Three Energy Sector Stocks Under Investors’ Radar - SXY, LNG, WPL

As per the report from Australian Energy Market Operator, domestic and global energy consumption is expected to increase. To meet this growing demand, Australian companies are tightening their belt to increase the exploration and production of gas and other energy resources in Australia and other regions. The three important companies in the energy segment with recent updates are Senex Energy Limited, Liquefied Natural Gas Limited and Woodside Petroleum Ltd.

Senex Energy Limited (ASX: SXY)

Senex Energy Limited is into generating and exploring of oil and gas in a secure and effective way. It has three decades of experience and has diverse portfolio positioned in South Australia (in the Cooper Basin) and Queensland (in the Surat Basin) region.

The company on July 22, 2019, informed the market that it continues to achieve key milestones in the delivery of its Surat Basin natural gas development projects, with Roma North gas production exceeding eight terajoules following commissioning of the Roma North gas compressor station.

In the past three months, there were several milestones achieved at Roma North and Project Atlas, including:

  • Mechanical commissioning and completion of the Roma North gas compressor station, with excellent safety performance. The commissioning process includes rigorous safety checks, system stability tuning and performance testing, and is expected to be completed in Q1 FY20.
  • Daily production reached 8.4 TJ (terajoules) at Roma North, where improved well performance from past optimisation activities and initial uplift from commissioning of the compressor station saw materially higher production rates towards the end of June.
  • In April 2019, experienced oil and gas services provider, Easternwell was awarded drilling contract for the company’s ~110-well Surat Basin campaign, which was undertaken successfully and without incident. The first well was drilled on June 5, 2019, and nine wells were subsequently drilled. Ten wells will be drilled at Roma North prior to the mobilisation of Easternwell Rig 27 to Project Atlas in late July 2019.
  • Project Atlas witnessed significant progress with completion of 12 lease pads, with remaining lease pads under construction. The company is awaiting the arrival of Easternwell Rig 27, and the first sales gas from Project Atlas is expected to start in late 2019.

Roma North gas production to June 30, 2019 (Source: Company’s Report)

On the stock information front, on 22 July 2019, the stock of Senex Energy was at $0.36, up 1.408% from its last close, with a market capitalisation of ~A$515.84 Mn. It reached the day’s high at A$0.370 and day’s low at $0.352, with an average daily volume of 1,464,589. Its 52 weeks high and low-price stands at A$0.535 and 52 weeks low price at A$0.262, with an average volume of 4,341,311 (yearly). Its absolute returns for the past one year, six months and three months are -13.41%, 2.90%, and -4.05%, respectively.

Liquefied Natural Gas Limited (ASX: LNG)

Liquefied Natural Gas Limited offer solutions related to the middle scale LNG liquefaction to its consumers.

LNG, on 22 July 2019 informed the market on its decision to re-locate its centre to the USA. Following all the judicial and regulatory approvals, and shareholder’s vote , LNGL will begin the process to list on the NASDAQ Stock Exchange. Greg Vesey, LNG’s Managing Director and Chief Executive Officer stated that the management is committed to transparency and regular communication during the re-domicile process, which could be completed in the late 2019 or early 2020. This will ensure that all its institutional, retail shareholders from either Australia or U.S or elsewhere are able to make fully informed decisions.

Benefits from the re-domicile process:

  • Attracting and increasing awareness of LNG with North American investors who are familiar with the LNG industry and have significant capital to deploy to such assets;
  • Increasing the attractiveness of LNG to potential future business partners;
  • Retaining and attracting outstanding talent;
  • Aligning with the company’s current 100% North American LNG project development and operational management focus;
  • Improving valuation and better trading liquidity given the current valuations for the company’s peers, all of which are US-listed LNG companies;
  • Enabling demand from investors who are not able to invest in equities listed outside of the US.

March ‘19 Quarter Highlights: The operating cash outflow at the end of the quarter was reported at $7.9 Mn. The net cash and cash equivalents at the end of the quarter was reported at $28.68 Mn.

Operating Cash Flow Statement (Source: Company’s Report)

On the stock information front, on July 22, the stock of Liquefied Natural Gas was at A$0.295, up 25.532%, with a market capitalisation of ~$135.36 Mn. It reached the day’s high at A$0.265 and touched day’s low at A$0.235, with a daily volume of 3,291,831. Its 52 weeks high price stands at A$0.875 and 52 weeks low price at $0.225, with an average volume of 2,275,067 (yearly). Its absolute returns for the past one year, six months, and three months are -61.48%, -58.04%, and -45.35%, respectively.

Woodside Petroleum Limited (ASX:WPL)

Woodside Petroleum Limited is the biggest natural gas producer and pioneer of the LNG sector in the Australian region. The company has an international portfolio and is acknowledged for its abilities of integrated energy supplier of world-class level.

On 18 July 2019, the company released the report for second quarter ending 30 June 2019.

Q2 2019 Highlights

On the performance front, WPL’s sales revenue stood at $738 million along with the output of 17.3 MMboe. Besides, the company attained a solid LNG output from North West Shelf.

Company’s Production Source: Company’s Report

Further, WPL delivered a clear strategy throughput the three horizons; it began an offshore commissioning for the Greater Enfield project; it is on track, budget and by the closure of the quarter was 95 percent finalised.

Also, the Browse Joint Venture gave a nod to Browse to NWS Project basis of design during May this year. Further, during June 2019, the geotechnical and environmental elements of the proposed trunkline route survey was concluded.

Outlook:

The company provided its half-year guidance for 2019 period. The same is as depicted below:

Source: Company’s Report

By the closure of the trading session, on 22 July 2019, WPL’s stock was at a price of A$33.650, up by 0.149% from its prior close. The company has a market capitalisation of A$31.45 billion, with ~936.15 million outstanding shares. The stock has given a negative return of 1.75 percent in the last year; however, the YTD return of the stock is of 10.20 percent.


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