CALGARY, ALBERTA--(Marketwired - July 10, 2014) - Serinus Energy Inc. ("Serinus", "SEN" or the "Company") (TSX:SEN)(WARSAW:SEN) is pleased to provide the following update for its second quarter operations.

Second Quarter Production and Realized Prices

Average corporate production for the second quarter was 4,964 boe/d (SEN WI), representing a 2% increase from 4,873 boe/d in the first quarter.

Gas and condensate production in Ukraine during the second quarter were 21.3 MMcf/d and 102 bbl/d respectively (both volumes are SEN's 70% WI). These volumes are 4% and 3% higher than the first quarter. This includes only a minor contribution from the M-17 well, which did not start up until June 26. To date, M-17 has averaged 6.4 MMcf/d (4.4 MMcf/d SEN WI).

KUB-Gas LLC ("KUB-Gas"), Serinus' indirectly owned 70% subsidiary, has achieved record production in Ukraine with average rates for July to date reaching 35.0 MMcf/d and 120 bbl/d (24.5 MMcf/d and 84 bbl/d SEN WI). This is 15% above 2013 exit production.

The estimated prices received in Ukraine during the quarter were $10.23/Mcf and $79.86/bbl. The gas price was significantly higher than the $8.67/Mcf realized in Q1 2014, as the discounts on imported Russian gas during the prior quarter expired on April 1, 2014, and Ukrainian Hryvnia ("UAH") reached a more stable level vs. the U.S. dollar ("USD"). Gas sold in Ukraine by KUB-Gas is based on the import price of Russian gas, which in turn is linked to the price of oil. KUB-Gas is paid in UAH, making its realized price in USD also subject to exchange rate risk. That exchange rate was substantially less volatile during Q2 than in the first quarter which contributed to the higher realized gas prices.

Overall production in Tunisia for Q2 was 1,310 boe/d, 3% lower than the 1,345 boe/d in Q1. Oil averaged 1,005 bbl/d, and gas was 1.8 MMcf/d. Estimated realized prices during the quarter were $105.34/bbl and $14.35/Mcf. There were two tanker lifts of oil during Q2.

Tunisia production for July so far has averaged 1,288 boe/d, comprised of 978 bbl/d and 1.9 MMcf/d.

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

Drilling & Workover Update

As disclosed in our press release of June 27, 2014, Serinus has put developmental field operations in Ukraine on hold pending improvement in the security situation. Production is continuing, but drilling, workover, stimulation and construction activities will cease. Operations already underway have been (or are being) wound down at threshold points where the cessation of activity can be accomplished with no risk to the people or assets.

During the second quarter, the M-17 well in Ukraine was completed and tested. Logs had indicated pay in the S5 and S6 zones, and resource potential in the R30c and S7 sections. The S7 tested 900 Mcf/d without stimulation. The S6 was tested at multiple rates, the highest of which was 6.6 MMcf/d at a flowing wellhead pressure of 2,970 psi(1). The S6 zone was placed on production on June 26, and has averaged 6.4 MMcf/d (4.4 MMcf/d SEN WI) to date. The S7 will be stimulated when development operations resume, and M-17 will be completed as a dual producer at that time.

The O-11 well was spud on April 4, 2014 after the drilling rig moved on from M-17. It reached its planned TD of 3,230 metres in late May, and was cased and the rig released. In late June, the well was perforated, and experienced a strong air blow, followed by gas to surface. The well was shut in for a pressure build up(1). No further testing will be undertaken at this time.

The NM-4 well was spud on June 16, and drilled to a depth of 102 metres. Surface casing was run to 100.2 metres and cemented in place prior to suspending drilling operations.

In Tunisia, a coiled tubing unit was successful in restoring the CS Sil-1 well to production at a rate of approximately 400 - 500 Mcf/d and 40 - 50 bbl/d of oil, after running a velocity string during April. It also attempted unsuccessfully to recomplete CS Sil-10 from the Triassic TAGI sandstone to the Silurian Tannezuft. Both wells are being reviewed to determine additional measures to increase or restore production.

In Ech Chouech and Chouech Es Saida, a full workover rig commenced operations on EC-4 on May 29. Operations so far have been to clean out debris left in the well by previous operators. Once the wellbore is remediated, the well will be perforated in the Devonian Ouan Kasa zone, and prepared for a stimulation later this summer.

Ukraine Facilities

Gas began flowing through the new treatment facility at Makeevskoye on March 6, 2014, and the M-16 well was re-routed to that new facility at the end of April. The overall configuration is now that higher pressure wells are tied into the new plant, while lower pressure wells and the production from Olgovskoye field flow through the old plant. The system has easily accommodated the new gas volumes from the M-17 well.

While the system is handling the current production load, management is looking at the possibility of adding compression initially, and possibly later refrigeration to assist in dew point control.

Ukraine Outlook

Once the security situation improves enough to resume development activities, drilling will resume on NM-4, after which the rig will move to M-22. 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 had also been planned in October for O-11 and O-15 (both R30c and S6 zones), NM-3 (Visean oil potential) and M-17 (S7).

The official gas price for the month of July is 5,448.78 UAH per Mcm (including VAT at 20%), or $10.90/Mcf (excluding VAT) using an exchange rate of 11.8 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 June, that rate fluctuated between 11.6 and 11.9 UAH/USD.

Tunisia Outlook

In Tunisia, the two well drilling program including Winstar-12bis ("Win-12bis") and Winstar-13 ("Win-13") is expected to start in mid-July. The targets in both wells are the Lower Hamra and El Atchane formations currently producing in other wells in the Sabria field. Each well will take approximately three months, with target total depths of over 3,900 metres. After Win-12bis, the rig move to Win-13 is expected to take 3 - 4 weeks.

The workover on EC-4 is expected to be completed within a week, after which the rig will move to ECS-1. The balance of the workover campaign includes various operations on ECS-1, CS-11, and CS-8bis. This program is expected to add production, exploit new reserves and develop a new hydrocarbon play type. Both EC-4 and ECS-1 are scheduled to be stimulated later this summer.

A 203.5 km2 3D seismic program over the Sanrhar field commenced in early June, and is approximately 40% complete. Legacy sparse 2D data indicates 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, which has produced 421 Mbbl of oil to the end of 2013.

Romania Outlook

This year's program includes two exploration 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 November 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.


bbl Barrel(s) bbl/d Barrels per day
Mbbl Thousand barrels MMbbl Million barrels
boe Barrels of Oil Equivalent boe/d Barrels of Oil Equivalent per day
Mboe Thousand boe MMboe Million boe
Mcf Thousand Cubic Feet Mcf/d Thousand Cubic Feet per day
MMcf Million Cubic Feet MMcf/d Million Cubic Feet per day
Mcfe Thousand Cubic Feet Equivalent Mcfe/d Thousand Cubic Feet Equivalent per day
MMcfe Million Cubic Feet Equivalent MMcfe/d Million Cubic Feet Equivalent per day
Mcm Thousand Cubic Metres Bcf Billion Cubic Feet

Cautionary Statement:

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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

(1) Test results are not necessarily indicative of long-term performance or of ultimate recovery. The test data contained herein is considered preliminary until full pressure transient analysis is complete.

Contact Information:

Serinus Energy Inc. - Canada
Norman W. Holton
Vice Chairman

Serinus Energy Inc. - Canada
Gregory M. Chornoboy
Director - Capital Markets & Corporate Development

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