Serinus Energy Inc.

Serinus Energy Inc.

February 20, 2015 17:30 ET

Serinus Energy Arranges EUR10 million Debt Facility for Romania

WARSZAWA, POLAND--(Marketwired - Feb. 20, 2015) - Serinus Energy Inc. ("Serinus", "SEN" or the "Company") (TSX:SEN)(WARSAW:SEN) is pleased to announce that it has finalized a new 10 million Euro debt facility with the European Bank for Reconstruction and Development ("EBRD" or the "Bank").

The proceeds from this new facility (the "Romania Facility") will be used to fund the Company's capital program currently underway in the Satu Mare licence ("Satu Mare") located in northwest Romania. Satu Mare is a 765,000 acre exploration block which is 60% owned and operated by Winstar Satu Mare SRL, a wholly owned subsidiary of Serinus.

The capital program includes the drilling, completion and testing of the Moftinu-1001 and 1002bis wells, and the Santau 3D seismic survey conducted in the last quarter of 2014, and will fulfil the Phase 2 work requirements associated with the Satu Mare licence. Pursuant to a farm-in agreement between Winstar Satu Mare and the other owner, the Company is funding 100% of these expenditures. Once the Phase 2 work requirements have been completed, all working interest owners will be responsible for their respective shares of future capital costs.

The Romania Facility will be a senior loan with the following significant terms:

Interest rate: LIBOR (six month) plus 8%

Repayment: 10 semi-annual instalments beginning on the first anniversary of the loan agreement

Accelerated Repayment Provisions:

  • Ukraine: If and when the Company is able to convert and repatriate its cash in Ukraine, currently held in UAH, it will apply those funds to early repayment the Romania Facility according to the following schedule:
Threshold Amount Applied
to Pre-Payment
Up to the first 50 million UAH equivalent 100%
Thereafter, until 50% of the Romania Facility has been pre-paid 70%
Thereafter, until 70% of the Romania Facility has been pre-paid 50%
Thereafter, until the Romania Facility has been fully repaid 30%
  • Tunisia: The Company will apply 40% of its Excess Cash from Tunisia toward early repayment of the Romania Facility and once repaid, then Excess Cash shall be applied to the Tunisian facility outstanding with EBRD. Excess Cash is defined as the Operating Cash Flow from Serinus' Tunisia subsidiary, less debt service costs arising from all senior debt on the Tunisia assets and the Romanian debt, less capital expenditures, plus any new debt disbursement on the Tunisian debt. In the event that pre-payments are made in any given year from Ukraine as described above, the repayment from Tunisia shall drop to 25% of Excess Cash.
  • No pre-payment fees are applicable to the accelerated payments described above.

Note: Serinus reports in US dollars. All dollar amounts referred to herein are in USD, unless specifically noted otherwise.

Other Conditions:

  • The average production rate from the Company's Tunisian operations share must exceed 1,500 boe/d for a minimum of 60 days. As at the date of this press release, production has exceeded that threshold for more than the 60 days.
  • The committed portion of the second tranche of the Company's senior debt facility with the EBRD associated with the Tunisian assets shall be reduced from $20 million to $8.72 million. The placement of the Romania Facility therefore does not result in any change in the aggregate amount of the Company's overall debt facilities in place.
  • The Company shall meet certain specified financial and reserve coverage ratios.

Tim Elliott, President and Chief Executive Officer of Serinus said "We are very pleased to continue and extend our relationship with the EBRD through this new loan facility. Prior to the changes in the Ukraine fiscal regime since the last half of 2014, and in particular the restrictions on foreign currency remittances from Ukraine, Serinus had been fully capable of funding the Romanian program through cash flow. Those changes, along with the recent drop in commodity prices significantly impaired that ability and the Romanian Facility helps the Company to meet its cash requirements. We have a very successful history with the EBRD, and the fact that they have stepped forward to assist us though this period speaks well of our assets and of the partnership that has developed over the last 5 years with the Bank."

bbl Barrel(s) bbl/d Barrels per day
boe Barrels of Oil Equivalent boe/d Barrels of Oil Equivalent per day
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
Mboe Thousand boe Bcf Billion Cubic Feet
MMboe Million boe Mcm Thousand Cubic Metres
UAH Ukrainian Hryvnia USD U.S. Dollar
CAD Canadian Dollar

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.

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.

About Serinus

Serinus is an international upstream oil and gas exploration and production company that owns and operates projects in Ukraine, Tunisia, and Romania.

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.

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