Senex Energy Ltd (ASX:SXY) released its latest quarterly report, and numbers reveal positive financial performance from Q1 with indication of production growth from its Surat Basin natural gas assets.
On the update, Managing Director and CEO Ian Davies, commented: “Senex has achieved a significant milestone with natural gas production…”
Senex currently holds a number of natural gas developments – namely, Project Atlas and Roma North – in the Surat Basin, an onshore energy-producing region of Australia’s east coast.
Production rates reached 50 TJ/day (>PJ/year) in the Surat Gas Basin, with Atlas enjoying a daily rate beyond 30 TJ after quarter end.
Surat Gas production jumped 16% to 4.3PK as Atlas ramp-up continued with production increasing by 31%, a marked 225% raise relative to the previous December quarter.
Similarly, Senex saw revenue increases by 26% to $27.9 million due to higher production volume and improved realised pricing for natural gas production in Roma North.
“This milestone follows another impressive quarter of production and sales revenue growth, the sale of our Cooper Basin business to Beach Energy for $87.5 million, and the signing of additional domestic gas customer contracts,” Davis added.
In November 2020, Senex announced the sale of its South Australian Cooper Basin assets to exploration and production company Beach Energy (ASX:BPT) for $87.5 million cash consideration.
With free cash flow generation from the sale, Senex will have more financial leeway to accelerate the development of its Surat Basin assets.
Senex is currently developing its extensive 2P reserves position of 780 PJ as part of a five-fold growth strategy to increase annual production to >10mmboe (60 PJe) by the end of FY2025.
“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 PJ/year.”
Senex is also eyeing expansion for its Roma North Project to 24 TJ/day.
The expansion is expected to come online by Q1 FY22, alongside “further production expansions” at both Roma North and Atlas within the FEED phase.