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Consensus community valuation
$0.360
Average Intrinsic Value
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#Company Reports
Added 6 months ago
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#Company Reports
Added 4 weeks ago

11-June-2020:  Macquarie Mining and Energy Forum presentation

Disclosure:  I hold SXY shares.  This presentation gives a good overview of the company and the investment case.

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#Guidance Upgrade
Last edited 2 months ago

26-May-2020:  Roma North gas for domestic market. FY20 guidance upgrade

SXY closed up +20% today (up 4c to 24c) on the back of this.  The upgrade to production and FY20 EBITDA guidance is relatively small, but any positive news in the current environment is going to send a company's SP higher, particularly on an "up" day (risk-on day) like today.

I hold SXY shares.  Within energy, I much prefer gas companies to oil companies, particularly those with exposure to Australian domestic natural gas demand.

From the announcement today:

Senex and GLNG to supply Roma North natural gas to the domestic market; Senex FY20 guidance upgraded 

Key points:  

  • Senex Energy Ltd (Senex, ASX: SXY) and GLNG have agreed a short-term re-direction of around  1 PJ of natural gas from Roma North to the domestic market.
  • Re-direction follows GLNG’s currently lower LNG offtake requirements and material production outperformance at Roma North.
  • Surat Basin production continues to perform strongly, currently producing above 34 TJ/day; Atlas drilling campaign further reduced.
  • FY20 guidance upgraded: production guidance increased to 2.0 – 2.1 mmboe (previously 1.8 – 2.0 mmboe); EBITDA guidance increased to $45 – 55 million (previously $40 – 50 million). 

 
Part of Roma North gas production to be re-directed to domestic market

Senex will reduce natural gas supply to GLNG by around 1 PJ over the period June to August 2020 at GLNG’s request, following currently lower LNG offtake requirements at GLNG.

Senex and GLNG have agreed to re-direct these volumes to the Wallumbilla natural gas supply hub. Senex will market this natural gas, together with higher than expected production from Atlas, to east coast gas customers as a part of its supply portfolio. 
 
Continued production outperformance and further reduction in Atlas drilling campaign

Natural gas production continues to outperform at both Roma North and Atlas in the Surat Basin, with production now exceeding 34 TJ/day. Given continued production and reservoir outperformance, Senex will further reduce the number of wells to be drilled at Atlas to 45 wells from 50 wells (previously reduced from 60 wells). Additional wells to maintain plateau production are to be drilled in the next campaign.

Senex expects to complete the current drilling campaign in the coming weeks, with final wells to be brought into production during June 2020. Atlas water infrastructure is also on schedule to commence commissioning and water intake in June, with completion of all works expected in early FY21. 
 
FY20 production and EBITDA guidance upgraded 

Following strong production performance across Senex’s Surat Basin assets, and assuming continued normal operations in the current pandemic environment, Senex has increased its full year FY20 production guidance to 2.0 – 2.1 mmboe (previously 1.8 – 2.0 mmboe). Senex has also increased its full year FY20 EBITDA guidance to $45 – 55 million (previously $40 – 50 million).

Comments from Managing Director and CEO

Managing Director and CEO Ian Davies said, “In October 2018, Senex reached the Final Investment Decision for our $400 million capital program in the Surat Basin. Less than two years later, the transformational Roma North and Atlas natural gas development projects have established Senex as an important producer of gas for the east coast market. 

“Today, together with our infrastructure partner Jemena, Senex has successfully constructed 56 terajoules a day of gas processing capacity, drilled 78 wells of the 80 well campaign, built a portfolio of high-quality domestic gas customers, and seen gas production increase rapidly to a current rate of more than 34 terajoules a day. 
 
“Our announcement today of an increase in full year FY20 production and EBITDA guidance further reinforces the underlying strength of our transformed east coast natural gas business and our ability to adapt and grow in the current lower oil price environment”,
Mr Davies said.

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In this space (increasing Australian domestic natural gas demand exposure), I hold COE, SXY & BPT.  I also hold WPL, but Woodside is mostly a gas exporter now, rather than a domestic supply story.  Have a look at the graphs of those companies and have a bo-peep at the levels they got down to in March, only two months ago.  And Yes, I was certainly buying in March!  COE (Cooper Energy) even gave us another chance to pick up their shares at similar levels in May (THIS month), but they have already rallied +18% from that 36 cps May low to close at 42.5c today.  If the long term value and price drivers still remain in place, be greedy when others are fearful.  Who was it who said that?  Probably Buffett.  And probably Ben Graham before him.

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#New Gas Sales Agreements
Last edited 2 months ago

14-May-2020:  Senex and CleanCo Queensland sign new gas sales agreement

Senex Energy Ltd (Senex, ASX: SXY) today announced it had agreed a further domestic gas sales agreement with power generator CleanCo Queensland for 2.55 petajoules (PJ) of natural gas.

Under the one-year agreement, Senex will supply CleanCo with 2.55 PJ of natural gas from Atlas, commencing 1 January 2021. Gas will be supplied at the Wallumbilla Gas Hub in Queensland at a fixed price in line with current market levels. 

CleanCo is the new Queensland Government-owned corporation focused on delivering affordable and reliable clean energy. Atlas gas will fuel Swanbank E, CleanCo’s highly efficient 385 MW gas-fired power station near Ipswich in south-east Queensland. Initial gas sales to CleanCo – the first from dedicated domestic gas acreage in Australia – have been made since December 2019. 

Managing Director and CEO Ian Davies said Senex is proud to be helping power homes and businesses throughout Queensland with cleaner energy.

“The increase in supply of Atlas gas to CleanCo is a great outcome for Queensland, enabled by the State Government’s policy to support the domestic market.

“Senex is continuing to negotiate gas sales agreements that will support jobs and regional economies as we partner with commercial and industrial customers for long-term and mutually beneficial relationships. 

“As strong demand for domestic gas supply continues, new gas sales agreements are being negotiated to further de-risk future Atlas revenue streams and strengthen overall business resilience,” Mr Davies said.

Senex has contracted more than 35 PJ of natural gas from Atlas (including potential contract volume expansions and term extensions). Atlas gas production for calendar year 2020 is fully contracted and 2021 expected production is more than 70% contracted. 

Senex has drilled 39 wells of the 50-well Atlas campaign, with Atlas gas production continuing to perform strongly at ~14 TJ/day. Total daily Surat Basin gas production is above 32 TJ and continues to increase towards initial nameplate capacity of 48 TJ/day (about 18 PJ/year).

--- click on link above for more ---

[Disclosure:  I hold SXY shares.]

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#Company Reports
Added 3 months ago

15-Apr-2020:  March 2020 Quarterly Report

Highlights  
Senex Energy Ltd (Senex, ASX: SXY) continues to record strong quarterly production growth as the execution phase of its transformational Surat Basin gas development projects nears completion. Highlights include:

  • Quarterly production up 31% to 589 kboe: Gas production up 61% to 422 kboe from continuing Surat Basin ramp-up and the first full quarter of production from the Gemba field in the Cooper Basin
  • Surat Basin gas production outperformance:  Roma North producing above nameplate capacity at ~18 TJ/day; Surat Basin production now >29 TJ/day and tracking towards initial nameplate capacity of 48 TJ/day
  • Surat Basin drilling program reduced to 85 wells (from 110) due to production outperformance: Roma North campaign reduced by 15 wells to 35 wells;  Atlas campaign reduced by 10 wells to 50 wells 
  • 67 wells of 85 well campaign now drilled: 58 wells brought on production with the remainder online in coming weeks
  • Senex to build, own and operate Atlas water management infrastructure: Eliminating ongoing water processing tolls and increasing operational flexibility
  • Broad ranging COVID-19 protocols implemented: Operations and work programs proceeding safely and with minimal disruption following swift implementation of broad ranging protocols
  • FY20 guidance reiterated: Full year production guidance of 1.8-2.0 mmboe; full year EBITDA guidance of $40-50 million 

Comments from Managing Director and CEO Ian Davies: 

“Against the backdrop of COVID-19 and lower oil prices, Senex has delivered another outstanding quarter highlighted by strong gas production growth and delivery of key project milestones.

“Our highest priority is always the safety and wellbeing of our employees, contractors and the communities in which we operate. Senex responded swiftly to COVID-19, with broad ranging protocols implemented. This has allowed operations and work programs to continue safely with minimal disruption.  

"Surat Basin gas production continues to ramp and has exceeded 29 TJ/day, with Roma North producing above nameplate capacity. Ramp-up is set to continue as new Atlas wells are brought online later this month.

“The Surat Basin drilling campaign has been reduced by 25 wells due to production outperformance, and we will be eliminating Atlas water processing tolls through building and operating our own water infrastructure.

“Senex’s diversified revenue streams, low-cost business model and free cashflow breakeven below US$30/bbl mean we are in a strong financial position to not only complete our transformational Surat Basin gas projects, but to thrive in a lower oil price environment”, Mr Davies said.

--- click on link above for more --- 

[Disclosure:  I hold SXY shares]

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#COVID-19 Response
Last edited 4 months ago
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#FY20 H1 Results
Added 5 months ago

21-Feb-2020:  FY20 half year results

FY20 half year results presentation

Appendix 4D and Half Year Report

Disclosure:  I hold SXY shares.  I like BPT, COE & SXY as exposure to Australian domestic east coast natural gas demand increasing over the next few years.  With so much gas now being exported overseas by the bigger players, those companies that supply the domestic market should benefit from improving demand and tighter supply.  Of the three, Senex (SXY) has performed worst over the past 12 months, trading sideways mostly, while both BPT (Beach Energy) and COE (Cooper Energy) had good years until recently (about 1 month ago) when oil and gas prices and the outlook for near-term demand for both deteriorated - mostly on the back of fears around the spread of the Covid-19 coronavirus and its impact on the global growth outlook.  However, as they say, this too will pass.  Looking out a little further, I still like all 3 of these gas companies, and I think SXY - as the underperformer thus far of the three - could outperform the other two over the next 12 months.

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#Media
Added 4 weeks ago

10-June-2020: www.energynewsbulletin.net/development/news: Senex takes a victory lap as Surat gas project complete

To see my straw on SXY's announcement to the ASX today about this, click here.

Senex takes a victory lap as Surat gas project complete

After almost two years Senex Energy is celebrating today as it has finally completed its $400 million, 80 well Surat Basin drilling campaign. 

Senex reached a final investment decision on the project in October 2018 after being awarded the acreage in 2017 under the Queensland government's first domestic acreage round.

[click on top link for more]

Disclosure:  I hold SXY (Senex Energy) shares.

Further Reading:  https://www.qld.gov.au/__data/assets/pdf_file/0020/108452/western-surat-gas-project-ias.pdf

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#ASX Announcements
Added 4 weeks ago

10-June-2020:  Senex completes $400m transformational Surat gas project

Senex completes transformational $400 million Surat Basin natural gas development project

Senex Energy Ltd (Senex, ASX: SXY) today announced the successful completion of its 100% owned Surat Basin natural gas development project, establishing Senex as an important supplier of gas to the domestic market.

Senex has now completed its 80 well Surat Basin drilling campaign, down from ~110 wells originally planned due to continued production outperformance.

In conjunction with its infrastructure partner Jemena, Senex has also successfully built and commissioned natural gas facilities at Roma North and Atlas, delivering greenfield gas processing infrastructure capacity of more than 20 petajoules (PJ) a year. 

Senex Managing Director and CEO Ian Davies said its Surat Basin natural gas development project was executed superbly, with strong support from partners and stakeholders.

“In October 2018, Senex reached its Final Investment Decision for this $400 million capital program. Less than two years later, Roma North and Atlas have been successfully delivered – an industry leading achievement and a credit to all involved.

“We are proud to have worked closely with our partners Jemena and Easternwell, landholders, community and other stakeholders to successfully develop these critical natural gas resources for the east coast market. 

“Further, we are appreciative of the strong policy settings of successive Queensland Governments, enabling the development of these valuable resources.

“With proved and probable (2P) natural gas reserves in excess of 600 PJ across our Surat Basin acreage, Senex will be delivering natural gas to the domestic market for decades to come,” Mr Davies said.

Roma North has been consistently producing above nameplate capacity at around 18 terajoules per day (TJ/day). Atlas production has exceeded 15 TJ/day and continues to increase steadily towards nameplate capacity of 32 TJ/day, with an additional 8 TJ/day of installed capacity available. Initial water treatment facilities at Atlas have been commissioned, with final construction completion expected in early FY21. 

--- ends ---

Disclosure:  I hold SXY shares.

Other recent announcements:

16-May-2020:  Roma North gas for domestic market. FY20 guidance upgrade

14-May-2020:  Senex and CleanCo Queensland sign new gas sales agreement

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#Investor Briefings
Added 4 months ago
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#ASX Announcements
Added 4 months ago

02-March-2020:  Surat Basin operations and hedging program update

Senex Energy Ltd (SXY) has successfully completed the current Roma North drilling campaign with industry leading cycle times and well costs achieved. Senex is in a very strong financial position with around two thirds of oil production hedged at US$70/bbl (A$95/bbl). 

Key points:

  • Current Roma North campaign completed; 35 wells drilled at industry leading cycle times and well costs. 
  • Easternwell Rig 27 re-mobilising to Atlas; drilling to re-commence this week with campaign to be completed by the end of FY20.
  • Surat Basin gas production continues to outperform and track towards initial plateau production of 18 PJ/year; number of wells required to reach initial plateau production under review with potential for reduction.
  • Strong financial position and oil revenue outlook; $123 million of cash reserves as at 31 December 2019 and around two thirds of oil production hedged at an average price of US$70/bbl (A$95/bbl).  
  • More than 300,000 barrels of FY21 oil production hedged at an average price of US$67/bbl (A$90/bbl). 

Managing Director and CEO Ian Davies said Senex’s work programs and project execution remain firmly on track despite a volatile market backdrop. 

“We are very pleased to have successfully completed the current Roma North drilling campaign. With production nearing the plant’s initial capacity of 16 TJ/day, we are currently reviewing requirements for future drilling.

“We are now focused on completing the Atlas drilling campaign by the end of FY20. Atlas production continues to ramp, with 95% of expected volumes for calendar year 2020 contracted to high quality customers at fixed prices.

“Senex is in a very strong financial position, with revenue well protected from oil price declines through a proactive and material oil hedging program strong fixed price gas contracts from Atlas,” Mr Davies said. 

--- click on link above for the rest of the announcement ---

Disclosure:  I do hold Senex Energy (SXY) shares.

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#Company Reports
Last edited 5 months ago

20-Aug-2019:  Senex have reported today, and also released a reserves statement and a corporate governance statement; all-up they've released 6 different items this morning - and they can all be reached from here:

https://www.senexenergy.com.au/investors/announcements/

The main three are:

FY19 Full Year Results Presentation

FY19 Full Year Results and Reserve Statement

FY2019 Annual Report

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https://www.senexenergy.com.au/

 

Disclosure:  I hold SXY shares.

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#ASX Announcements
Last edited 5 months ago

30-Jan-2019:  Senex Energy (SXY) have released their December 2018 Quarterly Report this morning - see here.

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#Company Presentations
Last edited 8 months ago

12-Nov-2018:  Senex has presented at the Morgans Energy Conference - see here

The presentation is titled:  "DRIVING GROWTH WITH GAS"

They have also announced today that construction has begun at their Roma North gas project - see here

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#Company Reports
Last edited 9 months ago

24-Oct-2018:  Senex Energy September 2018 Quarterly Report - see here.

28-Oct-2019:  Senex Energy September 2019 Quarterly Report - see here.

Meanwhile - for a good recent snapshot of SXY today - click here for their presentation at the Citi Investment Conference earlier this month (on 16-Oct-2019).

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