SENEX POWERS THROUGH DOWNTURN
Written on the 23 August 2016 by Laura Daquino
SENEX Energy (ASX: SXY) is still digging red, but the oil and gas company has vastly improved on its loss last year.
The Brisbane business recorded a statutory net loss of $33.2 million for FY16, taking into account significant one-offs incurred during the first half.
Senex believes its progress makes for a 'strong defensive response to volatile market conditions', improving on its $81 million loss last year.
The oil price plummeted to a 13-year low during this reporting period.
Senex is operating from a strong financial position, holding $102 million in cash and $180 million in total liquidity.
The company recognised a $38.2 million gain on the sale of Maisey block to Santos GLGNG in the Surat Basin, but this was offset by a non-cash impairment of $69.7 million in the first half.
"Oil production was solid given the low level of investment, and was delivered at our lowest ever operating cost. Combined with a well-timed hedging program we maintained healthy margins from oil sales," says Senex managing director and CEO Ian Davies (pictured).
"As a business we acted decisively to minimise capital expenditure throughout the year, and focus our resources on creating internal efficiencies to set stronger foundations for recovery and growth."
Senex also made major progress with its Western Surat Gas Project, which is now appraisal ready and on-ground civil works have commenced. The 20-year binding gas sales agreement signed with Santos GLNG at the beginning of the year has underwritten and de-risked the large project.
Davies says the company is entering 2017 well-equipped, having made material improvements during the downturn.
"This will be a foundation year for future growth and our business priorities have been set accordingly," he says.
"Senex has a differentiated investment proposition and is strongly positioned for growth."
Senex's share price has gained almost 83 per cent on the ASX this year, now trading at around 26c.