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Good morning, and welcome to the Serinus Energy plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll.
I'd now like to hand you over to Jeffrey Auld, CEO. Good morning.
Good morning. Thank you. Welcome, everyone, to Serinus Energy's financial results for the 3 months ended the 31st of March 2023. My name is Jeffrey Auld, I'm the CEO of Serinus Energy. I'm joined by Andrew Fairclough, our CFO; and Stuart Morrison, our COO; and Calvin Brackman, our Vice President of External Relations and Strategy.
The results for the 3 months ended the 31st of March 2023. Production for the period averaged 691 barrels a day. That was 163 barrels a day in Romania and 528 barrels a day equivalent in Tunisia. In Tunisia, the production has remained very stable. The company is performing a lifting of crude towards the end of May. We'll be lifting 50,344 barrels of crude.
The CTF-004 rig moved during the quarter. As people recall, at the start of the quarter, we were working on the workover of the W-1 well. In our last results, we announced that, that had run into some unexpected jump in the well. We reviewed that. The estimates for milling through that jump were between 50 and 63 days. And clearly, a sidetrack is shorter in time duration so we made the decision with our partner to suspend that work over.
We're now -- we're designing a sidetrack for that well, and we'll go back at some point to that well and recomplete that workover. The rig moved to the N-2 well. The rig moved happened during Ramadan. So we were on half-staff during Ramadan, but we announced the kickoff of that workover and that workover is going according to plan and on time. We've been delayed by some sandstorms, but other than that, there's been no delays.
We talked about the W-1 well and the suspension and the reasons for the suspension. It's milling through a lot of old junk, it's uncertain. It's time-consuming. And when you get through it, if you get through it, there's no certainty that you have a clean and useful wellbore. So it's the prudent decision to stop and go back and sidetrack around that, that will give us a clean wellbore from which to produce. And that design work is ongoing now.
In the quarter, we have engaged a local G&G, geological and geophysical consultant. That consultant is taking a look at the Sabria field and determining where we would locate 2 new wells, and that work is in progress. We would expect to have well locations, and then we will start building the plans for future wells in Sabria. In Romania, we completed our block wide review at the start of the quarter. As Stuart has explained on previous calls, this was to take all the geological work that had been done in the past, which was a point here or point there or point -- and tie them all together across what is an extensive block. So we have a whole block review of where the best exploration targets would be located.
We've enhanced some of the prospects. We found new prospects and some of the prospects have shrunk with this work. But all in all, the prospect inventory remains very, very -- there's lots of opportunities on this block.
During the quarter, we received a decision in our favor regarding the 40% of the Satu Mare Concession that we had defaulted the partner. Other than that is currently being transferred to Serinus. So that's the final stage of the ICC decision, and we'll get that transferred. We've said for many years that there was a deemed 100%, we paid all the capital, we've taken all of the revenue. Almost $100 million of revenues come out of the Moftinu gas plant. We paid all the taxes, all the insurance. It's been a deemed 100%. This was the final procedural step to have that 100% gets added to our name.
I'll hand it over to Andrew, and he can run through the financial results. I'll pick it up at the end for additional closing comments.
So financial highlights. Revenue for the period was $4.9 million. Gross profit, $0.9 million with EBITDA of $0.4 million. We had a net loss for the period of $1.3 million and we expended $2.4 million through the period. CapEx, Capital expenditures predominantly in Tunisia. We'll look at that a little bit further on the slide.
Net realized price is $78.87 per BOE. Pricing in Tunisia has slowly -- has come off through the year, it's still $8 -- just over $8 per barrel, whereas natural gas price predominantly sub-driven by Romania, it's about where we were this time last year, but still pretty robust at $12.72 per Mcf.
The nonoperating netbacks correspondently decreased from the previous period but were $39.52 per BOE for the quarter. We closed the period with a cash balance of $2.7 million. And as Jeffrey highlighted at the beginning, we are scheduled for a lifting later this month for 50,344 barrels of oil.
Looking here, I think the most hopeful thing related to the cost of sales, where you can see the impact of windfall tax. We were on a regulated price for February and March of this year with a 0 windfall tax in that corresponding period. So it's cost of sales, windfall tax is markedly different. Our operating expense has come down as well, which is very much reflecting the benefits of water injection that we're doing through the Canar-1 well in Romania.
We look some of the production trends and pricing trends. You can see that Tunisia has actually been very stable through the last year and it's improved in this last quarter. And in Romania, as we've highlighted on new occasions, we have a natural decline in Romania and those declines continue. And I think as a -- if we look at the last -- performance in the last quarter, the last 3 months of last year and the first quarter of this year, the trends remained very consistent.
Realized pricing, we can see again through the year, we have come off of the highs of last year and -- related to Brent oil pricing, but they remain very resilient and we're still at $80 for the period. Current price is about $76. And we have a marked difference in the pricing environment in Romania. But again, looking at $13.97 when we look at pricing a year ago or 2 years ago, it's still very strong pricing in any context.
Production expense. This has come down very much driven by efficiency. It's the better operating expenses in Romania because we are no longer trucking water for our wells. And we're now able to reinject them. We're reinjecting 100% of water that's produced and that is delivering marked cost savings in Romania. On a per barrel basis, we are getting a continuing sort of improving performance in the Tunisia as well with expenditures there, very much sort of managed and stable.
Operating netbacks, again, very much a relation of volumes and prices, pretty consistent in Tunisia and the revision in the pricing environment in Romania, it's clearly making an impact there.
Capital expenditure. In Tunisia, this is very much related to the W-1 schedule of the program, and we'll clearly see more CapEx going through at N-2 as that continues through the next quarter. The Romania is really very much the tail end of expenditures on the well program last year, and we expect in the next quarter or so, minimal CapEx coming through in Romania. Bottom line EBITDA was still cash flow, generating cash flows, and that's very much close to the business, manage our cost base and really look at driving cash flows and maintaining positive cash flow.
Good. So looking forward, I mean, Romania is a large asset. And so the focus in Romania is highlighting exploration potential. We've said probably for the last 1.5 years, there's not going to be production growth in Romania without new wells. The 2 wells last year were an attempt to get gas with the gas plant and very unfortunately, we found gas, which is not enough to make it economic to produce.
The block-wide geological review is a big part of that. So Romania goes into a phase of studying for the next exploration round. We like the 2D. It gives us a good resolution for overtop of some of these prospects. It's quick. It's much cheaper than 3D. It's likely we'll look at further 3D over our highest prospects, our highest value prospects. And so that's really where we're at in Romania.
In Tunisia, I mean, both W-1 and N-2 remain very, very good production potential. W-1, very disappointing to run into. We had all the well reports, we've had all the workover reports from the past and none of them highlighted the real mess we found in that well. So sidetracking around it is, like I said, prudent and the most cost-effective way. But again, nothing has changed in the production values once we can get a pump in there.
N-2 is the same. We're on track on N-2. The workover is going well. And so getting that on production is where we see production growth in Tunisia. So we've put out the numbers where we think the successful workovers and pump installation are. With W-1, we got no estimates have changed on the production potential or the pump. It's merely a time delay while we plan the side track and put that in place. And N-2, we're working through that work over and nothing has changed there in terms of the production upside there.
Environmental safety. We continue to have very effective teams in both of our business units that are very focused on safety. We have had our fugitive gas emissions and our ESG report. I would encourage people to read that in our annual report because we spend a lot of time making sure that those facilities are as environmentally focused as they possibly can. And of course, 2,706 days without a lost time incident in Tunisia and 1,470 days in Romania. So we're very proud of those numbers. We're very focused on maintaining those numbers.
So in conclusion, we had a disappointment in the first quarter with W-1. We're going to define that, put the plan in place. Once we have the plans and we've refined those plans to a point where we can announce them, we, of course, we'll announce them. But I think we have to remember there's a very large asset base here. We don't have to find in Romania, we've find a lot of the prospects. We have to refine which prospects we're going to drill next.
And in Tunisia, it's very much a maximized production out of the field and then grow the field. Like I said, we are looking at future well locations. We know modern wells produced out of that field very well. And so we are looking at the plans for putting that in place.
Romania is a big exploration block. Moftinu will continue to produce. It continues to see its -- declines the compression, moderates that -- those declines for us. But we manage our costs, we keep the cash flow going. We improve operating cash flow, and we proceed with the operations as we've defined. And that's our presentation for the first quarter results.
That's fantastic. Thank you very much indeed for your presentation. [Operator Instructions] Just while the team take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation along with the copy of the slides and the published Q&A can be accessed via your investor dashboard.
Guys, as you can see, we have had several questions that have come through during today's presentation. Jeffrey, if I may just hand back to you, just a click on that Q&A tab, where appropriate to do so, just read out the question and give you a response and I'll pick up from you at the end. Thank you.
Good. First question, what time lines can we expect in both Romania and Tunisia to drive returns?
I think we've talked about that. Romania, we need to high-grade our prospects and then get on with them. Romania, the delay on prospects is permitting. So you need to get the permits in place. And when we do the 2D seismic, the permits, as we talked about on previous calls, they can be extensive. I think we had 6,000 permits when we did the 2D seismic last year. So it takes some time to get all the permits in place. That's really the time constraint. There's lots of rig availability. There's lots of service availability. So the time line in Romania is defining the prospect, getting the 2D seismic done and then getting on the journey.
What price do we expect for the lifting? The formula runs up to the lifting. So we're looking at a formula that captures pretty much the current Brent price. We talked about how we price the crude. It's North African light, so it trades at a premium to Brent, but the lifting costs and the charges pretty much take care of that premium. So you can think about it trading pretty much at Brent.
Any updates on the lowering of taxes in Romania. I'll be in Romania a week after next. Again, we'll have further meetings. I think that it's a slow change, but there are definitely components of the government that recognize that the tax situation and the tax changes they've made are both shortening the economic lives of the existing fields and making exploration for people much more expensive.
There is a recognition of how long that takes a government. It's a coalition government. We have all the entertainment value of the coalition government. So right now, we're switching ministers for the party switches within the coalition. So it's hard to determine how they might revise their taxes. They are far more engaged in conversations than they were last year. And of course, it was very difficult to talk to a government about a punitive fiscal regime when gas was trading at very, very high prices. There was not a lot of sympathy. Now the gases are back to a more normalized level, I think the government and the ministries are starting to recognize that it's -- it needs to be addressed.
With more capital, how quickly could things be accelerated in Tunisia. Planning the sidetrack is not a capital issue. It's just getting the right plans and giving the long-lead items. I think we looked at the sidetrack, we're looking at a 7-inch casing, which is one of the long-lead items but we have some 7-inch casing in Romania. So there are things that we could do to accelerate that, but there is a natural planning process and a long-lead item process. It's not really capital-dependent. It's more depending on getting everything in order.
We will need to get a rig, and so we're starting to look at rig availability because, of course, we had the rig for the first part of W-1, which then we went to N-2 and we -- the rig goes way after N-2. So we would then have to look at rig availability and planning for the rig.
When will this be done? Work for the side track to be completed and when you expect to complete the actual work? Why are the lead times not confirmed?
Well, first, we have to finish the design work before we know what we have to order for long-lead items. And as I said, we'll look at what we have in our business units to see if we can accelerate that. But right now, we have a very rough idea of what the sidetrack would look like. We need to engineer that properly. And then we need to go out and cost that properly. So there is a natural time that it takes to do these things. And as soon as we have a definition on that, we'll announce that to shareholders.
Are you concerned with a cash burn? Do you foresee a capital raise within the next year?
No, concerned with the cash burn. We have worked very, very hard to keep our cost structure very, very lean. I think the business units have done a great job through some very, very high inflation. We've managed to keep the costs as Andrew showed, flat. So that's taking a lot of work. We'll operate in 2 different countries. We're operator on both of these on all of our assets. So managing the cost structure is very, very important to making sure that we accrue operating cash flow, and that operating cash flow can be spent on our operations.
Do you foresee a capital raise within the next year? We work our capital plans to our operating cash flow. So we do not -- you never say never because we don't know what might happen. But no, there's no current plans for an equity raise.
What will the sideline, I think -- what was the sidetrack cost on the Tunisia well and how will that affect cash flow?
Look, the sidetrack is -- we're costing it now. It will affect cash flow because it's going to cost more than what we had originally anticipated in that workover. However, it's going to cost a lot. We think it will cost a lot less than trying to keep going and milling through and continuing on with the W-1 workover. And so that was really one of the big determinants is the length of time it would have taken to continue to build through the uncertainty of that operations and what the state of the borehole would be after we've done all the milling.
So yes, it was an economic decision to do the sidetrack as opposed to milling ahead. But both of those, milling ahead and the sidetrack would have increased the cost -- will increase the cost of that. We're determining exactly the design of the sidetrack, which will go to cost. And as soon as we have that, we'll let people know.
I know you've addressed the difference in Warsaw exchange, stock price different than before, but this is concerning as the value of the company is worse. Are there any actions you can take to address this?
We've talked about this on almost every call. The Warsaw price -- and it's a false market. It does not have the volume or it does not -- it does not show any similarity to the London price. And there's very little we can do about that. To delist from Warsaw, we have to tender at the Warsaw price, which we're not doing. And so there's -- we've said time and time again, we think that the Warsaw price is above the market. It's -- the shares are the same. It's the same ISIN.
So I think for Warsaw shareholders, it's a bit of a dangerous situation because where we do -- as an example, and wholly as a hypothetical example, where we do pay a dividend, a number of shareholders would get a dividend on the price. Their yield would be high and worse, our shareholders would get the same dividend that would be given to us. So it's a very -- it's an odd situation that there's very little we can do. We've spent years trying to figure out and talking to the exchange there about -- and our role here is about what we might be able to do. And I think that's -- those are the questions that we have to answer.
That's fantastic. Thank you very much, indeed for addressing those questions as you can. Of course, any further questions come through, the team will be able to review those. And we'll publish responses where appropriate to do so on the Investor Meet company platform. Jeffrey, perhaps before redirecting investors to provide you with their feedback, what is just particularly important to you and the team, if I could just ask you for a few closing comments, please.
Yes. Look, I mean, as closing comments, we continue along with the plans that we have laid out. We've been delayed on the W-1 and that has been very, very disappointing. We continue to generate cash flow. Our production continues in Tunisia. And we hope that with N-2 that, that will increase considerably.
And Romania now, we shift to -- we hope to continue to produce the gas plant, but we're going to find the next Moftinu. And you remember, Moftinu has produced just short of $100 million of revenue. It's been a very little field for us. The fiscal system, I think will be in time adjusted in Romania, and we'll be back to a place that's very attractive to invest in. So most of the assets continue to be good opportunity assets with lots of opportunities to solve them. And the cash flow underpins the business. So that's what we intend to do.
Fantastic. Thank you indeed for that, and thank you for updating investors today. Can I please ask investors not to close the session. You should be automatically redirected to provide your feedback in order the team can better understand your views and expectations. This will only take us a few minutes to complete and is greatly valued by the company.
On behalf of the management team of Serinus Energy plc. I would like to thank you for attending today's presentation. That concludes today's session. Thank you, and good morning to you all.