Serinus Energy a material and cash generative producer with a pipeline of identified, near-term opportunities

Serinus Energy

Serinus Energy plc (LON:SENX) recently published the results of its M 1008 production well so we caught up with two analysts, Craig Howie at Shore Capital and Daniel Slater from Arden Partners for their views on the news.

Serinus have published the results of its M 1008 production Well, how do you view the results?

Daniel: This was a successful well, reporting a good flow rate of 667boe/d which will add important production for the Moftinu asset, augmenting existing volumes and helping maintain these as other wells decline, supporting company cash flows.

Craig: These are good results from the Moftinu-1008 well – confirming healthy, commercial flow rates which are reasonably consistent with other Moftinu wells and can ensure that the existing Moftinu gas plant remains well-utilised going forward.

Looking forward then what can we expect to see from the company?

Daniel: Following M-1008 we expect ongoing workovers in the Tunisian portfolio, spudding of the Sancrai exploration well in Romania in Q2 2021 and installation of the first ESP at Sabria around mid-2021. Overall, this creates a full news flow schedule over the coming months.

Craig: We expect the Moftinu-1008 well to be brought online as a commercial producer shortly, with the company confirming today that the relevant flowline connection has already been completed ahead of final pressure testing and tie-in. In the nearer term, we also expect a continuation of the company’s production enhancement work in Tunisia, where we see excellent growth potential.

Have you had to change your forecast in any way?

Daniel: We have adjusted our 2021 production to account for the M-1008 well result.

Craig: Confirmation of commercial flow rates from Moftinu-1008 will clearly have a positive revenue impact and we look forward to formally introducing forecasts for Serinus Energy shortly.

How do you value the company now based on todays news?

Craig: Our forthcoming initiation will include a formal Risked NAV estimate. In the meantime, we believe that the company is now a material and cash generative producer which is strongly underpinned by its existing reserves and production and offers the potential for significant follow-on growth. We believe that today’s results from Moftinu-1008 provide great evidence of the company’s capabilities as it capitalises on a pipeline of identified, near-term opportunities across the portfolio.

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Daniel: Our total risked NAV remains at 6.7p/share.

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