Straws are discrete research notes that relate to a particular aspect of the company. Grouped under #hashtags, they are ranked by votes.
A good Straw offers a clear and concise perspective on the company and its prospects.
Please visit the forums tab for general discussion.
- Recent
- Votes
31-Mar-2021: SXY shares had a 1 for 8 share consolidation effective today, so although it might look like the share price rose by over 700%, it actually didn't.
If you held 40,000 share yesterday (Tuesday), they closed at 36c/share, so your position was worth $14,400. Today, you would instead own 5,000 shares worth $2.90 each, so the market is valuing that position today at $14,500, so in real terms SXY has actually risen today by a much more modest +0.7%.
[I hold Senex Energy (SXY) shares in my SMSF.]
22-Feb-2021: FY21 half year results and presentation plus Appendix 4D and FY21 Half Year Report
Senex Energy, which I hold in my SMSF, and which has the sexiest ticker code on the ASX (SXY) have released their results this morning, and I reckon the market likes them - they're up 6% as I type this. While their share price has been quite choppy, the overall trajectory has been north east since their March low, and I think they are on track to go past their October 2018 high (of just over 50 cps) during the next year or two. One of today's highlights is their announcement of the commencement of regular dividends plus a special dividend - see below:
Senex delivers strong production and earnings growth and commences dividend distributions
Senex Energy Limited (Senex, ASX:SXY) has today announced the commencement of dividend distributions to its shareholders at an initial rate of 1 cent per share per annum for FY21 (to be paid half yearly) and an additional 0.5 cent per share special dividend following completion of the Cooper Basin sale, representing an annualised dividend yield for FY21 of 4.3%*.
The determination of Senex’s inaugural dividend follows the successful delivery of its $400 million Surat Basin natural gas development projects, providing a step change in gas production, revenue and earnings.
FY21 half year results performance summary**:
- Natural gas production of 8.0 PJ (1.4 mmboe), up 271%;
- Sales revenue of $45 million, up 239%;
- Underlying EBITDA of $25 million, up $26 million;
- Net cash of $33 million***, up $78 million;
- Surat Basin gas reserves of 780 PJ, up 27%; and
- Dividends determined of 1 cent per share for the half year, franked to 97%.
A pre-recorded video presentation of Senex’s FY21 half-year results is available on Senex’s website and can be accessed here.
Commenting on the FY21 half year results, Senex Managing Director and Chief Executive Officer, Ian Davies said it has been an excellent start to FY21 with Senex delivering strong production growth, a material step change in earnings and cashflow and the disposal of our Cooper Basin business.
“Production in the Surat Basin now exceeds 50 TJ/day, or more than 18 PJ/year and equivalent to around 10 per cent of Queensland’s natural gas demand, with natural gas production in the half of 8.0 PJ exceeding total FY20 production, demonstrating the increase in gas field production performance.
“We have new investments underway to accelerate production from our extensive natural gas reserves position in the Surat Basin. We announced the Final Investment Decision for the expansion of Roma North natural gas production by 50% to 24 TJ/day (~9 PJ/year), with this low-cost, high-return and long-life investment being the first example of Senex’s high-quality investment opportunities to realise the 780 PJ of 2P reserves that we hold.
“Also announced in the half, the sale of our Cooper Basin business to Beach Energy for $87.5 million will provide additional strength to our balance sheet and bolster the cash flow resilience of our natural gas portfolio.
“On the back of our natural gas project delivery performance and resilient production and cashflow outlook, the Board has determined to accelerate commencement of dividend distributions to our shareholders, with the company determining to pay our inaugural interim ordinary dividend of 0.5 cent per share and a special dividend of a further 0.5 cents per share following completion of the Cooper Basin sale.
“Our long-term dividend policy will target a range of 20-30% payout of free cash flow.
“Looking forward we will continue to carefully assess further capital management initiatives along with the accelerated development of our low-risk, high-return organic growth opportunities to achieve our FY25 annual production target of more than 60 PJ per year”, Mr Davies said.
UPDATED FY21 GUIDANCE
Senex has now reached plateau production at its Roma and Atlas natural gas fields, and has finalised execution plans for the Roma North expansion project accelerating part of this FY22 work program into Q4 FY21. Accordingly, Senex FY21 guidance has been updated as follows:
- Natural gas production guidance narrowed to 17 – 18 PJ (2.9 – 3.1 mmboe), from 16.3 – 18.6 PJ.
- Capital expenditure guidance updated to $35 – 45 million, from $30 – 40 million. Sustaining capital expenditure estimates are unchanged.
- Free cashflow ($10 – 20 million) and Underlying EBITDA ($30 – 40 million) guidance remain unchanged, with the latter tracking to the top half.
DIVIDENDS
The Senex board has determined to pay to Senex shareholders an ordinary dividend of $0.005 per share fully franked (Interim Dividend). The Interim Dividend will be paid on 7 April 2021 (Dividend Payment Date), with a record date of 5 March 2021 (the Dividend Record Date).
In addition, the Senex board has determined to pay a special dividend of $0.005 per share franked at 93% (Special Dividend) conditional upon completion of the sale of the Cooper Basin business (as announced on 3 November 2020). Completion of the sale is expected to occur on 1 March 2021 and on that basis the Special Dividend will have the same Dividend Record Date and Dividend Payment Date as the Interim Dividend.
The Interim Dividend and Special Dividend amounts specified above are quoted on a pre-consolidation basis. If the share consolidation resolution is passed at the Extraordinary General Meeting scheduled for 18 March 2021, shareholders on the register at the Dividend Record Date would, on a post-consolidation basis, be entitled to eight (8) times the dividend amounts quoted above in respect of the reduced number of post-consolidation shares.
Notes:
- (*) At 30-day VWAP of $0.348, based on 1 cps ordinary dividend p.a. paid half yearly and 0.5 cps special dividend, before share consolidation.
- (**) Unless otherwise noted, all results are against pcp and stated on a “Continuing Operations” basis (i.e. exclude Cooper Basin business contribution).
- (***) Proforma, as of 31 December 2020, inclusive of $87.5 million proceeds from the Cooper Basin sale, before transaction completion adjustments.
--- Click on the links at the top for more ---
[I hold SXY shares in my SMSF, and they are also on my Strawman.com scorecard.]
05-Nov-2020: Senex growth transformation - Investor Briefing
Senex growth transformation: Investor Briefing
Senex Energy Limited (Senex, ASX:SXY) today announced its growth transformation is delivering balance sheet strength, cashflow resilience, dividends and production growth following the $87.5 million sale of its Cooper Basin business to Beach Energy and successful delivery of its $400 million Surat Basin natural gas development projects.
Senex today, via its Investor Briefing, outlined further details of its growth transformation through to FY25:
- Senex’s core focus is on cash generation, balance sheet strength, shareholder returns and low-risk highreturn growth;
- Sale of the Cooper Basin business to Beach Energy for $87.5 million provides cashflow stability for dividends and accelerated Surat Basin production growth;
- Following the Cooper Basin sale, Senex to fully de-lever to a proforma net cash position of ~$30 million ($155m cash on hand)*, with an ongoing leverage policy targeting 1.0x Net Debt:Adjusted EBITDA through the cycle;
- Annual EBITDA of $85-95 million and free cashflow of $40-60 million per annum from Foundation Asset Base**;
- Commencement of dividends from FY22 from strong and resilient natural gas production cashflows, with Senex’s dividend policy to target a 20-30% payout of free cashflow***;
- Targeting annual production of >10 mmboe (60 PJe) by end FY25 from best-in-class project execution.
Speaking at the Company’s Investor Briefing, Senex Managing Director and CEO Ian Davies said “The sale of our Cooper Basin business will strengthen our balance sheet and cashflow resilience, allowing us to accelerate production growth from our material Surat Basin natural gas asset position and commence dividend payments to our shareholders from FY22.
“Senex’s growth transformation has created a natural gas business with a robust balance sheet and a strong and growing production profile.
“Senex has more than 300 petajoules of natural gas contracted under firm contracts to domestic customers with strong fixed prices, and GLNG which features material downside protection to low oil prices with full upside participation to oil price recovery.
“Following successful delivery of our $400 million Surat Basin natural gas developments, we are uniquely positioned to increase supply of natural gas through our established hub-and-spoke infrastructure operating model,” Mr Davies said.
Notes:
- (*) As at 30 September 2020, on completion, and before transaction completion adjustments
- (**) Foundation Asset Base refers to Atlas gas assets at 12 PJ/year (32 TJ/day) nameplate capacity and Roma North gas assets at 9 PJ/year (24 TJ/day) nameplate capacity; plateau production and earnings targets expected during H1 FY22 following Roma North expansion
- (***) Free cashflow is Operating cashflow less principal payments for lease liabilities, less sustaining capital expenditure
The Investor Briefing webcast can be accessed via the Senex company page on the Open Briefing website: https://webcast.openbriefing.com/6690/. A recording of the webcast will be available via the same link.
A copy of the Senex Energy Investor Briefing slide pack is attached.
--- Please click on the link at the top for the full announcemet including the slide pack ---
[I hold SXY shares.]
03-Nov-2020: SXY: Senex announces sale of Cooper Basin business
Senex has agreed to sell their Cooper Basin assets to Beach Energy (BPT) for $87.5m in cash, which makes a lot of sense. I hold SXY shares, and I'm also a supporter of BPT, and often hold BPT, although not at this moment. Both BPT and SXY are on my Strawman.com scorecard.
26-Oct-2020: Senex and Alinta Energy sign new gas sales agreement
[I hold SXY shares.]
13-Oct-2020: September 2020 Quarterly Report plus Senex announces Roma North expansion FID
[I hold SXY shares. I prefer my energy stocks to produce natural gas, rather than oil, and SXY ticks that box. They also have good exposure to rising Australian east coast gas demand.]
22-Sep-2020: Senex to supply gas to Gladstone's Northern Oil Refinery
[I hold SXY shares.]
24-Aug-2020: FY20 Appendix 4E and Financial Report and FY20 full year results and outlook release and presentation
Senex Energy FY20 full year results and outlook
Senex Energy Ltd (Senex, ASX: SXY) today reported full year FY20 results, delivering its promised transformation into a material east coast natural gas producer with production and underlying EBITDA growth at the top end of upgraded guidance.
FY20 Highlights
- Senex transformation complete with $400 million Surat Basin gas development projects delivered; platform now in place to support material production expansion and acceleration from extensive gas reserves position
- Production up 73% to 2.1 mmboe, with Roma North gas production up 278% to 1.2 mmboe (7.2 PJ)
- Sales revenue up 28% to $120 million, underlying EBITDA up 51% to $53 million and operating cashflow up 16% to $52 million
- 2P oil and gas reserves up 19% to 134 mmboe following continued production outperformance
- Surat Basin 1P gas reserves up 108% to 210 PJ; 2P gas reserves up 21% to 739 PJ
Outlook
- FY21 to deliver continued strong growth in production, earnings and cashflow, with peak net debt of <$60 million (< 1x EBITDA) and a reduced free cashflow breakeven Brent oil price of <US$15/bbl
- Reflects a cash generative asset portfolio with resilient and diversified revenue streams
- FY22 Foundation Asset Base targets maintained despite lower commodity price outlook; targeting free cashflow of $70 – 90 million and deleveraging to a net cash position by the end of FY22
- Core focus remains on cash generation, shareholder returns and low-risk high-return growth
Managing Director and Chief Executive Officer, Ian Davies said Senex outperformed throughout FY20, delivering outstanding project, operating and financial results as the company continued its trajectory towards high-yielding free cashflow generation in FY22.
“Following the onset of COVID-19, Senex rapidly implemented broad ranging protocols and procedures to mitigate impacts of the pandemic. This ensured business continuity and uninterrupted operations throughout this critical period, while our large capital works programs continued on schedule.
“We also undertook decisive action to streamline operations which will deliver material and ongoing cost savings. Senex remains a highly cost competitive, agile and scalable business well positioned to deliver on its growth strategy.
“Our success in FY20 sees Senex’s transformation to a diversified oil and gas producer now complete. We have a low-cost business model with a diversified asset portfolio and material acceleration and expansion growth opportunities.
“Outstanding production performance in FY20 has re-set our expectations for FY22. We now target production of 3.6 – 4.1 mmboe from our Foundation Asset Base in FY22, up half a million barrels from our baseline guidance earlier this year and before any expansion opportunities.
“With production targets re-set and an ongoing focus on operating and cost efficiencies, Senex has maintained FY22 earnings and cashflow targets despite the lower commodity price outlook. We are targeting Foundation Asset Base underlying EBITDA of $100 – 110 million and free cashflow of $70 – 90 million in FY22.
“As always, our Balance Sheet remains strong, with $80 million of liquidity as at 30 June 2020, deleveraging underway and a targeted net cash position by the end of FY22. We have a resilient business model and expect a free cashflow breakeven of less than US$15/bbl in FY21.
“After an incredibly successful year, Senex has unquestionably delivered the foundations to achieve a stepchange in annual production, cashflow and earnings”, Mr Davies said.
--- click on link above for the full announcements --- [I hold SXY shares.]
15-7-2020: Senex Energy (SXY) June 2020 Quarterly Report
[I hold SXY shares]
14-7-2020: Senex delivers major Surat Basin gas reserves upgrade
Senex delivers major Surat Basin gas reserves upgrade following delivery of transformational gas developments
Senex Energy Ltd (ASX: SXY) today released its independently assessed estimates of reserves and contingent resources as at 30 June 2020, reporting a 21% increase in Surat Basin 2P gas reserves to 739 PJ following outstanding execution of its Surat Basin natural gas developments.
Excellent appraisal and development drilling results at Atlas have driven a 62% (90 PJ) increase in 2P gas reserves to 234 PJ, with continued Roma North production outperformance driving a 10% (25 PJ) increase in 2P gas reserves to 283 PJ. Other reserves estimate highlights include:
- Surat Basin 1P (proved) gas reserves up 109 PJ (108%) to 210 PJ
- Surat Basin 2P (proved and probable) gas reserves up 127 PJ (21%) to 739 PJ
- Surat Basin 3P (proved, probable and possible) gas reserves up 105 PJ (12%) to 995 PJ
- Cooper Basin 2P reserves replacement ratio of ~100% achieved; 2P reserves steady at 7.3 mmboe
- Total Senex 2P oil and gas reserves up 127 PJe (19%) to 781 PJe (134 mmboe) as at 30 June 2020
Senex Managing Director and CEO Ian Davies said Senex’s major Surat Basin reserves upgrade follows the successful delivery of its transformational natural gas developments.
“FY20 was a year focused on successful execution of our $400 million Surat Basin developments, which delivered outstanding project delivery performance, continued gas production outperformance, and now material upgrades in booked natural gas reserves.
“With gas processing infrastructure established and a growing reserves base, Senex has now successfully delivered on the foundations to achieve continued growth in production, earnings and cashflow from its valuable east coast Surat Basin natural gas position”, Mr Davies said.
--- click on link above the more ---
[I hold SXY shares]
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.
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
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
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.
--- ends ---
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.
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.]
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]
27-Mar-2020: Senex COVID-19 response and business update
June 2018:
- No net debt
- Good couple of years coming
- Good management
- Good exposure to east coast domestic gas supply (plenty of demand, and supply is needed)
- Looking at historicals doesn't paint a rosy picture for Senex, but looking forward - there are some real positives on the near/mid-term horizon.
- Recent poor performance has resulted in a company that has been sold down by the market.
- There is not a lot of the future upside priced in at this point, in my opinion.
- Senex is a smaller oil/gas play, mostly overlooked by the market, which looks cheap based on future production (next 3 years).
- Energy usually does well in the late stages of a bull market.
Disclosure: I hold SXY (Senex) shares.
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.
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.
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
---
https://www.senexenergy.com.au/
Disclosure: I hold SXY shares.
23-Jan-2020: December 2019 Quarterly Report
Also:
22-Jan-2020: Surat Basin update - Gas production reaches 20 TJ/day
17 June 2019: Senex and Jemena agree $50 million infrastructure deal
11-June-2019: Senex and O-I Australia agree domestic gas supply contract
Senex Energy Ltd (Senex, ASX: SXY) today announced it had agreed a domestic gas sales agreement for up to 10.5 petajoules (PJ) of natural gas with leading glass-packaging manufacturer O-I Australia.
Under the five-year agreement, Senex will supply O-I Australia with 1 PJ of gas a year commencing 1 January 2021 (5 PJ in total).
Further, O-I can elect to increase the total contract volume by up to an additional 1.1 PJ of gas a year over a 5 year term (up to 5.5 PJ in total) commencing no earlier than 1 January 2022 thereby providing O-I’s Australian East Coast manufacturing plants with additional gas supply certainty.
O-I manufactures and supplies glass containers to some of the biggest breweries and beverage suppliers in Australia. The company operates four plants across the east coast of Australia, including O-I’s South Brisbane plant that will consume gas from Project Atlas.
Gas will be supplied at the Wallumbilla Gas Hub in Queensland at a fixed price in line with current market levels, indexed annually.
Managing Director and CEO Ian Davies said Senex was proud to once again support local manufacturing, jobs and investment with the supply of Queensland sourced gas.
“We’re delighted to secure O-I Australia as a customer and support this leading glass-container manufacturer, employing 1050 people across Australia.
“This agreement marks the third domestic gas contract for Senex’s Project Atlas natural gas development, bringing the total volume under contract to over 23 PJ1. These contracted volumes are systematically de-risking future revenue from Project Atlas.
“With first gas from Project Atlas planned for late 2019, Senex expects to write additional new gas contracts with a range of gas buyers in the coming months,” Mr Davies said.
--- ends ---
Disclosure: I hold SXY (Senex Energy) shares in my super. I also have energy sector exposure via COE (Cooper Energy) and WPL (Woodside). All three companies are gas plays, rather than traditional oil company exposure. I am more bullish on gas than oil.
05-June-2019: Senex begins Surat Basin drilling campaign
28-Nov-2018: Senex has presented at the Goldman Sachs Australian Emerging Energy Day - see here.
28-May-2019: APPEA Conference Presentation
28-May-2019: Senex awarded Surat Basin domestic gas acreage
27-May-2019: Roma North gas facility - Senex starts commissioning
Recent ASX announcements made by Senex Energy (SXY) can always be accessed from here:
http://www.asx.com.au/asx/statistics/announcements.do?by=asxCode&asxCode=SXY&timeframe=D&period=M6
As of today (Wednesday 17th April 2019), their 3 most recent announcememts are all positive ones:
17-Apr-19: Senex agrees domestic gas supply contract with CSR
16-Apr-19: Senex awards major Surat Basin drilling contract
03-Apr-19: Civil works begin at Project Atlas gas processing facility
Disclosure: I hold SXY shares (the sexiest stock code on the ASX) in my main portfolio and in my SMSF. I also hold COE and WPL in the energy space, and I have been in and out of BPT over a number of years. I am particularly bullish on gas, both as an export (WPL) and increasing demand for Australian domestic-use gas on the east coast (and Melbourne) - which is where SXY and COE provide excellent exposure via emerging companies who are both going through a rapid growth phase.
Post a valuation or endorse another member's valuation.