to 95.87% of the total
emission. The leaks have been repaired.
TUNISIA
Serinus Tunisia maintained a strong HSE track record through
2024, with a zero-frequency rate (per one-million-man hours
worked) for Total Recordable Injuries across all sites (2023 – zero
for Serinus Tunisia employees). There were no environmental
incidents at Sabria and two minor incidents at Chouech Es
Saida which were addressed and repaired. Serinus Tunisia
has maintained full compliance with all of its regulatory and
environmental obligations.
Environmental monitoring has been undertaken across all of our
Tunisian fields since 2014 in compliance with legal requirements
and the Group’s responsibilities to the local environment. The
annual environmental report for 2024 was submitted to the
Agence Nationale de Protection de l’Environnement (“ANPE”) in
February 2025.
During 2024, the annual environmental monitoring was
undertaken by Le Centre Mediterraneen d’Analyses (“CMA”) at
the Sabria and Chouech Es Saida fields, assessing: air emissions
from stacks at both fields; air quality monitoring; groundwater
monitoring; produced water; fresh water; soil sampling and noise
pollution. The environmental monitoring programme for remote
locations is reviewed by local management and implemented at
all sites.
Stack air emission analysis and air quality monitoring was
conducted at Sabria and Oum Chiah in September 2024. Analysis
of the results demonstrated that the Group was in compliance with
approved thresholds of groundwater and soil contaminants and
required solid waste management. The Group’s own review of
air emissions showed compliance in all areas, in accordance with
the air quality limits set by Decree No. 2018-447 of 18 May 2018
and Decree No.2010-2519 of 28 September 2010, except for
carbon monoxide (“CO”) emissions from older fixed equipment.
The Group has investigated mitigation measures and a short
and medium-term action plan with an enhanced preventative
maintenance programme has been implemented to address this,
including the refurbishment and overhaul of affected equipment.
Ground water monitoring is conducted on a yearly basis from
existing water wells drilled at Sabria. No evidence of pollution
has been reported. Five piezometer wells were drilled at Sabria
to monitor the ground water table in 2014 which continue to be
monitored.
The water disposal project manages produced water production
at Sabria. This formation water has high salinity (360 grams/
litre) with traces of heavy metals. Until 2015, disposal at Sabria
was conducted by discharge into lined surface pits for natural
evaporation of fluids. The low efficiency of natural evaporation
together with the ongoing need to construct additional lined
pits led to the introduction of automated fracturing evaporator
technology in 2015 and which has enabled the acceleration of
evaporation of produced water through an automated and a
more efficient process. At Sabria, 32,015 m3 of produced water
was disposed of in 2024 (2023 – 37,581 m3) and at Chouech Es
Saida 189,985 m3 of produced water was evaporated from lined
surface pits in 2024 (2023 – 196,770 m3). The Group is exploring
alternative solutions for the environmentally responsible disposal
of produced water.
A review of environmental management at the Sabria fields was
conducted by First North African Consultancy for the Environment
(“FNAC”
www.fnac-environment.com),
an
engineering
consultancy, in September 2020. This was designed to review
compliance at Sabria with Tunisian environmental regulations
and analyse underground water and soil pollution in proximity to
the water disposal project. The scope of this work included: the
recovery, analysis and assessment of environmental and technical
documents and reports related to the evaporation ponds; the
analysis of all previous waste pit treatment operations and related
reports; analysis of existing red register (hazardous waste) and
blue register (domestic waste); coring and sampling investigations
of the potential impacted areas (soil and underground water)
within the Sabria field; water sampling and laboratory analysis
from existing piezometers and production water discharge; and
the performance of an environmental monitoring program of the
potential impacted areas within Sabria field. The program was
conducted in conjunction with representatives of ANPE and the
environmental reports were submitted to ANPE. Results from the
assessment showed below threshold levels of potential pollutants
set under Tunisian regulations and equivalency with both
groundwater and soil control samples. These demonstrated the
efficacy of the water disposal project and the process of produced
water storage in evaporation pits, with no evidence of leakage or
24
SERINUS ENERGY
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (continued)
overflow from the pits into the soil or groundwater. Subsequent
to this review, recommendations from the report have been, and
continue to be, implemented. The Group began air emissions
monitoring at Sabria and Chouech in August 2015 and continues
to do so.
Waste management procedures have been implemented in
all locations in Tunisia and monitor a comprehensive range of
waste products including industrial waste (dry cell batteries,
lead acid batteries, empty gas cylinders, oil filters, used oil,
contaminated waste, used fluorescent lighting), resource waste
(diesel consumption), hazardous waste (sewage, medical waste),
domestic waste (food waste, plastic bottles, cooking oil, paper) and
office waste (plastic bottles, paper, printer cartridges, batteries).
For example, 1,164 kg of paper and plastic bottles were recycled
in the Tunis office in 2022, which decreased to 784 kg of paper and
plastic bottles being recycled in 2023 and maintained at the same
level 788 kg in 2024, as a result of training and greater awareness
of wastage. Electricity consumption at the Tunis office in 2024 was
92,904 kWh lower than 2023 (110,337 kWh). At Sabria electricity
consumption was 603,467 kWh (2023 – 601,259 kWh). Chouech
is not connected to the electricity grid and power at Chouech is
provided by on site gas generators. Fresh water consumption in
2024 at Sabria was 13,960 m3 (2023 – 15,820m3) and at Chouech,
21,716 m3 (2023 – 26,498 m3). Diesel consumption across all
operational locations was 143 m3 a 5 % decrease over 2024
(150m3) but remains a significant reduction from 2019 (305m3)
reinforced by a combination of greater awareness of wastage,
training, optimisation and more efficient transport management.
SOCIAL
Serinus seeks to ensure the health, safety, security and welfare of
our employees and those with whom we work and to ensure that
we have a workforce that is performing at its best and to contribute
to the economic and social development of the countries in which
we operate. Serinus Energy Romania has been certified for ISO
45001:2018 (Occupational Health and Safety).
The safety, security and welfare of all of our colleagues is a key
priority for the Group and governs the manner in which we aim
to conduct our business. Serinus has emergency response plans
in place for all projects and assets. These plans are reviewed for
relevance and updated by senior management annually. The
plans are communicated to the workforce and personnel receive
training to ensure they are competent to carry out their emergency
roles. This is supplemented by periodic refresher training. Drills
and training exercises are routinely carried out. Where relevant,
the Group monitors the security situation at a local level and
ensures that personnel are aware and appropriate measures are
taken and updated as required. In Tunisia the HSSE team ensures
the effective implementation of the Emergency Preparedness and
Response Procedures and maintains and updates the Security
Emergency Response Plan on a regular basis. In Romania,
personnel at both the head office and on-site at the Moftinu gas
plant receive monthly HSSE training for both local regulatory
requirements and corporate policies.
We undertake a range of activities to continuously improve our HSE
Management Plan to ensure that the Group’s policy commitments
are applied. Routine monitoring is undertaken to assess and
improve performance and periodic audits are conducted. Our
procedures are set out as corporate standards that define
the Group expected practices within the whole organisation.
The standards have been shared across the organisation and
employees and contractors are trained as required at country level.
In 2024, a total of 33 HSSE training drills and asset protection drills
took place in Tunisia and 180 HSSE training sessions took place in
Romania. Regular HSSE audits are undertaken to review policies
and procedures with 45 internal HSSE and regular inspections
audits completed in Tunisia in 2024 (2023 – 24) and an annual
audit was undertaken by Lloyds Register for ISO certifications in
Romania.
The Emergency Response Plan is recirculated to the Serinus
team involved, prior to the launch of any major works campaign.
These circulations are further supplemented by periodic refresher
training, with drills and training exercises regularly carried out.
In Romania, there have been no accidents since commencing
production in 2019. There had been 2,078 days without accidents
as at 31 December 2023. In Tunisia, there were 3,313 days with
no accidents as at 31 December 2024. In 2024, there were no
Lost Time Injuries recorded across both Tunisia and Romania
operations, and we maintain a continuous focus on providing
a safe working environment for our workforce. Our goal is to
maintain this high level of safety and efficiency.
Our Code and Policies commit us to providing a workplace free
of discrimination where all employees can fulfil their potential
based on merit and ability. We value a diverse workforce and
are committed to providing a fully inclusive workplace, which
ensures we recruit and retain the highest calibre candidates while
providing the right development opportunities to ensure existing
staff have rewarding careers. Both the Romanian and Tunisian
business units are led and managed by Romanian and Tunisian
nationals respectively, and we currently have no expatriates in
either of the business units. Our Romanian business is led by Ms.
Alexandra Damascan and 17% of the staff in Romania are women,
while in Tunisia 39% of the local head office are female. We value
a diverse and equal opportunities workforce, and we aim to recruit
locally in all jurisdictions as we believe in the quality of our staff
and the available pool of talent in each local market.
Serinus’ Anti-Slavery and Human Trafficking Policy commits
the Group to act ethically and with integrity in all our business
dealings and relationships and to implement and enforce effective
systems and controls to ensure modern slavery is not taking place
anywhere in our own business or in any of our supply chains. The
Group is also committed to ensuring there is transparency in our
own business and in our approach to tackling modern slavery
throughout our supply chains, consistent with our disclosure
obligations under the UK Modern Slavery Act 2015. We expect the
same high standards from all our contractors, suppliers and other
business partners, and as part of our contracting processes, we
include specific prohibitions against the use of forced, compulsory
or trafficked labour, or anyone held in slavery or servitude, whether
adults or children, and we expect that our suppliers will hold
their own suppliers to the same high standards. The prevention,
detection and reporting of slavery in any part of our business
or supply chains is the responsibility of all those working for the
Group or under our control and they are encouraged to raise
concerns about any issue or suspicion of slavery in accordance
with our Whistleblowing policy.
Serinus Tunisia developed its Corporate Social Responsibility (CSR)
program in conjunction with local communities and stakeholders
to identify those areas which would make a significant impact to
those groups, focussing on support for healthcare, education
and culture in the local areas within which it operates. It has
managed a program since 2013 to undertake this, with support
and contributions for providing medical equipment to hospitals,
repairing classrooms and school facilities, providing books for
school libraries, improving nurseries and sponsoring local cultural
events. Serinus Tunisia also participated in projects with local and
regional authorities and other oil and gas companies operating
in its areas, such as the Kébili CSR Consortium with which it has
2024 ANNUAL REPORT
25
been involved with since 2015 and which promotes the regional development of
the Governorate of Kébili, in collaboration with the regional authorities, the Ministry
of Industry, Energy and Mines, ETAP and the oil and gas companies operating in
the region (the “Kébili CSR Consortium”). Since 2015 the Kébili CSR Consortium
has supported education programs, restored schools and providing facilities and
infrastructure, health initiatives, purchasing medical equipment and renovations,
and other social projects. The CSR program for Kébili also includes a cultural
component with a specific focus on encouraging women to preserve the local
handicraft traditions amongst others by setting up and equipping a handicraft
centre for women in Kébili. This project has a training and development component
and will ensure the economic empowerment of women.
Social tensions and political instability in Tunisia, particularly in the southern regions,
over the past few years has impacted the ability to execute many of these initiatives
and CSR programs, but these initiatives have been an important part of maintaining
the Group’s relationships with local stakeholders throughout this period and it is
expected that with renewed stability it will become possible to resume such support
in the coming years.
GOVERNANCE
The Group recognises the importance of good corporate governance and is
managed under the direction and supervision of the Board of Directors. As required
under the AIM Rules, we have adopted and comply with a recognised corporate
governance code, being the Quoted Companies Alliance Corporate Governance
Code (the “Code”) and set out a summary of how we comply with it on pages 31 to
34 of the Annual Report.
Serinus currently operates in Romania and Tunisia. Romania is allocated a mid-score
on Transparency International’s most recently published Corruption Perception
Index (“CPI”) and is ranked 65th out of 180 countries in the 2024 CPI with a score of
46, while Tunisia is ranked 92nd with a score of 39 on the same CPI. Neither country
is designated as high risk, Romania is within the European Union, and both have
well-evolved legal systems in place, however the Group’s policies, procedures
and working practices need to remain fit for purpose and be regularly reviewed
and updated as required. The Group maintains internal control systems to guide
and ensures that our ethical business standards for relationships with others are
achieved.
Bribery is prohibited throughout the organisation, both by our employees and by
those performing work on our behalf. Our Anti-Bribery and Corruption (“ABC”)
programme is designed to prevent corruption and ensure systems are in place
to detect, remediate and learn from any potential violations. This includes due
diligence on new vendors, annual training for all personnel, requisite compliance
declarations from all associated persons, Gifts and Hospitality declaration and
comprehensive ‘whistleblowing’ arrangements.
26
SERINUS ENERGY
The Group is subject to several potential risks and uncertainties, which could
have a material impact on the long-term performance of the Group and could
cause actual results to differ materially from expectation. The management
of risk is the responsibility of the Board of Directors, and the Group has
developed a range of internal controls and procedures in order to manage
the risks. The following list outlines the Group’s key risks and uncertainties
and provides details as to how these are managed.
POLITICAL AND REGULATORY RISK
Operating in multiple jurisdictions poses a variety of political, regulatory
and social environments, and risks, such as social unrest, political violence,
corruption, expropriation, changes in the taxation environment and non-
compliance with laws and regulations. Currently the Group is doing the
following in order to mitigate this risk:
•
Actively
monitors
political
developments
and
maintains
relationships with government, authorities and industry bodies, as
well as with other stakeholders.
•
Weekly reports assessing security, social unrest and political
developments are provided to the Executive management team to
allow for real time reaction to dynamic situations.
•
Manages compliance with laws, regulations, taxes and contractual
obligations by employing the requisite skills or engaging consultants
to supplement internal knowledge.
•
Internal policies and procedures, as well as monitoring of
performance, help mitigate risks of non-compliance.
•
Actively involved with the regulatory bodies of both operating units
to ensure commitments are agreed upon and concessions may be
extended as required.
OPERATIONAL AND DEVELOPMENT RISK
The nature of oil and gas operations brings risks such as equipment failure,
well blow-outs, fire, pollution, performance of partners/contractors, delays in
installing property, plant or equipment, unknown geological conditions and
failure to achieve capital costs, operating costs, production or reserves. Staff
recruitment, development and retention is also key to managing operational
risk. Currently the Group is doing the following in order to mitigate this risk:
•
Has extensive monitoring and review of HSE and crisis management
policies and procedures.
•
Follows strict tendering protocols, physical inspection of all
contractor fabrication facilities and extensive financial due diligence
of counterparties is designed to minimise contractor performance
and counterparty credit risk.
•
Carries adequate levels of insurance.
•
Rigorous review processes when selecting vendors and contractors.
Once engaged as a contractor the Group monitors contractor
performance to ensure contractor compliance with Group policies.
•
Rigorously monitors costs, actual to budget trends and adjusting
forecasts on a frequent basis.
•
Employs geological and technical experts to review data and work
programs and undertakes an annual reserves review.
•
Training and development opportunities are considered for all staff.
•
Executive directors and senior staff have notice periods of
between six and twelve months to ensure sufficient time to transfer
responsibilities in the event of departure.
•
Succession planning is considered regularly at board level.
RISK MANAGEMENT STATEMENT
2024 ANNUAL REPORT
27
•
The Remuneration Committee meets at least once a year
and as additionally required to evaluate compensation
and incentivisation plans to ensure they remain
competitive.
AVAILABILITY OF FINANCING
The risk that the Group will not be able to raise funds through debt
or equity if required. Currently the Group is doing the following in
order to mitigate this risk:
•
Monitor the cash position by producing monthly cash
projections to determine future cash flow requirements.
•
Maintain a public listing of its equity on the Alternative
Investment Market of the London Stock Exchange in
order to access capital, if required.
•
The Group is currently debt-free, with a low operating
cost base and has continued to generate positive
cashflows during 2024.
•
The Board considers the structure and differing capital
costs of a variety of possible sources of funds as well
as the timing and access to the various capital markets.
FINANCIAL RISK
The Group is subject to commodity price volatility, interest rates,
foreign exchange rate volatility and credit risk of counterparties.
Currently the Group is doing the following in order to mitigate this
risk:
•
Actively monitoring the business, preparing monthly
forecasts with various sensitivities (commodity prices,
interest rates, foreign exchange rates) to ensure the
Group can sustain all macroeconomic changes.
•
Careful cost management to preserve financial flexibility
in the event of economic or commodity price downturns.
•
The Group has restructured its balance sheet and is now
debt-free to create greater financial flexibility.
•
Exposure to both oil and gas pricing diversifies
commodity price risk.
•
The Group’s financial risk policies are set out in Note 4 to
the financial statements.
ENVIRONMENTAL
Investor and lender sentiment may become adverse towards the
oil and gas sector. Longer term reduction in demand for oil and
gas may result in lower oil and gas prices. Currently the Group is
doing the following in order to mitigate this risk:
•
The Group’s production in Romania is 100% gas,
providing exposure to a cleaner, transition fuel.
•
The Group’s main source of production in Romania
is a modern energy, emission efficient and highly
automated gas plant limiting the environmental impact
of the Group’s production.
•
The Group has in place strict emissions and
environmental monitoring. Routine monitoring and
third-party inspections for emissions, ground water
contamination, solid waste management and soil
protection are routinely performed in excess of all local
government guidance.
•
The Group’s strategy is to maintain a low operating cost
base in order to maintain operational flexibility in the
event of lower commodity prices.
28
SERINUS ENERGY
BOARD OF DIRECTORS
Łukasz Rędziniak
Chairman, Independent Director, Chair of Remuneration Committee, Member of the Environmental, Social, &
Governance Committee
Appointed March 2016
Mr. Rędziniak is a graduate of the Faculty of Law and Administration of the Jagiellonian University.
Mr. Rędziniak is an Attorney and member of the District Bar Association in Warsaw. Between 1990 and 1991 he worked as an Assistant at
the Faculty of Law and Administration of the Jagiellonian University. During the years 1991-1992 he was an in-house Lawyer at Consoft
Consulting sp. z o.o. From 1997 to 2000 he worked as an Attorney - individual practice closely co-operating with Dewey Ballantine sp.
z o.o. In the years 1993-2007 he worked in the law firm Dewey and LeBoeuf LLP and in 2001 he was appointed as a partner. Then, in
the years 2007-2009 he was Undersecretary of State in the Ministry of Justice of the Republic of Poland. Since 2009 he was a Partner
and Managing Partner at the Warsaw office at Studnicki, Płeszka, Ćwiąkalski, Górski sp. k. In Between 2013 and 2022, he worked as a
Member of the Management Board at Kulczyk Investments S.A. He currently serves on the Management Board of Kulczyk Privatstiftung
as well as Supervisory Board of Qemetica SA.
James Causgrove
Independent Director, Chair of the Reserves Committee, Member of the Audit Committee, Member of the Remuneration
Committee, Member of the Environmental, Social, & Governance Committee
Appointed September 2017
Mr. Causgrove is an experienced Oil and Gas executive with over 40 years’ experience. On March 31, 2019, Mr.
Causgrove retired as COO of Harvest Operations Corporation and is now the President and principal consultant
for Causgrove Energy West with a focus on energy opportunities in Western Canada. Mr. Causgrove offers both excellent technical
engineering and business experience along with a strong track record in management and leadership in the oil and gas sector. Since
1979, working for first Chevron Corporation, then Pengrowth Energy Corporation, and finally Harvest Operations Corporation, Mr.
Causgrove has gained experience and skills in virtually all facets of the oil and gas business; with a particular technical focus on drilling,
production, operations, and midstream. Mr. Causgrove gained excellent field and technical experience with Chevron working in both
the Canadian head office as well as many field offices and field sites. As well as his technical roles Mr. Causgrove spent time working
in Joint Ventures, Human Resources, Strategic and Business Planning, and in the Midstream business. Mr. Causgrove gained valuable
business insights as first a technical leader, then as a middle manager, and finally as an executive for Chevron, Pengrowth, and Harvest. In
his roles as COO at Harvest and as Vice President at Pengrowth, Mr. Causgrove worked as part of the senior leadership team and worked
closely with the Board of Directors.
Mr. Causgrove graduated with a Chemical Engineering degree from the University of Alberta and has earned his P. Eng designation in
Alberta. Mr. Causgrove also holds the ICD.D designation from the Institute of Corporate Directors (ICD) in Canada.
Natalie Fortescue
Independent Director, Chair of the Environmental, Social, & Governance Committee, Interim Chair of the Audit
Committee, Member of the Reserves Committee
Appointed March 2021
Ms. Fortescue is a chartered accountant and experienced capital markets professional with a background in corporate
finance and investor relations. After a long investment banking career at Investec and as a corporate partner at Oriel
Securities (now Stifel Europe), she joined Genel Energy plc to establish and lead an Investor Relations function. Following this, Ms.
Fortescue spent six years at Premier Oil Plc in various corporate finance roles including capital markets transactions and debt refinancings.
Ms. Fortescue has spent over 20 years advising companies on corporate finance transactions, fundraising, strategy, debt refinancing and
restructurings, investor relations and the impact of corporate transactions on stakeholders. Current directorships/partnerships: FUTH
Consulting Limited, Clean Power Hydrogen plc, Trustee of GB Wheelchair Rugby.
Ms. Fortescue has an undergraduate degree in Accounting and Finance from Kingston University.
BOARD OF DIRECTORS AND MANAGEMENT TEAM
2024 ANNUAL REPORT
29
Jeffrey Auld
Chief Executive Officer, Executive Director
Appointed September 2016
Mr. Auld has been involved with the international oil and gas business for over 30 years. In that time, he has managed
companies and acted as an advisor to companies operating in the emerging markets oil and gas business. Mr. Auld
has a depth of experience in corporate finance, mergers and acquisitions and strategic management.
Mr. Auld began his career in Canada and moved to the United Kingdom in 1995. He was the Commercial Manager for New Ventures
for Premier Oil plc. Mr. Auld left Premier Oil and joined the Energy and Power team within the Mergers and Strategic Advisory group of
Goldman, Sachs and Co. When Mr. Auld left Goldman Sachs, he joined PetroKazakhstan, a NYSE listed Group with assets in Kazakhstan,
as a Senior Vice-President. After his time at PetroKazakhstan Mr. Auld became the Head of European Energy for Canaccord Genuity in
London. Prior to joining Serinus Mr. Auld was the Head of EMEA Oil and Gas at Macquarie Capital in London.
Mr. Auld has an undergraduate degree in Economics and Political Sciences from the University of Calgary and a Masters of Business
Administration with Distinction from Imperial College, London.
30
SERINUS ENERGY
SENIOR MANAGEMENT
Vladislav Ryabov
Chief Financial Officer, Serinus Energy plc
Mr. Ryabov joined Serinus Energy Plc in March 2023 as Group Financial Controller and was promoted to Chief Financial Officer in
September 2023. Mr. Ryabov started his career in public practice with Deloitte CIS in 2001 where he qualified as an accountant and
in November 2007 moved to Deloitte UK in London. Mr. Ryabov’s experience is spanning a variety of sectors including over nine-year
tenure in public practice with Deloitte and over twelve years in the natural resources sector for oil & gas exploration and production
operations in emerging markets, followed by most recent finance director role in the Saudi investment Group, all contributing to his
development into experienced finance professional.
Mr. Ryabov has a Masters Degree in Finance and Banking as well as Bachelor’s Degree in Finance and Accounting from the Tashkent
State University of Economics.
Stuart Morrison
Chief Operating Officer, Serinus Energy plc
Mr. Morrison has over 36 years of oil and gas industry operational experience in numerous senior management roles. Early in his career
he worked as a Petroleum and Reservoir Engineer with BP Research, British Gas, Sun Oil and Oryx Energy UK prior to joining Premier Oil
in 1997. At Premier, Mr. Morrison assumed a variety of technical and management positions such as Chief Petroleum Engineer, Business
Development Manager and Exploration Manager in corporate roles and business units such as the Middle East and Falkland Islands.
Mr. Morrison has a Masters Degree in Petroleum Engineering and a Bachelor’s Degree in Chemical Engineering, both from Heriot-Watt
University (Edinburgh).
Calvin Brackman
Vice President, External Relations & Strategy
Mr. Brackman has more than 25 years’ experience in the oil & gas industry, both in the public and private sector. He started his career
working for the Department of Natural Resources of the Government of Canada, before moving to a senior position in the Minerals, Oil
& Gas Division of the Government of the Northwest Territories. In 2003, Mr. Brackman moved to London, UK, to join PetroKazakhstan
Inc. as Director of Government Relations. In this position he developed and implemented strategies to reduce the Group’s surface
risk. Following the sale of PetroKazakhstan to CNPC in 2005, Mr. Brackman moved back to Canada and started a successful consulting
practice, providing expert advice to various international companies and governments. In December 2016, he joined Serinus in his
current role, working with the Group’s management team and business units to develop and implement the Group’s exploration and
development strategies and oversee government and stakeholder relations.
Mr. Brackman has a Masters Degree in Economics from the University of Waterloo and a Bachelor’s Degree in Economics from the
University of Calgary.
Alexandra Damascan
President, Serinus Energy Romania S.A.
Ms. Damascan has been with Serinus Energy Romania since 2008 and as a senior executive with expertise in all areas of the global oil
and gas industry. Ms. Damascan has been an integral piece to bringing the Romanian assets from the exploration phase to production
in 2019. Prior to joining Serinus, Ms. Damascan was a partner in a medium size Romanian Group which handled technical and legal
translations and language interpretation for different journals and professional magazines.
Ms. Damascan graduated from the Oil and Gas Institute as a Petroleum Engineer. Ms. Damascan also has a degree in Political Economics,
an MBA in Business Transactions from the Academy of Economic Studies, a Law Degree and LLM in International Arbitration from the
Romanian-American University and an MBA in Oil & Gas from the Oil and Gas Institute in Ploiesti, Romania. Ms. Damascan has also a Ph.D
in Mining, Oil and Gas, from the Oil and Gas Institute in Romania.
Haithem Ben Hassen
President, Serinus Energy Tunisia B.V.
Mr. Ben Hassen joined Serinus Energy Tunisia B.V. in November 2014 as a Senior Project Engineer and was then promoted to Project
Manager in May 2015. In January 2018, he was promoted to President of Serinus Energy Tunisia B.V. He has been responsible for the
completion of numerous capital projects undertaken by Serinus Energy Tunisia B.V. He was also appointed to handle the technical
aspect of the Moftinu Development Project in Romania.
Mr. Ben Hassen has over 20 years of experience in the oil and gas industry, as well as power plants and renewable energies. He has
a very well-rounded breadth of knowledge including; project management, engineering, construction, completions, handover and
closeout and operating, contract review, business plan development and budgeting and forecasting.
Mr. Ben Hassen has a degree in Mechanical Engineering from the École Polytechnique of Montréal in Canada.
2024 ANNUAL REPORT
31
CORPORATE GOVERNANCE STATEMENT
CHAIRMAN’S INTRODUCTION
The Group is managed under the direction and supervision of the Board of Directors.
Among other things, the Board sets the vision and strategy for the Group in order to
effectively implement the business model which is the exploration and production of
hydrocarbon resources from its current concessions in Romania and Tunisia.
Good corporate governance creates shareholder value by improving performance
while reducing or mitigating risks that the Group faces as we seek to create sustainable
growth over the medium to long-term. It is the role as Chairman to lead the Board
effectively and to oversee the adoption, delivery and communication of the Group’s
corporate governance model. The Board has adopted the Quoted Companies
Alliance Corporate Governance Code (the “Code”).
The report that follows sets out in summary terms how we comply with the Code
to be read in conjunction with the Statement of Compliance with QCA Corporate
Governance Code available on our website at
https://serinusenergy.com/shareholder-information
As an issuer listed on the Warsaw Stock Exchange, Poland (“WSE”), the Group was
subject to, and followed, the recommendations and rules contained within the “Code
of Best Practice for WSE Listed Companies 2021”. These rules were adopted by the
WSE Supervisory Board on 29 March 2021 (Resolution No. 13/1834/2021) and are
accessible at:
https://www.gpw.pl/best-practice2021
https://www.gpw.pl/pub/GPW/files/PDF/dobre_praktyki/en/DPSN2021_EN.pdf
PRINCIPLE 1: ESTABLISH A STRATEGY AND BUSINESS MODEL WHICH PROMOTES
THE LONG-TERM VALUE FOR SHAREHOLDERS
•
The Group’s strategy is defined in the “Serinus Strategy” section of this Annual
Report.
•
The objective is to grow the hydrocarbon production of the Group through
efficient allocation of shareholder capital to produce long-term return on
investments for shareholders.
•
In order to capitalise on the available opportunities and to mitigate the key
challenges facing the Group, the Group has assembled a high-quality Board of
Directors, and set of advisers with relative experience in the upstream oil and gas
environment. The Group has been structured to give the Board the necessary
oversight of all investment decisions of the Group.
•
The long-term commercial success of the Group, meaning the capability to
generate positive net revenues on a sustainable basis, will depend on its ability
to find, acquire, develop, and commercially produce oil and natural gas reserves.
PRINCIPLE 2: SEEK TO UNDERSTAND AND MEET SHAREHOLDER NEEDS AND
EXPECTATIONS
The Group is committed to listening and communicating openly with its shareholders
to ensure that its strategy, business model, and performance are clearly understood.
Providing an open environment with investors and analysts allows us to build our
relationships with these audiences, while providing the opportunity to further share
our business model and allows us to drive our business forward. The initiatives taken
by the Group to keep investors and analysts informed are as follows:
•
Presenting quarterly results presentations online
•
Investor roadshows
•
Participating in online interviews
•
Attending investor conferences
•
Hosting capital markets days
•
Timely disclosure of material information
•
Regular reporting
32
SERINUS ENERGY
32
SERINUS ENERGY
CORPORATE GOVERNANCE STATEMENT (continued)
The Directors understand the importance of building relationships with institutional shareholders
and will make presentations when appropriate. The Directors welcome all feedback and
concerns from shareholders and will implement the appropriate action as required. The Board
is in active communication with the management team to ensure they are up to date on all
recent corporate activities.
The Annual General Meeting (“AGM”) is one forum for dialogue with shareholders and the
Board. The results of the AGM are subsequently published on the Group’s website.
PRINCIPLE 3: TAKE INTO ACCOUNT WIDER STAKEHOLDER AND SOCIAL RESPONSIBILITIES
AND THEIR IMPLICATIONS FOR LONG TERM SUCCESS
Key stakeholders are as follows:
•
Shareholders.
•
Employees.
•
Communities in which we operate (landowners, local authorities and local citizens).
Engaging with all stakeholders strengthens our relationships and allows for better business
decisions to ensure the Group delivers on our commitments to all parties.
The Group also actively engages stakeholders near our operations as follows:
•
Regular meetings with local authorities and governments providing progress updates as
required.
•
Town hall meetings are held with local citizens as required to discuss development plans.
•
We seek the input of the communities in identifying the funding needs of different
community initiatives.
PRINCIPLE 4: EMBED EFFECTIVE RISK MANAGEMENT, CONSIDERING BOTH OPPORTUNITIES
AND THREATS, THROUGHOUT THE ORGANISATION
•
The Group has a risk register that outlines the key financial and operational risks which
has been circulated to all management and Board members. A summary of these risks is
included in the Risk Management Statement of this annual report.
•
The Audit Committee monitors the integrity of the financial statements.
•
The Audit Committee focuses particularly on compliance with legal requirements,
accounting standards and the relevant rules for the listings the Group resides (AIM and
Warsaw).
•
The Board acknowledges that the Group’s international operations may give rise to possible
claims of bribery and corruption. The Board has adopted a zero-tolerance policy toward
bribery and has reiterated its commitment to carry out business fairly, honestly, and openly.
•
The Group has also adopted a share dealing code, in conformity with the requirements of
Rule 21 of the AIM Rules for Companies.
•
All material contracts are required to be reviewed and signed by a Director and reviewed
by our external counsel.
PRINCIPLE 5: MAINTAIN THE BOARD AS A WELL-FUNCTIONING, BALANCED TEAM LED BY
THE CHAIR
The Board comprises of a non-executive, independent Chairman, one Executive Director and
two non-executive independent Directors. The Board is satisfied that it has a well-diversified
and balanced team with varying levels of expertise in different facets of the business. This allows
the Board to act effectively and efficiently in the best interests of the Group.
Directors’ attendance at Board and Committee meetings during 2024 was as follows:
2024 ANNUAL REPORT
33
Director
Board
Audit
Committee
Remuneration
Committee
Environmental
Social &
Governance
Committee
Reserves
Committee
Total Meetings
7
4
6
2
5
Łukasz Rędziniak
Jeffrey Auld
James Causgrove
Natalie Fortescue
Jon Kempster3
6
6
7
7
3
1
4
4
4
2
6
1
6
2
4
2
2
2
2
-
1
5
5
5
-
________________________
³ Jon Kempster resigned in July 2024.
Key Board activities this year included:
•
Continued an open dialogue with the investment community.
•
Discussed and evaluated strategic priorities and shareholder
growth opportunities.
•
Discussed internal governance processes.
•
Reviewed the performance of the Group’s advisers.
•
Reviewed the Group’s risk profile.
•
Reviewed feedback from shareholders post quarterly and full
year results.
The Group has effective procedures in place to monitor and
deal with conflicts of interest. Since the non-executive Directors
perform their duties on a part-time basis, the Board is aware of the
other commitments and interests of its Directors, and changes to
these commitments and interests must be reported to and, where
appropriate, agreed with the rest of the Board. The executive
director is full time with the Group.
The Group’s Board has a broad range of relevant experience
suitable for issues pertaining to the oversight of a publicly listed oil
and gas Group. These include financial, legal, capital markets and
technical. The Board of Directors and Management team section
of this annual report contains the biographies and experience of
each of the Directors and key management personnel.
PRINCIPLE 6: ENSURE THAT BETWEEN THEM THE DIRECTORS
HAVE THE NECESSARY UP-TO-DATE EXPERIENCE, SKILLS AND
CAPABILITIES
Members of the Board are listed in the Board of Directors section
of this Annual Report which also details their experience, skills
and personal qualities. The Corporate Secretary of the Group
during 2024 was Fairway Trust Limited. The Board is satisfied
that, between the Directors, it has an effective and appropriate
balance of skills and experience, including financial, legal, capital
markets and technical skill sets. As the Board is a strong believer in
diversity, the Board has one female director, Natalie Fortescue, and
the President of the Romanian operations is Alexandra Damascan.
All Directors receive regular and timely information on the Group’s
operational and financial performance. Board members are
provided with agendas and related materials in advance of all
meetings. The Group’s management provides the Board with a
Monthly Directors’ Report that contains share price performance,
key financial and operating indices, cash flow forecast, capital
expenditures, budget variance reports and commentary on the
opportunities and risks facing the Group.
New Directors have access to the entire management team and
other Directors to further develop their understanding of the
business operations and risks. The Directors are encouraged to
seek independent advice to ensure they are able to fulfil their
duties at the expense of the Group.
PRINCIPLE 7: EVALUATE BOARD PERFORMANCE BASED ON
CLEAR AND RELEVANT OBJECTIVES, SEEKING CONTINUOUS
IMPROVEMENT
The Group is constantly assessing the individual contributions of
all Board members to ensure each member:
•
Is actively contributing to the success of the Group.
•
Is fully committed.
•
Is maintaining their independence.
A process of formal Board and Committee evaluation was
conducted during the last financial year by way of a comprehensive
internal survey. The Board appreciates that an annual evaluation of
the Board is crucial for effective governance and development of
the Board’s capabilities and effectiveness.
Periodically
the
non-Executive
Directors
discuss
relevant
succession planning with the CEO. These discussions focus on key
individual risk as well as broader succession issues.
PRINCIPLE 8: PROMOTE A CORPORATE CULTURE THAT IS
BASED ON ETHICAL VALUES AND BEHAVIOURS
The Board believes that the promotion of a corporate culture based
on sound ethical values and behaviours is essential to maximise
shareholder value. The Group maintains and annually reviews a
handbook that includes clear guidance on what is expected of
every employee. Adherence to these standards is a key factor in
the evaluation of performance within the Group.
PRINCIPLE 9: MAINTAIN GOVERNANCE STRUCTURES AND
PROCESSES THAT ARE FIT FOR PURPOSE AND SUPPORT
GOOD DECISION-MAKING BY THE BOARD
The Board meets at least four times annually in accordance with its
scheduled quarterly meeting calendar. This may be supplemented
by additional meetings if, and when required. During the year
ended 31 December 2024, the Board met for seven scheduled
meetings.
The Board and the Committees are provided with the agenda and
other appropriate material on a timely basis in order to prepare for
each meeting. Any Director may challenge Group proposals and
after all relevant discussions, proposals are voted on. Any Director
who feels that any concern remains unresolved after discussion
may ask for that concern to be noted in the minutes of the meeting,
which are then circulated to all Directors. Any specific actions
arising from such meetings are agreed by the Board or relevant
committee and then followed up by the Group’s management.
34
SERINUS ENERGY
34
SERINUS ENERGY
CORPORATE GOVERNANCE STATEMENT (continued)
The Board is responsible for the long-term success of the
Group. There is a formal schedule of matters reserved for the
Board. It is responsible for overall group strategy, approval of
major investments, approval of the annual and interim results,
annual budgets, and Board structure. It monitors the exposure
to key business risks and reviews the annual budgets and their
performance in relation to those budgets. There is a clear division
of responsibility at the head of the Group.
The Chairman is responsible for running the business of the
Board and for ensuring appropriate strategic focus and direction.
The CEO is responsible for proposing the strategic focus to the
Board and implementing and overseeing the projects as they are
approved by the Board. The terms of reference for the Chairman
and CEO are on the Group’s website at https://serinusenergy.
com/shareholder-information.
The Board is supported by the audit, remuneration, ESG and
reserves committees:
•
The Audit Committee is responsible for the financial reporting
and internal control principals of the Group, oversight of the
CFO and the finance team and maintaining a relationship
with the Group’s auditors.
•
The Remuneration Committee is responsible for the
consideration, development and implementation of policy
on executive remuneration and fixing remuneration packages
of individual directors, so that no director shall be involved
in deciding his or her own remuneration. The committee
ensures remuneration is aligned to the implementation of the
Group strategy and effective risk management, considering
the views of shareholders, and is also assisted by executive
pay consultants as and when required.
•
The ESG Committee ensures the Group maintains the highest
standards in environmental, social, and governance. The
Committee is responsible for the composition of the Board
of Directors and that the Board maintains proper levels of
governance suitable to the size and activities of the Group.
•
The Reserves Committee is responsible for overseeing the
evaluation of the Group's petroleum and natural gas reserves,
requiring a “Competent Person” (as such term is defined in
“Note for Mining and Oil & Gas Companies” issued by AIM) to
prepare a report (the “Report”) of an evaluation of the Group’s
petroleum and natural gas reserves, and periodically meeting
with the Competent Person and management to discuss the
Report’s preparation and results.
PRINCIPLE 10: COMMUNICATE HOW THE GROUP IS
GOVERNED AND IS PERFORMING BY MAINTAINING A
DIALOGUE WITH SHAREHOLDERS AND OTHER RELEVANT
STAKEHOLDERS
The Group communicates with shareholders through the Annual
Report and Accounts, full-year and quarterly announcements and
the AGM. Corporate announcements, results and presentations are
available on the Group’s corporate website, www.serinusenergy.
com. The Board receives regular updates on the views of
shareholders through briefings and reports from the CEO and
the Group’s brokers. The Group communicates with institutional
investors frequently through briefings with management. In
addition, analysts’ notes, and brokers’ briefings are reviewed to
achieve a wide understanding of investors’ views.
For the Group’s shareholder meetings, any resolutions voted by
shareholders that have a significant number of dissenting votes
the Group will provide, on a timely basis, an explanation of what
2024 ANNUAL REPORT
35
REMUNERATION COMMITTEE REPORT
actions it intends to take to understand the reasons behind that
vote result, and, where appropriate, any different action it has
taken, or will take, as a result of the vote.
This remuneration report has been prepared by the Remuneration
Committee and approved by the Board. This report sets out the
details of the remuneration policy for the Directors and discloses
the amounts paid during the year.
MEMBERSHIP
•
Łukasz Rędziniak – Chairman
•
James Causgrove
RESPONSIBILITIES
The aim of the Remuneration Committee is to:
•
Attract, retain and motivate the executive management of the
Group.
•
To offer the opportunity for employees to participate in
share option schemes to incentivise employees to enhance
shareholder value and to retain employees.
To achieve the above, the Committee considers the following
categories of remuneration:
•
Annual salary and associated benefits.
•
Share option plan and long-term share-based incentive plan.
•
Performance based annual bonuses.
The terms of reference of the Remuneration Committee are set
out below:
•
To determine and agree with the Board the overall
remuneration policy of the Chairman of the Board, the
executive directors and other members of the executive
management as designated by the Board to consider.
•
Review the ongoing appropriateness and relevance of the
remuneration policy.
•
Approve the design and targets for, any performance related
pay schemes and approve the total annual payments made
under such schemes.
•
Review the design of all share incentive plans for approval by
the Board and determine whether awards will be made under
the share incentive plans, including the number of awards to
each individual and the performance targets to be used.
•
To review and approve any, and all, termination payments.
•
To review and monitor the remuneration trends across the
Group and if required undertake a benchmarking exercise to
compare against a peer group, obtaining reliable, up to date
third party remuneration.
2024 ACTIVITY
The Committee met six times throughout the year (2023 – three times).
EXECUTIVE DIRECTORS’ REMUNERATION
Compensation for the executive Directors is shown in US dollars4 in the table below.
Director
Salaries
Benefits5
2024 Total
2023 Total
Jeffrey Auld
447,541
138,212
585,753
601,694
601,694
The 2024 compensation package above for the executive Director included salaries and benefits and are short-term in nature.
EXECUTIVE DIRECTORS’ SHARE CAPITAL
The following tables outline the share options outstanding and shares6 owned as at 31 December 2024 for the executive Directors.
There have been no changes between 31 December 2024 and 14 March 2025.
Director
Share Options
LTIP Awards7
Shares
Jeffrey Auld
2,230,000
959,505
4,992,954
________________________
4 The average GBP:USD rate for the year was 0.7821 (2023 – 0.8021).
5 Benefits include annual performance bonus, medical insurance and UK pension scheme contributions.
6 2023 shares and options consists of share options, shares issued in lieu of salary, and LTIP awards. Share options are priced at the fair value on the grant date, calculated using Black
Scholes, and amortised over the vesting period. Shares issued in lieu of salary, were issued at the average share price over the period related to the salary forgone. The LTIP awards
were priced using the closing share price on the issuance date and have no vesting conditions. Both the shares issued in lieu and LTIP awards are fully expensed at date of issuance.
7 Each LTIP award represents a right to acquire a share of the Group at $nil consideration.
36
SERINUS ENERGY
REMUNERATION COMMITTEE REPORT (continued)
Stock Options
Director
Grant date
Strike Price
Share Options
Jeffrey Auld
Jeffrey Auld
Jeffrey Auld
22 Dec 2020
27 May 2019
03 Dec 2018
£0.02
£0.02
£0.02
1,880,000
100,000
250,000
2,230,000
LTIP Awards
Director
Grant date
LTIP Awards
Jeffrey Auld
23 Oct 2024
959,505
959,505
NON-EXECUTIVE DIRECTORS’ REMUNERATION
Non-executive Directors receive a £30,000 annual fee, with each Chair receiving an additional £10,000 fee.
Director
Fees8
Share Options
2024 Total
2023 Total
Łukasz Rędziniak
James Causgrove
Natalie Fortescue
Jon Kempster3
63,934
51,148
57,541
25,574
-
-
-
-
63,934
51,148
57,541
25,574
62,338
49,870
49,870
49,870
198,197
-
198,197
211,948
Yours sincerely,
Łukasz Rędziniak, Chairman of the Remuneration Committee
14 March 2025
________________________
8 The average GBP:USD rate for the year was 0.7821 (2023 – 0. 8021).
2024 ANNUAL REPORT
37
AUDIT COMMITTEE REPORT
This report addresses the responsibilities, the membership and the
activities of the Audit Committee in 2024 up to the approval of the 2024
Annual Report and 2024 year-end Financial Statements.
MEMBERSHIP
•
Natalie Fortescue – Interim Chairman
•
James Causgrove
RESPONSIBILITIES
The main responsibilities of the Audit Committee are the following:
•
Monitor the integrity of the annual and interim financial statements.
•
Review the effectiveness of financial and related internal controls and
associated risk management.
•
Manage the relationship with our external auditors including plans and findings,
independence and assessment regarding reappointment.
2024 ACTIVITY
The Committee met four times throughout the year (2023 – four times).
The Committee, together with the CFO, is responsible for the relationship with the external
auditor. PKF Littlejohn LLP is the Group’s auditor.
For the 2024 fiscal year-end, the Committee has reviewed the following significant financial
reporting issues:
1.
Carrying value of E&E and PP&E Assets
2.
Decommissioning provisions
3.
Corporate Risk Register
4.
Going concern (see page 16 of this Annual Report or Note 2 of the Financial Statements)
5.
Cash flow forecasts
As part of its oversight responsibilities, the Committee reviewed the effectiveness and suitability
of the external auditor, PKF Littlejohn LLP, considering the auditor’s independence, objectivity, and
performance. The Committee discussed key audit matters with the auditor, including significant
accounting judgments, the application of critical accounting policies, and areas of audit focus such as
impairment assessments, decommissioning provisions, and going concern assumptions. Additionally,
the Committee considered the auditor’s approach to addressing risks, their findings, and their
recommendations for enhancing financial reporting processes. Based on these discussions and its overall
assessment, the Committee remains satisfied with the auditor’s performance and independence.
INTERNAL CONTROLS AND RISK MANAGEMENT, WHISTLEBLOWING AND FRAUD
The Committee maintains a proactive approach to monitoring internal financial controls and risk management.
During 2024, the Committee conducted a comprehensive review of internal controls within the financial
reporting process, with particular emphasis on the recently implemented ERP system (Oracle NetSuite) and
continued assessing the corporate risk register and whistleblowing arrangements.
Yours sincerely,
Natalie Fortescue, Interim Chairman of the Audit Committee
14 March 2025
38
SERINUS ENERGY
2024 ANNUAL REPORT
39
REPORT OF THE DIRECTORS
The Directors’ present their report, together with the audited
consolidated financial statements of Group for the year ended 31
December 2024.
PRINCIPAL ACTIVITIES
The principal activity of the Group is oil and gas exploration and
development.
DIRECTORS AND DIRECTORS’ INTERESTS
Directors who held office during the year, their remuneration
and interests held in the Group are detailed in the Remuneration
Report. Directors’ biographies for those holding office at the
end of the year are detailed in the Board and Management Team
section of this annual report.
SUBSTANTIAL SHAREHOLDERS
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
Crux Asset Management
Michael Hennigan
Quercus TFI SA
Jeffrey Auld
Marlborough Fund Managers
Spreadex LTD
29.98%
6.38%
7.48%
6.07%
3.92%
3.15%
3.20%
RESULTS AND DIVIDENDS
The results for the year are set out in the Consolidated Statement
of Comprehensive Loss. The results are further discussed in the
CFO Report on pages 12 to 16 of this Annual Report.
The Directors do not recommend payment of a dividend in respect
of these financial statements (2023 - $nil).
STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF
THE FINANCIAL STATEMENTS
The directors are responsible for preparing the annual report and
the financial statements in accordance with applicable law and
regulations.
Companies (Jersey) Law 1991 requires the directors to prepare
financial statements for each financial year. Under that law the
directors have elected to prepare the group financial statements
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the United Kingdom. The directors have
elected to prepare accounts under IFRS as adopted by the United
Kingdom for all purposes except for the financial statements
for the purposes of the Warsaw Stock Exchange filing which are
prepared under European Union (“EU”) endorsed IFRS.
Under Group law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and Group and of the profit
or loss of the group for that period. The directors are also required
to prepare financial statements in accordance with the rules of the
London Stock Exchange for companies trading securities on AIM.
In preparing these financial statements, the directors are required
to:
•
select suitable accounting policies and then apply them
consistently
•
make judgements and accounting estimates that are
reasonable and prudent
•
state whether they have been prepared in accordance with
IFRSs as adopted by the United Kingdom, subject to any
material departures disclosed and explained in the financial
statements
•
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will
continue in business (note 2).
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and enable them to ensure that the
financial statements comply with the requirements of Companies
(Jersey) Law 1991. They are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Group’s website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Group’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of
the financial statements contained therein.
STATEMENT OF DISCLOSURE TO AUDITORS
As far as the Directors are aware, there is no relevant audit
information of which the Group’s auditor is unaware and each
Director has taken all the steps that they ought to have undertaken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group’s auditor is aware
of that information.
AUDITORS
PKF Littlejohn LLP has indicated its willingness to continue in
office, and a resolution that they are appointed will be proposed
at the next annual general meeting.
On behalf of the Board
Yours sincerely,
Jeffrey Auld, Chief Executive Officer
14 March 2025
40
SERINUS ENERGY
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SERINUS ENERGY PLC
Opinion
We have audited the group financial statements of Serinus
Energy Plc (the ‘group’) for the year ended 31 December 2024
which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity, the Consolidated
Statement of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and UK-adopted international accounting standards.
In our opinion, the group financial statements:
•
give a true and fair view of the state of the group’s affairs as
at 31 December 2024 and of its loss for the year then ended;
•
have been properly prepared in accordance with UK-
adopted international accounting standards; and
•
have been prepared in accordance with the requirements of
The Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the group in
accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the director’s use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the group’s ability to
continue to adopt the going concern basis of accounting included:
•
Assessing any key cost and income streams included in the
group cash flow forecast which has been prepared by the
directors for a period of no less than twelve months from the
date of approval of these financial statements. We reviewed
management’s sensitised versions of the cash flow forecast
to assess whether a downturn could lead to future concerns.
•
Challenging and critiquing the directors’ assumptions
included in the cash flow forecast and agreeing the inputs
to evidence obtained during the course of the audit and the
understanding of the business obtained during the course
of the audit.
•
Assessing management’s price forecasts for oil and
gas respectively to obtain an understanding of the
appropriateness of these price inputs.
•
Reviewing and considering the adequacy of the disclosure
within the financial statements relating to the directors’
assessment of the going concern basis of preparation
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of misstatements.
At the planning stage, materiality is used to determine the financial
statement areas that are included within the scope of our audit
and the extent of sample sizes during the audit. No significant
changes have come to light through the audit fieldwork which has
required a revision of our materiality figure.
We calculated group materiality at 1.5% of gross assets (2023: 1%),
which resulted in a figure of $964,000 (2023: $785,000). Gross
assets were determined as an appropriate basis for materiality
because the principal focus of the group in 2024 remained on the
development of its oil and gas assets in Tunisia and Romania.
Overall Materiality for the significant components of the group
ranged from $396,500 to $634,000 (2023: $210,000 to $500,000),
based on 1.5% (2023: 1%) of gross assets for each component.
Group performance materiality was set at $674,000, up from
$510,250 in the prior year due to the increase in overall materiality.
We agreed to report to those charged with governance all
corrected and uncorrected misstatements we identified through
our audit with a value in excess of $48,000 (2023: $39,250),
calculated as 5% of overall materiality. We also agreed to report
any other audit misstatements below that threshold that we
believe warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular we looked at areas involving significant accounting
estimates and judgements by the directors and considered future
events that are inherently uncertain. These included, but were
not limited to the carrying value of both the production assets
and exploration & evaluation assets, and the completeness and
accuracy of the decommissioning provision. We also addressed
the risk of management override of internal controls, including
among other matters consideration of whether there was evidence
of bias that represented a risk of material misstatement due to
fraud.
Our group audit scope focused on the principal areas of operation,
being Romania and Tunisia. Each component was assessed as to
whether they were significant or not significant to the group by
either their size or risk. The parent Company and two operating
subsidiaries were considered to be significant due to identified
risk and size. We have performed the audit of the parent Company
that is registered in Jersey. The two key components are located in
Romania and Tunisia and have been subject to full scope audits by
component auditors. As group auditors we maintained oversight
and regular contact with the component auditor throughout all
stages of the audit and we were responsible for the scope and
direction of their work.
2024 ANNUAL REPORT
41
Key Audit Matter
How the scope of our audit responded to the key audit matter
Carrying
value
of
development
and
production assets (see notes 11 and 12)
The
group’s
total
development
and
production assets are highly material and
are key to the group’s operations. The
total net book value of development and
production assets has decreased from
$66.7m as at 31 December 2023 to $55.1m
as at 31 December 2024, mainly due to
impairments recognised during the year.
Management are required to assess at the
end of the reporting period as to whether
there are any indications of impairment
in line with IAS 36. If such indicators are
identified, the entity is required to estimate
the recoverable amount.
The
assessments
undertaken
by
management
in
undertaking
these
impairment
reviews
include
significant
judgements and estimates. These key
judgements
and
estimates
relate
to
proved and probable reserves, forecasted
commodity prices, expected production,
future development costs and discount
rates.
There is the risk that the group’s development
and production assets are impaired and that
the judgements and estimates made in the
calculations are inappropriate.
The audit team obtained a detailed understanding of the business of Serinus Energy
plc, to ensure that appropriate audit procedures were performed. As part of the audit
work performed, the audit team specifically:
• Held meetings with management to assess and challenge their assertions related
to the operating activity and development of the assets undertaken in the year
and future plans;
• Considered Managements’ conclusions in respect of the appropriate identification
of the Group’s cash generating units ‘(CGUs’) against the requirements of the
accounting standard;
• Examined licence concession agreements and supporting documentation in
order to assess that appropriate legal and beneficial ownership percentages had
been considered by Management in their CGU assessment;
• Obtained the most recently available communication with regards to the Ech
Chouech licence and an understanding of whether the costs capitalised in relation
to this licence should be carried on the balance sheet;
• Reviewed Management’s impairment indicators assessment for each CGU against
the criteria in the accounting standard in order to determine whether their
assessment is complete and in accordance with the requirements;
• Performed an independent assessment of financial and non-financial data for
potential impairment indicators;
• Compared the actual operating performance for each CGU for the year back to
the Group’s historic figures in order to assess whether the CGUs operated in line
with forecasts and in order to assess the Group’s ability to forecast reliably;
• Assessing the competence of the internally prepared reserve report and reviewing
the reasonableness of the key inputs in the report by comparing the data to
publicly available data;
• Obtained and reviewed the key inputs in the Group’s Discounted Cash Flow
models and challenged the reasonableness of the key inputs included in the
models such as oil prices, reserves, capex, interest rates and discount rates; and
• Tested the mathematical integrity of the Group’s model and ensured that the basis
of preparation of the model is in line with our expectations.
Based on the audit work performed and the challenge of management we do not
consider the carrying value of development and production assets to be materially
misstated. It is however important to draw users’ attention to the fact that the net value
($4.6m) of the Ech Chouech licence area is dependent on the successful renewal of
this licence.
Failure to obtain the necessary licence renewals may result in an impairment to the
carrying value of the linked development and production assets held.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
group financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in
the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
42
SERINUS ENERGY
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SERINUS ENERGY PLC (continued)
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement,
the directors are responsible for the preparation of the group
financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.
In preparing the group financial statements, the directors are
responsible for assessing the group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
•
We obtained an understanding of the group and the sector
in which it operates to identify laws and regulations that
could reasonably be expected to have a direct effect on the
financial statements. We obtained our understanding in this
regard through discussions with management, application of
cumulative audit knowledge and experience of the industry
sector.
•
We determined the principal laws and regulations relevant
to the group in this regard to be those arising from AIM
Rules for Companies January 2021, The Companies (Jersey)
Law 1991, IFRSs, Health and Safety Regulations and License
requirements and local laws and regulations applicable in
the jurisdictions where the group has operations. The team
remained alert to instances of non-compliance with laws and
regulations throughout the audit.
•
We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-
compliance by the group with those laws and regulations.
These procedures included, but were not limited to:
enquiries of management; review of minutes of meetings;
review of Regulatory News Service announcements and
correspondence.
2024 ANNUAL REPORT
43
•
We have also discussed among the engagement team how
and where fraud might occur and any potential indicators
of fraud. We then challenged the key assumptions made
by management in respect of their significant accounting
estimates (see key audit matter).
•
As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing
audit procedures which included, but were not limited to:
the testing of journals; reviewing accounting estimates for
evidence of bias; and evaluating the business rationale of
any significant transactions that are unusual or outside the
normal course of business.
•
The component auditors performed audit procedures for
each of the components, based on the instructions issued
to them by us. This included reviewing journal entries for
evidence of material misstatement due to fraud; reviewing
accounting estimates, judgements and assumptions for
evidence of management bias; and performing a review of
the bank transactions to ensure appropriate authorisation.
•
The audit team was in constant communication with the
component auditors during the component audits, including
regular discussions on those areas that were of concern to
the component auditors
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-
compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events
and transactions reflected in the financial statements, as we will
be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council’s
website at:
http://www.frc.org.uk/auditorsresponsibilitieshttp://www.frc.
org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-
the-audit-of-the-fi/description-of-the-auditor’s-responsibilities-
forhttps://www.frc.org.uk/auditors/audit-assurance/standards-
and-guidance/2010-ethical-standards-for-auditors-(1).
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body,
in accordance with our engagement letter dated 05 November
2024. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone, other than the company and the
company's members as a body, for our audit work, for this report,
or for the opinions we have formed.
Joseph Archer (Engagement Partner)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
14 March 2025
44
SERINUS ENERGY
Note
2024
2023
Revenue
6
15,401
17,875
Cost of sales
Royalties
Windfall tax
Production expenses
Depletion and depreciation
11, 13
(1,879)
(340)
(8,130)
(3,653)
(2,054)
(783)
(8,013)
(4,572)
Total cost of sales
(14,002)
(15,422)
Gross profit
1,399
2,453
Administrative expenses
Share-based payment expense
7
(3,409)
(221)
(4,928)
(3)
Total administrative expenses
(3,630)
(4,931)
Impairment expense
Release of provision
Decommissioning provision recovery
Gain on disposal of assets
11,12
23
18
(5,666)
-
68
37
(6,965)
-
16
-
Operating loss
(7,792)
(9,427)
Finance expense
8
(793)
(1,923)
Net loss before tax
(8,585)
(11,350)
Tax expense
9
(1,128)
(1,672)
Loss after taxation attributable to equity owners of the parent
(9,713)
(13,022)
Other comprehensive income
-
-
Total comprehensive loss for the year attributable to equity owners of the parent
(9,713)
(13,022)
Loss per share:
Basic
Diluted
10
10
(0.08)
(0.08)
(0.11)
(0.11)
The accompanying notes on pages 50 to 73 form part of the consolidated financial statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS)
As at
Note
31 December 2024
31 December 2023
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Right-of-use assets
11
12
13
44,441
10,666
664
56,032
10,703
498
Total non-current assets
55,771
67,233
Current assets
Restricted cash
Trade and other receivables
Product inventory
Cash and cash equivalents
14
15
16
14
1,135
5,402
653
1,368
1,171
8,137
698
1,335
Total current assets
8,558
11,341
Total assets
64,329
78,574
Equity
Share capital
Share-based payment reserve
Treasury shares
Accumulated deficit
Cumulative translation reserve
17
7
17
401,641
25,108
-
(409,091)
(3,372)
401,426
25,560
(458)
(399,378)
(3,372)
Total equity
14,286
23,778
Liabilities
Non-current liabilities
Decommissioning provision
Deferred tax liability
Lease liabilities
Other provisions
18
19
20
21
18,251
12,081
504
1,317
24,004
12,125
424
1,317
Total non-current liabilities
32,153
37,870
Current liabilities
Current portion of decommissioning provision
Current portion of lease liabilities
Accounts payable and accrued liabilities
18
20
22
9,446
177
8,267
6,720
137
10,069
Total current liabilities
17,890
16,926
Total liabilities
50,043
54,796
Total liabilities and equity
64,329
78,574
The accompanying notes on pages 50 to 73 form part of the consolidated financial statements
These consolidated financial statements were approved by the Board of Directors and authorised for issue on 14 March 2025 and were
signed on its behalf by:
NATALIE FORTESCUE
JEFFREY AULD
DIRECTOR, INTERIM CHAIR OF THE AUDIT COMMITTEE
DIRECTOR
2024 ANNUAL REPORT
45
46
SERINUS ENERGY
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS)
Note
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
Income for the year
Other comprehensive loss for the year
-
-
-
-
-
-
(13,022)
-
-
-
(13,022)
-
Total comprehensive loss for the year
Transactions with equity owners
Share-based payment expense
Shares purchased to be held in Treasury
-
-
-
-
3
-
-
-
(3)
(13,022)
-
-
-
-
-
(13,022)
3
(3)
Balance at 31 December 2023
401,426
25,560
(458)
(399,378)
(3,372)
23,778
Income for the year
Other comprehensive loss for the year
-
-
-
-
-
-
(9,713)
-
-
-
(9,713)
-
Total comprehensive loss for the year
Transactions with equity owners
Share issuance
Share-based payment expense
Options exercised
-
-
-
215
-
-
221
(673)
-
-
-
458
(9,713)
-
-
-
-
-
-
-
(9,713)
-
221
-
Balance at 31 December 2024
401,641
25,108
-
(409,091)
(3,372)
14,286
The accompanying notes on pages 50 to 73 form part of the consolidated financial statements
2024 ANNUAL REPORT
47
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS)
Note
2024
2023
Operating activities
Income for the year
Items not involving cash:
Depletion and depreciation
Impairment expense
Share-based payment expense
Tax expense
Accretion expense on decommissioning provision
Change in other provisions
Foreign exchange (gain) / loss
Decommissioning provision recovery
Other income
Gain on disposal of assets
Income taxes paid
11, 13
11, 12
7
9
18
21
(9,713)
3,653
5,666
221
1,128
1,667
-
(705)
(68)
23
(37)
(727)
(13,022)
4,572
6,965
3
1,672
1,801
(41)
192
(16)
(59)
-
(192)
Funds from operations
Changes in non-cash working capital
25
1,108
(243)
1,875
66
Cashflows from operating activities
865
1,941
Financing activities
Lease payments
Proceeds from equity issuance
Shares purchased to be held in treasury
20
17
(376)
90
-
(184)
-
(3)
Cashflows used in from financing activities
(286)
(187)
Investing activities
Capital expenditures
Proceeds on disposition of property, plant and equipment
25
(464)
-
(5,298)
-
Cashflows used in investing activities
(464)
(5,298)
Change in cash and cash equivalents
115
(3,544)
Cash and cash equivalents, beginning of year
14
1,335
4,854
Impact of foreign currency translation on cash
(82)
25
Cash and cash equivalents, end of year
14
1,368
1,335
The accompanying notes on pages 50 to 73 form part of the consolidated financial statements
48
SERINUS ENERGY
2024 ANNUAL REPORT
49
50
SERINUS ENERGY
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 Group whose ordinary shares are traded under the symbol “SENX” on AIM and “SEN” on the WSE.
The consolidated financial statements for Serinus include the accounts of the Group and its subsidiaries for the years ended 31
December 2024 and 2023.
2.
BASIS OF PRESENTATION
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. The
policies have been consistently applied to all years presented, unless otherwise stated. The consolidated financial statements have
been prepared on a historical cost basis except as noted in the accompanying accounting policies.
The consolidated financial statements of the Group for the 12 months ended 31 December 2024 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. The directors have elected to prepare accounts under IFRS as adopted by the United Kingdom for all purposes except for
the financial statements for the purposes of the Warsaw Stock Exchange filing which are prepared under European Union (“EU”)
endorsed IFRS. No material differences have been noted between EU IFRS and UK IFRS for the year ended 31 December 2024.
These consolidated 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.
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 Summary, the Chairman’s Letter and the Letter from the CEO. The financial position of the Group is described in these
consolidated financial statements and in the Report from the CFO.
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, accelerated
decommissioning 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 consolidated financial statements. In the event of sustained oil price volatility, delays in receiving the anticipated VAT refund
in Romania, and the inability to secure the necessary funding for the capital program, the Group will maintain adequate resources
and liquidity to continue operations and fulfil its obligations as they become due in the normal course of business for at least 12
months from the date of these consolidated financial statements. Accordingly, the Directors continue to adopt the going concern
basis for the preparation of these consolidated financial statements.
3.
SIGNIFICANT ACCOUNTING POLICIES
a. Principles of consolidation
The consolidated financial statements include the results of the Group and all subsidiaries. Subsidiaries are entities over
which the Group has control. All intercompany balances and transactions, and any recognised gains or losses arising from
intercompany transactions are eliminated upon consolidation. Serinus has three directly held subsidiaries, Serinus Energy
Canada Inc., Serinus Holdings Limited and Serinus Petroleum Consultants Limited. Through Serinus Holdings Limited, the
Group has the following indirect wholly-owned subsidiaries: Serinus Energy Romania Trading S.r.l, Serinus Energy Romania
S.A., SE Brunei Limited, AED South East Asia Limited and Serinus Tunisia B.V. 99.999996% of Serinus Energy Romania S.A. is
held by Serinus Holdings Limited, with Serinus Tunisia B.V. owning the remaining 0.000004% of Serinus Energy Romania S.A.
On 21 December 2022, the Group completed a reorganisation whereby the interests in Serinus Tunisia B.V. and Serinus Energy
Romania S.A. were transferred from Serinus B.V. to Serinus Holdings Limited. On 9 August 2022 KOB Borneo Limited was struck
off and on 17 August 2022, the liquidation of Serinus B.V. was completed.
Some of the Group’s activities are conducted through jointly controlled assets. The consolidated financial statements therefore
include the Group’s share of these assets, associated liabilities and cashflows in accordance with the term of the arrangement.
The Group’s associated share of revenue, cost of sales and operating costs are recorded within the Statement of Comprehensive
Income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED)
2024 ANNUAL REPORT
51
Basis of consolidation
Where the Group has control over an investee, it is classified as a subsidiary. The Group controls an investee if all three of the
following elements are present: power over the investee, exposure to variable returns from the investee and the ability of the
investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that
there may be a change in any of these elements of control.
De-facto control exists in situations where the Group has the practical ability to direct the relevant activities of the investee
without holding the majority of the voting rights. In determining whether de-facto control exists the Group considers all relevant
facts and circumstances, including:
•
The size of the Group’s voting rights relative to both the size and dispersion of other parties.
•
Substantive potential voting rights held by the Group and by other parties.
•
Other contractual arrangements.
•
Historic patterns in voting attendance.
The consolidated financial statements present the results of the Group as if they formed a single entity. Intercompany transactions
and balances between group companies are eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised
at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of
comprehensive loss from the date on which control is obtained. They are deconsolidated from the date on which control ceases.
b. Segment information
Operating segments have been determined based on the nature of the Group’s activities and the geographic locations in which
the Group operates and are consistent with the level of information regularly provided to and reviewed by the Group’s chief
operating decision makers.
c. Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the Group’s functional currency at exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the
year-end exchange rate. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value
are translated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency
differences arising on translation are recognised in profit or loss.
Foreign currency translation
In preparing the Group’s consolidated financial statements, the financial statements of each entity are translated into U.S. dollars,
the presentational currency of the Group. The assets and liabilities of foreign operations that do not have a functional currency
of US dollars are translated into US dollars using exchange rates at the reporting date. Revenues and expenses of foreign
operations are translated into US dollars using foreign exchange rates that approximate those on the date of the underlying
transaction. Significant foreign exchange differences are recognised in Other Comprehensive Income.
If the functional currency changes from a foreign currency to the Group’s reporting currency, translation adjustments for prior
periods remain in equity and the translated amounts for non-monetary assets at the end of the prior period become the
accounting basis for those assets in the period of the change and subsequent periods.
d. Revenue recognition
The Group earns revenue from the sale of crude oil, natural gas and natural gas liquids. Royalties are recorded at the time of
production.
Revenue from the sale of crude oil, natural gas and natural gas liquids is recorded when performance obligations are satisfied.
Performance obligations associated with the sale of crude oil are satisfied at the point in time when the products are delivered to
the loading terminal and the volumes and prices have been agreed upon with the customer, which is considered to be the point
at which the Group transfers control of the product. Performance obligations associated with the sale of natural gas and natural
gas liquids are satisfied upon delivery to the respective concession delivery points, which is where the Group transfers control.
e. Windfall tax
Within the Romanian operating segment, the Group incurs a windfall tax if the realised price of gas exceeds a price set by the
Romanian authorities. The windfall tax is recognised on a production basis and is shown as a cost of sale.
f.
Share-based compensation
The Group reflects the economic cost of awarding share options to employees and Directors by recording an expense in the
Consolidated Statement of Comprehensive Income equal to the fair value of the benefit awarded. The expense is recognised in
the Consolidated Statement of Comprehensive Income or Loss over the vesting period of the award. Fair value is measured by
52
SERINUS ENERGY
use of a Black-Scholes model which takes into account conditions attached to the vesting and exercise of the equity instruments.
The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations.
Share awards issued under the Group’s LTIP comprise of a right to acquire a share of the Group at no cost and are valued at the
closing price on the date of issuance. There are no vesting conditions for these awards, therefore the full value of the awards
are expensed upon issuance and carried within the Group’s share-based payment reserve.
Shares issued in lieu of salary are issued to the equivalent amount of salary forfeited. In determining the number of shares
awarded, the Group uses the volume weighted average share price for the equivalent period of the salary forfeited. As there
are no vesting conditions for these shares, they are fully expensed during the period the salary was forfeited and are recorded
within Share Capital.
When a share option modification is completed, the Group compares the original fair-value of the share option on the
modification date, to the modified fair-value on the modification date. If the fair-value of the modified share option is lower
than the original fair-value, no adjustment is required as the original fair-value is the minimum the Group is required to expense.
The increase in incremental fair-value is expensed over the remaining vesting period. If the share option is fully vested, the
incremental fair-value is expensed immediately through profit and loss and carried under the share-based payment reserve.
g. Taxes
Current and deferred income taxes are recognised in profit or loss, except when they relate to items that are recognised directly
in equity or other comprehensive income, in which case the current and deferred taxes are also recognised directly in equity or
other comprehensive loss, respectively. When current income tax or deferred income tax arises from the initial accounting for a
business combination, the tax effect is included in the accounting for the business combination.
Current income taxes are measured at the amount expected to be paid to or recoverable from the taxation authorities based on
the income tax rates and laws that have been enacted at the end of the reporting period.
The Group follows the balance sheet method of accounting for deferred income taxes, where deferred income taxes are
recorded for the effect of any temporary difference between the accounting and income tax basis of an asset or liability, using
the substantively enacted income tax rates expected to apply when the assets are realised, or the liabilities are settled. Deferred
income tax balances are adjusted for any changes in the enacted or substantively enacted tax rates and the adjustment is
recognised in the period that the rate change occurs.
Deferred income tax liabilities are generally recognised for all taxable temporary differences. Deferred income tax assets are
recognised to the extent that it is probable future taxable profits will be available against which the temporary differences can
be utilised. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be
recovered. Deferred income tax assets and liabilities are only offset where they arise within the same entity and tax jurisdiction.
Deferred income tax assets and liabilities are presented as non-current.
Taxes in Tunisia are prepaid based on the prior year tax balance, and are used to reduce future taxes payable, and may not
be refunded. The Group classifies these as prepaid taxes when they are paid. The Group reassesses the likelihood that these
prepaid taxes will result in a benefit to the Group, and to the extent that these are deemed to have no value, the Group includes
this through profit and loss as a tax expense.
h. Cash and cash equivalents and restricted cash
Cash and cash equivalents include short-term investments such as term deposits held with banks or similar type instruments
with a maturity of three months or less. Restricted cash is comprised of cash held in trust by a financial institution for the benefit
of a third party as a guarantee that certain work commitments will be met. Once the work commitments are met, the restricted
cash is released from the trust and returned to cash.
i.
Financial instruments
Financial instruments are recognised when the Group becomes a party to the contractual provisions of the instrument and are
subsequently measured at amortised cost.
Classification and measurement of financial assets
The initial classification of a financial asset depends upon the Group’s business model for managing its financial assets and the
contractual terms of the cash flows. There are three measurement categories into which the Group classified its financial assets:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
2024 ANNUAL REPORT
53
i.
Amortised costs: includes assets that are held within a business model whose objective is to hold assets to collect contractual
cash flows and its contractual terms give rise on specified dates to cashflows that represent solely payments of principal
and interest;
ii. Fair value through other comprehensive income (“FVOCI”): includes assets that are held within a business model whose
objective is achieved by both collecting contractual cash flows and selling the financial assets, where its contractual terms
give rise on specified dates to cash flows that represent solely payments of principal and interest; or
iii. Fair value through profit or loss (“FVTPL”): includes assets that do not meet the criteria for amortised cost or FVOCI and are
measured at fair value through profit or loss.
The Group’s cash and cash equivalents, restricted cash and trade receivables and other receivables are measured at amortised
cost.
Trade receivables and other receivables are initially measured at fair value. The Group holds trade receivables and other
receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised
cost. Trade receivables and other receivables are presented as current assets as collection is expected within 12 months after
the reporting period.
The Group has no financial assets measured at FVOCI or FVTPL.
Impairment of financial assets
The Group recognised loss allowances for expected credit losses (“ECLs”) on its financial assets measured at amortised cost.
Due to the nature of its financial assets, the Group measures loss allowances at an amount equal to the lifetime ECLs. Lifetime
ECLs are the anticipated ECLs from all possible default events over the expected life of a financial asset. ECLs are a probability-
weighted estimate of credit losses.
Classification and measurement of financial liabilities
A financial liability is initially measured at amortised cost or FVTPL. A financial liability is classified and measured at FVTPL if it is
held-for-trading, a derivative or designated as FVTPL on initial recognition.
The Group’s accounts payable and accrued liabilities, lease liabilities and long-term debt are measured at amortised cost.
Accounts payable and accrued liabilities are initially measured at fair value and subsequently measured at amortised cost.
Accounts payable and accrued liabilities are presented as current liabilities unless payment is not due within 12 months after
the reporting period.
Long-term debt is initially measured at fair value, net of transaction costs incurred. The contractual cash flows of the long-term
debt are subsequently measured at amortised cost. Long-term debt is classified as current when payment is due within 12
months after the reporting period.
The Group has no financial liabilities measured at FVTPL.
The Group characterises its fair value measurements into a three-level hierarchy depending on the degree to which the inputs
are observable, as follows:
Level 1: inputs are quoted prices in active markets for identical assets and liabilities;
Level 2: inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability either
directly or indirectly; and
Level 3: inputs are unobservable inputs for the asset or liability.
j.
Exploration and evaluation (“E&E”) and Property, plant and equipment (“PP&E”)
i.
Exploration and evaluation expenditures
Pre-license costs are costs incurred before the legal rights to explore a specific area have been obtained. These costs are
expensed in the period in which they are incurred.
E&E costs, including the costs of acquiring licenses and directly attributable general and administrative costs, are capitalised
as E&E assets. The costs are accumulated in cost centres by well, field or exploration area pending determination of
technical feasibility and commercial viability.
E&E assets are assessed for impairment when (i) facts and circumstances suggest that the carrying amount exceeds the
recoverable amount, or (ii) sufficient data exists to determine technical feasibility and commercial viability, and the assets
are to be reclassified.
The technical feasibility and commercial viability of extracting a resource is considered to be determinable based on several
factors including the assignment of proved or probable reserves. A review of each exploration license or field is carried out,
at least annually, to ascertain whether the project is technically feasible and commercially viable. Upon determination of
technical feasibility and commercial viability, exploration and evaluation assets attributable to those reserves are first tested
for impairment and then reclassified from E&E assets to a separate category within PP&E referred to as oil and natural gas
interests.
54
SERINUS ENERGY
ii. Development and production costs
Items of PP&E, which include oil and gas development and production assets, are measured at cost less accumulated
depletion and depreciation and accumulated impairment losses. Development and production assets are grouped into
cash generating units (“CGU”) for impairment testing and categorised within property and equipment as oil and natural
gas interests. PP&E is comprised of drilling and well servicing assets, office equipment and other corporate assets. When
significant parts of an item of PP&E, including oil and natural gas interests, have different useful lives, they are accounted
for as separate items (major components).
Gains and losses on disposal of an item of PP&E, including oil and natural gas interests, are determined by comparing the
proceeds from disposal with the carrying amount of PP&E and are recognised within profit or loss.
iii. Subsequent costs
Costs incurred subsequent to the determination of technical feasibility and commercial viability and the costs of replacing
parts of PP&E are capitalised only when they increase the future economic benefits embodied in the specific asset to which
they relate. All other expenditures are recognised in profit or loss as incurred. Such capitalised costs generally represent
costs incurred in developing proved and/or probable reserves and bringing in or enhancing production from such reserves
and are accumulated on a field or geotechnical area basis. The carrying amount of any replaced or sold component is
recognised. The costs of the day-to-day servicing of PP&E are recognised in profit or loss as incurred.
iv. Depletion and depreciation
The net carrying value of development or production assets is depleted using the unit-of-production method based on
estimated proved and probable reserves, taking into account future development costs, which are estimated costs to
bring those reserves into production. For purposes of the depletion assessment, petroleum and natural gas reserves are
converted to a common unit of measurement on the basis of their relative energy content where six thousand cubic feet
(“Mcf”) of natural gas equates to one barrel of oil.
Certain of the Group’s assets are not depleted based on the unit of production method as they relate to infrastructure,
corporate and other assets. Such plant and equipment items are recorded at cost and are depreciated over the estimated
useful lives of the asset using the declining balance basis at rates ranging from 20% to 45%. The expected lives of other
PP&E are reviewed on an annual basis and, if necessary, changes in expected useful lives are accounting for prospectively.
v. Impairment
The carrying amounts of the Group’s PP&E are reviewed whenever events or changes in circumstances indicate that that the
carrying value of an asset may not be recoverable and at a minimum at each reporting date. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or groups of assets (CGUs). The recoverable amount is then
estimated. The recoverable amount of an asset or a CGU is the greater of its value in use and its fair value less costs to sell.
Value-in-use is generally computed as the present value of the future cash flows, discounted to present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset,
expected to be derived from production of proved and probable reserves.
An impairment loss is recognised if the carrying amount of an asset or a CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to reduce the carrying amounts of the other
assets in the unit on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior
years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss
is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depletion and depreciation if no impairment loss had been recognised.
vi. Corporate assets
Corporate assets consist primarily of office equipment and computer hardware. Depreciation of office equipment and
computer hardware is provided over the useful life of the assets on the declining balance basis between 20% and 45% per
year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
2024 ANNUAL REPORT
55
k. ROU asset and lease liabilities
Serinus does not act as a lessor, and therefore this policy solely reflects Serinus acting in the manor of a lessee. Serinus recognises
a right-of-use asset and an offsetting lease obligation on the date the asset is available to the Group for use. The asset and lease
obligation are initially measured at the present value of the future lease payments, using the implicit interest rate stated in the
agreement, if available. If no interest rate is defined in the contract, the Group uses the weighted average cost of capital of the
business unit the lease is incurred within. Over the life of the lease, the Group incurs interest expense, which is added to the
lease obligation, which is reduced by each future lease payment.
Modifications to lease contracts results in remeasuring the lease asset and obligation as of the effective date, with the resulting
change reflected through an addition to the underlying right-of-use asset and corresponding lease obligation.
Short-term leases and leases of low-value are not recognised on the balance sheet. Instead, these lease payments are recognised
through profit and loss as incurred.
l.
Product inventory
Product inventory consists of the Group’s unsold Tunisia crude oil barrels, valued at the lower of cost, using the first-in, first-
out method, or net realisable value. Cost includes royalties, operating expenses and depletion associated with the barrels as
determined on a country-by-country basis.
m. Provisions
i.
General
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. Provisions are not recognised for future
operating losses. Management uses its best judgement in determining the likelihood that the provision will be settled within
one year; provisions that are settled within one year are classified as a current provision.
ii. Decommissioning provisions
Decommissioning provisions include legal or constructive obligations where the Group will be required to retire tangible
long-lived assets such as well sites and processing facilities. The amount recognised is the present value of estimated future
expenditures required to settle the obligation using the risk-free interest rate associated with the type of expenditure and
respective jurisdiction. A corresponding asset equal to the initial estimate of the liability is capitalised as part of the related
asset and depleted to expense over its useful life. The obligation is accreted until the date of expected settlement of the
retirement obligation and is recognised within financial costs in the statement of comprehensive loss.
Changes in the estimated liability resulting from revisions to the estimated timing or amount of undiscounted cash flows
or the discount rates are recognised as changes in the decommissioning provision and related asset. Actual expenditures
incurred are charged against the provision to the extent the provision was established. Downward revisions to the liability
in cases when the full decommissioning asset has been impaired, the resulting change in estimate will flow through the
Statement of Comprehensive Income.
n. Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share
options are recognised as a deduction from equity, net of any tax effects.
o. Treasury shares
The Group also from time to time acquires own shares to be held as treasury shares. Treasury shares are held at cost and shown
as a deduction from total equity in the Consolidated Statement of Financial Position.
Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from
sale and the original cost being taken to reserves. No gain or loss is recognised in the profit or loss on the purchase, sale, issue
or cancellation of treasury shares.
p. Warrants
Warrants are classified as equity. Incremental costs directly attributable to the issuance of warrants are recognised as a deduction
from equity, net of any tax effects. Fair value is measured by use of a Black-Scholes model which takes into account conditions
attached to the vesting and exercise of the equity instruments.
q. Dividends
To date the Group has not paid a dividend and does not anticipate paying dividends in the foreseeable future. Should the
Group decide to pay dividends in the future, it would need to satisfy certain liquidity tests as established in the Companies
(Jersey) Law 1991.
r.
Changes and amendments to accounting policies
During the year, there were no new standards or amendments to standards adopted that had a material effect to the Group.
56
SERINUS ENERGY
s. Accounting standards issued but not yet adopted
The following standards have been published and are mandatory for accounting periods beginning after 1 January 2025 but
have not been early adopted by the Group and could have an impact on the Group financial statements:
•
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
•
Amendments to IAS 1 Classification of Liabilities as Current or Non-current
•
Amendments to IAS 1 Non-current Liabilities with Covenants
•
Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements
•
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback
The management do not expect that adoption of the standards listed above will have a material impact on the financial
statements of the Group in future periods, except if indicated below.
4.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
All financial assets and financial liabilities are held at amortised costs.
The fair values of cash and cash equivalents, restricted cash, trade receivables and other receivables and accounts payable and
accrued liabilities approximate their carrying amounts due to their short-term maturities.
The fair value of the lease liabilities and long-term debt approximates its carrying value as it is at a market rate of interest and
accordingly the fair market value approximates the carrying value (level 2).
RISK MANAGEMENT
The Directors have overall responsibility for identifying the principal risks of the Group and ensuring the policies and procedures
are in place to appropriately manage these risks. Serinus’ management identifies, analyses and monitors risks and considers the
implication of the market condition in relation to the Group’s activities.
Market risk is the risk that the fair value of future cash flows of financial assets or financial liabilities will fluctuate due to movements
in market prices. Market risk is comprised of commodity price risk, foreign currency risk and interest rate risk, as well as credit and
liquidity risks.
COMMODITY PRICE RISK
The Group is exposed to commodity price risk in fluctuations in the price of oil, natural gas and natural gas liquids. In Tunisia, the
Group enters into lifting agreements with trading counterparties based on the market price of Brent crude oil. In Romania, the
Group enters into contracts with customers for a stated gas price based on the Romanian gas trading activity.
The Group has no commodity hedge program in place which could limit exposure to price risk. For the year ended 31 December
2024, a 10% change in the price of crude oil per bbl would have impacted revenue, net of royalties, by $1.2 million (2023 - $1.3
million) and a 10% change in the price of gas per mcf would have impacted revenue, net of royalties, by $0.3 million (2023 - $0.5
million).
FOREIGN CURRENCY EXCHANGE RISK
The Group is exposed to risks arising from fluctuations in various currency exchange rates. Gas prices are based in Romanian LEU
(“LEU”) or Tunisian dinar (“TND”), while condensate and oil prices are based in USD. The Group has payables that originate in GBP,
CAD, LEU and TND. As such the Group is affected by changes in the USD exchange rate compared to the following currencies:
GBP, CAD, LEU and TND.
Functional currency of Serinus Romania was Romanian Leu (RON) up to 31 December 2022 subsequent which management
considered changed circumstances and economic environment in Romania and concluded that functional currency of the Group’s
Romanian business unit changed from RON to USD in 2023. In making this conclusion, management considered all primary and
secondary indicators for determination of the functional currency in accordance with IAS 21 The Effects of Changes in Foreign
Currency Exchange Rates. Particularly, management considered cash flow indictors of Serinus Romania, its sales price and
sales market indicators, expense indicators, financing indicators, degree of autonomy, as well as intra-Group transactions and
arrangements.
The Group’s day to day operations will often generate invoices in other currencies, but these are not sensitive to the foreign
exchange practice of the business.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
2024 ANNUAL REPORT
57
As at 31 December 2024
GBP
CAD
LEU
TND
Cash and cash equivalents
Restricted cash
Accounts receivable
Accounts payable
Lease liabilities
54
-
98
(748)
(206)
15
1,631
(6)
(81)
(58)
259
-
1,359
(5,665)
(425)
3,930
-
3,387
(20,651)
(1,035)
Net foreign exchange exposure
Translation to USD
(802)
1.2551
1,501
0.6956
(4,472)
0.2093
(14,369)
0.3138
USD equivalent
(1,007)
1,044
(936)
(4,509)
As at 31 December 2023
GBP
CAD
LEU
TND
Cash and cash equivalents
Restricted cash
Accounts receivable
Accounts payable
Lease liabilities
146
-
65
(425)
(316)
78
1,550
2
(74)
(85)
352
5
2,068
(6,154)
(563)
3,089
-
12,233
(24,742)
-
Net foreign exchange exposure
Translation to USD
(530)
1.2731
1,471
0.7547
(4,292)
0.2224
(9,420)
0.3263
USD equivalent
(675)
1,110
(955)
(3,074)
For the year ended 31 December 2024, a 1% change in foreign exchange rates would have impacted net income by $97,000 (2023
- $130,000).
CREDIT RISK
The Group’s cash and cash equivalents and restricted cash are held with major financial institutions. The Group monitors credit risk
by reviewing the credit quality of the financial institutions that hold the cash and cash equivalents and restricted cash. The Group’s
trade receivables consist of receivables for revenue in Tunisia and Romania, along with receivables from joint venture partners in
Tunisia.
Management believes that the Group’s exposure to credit risk is manageable, as commodities sold are under contract or payment
within 30 days. Commodities are sold with reputable parties and collection is prompted based on the individual terms with the
parties. For the year ended 31 December 2024, Tunisia’s revenue was generated from three customers (2023 – three), with an 81%,
13% and 6% weighting (2023 – 75%, 16%, 9%). Romania’s sales were made primarily to one customer (2023 – three), with a 100%
weighting (2023 – 78%, 8% and 7%). At 31 December 2024, the Group had $nil (2023 - $nil million) of revenue receivables that were
considered past due (over 90 days outstanding).
The Group applied the simplified model for assessing the ECLs under IFRS 9. This approach uses a lifetime expected loss allowance
based on the days past due criteria. Upon reviewing the historical transactions with the Group’s vendors, it was determined that the
ECL was insignificant as there is no history of default or unpaid invoices. As a result, the Group has determined the ECL percentage
to be nominal and has not recorded any allowance for doubtful accounts as at 31 December 2024 and 31 December 2023.
The Group manages its current VAT receivables by submitting VAT returns on a monthly basis. This allows the Group to receive the
VAT in a timely matter while any amounts that may come under scrutiny, only delays one month’s refund. Management has no formal
credit policy in place for customers and the exposure to credit risk is approved and monitored on an ongoing basis individually for
all significant customers. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the
statement of financial position. The Group does not require collateral in respect of financial assets.
LIQUIDITY RISK
Liquidity risk is the risk that Serinus will not be able to pay financial obligations when due. There are inherent liquidity risks,
including the possibility that additional financing may not be available to the Group, or that actual capital expenditures may
exceed those planned. The Group mitigates this risk through monitoring its liquidity position regularly to assess whether it has
the resources necessary to fund working capital, development costs and planned exploration commitments on its petroleum and
natural gas properties or that viable options are available to fund such commitments. Alternatives available to the Group to manage
its liquidity risk include deferring planned capital expenditures that exceed amounts required to retain concession licenses, farm-
out arrangements and securing new equity or debt capital.
58
SERINUS ENERGY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
As at 31 December 2024
1 year
1 - 3 years
3+ years
Total
Accounts payable and accrued liabilities
Lease liabilities
8,267
177
-
409
-
95
8,267
681
Total
8,444
409
95
8,948
As at 31 December 2023
1 year
1 - 3 years
3+ years
Total
Accounts payable and accrued liabilities
Lease liabilities
10,069
137
-
424
-
-
10,069
561
Total
10,206
424
-
10,630
INTEREST RATE RISK
During 2021, the Group fully repaid its long-term debt, and no longer has an interest rate risk.
5.
USE OF ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with IFRS requires management to make significant estimates and judgements
based on currently available information. Management uses their professional judgement along with the most up to date information
in making these estimates and judgements, however actual results could differ. By their very nature, these estimates are subject to
measurement uncertainty and the effect on the financial statements of future periods could be material. Estimates and underlying
assumptions are reviewed on an ongoing basis and any changes are recognised in the period that the estimates and judgements
have changed. The significant estimates and judgements made by management in the statements are described below:
a. Cash generating units
The determination of CGUs requires judgment in defining a group of assets that generate independent cash inflows from other
assets. CGUs are determined by similar geological structure, shared infrastructure, geographical proximity, commodity type,
similar exposure to market risks and materiality.
b. Oil and gas reserves
The process of determining oil and gas reserves is complex and involves many different assumptions. The Group conducts
a reserve evaluation at the end of each fiscal year. The Group’s reserve estimates are based on current production forecasts,
commodity price forecasts, licences being renewed as and when required, and other economic conditions. Estimates are
amended for all available information such as historical well performance and updated commodity prices. See the reserves
estimates in the Review of Operations.
The Group’s reserves drive the calculation of depletion of the oil and gas assets, calculating the future cash flows of the assets
and the recoverable amount for each CGU. The Group compares the recoverable amount to the carrying amount to determine
any potential impairment. In determining the recoverable amount, the Group makes other key estimates and judgements which
involve the proved and probable reserves, forecasted commodity prices, expected production, future development costs and
discount rates. Any changes to these estimates may materially impact the expected reserves of the Group. An impairment
sensitivity analysis is detailed in Note 11.
c. Decommissioning provisions (Note 18)
The Group recognises liabilities for the future decommissioning and restoration of oil and gas assets. Management is required
to apply estimates and judgements related to the estimated abandonment techniques, costs and abandonment dates.
Technological advancements in the industry could lead to changes to reserve life delaying the abandonment dates, as well as
possible cheaper abandonment techniques. Any changes to these estimates, along with the inflation and discount rates, could
result in material differences and affect future financial results.
d. Income taxes (Notes 9 and 19)
Deferred income taxes require estimates and judgements from management in determining the future cash flows and taxable
income of each business unit to determine the likelihood that any assets may be recognised by the Group.
Within Tunisia, taxes are at times paid in advance based on gross sales in certain circumstances. Management uses their best
estimates and future cash flow projections to determine if these advances will be utilised against income taxes in the future
2024 ANNUAL REPORT
59
periods. When it is deemed that these advances will not be utilised in the future, they are recorded through the Statement of
Comprehensive Income as a tax expense.
e. VAT receivable
The Group has outstanding VAT claims that have been disputed by Romanian authorities dating back to 2016. The VAT in
question relates to operational and developmental costs in Romania for costs paid in full by the Group at 100% working interest.
Management believes that these amounts are fully recoverable because in December 2023 the Romanian Court ruled in favour
of Serinus Romania regarding the claim against ANAF for $1.7 million in outstanding VAT refund and therefore the Group has
recorded 100% of the VAT balance in Trade and other receivables, regardless the fact that ANAF appealed this decision in April
2024 without giving a reason. The appeal is scheduled for early February 2025.
Subsequent year-end, the Superior Court of Cassation and Justice of Romania has ruled in favour of Serinus Energy Romania vs.
ANAF, in the case of the rejected VAT refunds (Note 30).
f.
Product inventory (Note 16)
Within Tunisia, crude oil inventory volumes are estimated based on historical production less volumes sold and other adjustments
for shrinkage, as well as estimates based on facility capacity and volume assumptions.
g. Exploration and evaluation assets (Note 12)
E&E assets are subject to ongoing technical, commercial and management review to confirm the continued intent to establish
the technical feasibility and commercial viability of any prospect for which costs have been incurred. The judgment involves
assessing whether sufficient progress has been made toward establishing the technical feasibility and commercial viability of
the project, including management’s evaluation of factors such as new geological information, market conditions, available
financing, and regulatory approvals. E&E assets remain capitalised until a point at which management determines whether a
project is economically viable.
h. Impairment of assets (Note 11)
The management and directors review the carrying value of the Group’s assets to determine whether there are any indicators
of impairment such that the carrying values of the assets may not be recoverable. The assessment of whether an indicator of
impairment or reversal thereof has arisen requires considerable judgement, taking account of factors such as future operational
and financial plans, commodity prices and the competitive environment.
For exploration and evaluation assets held by the Group, namely exploration works at the Satu Mare concession in Romania,
before the technical feasibility and commercial viability of extracting hydrocarbon resources is demonstrable, indicators of
impairment can include: (a) the right to explore in a specific area has expired and is not expected to be renewed; (b) significant
expenditure for further exploration or evaluation activities is not being planned; (c) exploration and evaluation of mineral
resources have not led to the discovery or confirmation of commercially viable resource; or (d) that sufficient data exists to
indicate that the carrying amount of the asset may not be recovered in full from development or sale.
The Group’s operating oil & gas assets, some of which have previously been impaired, are assessed for impairment at a Cash
Generating Unit (CGU) level, in accordance with IAS 36, which align to the concession agreements held by the Group, i.e.
Moftinu and Santau in Romania and in Tunisia, Sabria and Chouech Es Saida and Ech Chouech as the South Tunisia CGU. These
assets are sensitive to changes in operational assumptions and commodity pricing and therefore the management and directors
need to make judgements as to whether certain events represent indicators of impairment or impairment reversal.
Where such indicators exist, the carrying value of the assets of a CGU or exploration and evaluation asset is compared with
the recoverable amount of those assets, that is, the higher of its fair value less costs to sell and value in use, which is typically
determined on the basis of discounted future cash flows.
For the year ended 31 December 2024, the management and directors performed assessment of impairment indicators across
the Group’s CGUs. In Tunisia, there were no indicators of impairment or impairment reversals identified at Sabria or South
Tunisia. The Group has applied to extend the Ech Chouech licence but this expired in June 2022. The Group intends to continue
its application to regain the licence once the licence process is formalised. No indication has been received that they will not
be successful once the process to re-apply becomes available and as such has made the judgement that they will be able to
regain the Ech Chouech licence and therefore no impairment has been charged to this asset. At Moftinu, the management and
directors identified an indicator of impairment and recorded an impairment expense of $1.5 million (2023 - $7.0 million). The
primary impairment indicators in Romania during 2024 included reduced gas prices throughout 2024, natural depletion of the
Moftinu gas field reflecting on life of shallow gas fields and fiscal regime in Romania.
The Sancrai exploration well was drilled in 2021 and encountered gas; however, the Group was unable to achieve a measurable
gas flow across the three perforated zones. As a result, the well was suspended. Following a comprehensive analysis at the
2024 year-end, which included assessment of up-dip potential, the decision was made to abandon the well. Consequently, the
Sancrai-1 well was impaired, and the Group recognised an impairment expense of $4.2 million related to the exploration asset
for the year ended 31 December 2024.
Note 11 and 12 disclose the carrying amounts of the Group’s property, plant and equipment and exploration and evaluation
assets, respectively, as well as assumptions made by the management and directors in the discounted cash flow model which is
used to determine estimated recoverable amounts.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
i.
Solidarity Tax
In December 2022, the Government of Romania published Emergency Ordinance no.186/2022 detailing measures to
implement Council Regulation (EU) 2022/1854 regarding the emergency intervention to introduce a solidarity contribution for
companies that carry out activities in the oil, natural gas, coal and refinery sectors. This additional tax in Romania is calculated at
a rate of 60% applied to the Group’s annual profit, in excess of 20% of its average profits for the financial years 2018-2021. The
solidarity tax is applicable for 2022 financial year only.
The Group does not believe that the solidarity tax is applicable to it, has received legal advice to support that position and
will continue challenging the legality of this additional tax. If the Group were to consider the tax applicable the amount due
is estimated to be approximately $0.76 million. However, the Group has made the judgement that the solidarity tax is not
applicable and therefore has made no provision in respect of this tax within the financial statements.
6.
REVENUE
The Group sells its production pursuant to variable-price contracts with customers. The transaction price for these variable-priced
contracts is based on underlying commodity prices, adjusted for quality, location and other factors depending on the contract terms.
Under the contracts, the Group is required to deliver a variable volume of crude oil and natural gas to the contract counterparty.
The disaggregation of revenue by major products and geographical market is included in the segment note (see Note 29) and
analysis by significant customers is included in the risk management note (see Note 4).
As at 31 December 2024, the receivable balance related to contracts with customers, included within accounts receivable is $1.6
million (31 December 2023 - $3.1 million).
7.
SHARE-BASED PAYMENT EXPENSE
The Group did not grant any options during the year (2023 - none). All options granted in prior years vested and were fully expensed.
A summary of the changes to the option plans during the year ended 31 December 2024, are presented below:
GBP denominated options
2024
2023
Options
Exercise Price
Options
Exercise Price
Balance, beginning of year
Granted
Exercised
Forfeited
2,588,933
-
-
(3,333)
0.20
-
-
0.20
3,115,600
-
(175,000)
0.20
-
-
Balance, end of year
2,585,600
0.20
2,940,600
0.20
As at 31 December 2024 there are 2,585,600 (2023 – 2,940,600) options outstanding to executive directors and employees with a
weighted average contractual life of 2.5 (2023 – 4.0) years and a weighted average exercise price of £0.20 (2023 - £0.20).
During 2024, the Company granted 6,537,280 ordinary shares of nil par value in the capital of the Company to directors and senior
management under the Company’s long term incentive plan (the “Plan”), out of which 2,450,000 newly issued ordinary shares were
sold at 2.8 pence per share to satisfy tax and National Insurance liabilities arising due to the grant under the Plan and remaining
shares were issued to the directors and management. Share-based payment expense related to the net shares issued to employees
comprised $221,000.
60
SERINUS ENERGY
2024 ANNUAL REPORT
61
8.
FINANCE EXPENSE
Year ended 31 December
2024
2023
Interest of leases (Note 20)
Accretion on decommissioning provision (Note 18)
Foreign exchange and other
126
1,667
(1,000)
76
1,801
46
793
1,923
9.
TAXATION
Year ended 31 December
2024
2023
Current income tax expense
1,172
490
Deferred income tax
Origination and reversal of temporary differences (Note 19)
(44)
1,182
Tax expense
1,128
1,672
Reconciliation of the effective tax rate:
Year ended 31 December
2024
2023
(Loss) / Income before income taxes
Effective tax rate
(8,585)
50%
(11,350)
50%
Expected income tax
Non-taxable (deductible) items
Losses utilised
Tax rate differences
Foreign exchange and other
Net change in tax attributes not recognised
(4,293)
2,523
(1,698)
4,272
781
(457)
(5,675)
1,892
(924)
5,407
7,199
(6,227)
Income tax expense
1,128
1,672
The Group has elected to use the Sabria concession tax rate as the statutory rate instead of using 0% tax rate applicable to the
Group in Jersey. Sabria is currently the only producing concession that does not have any remaining loss pools, and therefore the
majority of the Group’s tax expense relates to Sabria.
The advance taxes unrecoverable in the year ending 31 December 2024 is related to taxes that are prepaid within the various
operating concessions in Tunisia. Tunisia requires taxes to be paid in advance based on the prior year tax balance. The amounts paid
may only be deducted from future taxes and are unrecoverable. The Group has determined that based on the future development
plans within Tunisia that the Group will not generate enough taxable income to fully utilise all advance taxes paid, losses carried
forward and other taxable pools available to the Group. No deferred tax asset has been recognised on losses carried forward and
other taxable loss pools (Note 19).
10. LOSS PER SHARE
Year ended 31 December
($000’s, except per share amounts)
2024
2023
(Loss) / Income for the year
Weighted average shares outstanding
Basic
Diluted
(9,713)
114,692
114,692
(13,022)
113,513
113,513
(Loss) / Income per share
Basic and diluted
(0.08)
(0.11)
In determining diluted net income 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. In calculating the weighted-average number of
diluted ordinary shares outstanding for the year ended 31 December 2022, the Group excluded 1 million stock options all of which
expired during 2023. Since there were no “in-the-money” stock during 2024 and 2023, basic and diluted shares are the same. All
outstanding warrants expired in 2021.
62
SERINUS ENERGY
11. PROPERTY, PLANT AND EQUIPMENT
Oil and gas interests
Corporate assets
Total
Cost or deemed cost:
Balance as at 31 December 2022
Capital additions
Change in decommissioning provision
Disposals
270,050
5,516
(501)
-
1,719
-
-
-
271,769
5,516
(501)
-
Balance as at 31 December 2023
Capital additions
Change in decommissioning provision
Transfer to EE Assets
Disposals
275,065
1,106
(3,675)
(4,277)
-
1,719
-
-
-
-
276,784
1,106
(3,675)
(4,277)
-
Balance as at 31 December 2024
268,219
1,719
269,938
Accumulated depletion and depreciation
Balance as at 31 December 2023
Depletion and depreciation
Disposals
Impairments
(204,545)
(4,317)
-
(6,965)
(1,642)
(12)
-
-
(206,187)
(4,329)
-
(6,965)
Balance as at 31 December 2023
Depletion and depreciation
Disposals
Impairments
(215,827)
(3,226)
-
(1,510)
(1,654)
(9)
-
-
(217,481)
(3,235)
-
(1,510)
Balance as at 31 December 2024
(220,563)
(1,663)
(222,226)
Cumulative translation adjustment
Balance as at 31 December 2022
Currency translation adjustments
(3,284)
-
13
-
(3,271)
-
Balance as at 31 December 2023
Currency translation adjustments
(3,284)
-
13
-
(3,271)
-
Balance as at 31 December 2024
(3,284)
13
(3,271)
Net book value
Balance as at 31 December 2023
Balance as at 31 December 2024
55,954
44,372
78
69
56,032
44,441
Future development costs associated with the proved plus probable reserves are included in the calculation of the Group’s
depletion. The future development costs for Tunisia are $33.1 million (2023 - $30.8 million) and for Romania are $5.8 million (2023
- $6.0 million).
IMPAIRMENT
At 31 December 2024, the Group completed an impairment assessment to determine if there were any indicators of impairment
or impairment reversals.
In Tunisia, indicators of impairment were identified for both the Sabria and South Tunisia cash-generating units (CGUs), prompting
management to perform impairment reviews. The review determined that the recoverable amount of the CGUs exceeded its
carrying amount, resulting in no impairment charge. The Group had applied to extend the Ech Chouech licence (part of South
Tunisia CGU) but this expired in June 2022. The Group intends to continue its application to regain the licence once the licence
application process is formalised. No indication has been received that they will not be successful once the process to re-apply
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
2024 ANNUAL REPORT
63
becomes available and as such has made the judgement that they will be able to regain the Ech Chouech licence and therefore no
impairment has been charged to this asset.
In Moftinu, the Group determined that there were indicators of impairment and recorded an impairment expense of $1.5 million
(2023 - $7.0 million).
The Group determined the estimated recoverable amount based on a discounted cash flow model, using production profiles from
the 2024 reserves report by a competent person and an after-tax discount rate equal to the weighted average cost of capital of
Romania (17%), computed internally using external market data.
The following table shows the forecast commodity prices used in the discounted cash flow model:
Year
Brent
(US$/bbl)
Romania Gas
(US$/MMBtu)
2025
2026
2027
2028
2029+
75.00
76.88
78.80
80.77
+2.5% inflation
11.00
11.28
11.56
11.79
+2.5% inflation
The following table provides a sensitivity of the impairment expense that would arise with the following changes to the key
assumptions used in the model.
Romania ($000s)
1% increase to
discount rate
1% decrease to
discount rate
10% increase
to commodity
prices
10% decrease
to commodity
prices
Additional impairment, net of tax
62
(64)
(694)
694
At 31 December 2023, the Group completed an impairment assessment on its PP&E to determine if there were any indicators
of impairment or impairment reversals. In South Tunisia and Sabria, no indicators of impairment or impairment reversals were
identified. In Moftinu the Group determined that there was an indicator of impairment and recorded an impairment expense of
$7.0 million. The Group determined the estimated recoverable amount based on a discounted cash flow model, using an after-tax
discount rate equal to the weighted average cost of capital of Romania (22%), computed internally using external market data. The
following table shows the forecast commodity prices used in the 2023 Reserve Report and used in the discounted cash flow model:
Year
Brent
(US$/bbl)
Romania Gas
(US$/MMBtu)
2024
2025
2026
2027
2028+
76.49
73.29
76.50
80.00
+2% inflation
10.76
11.50
10.42
11.00
+2% inflation
Although the discounted cash flow model indicated no further net impairment or reversal of impairment for the year ended 31
December 2023, the following table provides a sensitivity of the impairment expense that would arise with the following changes
to the key assumptions used in the model.
Romania ($000s)
1% increase to
discount rate
1% decrease to
discount rate
10% increase
to commodity
prices
10% decrease
to commodity
prices
Additional impairment, net of tax
-
-
-
-
The results of the impairment tests completed by management are sensitive to changes with regards to any of the key assumptions
such as, commodity prices, future development costs, change in reserves and production, or the future operating costs. Any
changes to the assumptions could increase or decrease the expected recoverable amounts from the assets and may result in
impairment or potential reversal of impairment.
12. EXPLORATION AND EVALUATION ASSETS
Carrying amount
2024
2023
Balance, beginning of the year
Transfer from oil & gas assets
Change in decommissioning provision
Impairment
Cumulative translation adjustment
10,703
4,277
(158)
(4,156)
-
10,529
-
174
-
-
Balance, end of the year
(10,666)
10,703
The Sancrai exploration well was drilled in 2021 and encountered gas; however, the Group was unable to achieve a measurable gas
flow across the three perforated zones. As a result, the well was suspended. Following a comprehensive analysis at the 2024 year-
end, which included assessment of up-dip potential, the decision was made to abandon the well. Consequently, the Sancrai-1 well
was impaired, and the Group recognised an impairment expense of $4.2 million related to the exploration asset.
The Group currently holds land rights to a large amount of undeveloped land within Romania.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
64
SERINUS ENERGY
2024 ANNUAL REPORT
65
13. RIGHT-OF-USE ASSETS
The following table details the cost and accumulated depreciation of the ROU assets:
Buildings
Vehicles
Total
Cost
Balance as at 31 December 2021
Additions
Disposals
871
584
(127)
39
-
-
910
584
(127)
Balance as at 31 December 2022
Additions
Disposals
1,328
75
-
39
-
-
1,367
75
-
Balance as at 31 December 2023
Additions
Disposals
1,403
695
(632)
39
152
(39)
1,442
847
(671)
Balance as at 31 December 2024
1,466
152
1,618
Accumulated depreciation
Balance as at 31 December 2021
Depreciation
Disposals
(481)
(256)
127
(39)
-
-
(520)
(256)
127
Balance as at 31 December 2022
Depreciation
Disposals
(610)
(265)
-
(39)
-
-
(649)
(265)
-
Balance as at 31 December 2023
Depreciation
Disposals
(875)
(289)
272
(39)
(32)
39
(914)
(321)
311
Balance as at 31 December 2024
(892)
(32)
(924)
Cumulative translation adjustment
Balance as at 31 December 2021
Currency translation adjustments
(20)
(10)
-
-
(20)
(10)
Balance as at 31 December 2022
Currency translation adjustments
(30)
-
-
-
(30)
-
Balance as at 31 December 2023
Currency translation adjustments
(30)
-
-
(30)
-
Balance as at 31 December 2024
(30)
(30)
Carrying amounts
Balance as at 31 December 2023
498
-
498
Balance as at 31 December 2024
544
120
664
14. CASH
As at 31 December
2024
2023
Cash and cash equivalents
Restricted cash
1,368
1,135
1,335
1,171
Total cash
2,503
2,506
The Group has cash on deposit with the Alberta Energy Regulator of $1.1 million (2023 - $1.2 million), as required to meet future
abandonment obligations existing on certain oil and gas properties in Canada (see Note 18). This deposit accrues nominal interest.
The fair value of restricted cash approximates the carrying value.
66
SERINUS ENERGY
15. TRADE AND OTHER RECEIVABLES
As at 31 December
2024
2023
Trade receivables
VAT receivable
Corporate tax receivable
Prepaids and other
1,992
1,907
362
1,141
4,146
1,906
463
1,622
Total trade and other receivables
5,402
8,137
The trade receivables consist of commodity sales in both Romania and Tunisia. The Group has determined that the ECL is nominal
for the years ended 31 December 2024 and 2023 while using the days past due criteria to measure the ECL. The Group has
reviewed the historical transactions with the vendors and has no history of default or unpaid invoices and has used a nominal
percentage in calculating the ECL. The Group has not taken an allowance for doubtful accounts as at 31 December 2024 and 2023.
and has had no instances of bad debts in this period
The VAT receivable relates to operating and development costs in Romania and are recovered through the Romanian government.
Of the VAT receivable, $1.7 million relates to 2018 and prior years which has been disputed by the Romanian authorities. In
December 2023, Serinus won a court case, which ordered ANAF to refund the audited VAT amount. The court recognised 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 the appeal was scheduled for early February 2025. Subsequent
to year-end, the Superior Court of Cassation and Justice of Romania has ruled in favour of Serinus Energy Romania vs. Agenția
Națională de Administrare Fiscală (“ANAF”), in the case of the rejected VAT refunds (Note 30).
16. PRODUCT INVENTORY
Product inventory consists of the Group’s entitlement crude oil barrels in Tunisia, which are valued at the lower of cost or net
realisable value. Costs include operating expenses and depletion associated with crude oil entitlement barrels and are determined
on a concession-by-concession basis.
These costs are initially capitalised and expensed when sold. As at 31 December 2024, the Group held 9.1 Mbbls of crude oil in
inventory valued at approximately $71.7/bbl.
17. SHAREHOLDER’S CAPITAL
AUTHORISED
The Group is authorised to issue an unlimited number of ordinary shares without nominal or par value. Changes in issued ordinary
shares are as follows:
Year ended 31 December
2024
2023
Number of
shares
Amount
($000s)
Number of
shares
Amount
($000s)
Balance, beginning of the year
Issued for cash
Issuance costs, net of tax
Issued in lieu of salary
Issued to retire Convertible Loan
Warrants exercised
114,066,073
6,887,357
-
-
-
-
401,426
215
-
-
-
-
114,066,073
-
-
-
-
-
401,426
-
-
-
-
-
Balance, end of the year
120,953,430
401,641
114,066,073
401,426
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
2024 ANNUAL REPORT
67
TREASURY SHARES
Treasury shares represent the shares purchased and held by the Group. All treasury shares held, as below, are excluded from
earnings per share calculations.
Year ended 31 December
2024
2023
Number of
shares
Amount
($000s)
Number of
shares
Amount
($000s)
Balance, beginning of the year
Shares purchased
Exercised
2,011,515
-
(2,011,515)
458
-
(458)
2,712,249
100,000
455
3
Balance, end of the year
-
-
2,812,249
458
18. DECOMMISSIONING PROVISION
As at 31 December
2024
2023
Balance, beginning of the year
Liabilities incurred
Liabilities settled
Accretion
Change in estimate
Foreign currency translation
30,724
-
-
1,667
(4,694)
-
29,131
198
-
1,801
(406)
-
Balance, end of year
27,697
30,724
The Group’s decommissioning provisions are based on its net ownership in wells and facilities in Tunisia, Romania and Canada.
Management estimates the costs to abandon and reclaim the wells and facilities using existing technology and the estimated time
period during which these costs will be incurred in the future.
The Group has estimated as at 31 December 2024 the decommissioning provisions of the wells in Canada to be $0.8 million.
During 2022, the Group completed the abandonment of three wells in Canada and it was determined that the Group was no longer
obligated to fulfil the decommissioning provisions of $1.6 million relating to legacy properties. The remaining obligations are
reported as current liabilities as they relate to non-producing properties or expired production sharing contracts.
The change in estimate in the current year is based on changes to interest rates, discount rates, the estimated date of abandonment
and reclamation, and the expected costs of abandonment.
The significant assumptions used in the calculation of the decommissioning provision are as follows:
As at 31 December
2024
2023
Risk-free
rate (%)
Inflation rate
(%)
Net present
value
Risk-free
rate (%)
Inflation rate
(%)
Net present
value
Tunisia
Romania
Canada
3.5-5.1
6.7-7.4
-
2.0
2.5-6.1
-
22,043
4,791
863
3.7 – 5.4
6.1 – 8.5
-
2.0
2.5 – 12.6
-
24,415
5,431
878
Total
Due within one year
Long-term liability
27,697
9,446
18,251
30,724
6,720
24,004
Total
27,697
30,724
As at 31 December 2024, the Group has aligned the abandonment dates with the expected economic life of the assets, anticipating
that concession licenses will continue to be extended until operations are no longer economically viable. However, decommissioning
of certain water pits in Tunisia have been classified as current liabilities despite being non-current in nature. This classification as
current liabilities is due to Tunisian statutory regulatory triggers that could require their decommissioning within the short term,
even though, under normal circumstances, their settlement would occur over a longer period.
19. DEFERRED INCOME TAX
The deferred taxes are recognised on a taxable body basis, specifically on an entity-by-entity basis with the exception of Tunisia.
Tunisia taxes each concession on a standalone basis, and therefore the deferred taxes are determined on each concession.
Movement in deferred income tax balances:
Tax effect related to:
31 December 2023
Movement in the year
31 December 2024
PP&E and E&E assets
AR and other
Decommissioning provision
Other
(15,814)
-
3,327
362
262
441
(287)
(372)
(15,552)
441
3,040
(10)
Deferred income tax liability
(12,125)
44
(12,081)
Tax effect related to:
31 December 2022
Movement in the year
31 December 2023
PP&E and E&E assets
Decommissioning provision
Other
(14,743)
3,306
495
(1,071)
21
(133)
(15,814)
3,327
362
Deferred income tax liability
(10,942)
(1,183)
(12,125)
UNRECOGNISED DEFERRED TAX ASSETS
Deferred tax assets have not been recognised in respect of the following deductible temporary differences:
As at 31 December
2024
2023
PP&E and E&E assets
ROU assets and lease liabilities
Decommissioning provision
Non-capital losses carried forward and other
(285)
-
5,567
2,822
(1,537)
-
6,277
3,822
Unrecognised deferred tax asset
8,104
8,562
Deferred tax assets have not been recognised in respect of these items because it is uncertain that future taxable profits will be
available against which they can be utilised due to the large amount of non-capital losses available to the Group.
The Group has Canadian non-capital losses of $0.5 million (2023 - $0.3 million) that do not expire, Tunisian losses of $4.1 million
are related to Chouech Essaid concession and have no expiry date (2023 - $7.8 million), and Romanian losses of $6.7 million (2023
- $6.6 million) that expire after seven years between 2026 to 2032..
The Group has temporary differences associated with its investments in its foreign subsidiaries. The Group has not recorded any
deferred tax liabilities in respect to these temporary differences as they are not expected to reverse in the foreseeable future.
The Group operates in multiple jurisdictions with complex tax laws and regulations, which are evolving over time. The Group
has taken certain tax positions in its tax filings and these filings are subject to audit and potential reassessment after the lapse
of considerable time. Accordingly, the actual income tax impact may differ significantly from that estimated and recorded by
management.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
68
SERINUS ENERGY
2024 ANNUAL REPORT
69
20. LEASE LIABILITIES
The following table details the movement in the Group’s lease obligations for the year ended 31 December 2024:
As at 31 December
2024
2023
Opening balance
Additions
Disposals
Principle payments
Cumulative translation adjustment
561
816
(427)
(255)
(14)
745
-
(184)
-
Balance, end of the year
681
561
Lease liabilities due within one year
Lease liabilities due beyond one year
177
504
137
424
During the year the Group made total payments toward lease liabilities in the amount of $0.3 million (2023 - $0.2 million), of which
$0.1 million (2023 - $0.08 million) was interest.
The Group has elected to exclude short-term leases and low-value leases from the Group’s lease liabilities. Payments towards
short-term leases, and leases of low-value assets for the year ended 31 December 2024 were nominal and have been included in
G&A expense in the Statement of Comprehensive Loss. The Group’s short-term leases and leases of low-value consist primarily of
office equipment leases.
The annual discount rates used were 22.66% in Canada, 10.96% in London, 20.76% in Tunisia and 8.11%, 8.82% and 9.56% in
Romania.
21. OTHER PROVISIONS
JV audit
Severance
Other
Total
Balance as at 31 December 2022
Change in provision
1,211
-
147
(41)
-
-
1,358
(41)
Balance as at 31 December 2023
Change in provision
1,211
-
106
-
-
-
1,317
-
Balance as at 31 December 2024
1,211
106
-
1,317
Current
Non-current
-
1,211
-
106
-
-
-
1,317
The Group is subject to audits arising in the normal course of business, with its joint venture partner in the Sabria concession in
Tunisia. A provision is made to reflect management’s best estimate of eventual settlement of these audits. The years currently
under audit are 2014-2021. Management has reviewed the audit claims and has made a provision for what it expects to settle.
Management expects settlement of the joint venture audit provision to occur later than twelve months from 31 December 2024.
As at 31 December 2017, a provision was made for potential severance costs relating to the termination of employees in the
Chouech field in Tunisia. Since shutting in the field, agreements have been reached with the majority of the employees. The
remaining provision at 31 December 2024 reflects the potential costs to terminate the remaining employees.
22. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As at 31 December
2024
2023
Accounts payable and accrued liabilities
Taxes payable
7,374
893
9,320
749
Total accounts payable and accrued liabilities
8,267
10,069
70
SERINUS ENERGY
23. AGGREGATE PAYROLL EXPENSE
The aggregate payroll expense of employees and executive management of Serinus was as follows:
Year ended 31 December
2024
2023
Wages, salaries, and benefits9
Share-based payment expense10
4,739
221
4,952
3
Total aggregate payroll expense
4,960
4,955
24. RELATED PARTY TRANSACTIONS
During the years ended 31 December 2024 and 2023, related party transactions include the compensation of key management
personnel. Key management personnel consist of Serinus’ Board of Directors, both executive and non-executive. Transactions with
key management personnel are noted in the table below:
Year ended 31 December
2024
2023
Wages and salaries
Benefits
Share-based payment expense
658
67
71
834
209
3
Total related party transactions
796
1,046
25. SUPPLEMENTAL CASH FLOW DISCLOSURE
Year ended 31 December
2024
2023
Cash (used in) generated from:
Trade receivables and other
Inventory
Accounts payable and accrued liabilities
Restricted cash
2,754
(185)
(2,699)
(113)
1,863
7
(1,752)
(52)
Changes in non-cash working capital from operations
(243)
66
The following table reconciles capital expenditures to the cash flow statement:
Year ended 31 December
2024
2023
PP&E additions (Note 11)
E&E additions (Note 12)
1,106
-
5,516
-
Total capital additions
Changes in non-cash working capital
1,106
(642)
5,516
(218)
Total capital expenditures
464
5,298
________________________
9 Includes amounts in general and administrative expenses, production expenses and exploration and development expenditures.
10 Represents the amortization of share-based payment expense associated with options granted.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
2024 ANNUAL REPORT
71
26. CAPITAL MANAGEMENT
Year ended 31 December
2024
2023
Shareholders’ equity
14,286
23,828
Total capital resources
14,286
23,828
The Group manages its capital structure to maximise financial flexibility as well as closely monitors cash forecasts. Management
considers capital to include debt and equity instruments. The Group has the ability to manage its capital structure raising
financing through debt or equity issuances, repurchasing shares and settling debt obligations. Further, each potential acquisition
and investment opportunity is assessed to determine the nature and total amount of capital required together with the relative
proportions of debt and equity to be deployed. The Group does not presently utilise any quantitative measures to monitor its
capital.
27. COMMITMENTS AND CONTINGENCIES
COMMITMENTS
In October 2023, the Group received an exploration phase extension of the Satu Mare Concession in Romania. 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 (Phase 1). 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 work commitment for Phase 1 is estimated at
$1.2 million.
•
The second phase of the license extension is optional and is two years in duration starting on 28 October 2025 (Phase 2) with a
work commitment of drilling one well within the concession area with no total drilling depth requirement stipulated. The work
commitment for Phase 2 is estimated at $2.3 million
CONTINGENCIES
The Tunisian state oil and gas company, ETAP, has the right to back into up to a 50% working interest in the Chouech concession if,
and when, the cumulative crude oil sales, net of royalties and shrinkage, from the concession exceeds 6.5 million barrels. As at 31
December 2024, cumulative liquid hydrocarbon sales net of royalties and shrinkage was 5.7 million (2023 – 5.5 million) barrels. The
Group currently does not expect to meet this threshold by the expiry of the concession.
In December 2022, the Government of Romania introduced a solidarity tax applied to the Group’s annual profit, in excess of 20%
of its average profits for the financial years 2018-2021 (Note 5 (i)). The solidarity tax is applicable for 2022 financial year only. The
Group does not believe that the solidarity tax is applicable to it, has received legal advice to support that position and will continue
challenging the legality of this additional tax. If the Group were to consider the tax applicable the amount due is estimated to be
approximately $0.76 million. However, the Group has made the judgement that the solidarity tax is not applicable and therefore
has made no provision in respect of this tax within the financial statements.
28. INCOME FROM OPERATIONS ANALYSIS
($000)
2024
2023
Administrative expenses
Share-based payment expense (Note 7)
Impairment recovery (expense) (Note 11, 12)
(3,409)
(221)
(5,666)
(4,928)
(3)
(6,965)
Included within administrative expenses of $3.5 million (2023 - $5.3 million) are the following:
($000)
2024
2023
Salaries and wages
Corporate audit and review fees
Consulting fees
(1,887)
(297)
(186)
(2,313)
(264)
(261)
29. SEGMENT INFORMATION
The Group’s reportable segments are organised by geographical areas and consist of the exploration, development and production
of oil and natural gas in Romania and Tunisia. The Corporate segment includes all corporate activities and items not allocated to
reportable operating segments and therefore includes Brunei.
As at 31 December 2024
Romania
Tunisia
Corporate
Total
Total assets
16,872
45,087
2,370
64,329
For the year ended 31 December 2024
Crude oil revenue
Natural gas revenue
Condensate revenue
-
1,084
-
12,345
1,972
-
-
-
-
12,345
3,056
-
Total revenue
Cost of sales
Royalties
Production expenses
Depletion and depreciation
Windfall tax
1,084
(48)
(1,665)
(339)
(340)
14,317
(1,831)
(6,453)
(3,188)
-
-
-
(12)
(126)
-
15,401
(1,879)
(8,130)
(3,653)
(340)
Total cost of sales
(2,392)
(11,472)
(138)
(14,002)
Gross profit (loss)
Administrative expenses
Share-based payment expense
Release of provision
Impairment expense
Gain on asset disposal
Decommissioning recovery
(1,308)
-
-
-
(5,666)
-
-
2,845
-
-
-
-
-
68
(138)
(3,409)
(221)
-
-
37
-
1,399
(3,409)
(221)
-
(5,666)
37
68
Operating income (loss)
Finance expense
(6,974)
552
2,913
(1,171)
(3,731)
(174)
(7,792)
(793)
Net income (loss) before income taxes
Tax expense
(6,422)
-
1,742
(1,106)
(3,905)
(22)
(8,585)
(1,128)
Net income (loss) for the year
(6,422)
636
(3,927)
(9,713)
Capital expenditures
61
1,024
21
1,106
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(US$ 000s, EXCEPT PER SHARE AMOUNTS UNLESS OTHERWISE NOTED) CONTINUED
72
SERINUS ENERGY
2024 ANNUAL REPORT
73
As at 31 December 2023
Romania
Tunisia
Corporate
Total
Total assets
24,027
52,322
2,275
78,624
For the year ended 31 December 2023
Crude oil revenue
Natural gas revenue
Condensate revenue
-
2,683
-
13,312
1,880
-
-
-
-
13,312
4,563
-
Total revenue
Cost of sales
Royalties
Production expenses
Depletion and depreciation
Windfall tax
2,683
(125)
(2,633)
(866)
(783)
15,192
(1,929)
(5,349)
(3,582)
-
-
-
(31)
(124)
-
17,875
(2,054)
(8,013)
(4,572)
(783)
Total cost of sales
(4,407)
(10,860)
(155)
(15,422)
Gross profit (loss)
Administrative expenses
Share-based payment expense
Release of provision
Impairment expense
Loss on asset disposal
Decommissioning recovery
(1,724)
-
-
-
(6,965)
-
-
4,332
-
-
-
-
-
31
(155)
(4,928)
(3)
-
-
-
(15)
2,453
(4,928)
(3)
-
(6,965)
-
16
Operating income (loss)
Finance expense
(8,689)
(1,866)
4,363
(824)
(5,101)
767
(9,427)
(1,923)
Net income (loss) before income taxes
Tax expense
(10,555)
(2)
3,539
(1,670)
(4,334)
-
(11,350)
(1,672)
Net income (loss) for the year
(10,557)
1,869
(4,434)
(13,022)
Capital expenditures
550
4,966
-
5,516
30. EVENTS AFTER THE REPORTING PERIOD
PLACING AND RETAILS OFFER
On 17 December 2024, the Company announced that it has conditionally raised gross proceeds of up to £0.66 million by way of a
placing of 26,841,141 new ordinary shares at a price of 2.5 pence per share.
On 9 January 2025, the Company held a General Meeting whereby shareholders approved the allocation of new shares with
93.54% of shareholders voting in favour.
VAT LITIGATION IN ROMANIA
On 12 February 2025, the Superior Court of Cassation and Justice of Romania has ruled in favour of Serinus Energy Romania vs.
ANAF, in the case of the rejected VAT refunds (Note 5 (e)).
In addition to the award of the VAT refunds of RON 8.3 million (approximately US$1.7 million), Serinus is also awarded interest
compensation for the delayed refund of the VAT in the amount of RON 3.6 million (approximately US$0.8 million).
74
SERINUS ENERGY
2024 ANNUAL REPORT
75
ADVISORS
Registered Office
2nd Floor, The Le Gallais Building
54 Bath Street
St Helier, Jersey, JE1 1FW, Channel Islands
Executive Office
3rd Floor
70 Jermyn Street
London, SW1Y 6NY, United Kingdom
Administrative Office
1910, 500 – 4th Avenue S.W.
Calgary, Alberta, T2P 2V6, Canada
Registration Number
126344
Company Secretary
Fairway Trust Limited
2nd Floor, The Le Gallais Building
54 Bath Street
St Helier, Jersey, JE1 1FW, Channel Islands
Registrar
Computershare Investor Services (Jersey) Limited
13 Castle Street
St Helier, Jersey, JE1 1ES, Channel Islands
Auditors
PKF Littlejohn LLP
15 Westferry Circus
London, E14 4HD, United Kingdom
Competent Person
Stuart Morrison, COO
3rd Floor
70 Jermyn Street
London, SW1Y 6NY, United Kingdom
Nominated Advisor & Broker
Shore Capital Stockbrokers Limited
57 St James’s Street
London, SW1A 1LD, United Kingdom
Legal Advisors
Jersey Solicitors to the Company
Mourant Ozannes (Jersey) LLP
22 Grenville Street
St Helier, Jersey, JE4 8PX, Channel Islands
English Solicitors to the Company
McCarthy Tétrault, Registered Foreign Lawyers & Solicitors
18th Floor
1 Angel Court
City of London, London, EC2R 7HJ, United Kingdom
Polish Solicitors to the Company
T. Studnicki, K. Płeszka, Z. Ćwiąkalski, J. Górski sp.k.
ul. Jabłonowskich 8
31-114 Kraków, Poland
Registered Office
2nd Floor, The Le Gallais Building
54 Bath Street
St Helier
Jersey JE1 1FW
www.serinusenergy.com