Written on the 24 February 2015 by Antony Scholefield


DIVERSIFIED energy company Senex (ASX: SXY) has recorded a half-year statutory loss of $65.9 million as it writes down the value of assets to reflect lower oil prices.

The company's underlying net profit after tax was $1.6 million for the six months to December 2014. It retains a cash balance of $74.9 million with no debt.

The statutory net result fell $91.5 million, from a $25.6 million profit during the same time period in 2013. The underlying net profit in that period was $31.8 million.

A non-cash impairment charge of $86.5 million reflects what Senex describes as a "conservative approach to managing its capital in the current volatile market conditions."

Amortisation and depreciation, reflecting the reduced value of assets, accounted for a further $13.2 million.

Managing director Ian Davies (pictured) says the write-downs should not affect current projects.

"We have acted sensibly to reduce operating costs and re-allocate capital spend, without impacting our capacity to progress our portfolio of growth projects," he says.

"During the half Senex successfully commenced gas production, with first commercial sales from our Hornet field in the Cooper Basin.

"We have bolstered our acreage position in the Surat Basin following the asset swap with the QGC JV, and stage one of our unconventional gas farm in with Origin Energy is taking shape."

The Cooper Basin is an oil- and gas-rich area that is mostly in Queensland but also extends into South Australia.

Similarly, two-thirds of the coal-producing Surat Basin is in Queensland, with one third in New South Wales.

Senex increased its net production by 14 per cent in the last six months of 2014, although revenue from ordinary activities fell by 17 per cent to $69.9 million.

The company has locked in a floor price of $68 per barrel for oil sales in the next six months.

Shares in Senex traded slightly higher following the half-year announcement.

The share price has trended upwards since the start of 2015, after falling from about 0.7c to 0.3c over the course of 2014.

It last traded at 0.337c.

Author: Antony Scholefield





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