CALGARY, ALBERTA--(Marketwired - July 19, 2013) - Serinus Energy Inc. ("Serinus", "SEN" or the "Company") (TSX:SEN), an international upstream oil and gas exploration and production company, is pleased to announce that the formalization of a strategic relationship with Dutco Energy Ltd ("Dutco Energy"), a division of the Dutco Group, a leading conglomerate in the Middle East. Serinus and Dutco Energy have entered into an option agreement (the "Option Agreement") which gives Dutco Energy the right to acquire an interest in Brunei Block L in consideration for Dutco Energy providing the Company with a US$15 million secured credit facility (the "Credit Agreement"). As part of the transaction both companies have agreed to jointly pursue new oil and gas opportunities in Tunisia for the duration of the Credit Agreement.
The Option Agreement grants Dutco Energy the right to acquire an interest, ranging from a minimum of 5% and a maximum of 15%, in Brunei Block L. The right may be exercised in consideration for US$1 million per percentage point of interest acquired by Dutco Energy. A decision to exercise the right to acquire an interest in Brunei Block L is to be made within 31 days of the test results of a discovery well being announced. Dutco Energy's rights to acquire an interest in Block L are subject to the approval of PetroleumBRUNEI as regulator of Block L and to the pre-emptive rights of the existing partners in Block L.
The term of the Credit Agreement is for 12 months with interest calculated on amounts outstanding at a rate of 12% per annum. Dutco Energy may convert amounts under the Credit Agreement into common shares of the Company with the conversion rights and the issuance of common shares to Dutco Energy pursuant to any conversion being subject to the prior approval of the TSX.
Tim Elliott, the President and Chief Executive Officer of Serinus stated that "we are very pleased to be working with Dutco Energy and the Dutco group of companies in what both parties hope will be the first step towards building a strategic partnership to jointly pursue oil and gas opportunities".
Ahmad Sharaf, Chief Executive Officer of Dutco Energy added, "This exciting partnership with Serinus is a further demonstration of our commitment to exploring in proven basins, such as those in Southeast Asia, and capitalizing on them to the benefit of the host governments and partners alike. Furthermore, this investment is an important building block to Dutco Group's long standing presence and experience in the Southeast Asian oilfield services and engineering sectors."
Dutco Energy is a wholly-owned subsidiary of Dubai Transport Company LLC, a private company based in Dubai. The Dutco group of companies is a diverse organization with operations in construction and engineering, trading and manufacturing, hospitality, and oil and gas Dutco Energy and the Dutco group of companies are at arm's length to Serinus.
Block L is a 1,123 square kilometre exploration and development block covering certain onshore and offshore areas of Brunei. The Lukut Updip 1 well, the first of two wells to be drilled in the 2013 drilling program, commenced drilling in the third week of June 2013 and is currently setting intermediate casing at a depth of 1,590 metres. The casing shoe will be drilled out in the next few days prior to drilling ahead into the prospective part of the well.
Serinus has an aggregate 90% interest in Block L with indirect wholly-owned subsidiary Kulczyk Oil Brunei Limited having a 40% interest and indirect wholly-owned subsidiary AED SEA (operator) having a 50% interest. The remaining 10% interest is owned by a private Brunei company at arm's length to Serinus.
About the Company
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 and the TSX.
In Ukraine, Serinus owns an effective 70% interest in KUB-Gas LLC. 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, a 1,123 square kilometre area covering onshore and offshore areas in northern Brunei.
In Romania, Serinus owns an undivided 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.
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 the Company. 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.
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