Serinus Energy converts exploring permit into a 20-year production licence

KUB-Gas, a 70%-owned Ukrainian subsidiary of Serinus Energy (SEN PW), has converted its five-year Krutohorivske exploration permit into a 20-year production license, authorizing full industrial production from the Krutohorivske field, Serinus said in a September 5 press release. As a result, the company’s production from the Krutohorivske field is no longer limited to 10% of the in-place reserves as it was under its previous five-year permit.

The company is currently producing 0.35 MMcfe/d from K-1 and K-3 wells at Krutohorivske field. The company expects to start commercial production shortly on the K-7 well that tested for natural gas at 5.9 MMcfe/d in February after gaining a permit for pipeline construction to connect the well.

Roman Dmytrenko: The lifting of the 10% production limit comes in handy as Serinus demonstrated sluggish 1% qoq production growth from its Ukrainian assets to 19 MMcfe/d in 2Q13, suggesting the peak output from its mature fields might be nearby. Although we do not dare to expect the K-7 well actual production rate would be anywhere near the impressive 5.9 MMcfe/d demonstrated during the tests, even when tied-in for commercial production at 50% of the test rate, the K-7 well should boost the company’s current hydrocarbon output by 10%.