- Over the December quarter, Senex Energy (SXY) reported a 16 per cent increase in total gas production to 4.3 petajoules from the Surat Basin in Queensland
- It also reported a 21 per cent quarterly increase in total sales volume which is attributed to a production increase from the Atlas block
- Project Atlas is the first natural gas acreage in Australia which is supplying the east cost market with electricity
- Overall, gas production at the Surat Basin reached 50 terajoules per day, or more than 18 petajoules per year which equates to around 10 per cent of Queensland’s natural gas demand
- In terms of sales revenue, Senex reported $27.9 million which is a 26 per cent increase from the previous quarter
- Significantly, Senex sold its Cooper Basin assets to Beach Energy (BPT) for $87.5 million
- The deal allows the energy stock to focus on the Surat Basin and the sale is expected to be completed this quarter
- At the end of the quarter, Senex had strong liquidity and $58 million in cash reserves
- Senex is trading in the grey at 36.5 cents
Over the December quarter, Senex Energy (SXY) reported a 16 per cent increase in total gas production to 4.3 petajoules from the Surat Basin in Queensland.
Surat Basin
Of this, it sold a total of four petajoules in the December quarter — a 21 per cent increase from the September quarter. This growth is largely due to an increase in production from the Atlas block as the field continues to ramp up towards an initial nameplate capacity of 32 terajoules per day and 18 petajoules per year.
Pleasingly, daily production at Atlas reached 30 terajoules per day just after the end of the quarter.
Significantly, Project Atlas is the first natural gas acreage in Australia dedicated to supplying domestic customers with electricity.
In terms of sales revenue, Senex reported $27.9 million which is a 26 per cent increase from the previous quarter. The increase is due to higher production and improved realised pricing for oil-linked natural gas production from Roma North which is also located in the Surat Basin.
On October 13, the oil and gas company announced a final investment decision (FID) for the expansion of natural gas production from Roma North by 50 per cent to 24 terajoules per day, or nine petajoules per year. This is expected to be online by the first quarter of the 2022 financial year.
However, Senex has commenced front-end engineering and design (FEED) activities to expand the Roma North acreage and reach a FID decision by the first half of FY22 and a target online date in the first half of FY23.
Overall, gas production at the Surat Basin reached 50 terajoules per day which is a significant milestone for the company.
“Senex has achieved a significant milestone with natural gas production reaching 50 terajoules per day, or more than 18 petajoules per year, equivalent to around 10 per cent of Queensland’s natural gas demand,” Managing Director and CEO Ian Davies said.
Capital expenditure (CAPEX) from continuing operations came in at $8.1 million which is a 23 per cent increase to the previous quarter. The increase in CAPEX reflects the cost of development work for the Roma North and Atlas expansions.
Cooper Basin sale
On November 3, Senex entered a binding agreement with ASX 200-lister, Beach Energy (BPT), to sell its South Australian Cooper Basin assets for $87.5 million.
The energy stock’s motivation behind the sale was to focus on its Surat Basin assets and be in a stronger position to be a significant supplier of natural gas to the east coast market.
The sale is expected to be completed before the end of this quarter.
At the end of the December quarter, Senex had strong liquidity and $58 million in cash reserves along with net debt of $52 million.
“Looking forward, we continue to aggressively pursue the development of our low-risk high-return organic growth opportunities as we progress towards our FY25 annual production target of 60 petajoules per year,” Ian concluded.
Senex is trading in the grey at 36.5 cents at 3:29 pm AEDT.