ASX300 Senex Energy strikes a gas deal with Gladstone

Summary

• The gas sales agreement (GSA) with Northern Oil Refinery, Gladstone, is for the supply of natural gas up to 2.5 petajoules (PJ)
• The GSA will create 32 direct jobs and hundreds of jobs indirectly in Queensland
• The gas will be supplied from the company’s Atlas field in the Surat Basin

Senex Energy Ltd (ASX: SXY) has announced a gas sales agreement (GSA) with Southern Oil Refining’s Northern Oil Refinery near Gladstone. Senex Energy will supply the gas from its Project Atlas in Surat Basin. Project Atlas is the first acreage in Australia which is dedicated to supplying gas in the domestic market. The GSA will create 32 direct jobs and more than 100 jobs indirectly in Queensland.

For Project Details: Senex Energy Commenced Civil Works For 110 Well Drilling Campaign in Surat Basin

On 21 September 2020, Senex Energy announced on ASX that the company had been awarded additional Atlas acreage. The new acreage is adjacent to the company’s existing development and will help in increasing production by 50% up to 18 PJ/year from the project.

Senex Energy’s agreement with the Northern Oil Refinery is strategically placed and in line with the development of the Atlas acreage. The deal is to supply 0.3 PJ/year for two and a half years with a provision to extend the deal to increase the supply to 0.35 PJ/year for the next five years.

Senex Energy is an upstream oil and gas exploration and production company catering to the energy needs of the east coast of Australia. Formerly known as Victoria Petroleum NL, Senex was listed in 1984 in ASX.

Company has proved reserves (1P) of 38.6 MMboe and probable reserve (2P) of 134.4 MMboe. The company updated its 1P reserves of Surat Basin to 210 PJ, 108% higher than its previous estimates, and 2P reserves to 739 PJ from 612 PJ.

Senex Energy hydrocarbon production increased by 73% in 2020. Senex produced 0.68 million barrels of crude oil which is 13% lower than the previous year. The company saw a huge rise in the production of natural gas and condensate. It produced 1.41 MMboe of natural gas which is 228% higher than the previous year.

Source: Annual Report

Operational Highlights FY20

• $400 million Surat Basin project capital work program got completed.
• A total of 79 gas producing wells and 1 appraisal well was drilled.
• 2 Oil producing and 2 water injection wells were also drilled.
• The company recently completed the sale of Roma North gas processing facility and pipeline to Jemena for $50 million.

Source: Annual Report 2020 FY20

Financial Performance FY20

Source: Annual Report FY20

Sensex Energy reported sales revenue of $120.3 million for the FY2020. Increase in the production of natural gas from the Surat Basin helped the company to increase the revenue by 28% and offset the lower prices of the crude oil. Gas production increased from the Roma North, Atlas and Gemba fields.

The realised prices of marketed gas were $ 7.8 per GJ. Gas unit operating cost was $ 2.9 per GJ in 2020. The realised price for crude oil stands at A$90 per barrel for FY2020 due to the steep decline in the prices of Brent crude. The oilfield unit operating cost was $13.0 per barrel.

The EBIDTA of $49.5 million, 60% higher than FY2019, reflects the high sales volume of the natural gas from its Surat and Cooper Basins. As a result of Covid-19 impact on the energy market, Sensex reported a non-cash impairment of $52.1 million. Out of $52.1 million, two-thirds of the charge relates to small oilfields which do not have efficient oil transportation infrastructure. The company also received $0.8 million as Covid-19 relief from the government in the form of Jobkeeper payments and payroll tax rebates.

Stock Information

As on 23 September 2020, Senex Energy closed the day’s trade at $0.33 with a market capitalisation of $474.49 million. The share price has appreciated by 150% in last six months.