CALGARY, ALBERTA--(Marketwired - April 22, 2014) - Serinus Energy Inc. ("Serinus", "SEN" or the "Company") (TSX:SEN)(WARSAW:SEN) is pleased to provide the following update for its first quarter operations.

First Quarter Production and Realized Prices

Average production for the first quarter was 4,873 boe/d (SEN WI), representing a 4% decrease from 5,088 boe/d in the fourth quarter. Volumes were impacted by continued facility constraints in Ukraine and pending workover requirements in Tunisia. Serinus anticipates both of these issues to be rectified during the current quarter, as described more fully below.

Serinus' gas and condensate production in Ukraine during the first quarter were 20.4 MMcf/d and 99 bbl/d respectively (both volumes are SEN's 70% WI). These volumes are 3% and 12% lower than the fourth quarter due to continuing high back pressures in the surface facilities and DonBas sales line. The Company hopes to mitigate this issue once the new Makeevskoye gas treatment facility comes fully onstream (see Facilities below).

The estimated average prices received in Ukraine during the quarter were $8.67/Mcf and $78.20/bbl. The gas price was lower than the $11.02/Mcf realized in Q4 2013, due to the discounted price of Russian imports during the quarter, and the deterioration of the Ukrainian Hryvnia ("UAH") vs. the US Dollar ("USD"). Gas sold in Ukraine by KUB-Gas LLC ("KUB-Gas"), Serinus' indirectly owned 70% subsidiary, is based on the import price of Russian gas, which in turn is linked to the oil price. Those discounts on Russian gas ended effective April 1, 2014 (see Ukraine Outlook below). Kub-Gas however, is paid in UAH, making its realized price in USD also subject to exchange rate risk. That rate fell from an average of 8.1 UAH/USD in Q4 2013, to 9.0 UAH/USD for Q1 2014.

In Tunisia, production in the first quarter averaged 1,053 bbl/d of oil and 1.9 MMcf/d of gas. Estimated realized prices during the quarter were $107.52/bbl and $13.60/Mcf. The oil rate was substantially the same as Q4, but gas was 24% lower due to inhibited production from the CS-Sil-1, CS-Sil-10 and CS-11 wells. All three will be worked over during the current quarter to alleviate their respective issues (see Tunisia Outlook below). There were two tanker lifts of oil during Q1.

Note: the volumes and prices referred to above are subject to minor revisions once final allocations and invoices are received.

Drilling & Workover Update

During the first quarter, the Company finished drilling the M-17 well in Ukraine. Logs indicated pay in the S5 and S6 zones, and resource potential in the R30c and S7 sections. The well was cased, and the service rig began completion operations on April 10, 2014. All prospective zones will be tested and completed.

The O-11 well was spud on April 4, 2014 after the drilling rig moved on from M-17. The well has a planned total depth of 3,200 metres, targeting the S6 and R30c formations. Drilling time is expected to be 70 days. O-11 is a development well, located approximately 1 km southeast of the O-15 discovery well, which began producing from the S6 zone in July 2013 and produced an average of 1 Mcf/d during the month of March 2014. Both zones are anticipated to require fracture stimulations as has been the case with other wells completed in those formations.


Gas began flowing through the new treatment facility at Makeevskoye on March 6, 2014. Volumes to date have been limited as the M-16 well, which has a high flowing pressure, needs to be re-routed to the new facility, and because the additional production has increased back pressure on the local sales line. Personnel from Kub-Gas are working with DonBas Transgas to configure the tie-ins to ensure that no other gas is backed out. The re-routing of the M-16 well should be completed by the end of April. The Company anticipates that once complete, these modifications will increase gross production by at least 3 MMcf/d (2.1 MMcf/d SEN WI).

Ukraine Outlook

With the expiry of the discounts on Russian gas effective April 1, 2014, the announced gas price for the month of April is 4,020 UAH per Mcm, or $9.49/Mcf using an exchange rate of 12 UAH/USD. The actual price received by KUB-Gas will be approximately 9% - 10% less for the profit margin of the intermediaries through which the gas is sold. It will also continue to be influenced by changes in the exchange rate. During the month of April, that rate has fluctuated between 11.1 and 13.0 UAH/USD.

After O-11, the next wells in the 2014 program will be drilled at the NM-4 and M-22 locations. NM-4 is testing a Moscovian stratigraphic trap, and if successful, will establish a new play type within Serinus' Ukrainian licences. The M-22 well is targeting a new Serpukhovian accumulation to the southwest of the pool containing the M-16 and M-17 wells.

A fracture stimulation campaign is also planned in Ukraine, anticipated to commence in October. The wells slated for stimulation include O-11 and O-15 (both R30c and S6 zones), NM-3 (Visean oil potential) and M-17 (S7). The scheduling of the fracture program has been pushed back from the second quarter due to unavailability of a frac spread.

Tunisia Outlook

In Tunisia, preparations for drilling at Sabria continue with the wellsite for Winstar-12bis completed and work on the location for Winstar-13 underway. The two wells will be drilled back to back with the drilling rig expected to mobilize to Winstar-12bis in mid-May and spud during the first week in June. The targets are the Lower Hamra and El Atchane formations currently producing in other wells in the field. Each well will take approximately three months, with target total depths of over 3,800 metres.

As has been previously disclosed, a coiled tubing unit has been moved to Chouech Es Saida to work over the CS-Sil-10 and CS-Sil-1 wells. The program for CS-Sil-10 is to shut the sliding sleeve over the Triassic TAGI sandstone, and test the deeper Silurian Tannezuft zone. On CS-Sil-1, the rig will install a velocity string and open up two deeper Tannezuft intervals.

A full workover rig will also be mobilized into the Chouech Es Saida and Ech Chouech concessions to perform various services on four wells, being EC-4, ECS-1, CS-11, and CS-8bis, with operations expected to commence during the first week of May. This campaign is expected to add production, exploit new reserves and develop a new hydrocarbon play type.

A 203.5 km2 3D seismic program will be shot over the Sanrhar field starting in early May. Legacy sparse 2D data indicate a number of four-way structural closures which this program will investigate more thoroughly. Current production from Sanrhar is 50 - 60 bbl/d of oil from a single well.

Romania Outlook

Preparations continue with respect to this year's exploration program which includes two wells and 180 km2 of 3D seismic. The two wells, Moftinu-1001 and 1002bis, will be drilled back to back, with the spud of the first well expected in September this year. Both are targeting Pliocene aged channel sands, at a depth of approximately 2,000 metres, which have been identified on 3D seismic. A previous well, Moftinu-1000, drilled in 2012 without the benefit of the 3D data, encountered gas but was subsequently found to be at the edge of the structural closure.

Shooting of the new 3D seismic program will also commence in September, and is expected to take 6 - 8 weeks. The survey area covers 180 km2 located approximately 35 km southwest of the Moftinu field against the western boundary of the Satu Mare concession. This area is in a well established hydrocarbon fairway on the edge of the Carei graben, and overlies the Santau oil pool.

About Serinus

Serinus is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Ukraine, Brunei, Tunisia, Romania and Syria and with a risk profile ranging from exploration in Brunei, Romania and Syria to production and development in Ukraine and Tunisia. The common shares of the Company trade under trading symbol "SEN" on both the WSE (Warsaw Stock Exchange) and the TSX.

In Ukraine, Serinus owns an effective 70% interest in KUB-Gas LLC through its 70% shareholding of KUBGas Holdings Limited. The assets of KUB-Gas LLC consist of 100% interests in five licences near to the City of Lugansk in the northeast part of Ukraine. Four of the licences are gas producing.

In Tunisia, Serinus owns a 100% working interest in the Chouech Essaida, Ech Chouech, Sanrhar and Zinnia concessions, and a 45% working interest in the Sabria concession. Four of the concessions are currently producing oil or gas.

In Brunei, Serinus owns a 90% working interest in a production sharing agreement which gives the Company the right to explore for and produce oil and natural gas from Block L.

In Romania, Serinus has a 60% working interest in the onshore Satu Mare concession, a 2,949 square kilometre exploration and development block, in north western Romania.

In Syria, Serinus holds a participating interest of 50% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon the satisfaction of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometre area in northwest Syria. The Company has an agreement to assign a 5% ownership interest to a third party which is subject to the approval of Syrian authorities, and which, if approved, would leave the Company with a remaining effective interest of 45% in Syria Block 9. Serinus declared force majeure, with respect to its operations in Syria, in July 2012.

The main shareholder of the Company is Kulczyk Investments S.A., an international investment house founded by Polish businessman Dr. Jan Kulczyk.

For further information, please refer to the Serinus website (

Translation: This news release has been translated into Polish from the English original.

Forward-looking Statements This release may contain forward-looking statements made as of the date of this announcement with respect to future activities that either are not or may not be historical facts. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable as of the date hereof, any potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors that could impair or prevent the Company from completing the expected activities on its projects include that the Company's projects experience technical and mechanical problems, there are changes in product prices, failure to obtain regulatory approvals, the state of the national or international monetary, oil and gas, financial, political and economic markets in the jurisdictions where the Company operates and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties and actual results may vary materially from those expressed in the forward-looking statement. The Company undertakes no obligation to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement, unless required by law.

Suite 1170, 700-4th Avenue SW, Calgary, Alberta, Canada
Telephone: +1-403-264-8877
Al Shafar Investment Building, Suite 123, Shaikh Zayed Road, Dubai, UAE
Telephone: +971-4-339-5212
Nowogrodzka 18/29, 00-511 Warsaw, Poland
Telephone: +48 (22) 414 21 00

Contact Information:

Serinus Energy Inc. - Canada
Norman W. Holton
Vice Chairman
Tel.: +1-403-264-8877

Serinus Energy Inc. - Canada
Gregory M. Chornoboy
Director - Capital Markets
& Corporate Development
Tel: +1-403-264-8877

Serinus Energy Inc. - Poland
Jakub J. Korczak
Vice President Investor Relations &
Managing Director CEE
Tel.: +48 22 414 21 00