SENEX HALVES LOSS DESPITE OIL DOWNTURN
Written on the 23 February 2016
OIL and gas explorer Senex Energy (ASX:SXY) has halved its first half loss amid volatile trading conditions in the resources sector.
The Brisbane-based business posted a net loss of $27.1 million for the half year ending December, down 59 per cent compared to the previous period.
The result accounts for a $38 million gain on the sale of its Maisey block in Queensland, which was offset by a $69.7 million impairment relating to Cooper Basin exploration assets.
The writedown was realised through a series of strategic transactions in the Surat Basin with neighbouring natural gas producers QGC and GLNG.
Net profit is up 225 per cent to $5.2 million on an underlying basis, while revenue decreased 47 per cent to $36.8 million.
Senex managing director Ian Davies (pictured) says the company's strong financial position and low cash cost profile bolstered performance despite the oil downturn.
He says Senex kicked off the year with $100 million cash on hand and no debt, as well as further cost cuts to support profit margins.
"The focus of the Senex team is on building a robust oil and gas business that not only survives the current downturn but comes out the other end stronger and healthier," Davies says.
"We are continuing to progress our growth projects at the same time as maturing our portfolio of exploration assets to position the company strongly for an oil price recovery."
Senex reported an operating cost per barrel of $28 against an average received oil price of $71 per barrel in the first half. The company has locked in a floor price of $72 a barrel for oil sales in the second half.
Davies says combined with a lower average realised oil price, the company will continue to explore strategic partnerships to boost its bottom line.
"Senex remains committed to delivering growth for shareholders and we demonstrated this in the strategic transactions agreed with GLNG during the period," he says.
"These transactions unlock material shareholder value and bring us a further step towards commercialisation of our Western Surat Gas Project.
"We will continue to invest in the right opportunities within our business and externally, where they align with our strategy and meet our economic criteria."
The company will continue to progress its unconventional gas project with Origin Energy and Murta Formation tight oil project with Halliburton.