Serinus Energy plc (LON:SENX) announced last week that it has received a further 12-month extension to its key Satu Mare licence. DirectorsTalk asked Daniel Slater, Analyst at Arden Partners for his thought’s on the news.
Q. Serinus has announced that it has received a further 12-month extension to its key Satu Mare licence. What key points do you think investors should take from this?
A. The extension itself is very helpful but not really surprising given the coronavirus. What is significantly more important is the exchange of work programme commitment, replacing the planned 3D seismic programme with a new Moftinu well and the Sancrai exploration well. While the seismic will eventually be important for the long term on Satu Mare, replacing this with drilling should add catalysts for the stock and potentially new discovered resources and production in the medium term, with both wells planned for 2021.
Q. What would you like to see in terms of newsflow from the company next?
A. Serinus Energy continues in discussions with the EBRD for a renegotiation of its debt, and this could free up cash to accelerate work programmes. We look for news on this in Q4 2020, followed by drilling of the new wells in 2021.
Q. How do you see the company in terms of fair value
A. We have a total risked NAV for Serinus of 18p/share.
Q. Has this affected your forecasts in any way?
A. The new work programme commitment on Satu Mare has driven a reduction in our CAPEX forecasts for 2021 and an improvement in our net debt for that year.