Serinus Energy

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Translated version of this PSD: French The project comprises financing the development of four oil and gas fields in Tunisia (Sabria, Chouech Essaida, Ech Chouechand Sanrahr) between 2013 and 2017. It finances a multi-year continuous drilling programme, including the stimulation of existing wells and the drilling of new production wells, securing dedicated drilling and service rigs. The objective is to significantly increase output and consolidate the position of the Company as a leading oil and gas player in Tunisia. The project has the potential to generate positive transition impact through: (i) supporting further development of a small private independent company in Tunisia, where the state-owned enterprise still dominates the production of hydrocarbons; (ii) the demonstration effect of the significant operational efficiency and productivity gains expected to be achieved through the project; (iii) transferring skills and know-how (notably geological and operational) from the new owner and operator; (iv) setting higher environmental, health and safety and social standards, as well as higher corporate governance practices through the company’s compliance with ‘Publish What You Pay’ principles. Serinus Energy Inc (“Serinus” or “the Company”), a medium sized oil and gas company organised under the laws of Alberta, Canada. Serinus is the entity resulting from the re-organisation of Kulczyk Oil Ventures Inc (“KOV”) following the completion of its acquisition of Winstar Resources Limited (“Winstar”), a Canadian company that owns the assets in Tunisia to be financed by the project. Up to USD 60 million long-term financing to Serinus with specific use of proceeds towards the development of the Company’s Tunisian oil and gas fields. Total expected costs for the development of the Company’s Tunisian oil and gas fields in the period to 2017 is expected to be USD 166 million. Categorised B in accordance with the EBRD’s Environmental and Social Policy 2008. The environmental and social due diligence (“ESDD”) by independent consultants identified that Tunisian assets demonstrate a high level of occupational health and safety (“OHS”) management. Required OHS management procedures are in place and required training is provided to staff. Operational management and field personnel are very competent and well-aware of required health and safety measures. The operations in Tunisia experienced a series of labour strikes in 2012 and 2013 by employees representing local communities and there were on-going discussions between Winstar’s management and Trade Unions that represent interests of the striking employees. The original ESDD also identified that a number of environmental improvements were required with regard to the treatment and recycling of drilling mud; disposal of produced water and efficient use of water resources. Existing emergency planning arrangements and communication with stakeholders also required a critical review. Required mitigation measures were included in the Environmental and Social Action Plan, which was approved by the Client. Recent monitoring by the Bank and the review of the detailed ESAP implementation report identified that the Company is implementing the agreed ESAP as per agreed schedule. A corporate HSE advisor and 16 HSE specialists have been hired and deployed at the fields. Research is being currently carried out on developing a social and environmental framework tailored to the Company’s operations and based on best practices in the industry sector. Social policy is being developed and a senior Tunis based Community Relations Advisor has been recruited. Interviews are ongoing to hire 4 local Community Relations Assistants to map and identify individuals and communities likely to be affected by the project and to interface with different stakeholders. Six consultative meetings have already been held at the Al Faouar Delegation level in the Kebili Governorate which have included the Village Council, the Unemployed Graduate NGO, the Bechni Telecenter in addition to other groups working on community issues. The Company has also initiated processes of monitoring the mechanisms for the environmental and social parameters. HR policies and procedures have been expanded and disseminated through the Winstar Tunisia BV Employee Policy after proper information has been communicated to all employees, union representatives and other stakeholders. The new Winstar Employee Policy, available in Arabic, French and English, is compliant with the Tunisian Labour Legislation and International Labour Regulations. 18 meetings with two key Trade Unions have been held since the approval of the Project. A comprehensive risk assessment has been carried for all activities and appropriate measures for identified concerns are being put in place. One of such measures includes further enhancing medical evacuation from the fields. Recently launched environmental monitoring programme is based on principles of developing a resource plan, release plan and a remediation project for all environmental parameters. Within such programme an evaluation of air pollution monitoring proposals is ongoing. Noise survey are conducted in all fields except for Sanghar (where noise measurements will be conducted during seismic surveys); and corrective measures are being developed. The Company also initiated monitoring of fresh water consumption in the fields by installing water meters and logging daily consumption. Technical solutions for final disposal of treated produced water are being reviewed by the Tunisian regulatory authorities at the moment. Investigations to identify historic hazardous waste pits have been initiated and proper treatment options will be considered and implemented after the waste inventory. The EIA studies for 3D seismic activities at Sanrhar and 2014 development drilling at the Sabria field have been completed and required mitigation measures will be implemented during the operations. The Company is planning to post approved EIA reports on its corporate website and intranet sites. Other modalities for communication of information on project activities, its impacts and ongoing mitigation measures being considered are such things as local community town-hall sessions and a Tunisian focused Facebook page. None. Tracy Heck, CFO +1 403 264 8877 E-mail: theck@serinusenergy.com