Serinus Energy boosts 2Q14 hydrocarbon output 56%,lowers FY guidance

Обзоры по компаниям и отраслям 13.08.2014 Oil and gas firm Serinus Energy (SEN PW) boosted its production to 4,956 boepd in 2Q14, an increase of 56% yoy and 2% qoq, the company reported on Aug. 13. Its Ukrainian asset, KUB-Gaz, boosted its hydrocarbons output 15% yoy and 4% qoq to 3,654 boepd (net to Serinus). The company’s extraction rate since the beginning of 3Q14 has been 5,625 boepd, which is 13% better than in 2Q14. The growth is mostly fueled by the launch of its M-17 well in Ukraine. The company’s revenue increased 44% yoy to USD 41.6 mln in 2Q14 as average prices for gas sold in Ukraine declined slightly yoy. At the same time, robust operating profit from its new Tunisian assets, as well as a smaller gas production tax in Ukraine, enabled the company to boost its bottom line in the quarter. Net income allocated to Serinus increased 6.5x yoy to USD 5.3 mln. The company’s cash flow from operations was at USD 15.8 mln in 2Q14 (vs. USD -4.1 mln a year before). The company downgraded its production outlook for 2014, now targeting to end the year at a 6,000 boepd production rate (vs. its previous plan of 6,500 boepd). The company blamed the current war for the revision, having had to stop its drilling operations in late June because of armed fighting in the Luhansk region, where KUB-Gaz operates. The war zone has since shifted far away from the KUB-Gaz assets, though the company has yet to restart its drilling. Secondly, the company’s CapEx plans have been downgraded after the introduction of a higher interim tax on gas production in Ukraine (refer to our note of Aug. 5). Serinus Energy is optimistic on the future of all its locations, including Ukraine, where it has already chosen four new wells for drilling as well as four wells for stimulation.