Serinus Energy Inc.-Brunei: Lukut Updip-1 Well Drilling Update
August 23, 2013 (Source: Marketwired) — Serinus Energy Inc. (TSX:SEN)(WARSAW:SEN) (“Serinus“, “SEN” or the “Company“), an international upstream oil and gas exploration and production company, advises that the exploratory well on its Lukut Updip 1 prospect on Brunei Block L is drilling ahead in 6” hole at 1,880 metres measured depth (“MD“) after having set 7″ liner at 1,716 MD. The well encountered formation pressures significantly higher than predicted which necessitated the setting of the 7″ liner earlier than planned.
Prior to setting the 7” liner, the well intersected a 2.5 metre sand at 1,723 metres MD which is believed to be hydrocarbon bearing based upon the logging while drilling gamma ray/resistivity profile and a positive oil show in drill cuttings. Further decision on evaluation of this zone will be undertaken following drilling of the current hole section, which is targeting several deeper seismically defined anomalies.
As a result of encountering hard formation in the 133/8” hole section, and the higher pressures in the 8″ hole section, the well is currently some 40 days behind schedule. The Block L Production Sharing Agreement (“PSA“) between the Brunei National Petroleum Company (“PetroleumBRUNEI“) and the Block L Parties was signed on 28th August 2006, and expires on 27th August 2013. The Company’s position is that as long as we are engaged in an active drilling program, the Phase 2 of the Exploration Period of the PSA is automatically extended. Serinus has requested a formal written extension to Phase 2 from PetroleumBRUNEI to allow for completion of the drilling program currently underway, including the drilling of Lukut Updip-1 and the drilling of the second exploration well (Luba-1) in the Phase 2 drilling program. The response from PetroleumBRUNEI to the extension request is expected imminently. Drilling operations are continuing in accordance with the terms and conditions of the PSA. In the event of a discovery, provisions within the PSA allow the Block L parties to continue with further appraisal and development provided the Block L Consortium satisfies any prior obligations as required by the Block L PSA.
Serinus has a 90% interest in the 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 Serinus Energy
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.
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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.
For further information, please refer to the Serinus website (www.serinusenergy.com).
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 of the Company or any of its subsidiaries and related to its interest in Brunei Block L and to certain wells drilled or to be drilled or seismic activities undertaken within that area 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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