Senex Energy Limited (ASX: SXY) achieves continued strong progress in Surat Basin during the March 2019 Quarter with the sales revenue moving straight up by 62% on prior quarter to $28 million on higher production and higher realised prices.
The quarterly report read the 21% growth in production to 334 kboe with oil production up 22% over the prior quarter and gas up by 18% as Roma North ramp-up continued. The oil production growth underlines the two new development well brought online in Cooper Basin that includes Growler-16 and Growler-17.
Managing Director and CEO of Senex Energy Ian Davies stated that the strong performance of the Cooper Basin oil production assets generates operating cash flow to fund the high growth projects of the company.
During the quarter, Senex has achieved several key milestones at Surat Basin including the receipt of Federal and Queensland Government environmental approvals required for the development of Project Atlas. The Group, therefore, confirmed the continued progress in its Surat Basin natural gas developments in line with the company’s objective to achieve initial plateau production of 48 TJ per day from Project Atlas and Roma North by the end of Fiscal 2021.
Davies added that the milestones already achieved in the Surat Basin have substantially de-risked the company’s natural gas development projects. Senex now intends to start its integrated drilling campaign across Roma North and Project Atlas which has the potential to be the game-changer in production and cash flow.
For this purpose, Senex has designed a drilling schedule in such a manner that the timing of Project Atlas gas production coincides with the commissioning of the Project Atlas gas processing facility. Accordingly, the company has scheduled the drilling to start at Roma North in May 2019, with the rig moving to Project Atlas in first quarter of Fiscal 2020. Australia-based Easternwell has been awarded the Surat Basin drilling contract by Senex to start drilling by May 2019.
Roma North has reported 21% improvement in gas production to 93 kboe in Q3 FY19 in comparison to the previous quarter with daily rates averaged above 6 terajoules. The company stated that Roma North is advancing at a rapid pace towards first sales gas scheduled by mid-2019, and construction of the 16 TJ per day gas processing facility reaching completion.
The Group has incurred the gross capital expenditure of $27.9 million with respect to the Cooper Basin’ Westeros seismic survey, construction work for the Roma North pipeline and Surat Basin pre-execution expenditure.
Following the March 2019 quarter, Senex hedged further 262,000 barrels of oil production over two years, taking the total hedging to 895,000 barrels of oil production for the period Q4 FY19 to the end of FY21.
SXY is currently trading flat as at 30 April 2019 (1:18 PM AEST). However, there has been daily volume change of 1,448,879 shares till this time. The stock last traded at $0.355.
Senex’ stock price has declined by 14.46% over the past 12 months despite a positive price momentum of 7.58% recorded in the past three months.
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