Serinus Energy “well positioned to generate significant cash flows” says Arden Analyst

Serinus Energy

Serinus Energy plc (LON:SENX WSE:SEN) is the topic of conversation when Dan Slater, Analyst at Arden Partners caught up with DirectorsTalk Interviews.

Serinus Energy plc has announced that the CTF-04 rig has completed rig-up and is preparing to commence operations. What does this mean for the company?

This is a very important first step in Serinus’ planned work programme on its Sabria asset in Tunisia. It will now allow the work programme to commence, targeting significant new production volumes from the field.

What are the next steps?

We now expect the company to proceed with installation of an ESP in the W-1 well, targeting additional net production of 358boe/d, followed by workover of the N-2 well, targeting 173boe/d. Sabria production tends to have a relatively low decline rate, and the existing low field recovery factor (1.0%) also bodes well for sustained production going forward. As such, this programme should make an important contribution to the company’s long term cash flow base.

What else should we be looking out for from the company?

In addition to the current Tunisia programme, Serinus is conducting a wide ranging review of the prospectivity on its producing Satu Mare block onshore Romania. This is likely to generate further prospects for exploration drilling, with wells cheap to drill, and the potential to tie new discoveries back to the company’s existing gas production plant. There is also potential for a further Tunisia ESP installation in another well later in 2023. This creates a regular work programme over the coming year.

In terms of an investment case how would you describe Serinus Energy?

Serinus is well exposed to both international oil prices and the strong European gas market. This, alongside the company’s controlled onshore OPEX profile, leaves Serinus well positioned to generate significant cash flows. These could be augmented by new production volumes from both the Tunisia and Romania asset positions going forward, allowing the company to take greater advantage of the margins that it is able to generate. This can all be funded by cash flows and the existing cash holding.

Serinus Energy (LON SENX) is an international upstream oil and gas exploration and production company that owns and operates projects in Tunisia and Romania.

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