Brisbane-based Senex Energy’s sales s revenue for full year FY16 was AU$69.3 million, down from $115.9 million in FY15, reflecting lower sales volumes and lower oil prices.
Total full year oil production of 1.0 MMboe was 26% down on the previous year, reflecting natural field decline and a limited number of new wells brought online due to reduced capital investment.
Sales revenue for Q4 2016 decreased by 6% to $15.7 million, compared to Q3 2016; and sales volumes for the three months to June was 210,000 bbl, down 13%.
Senex said capital expenditure for the June quarter mainly related to preparatory work for the Western Surat Gas project FY17 appraisal program and full field development planning. FY16 capital expenditure was $27.8 million, 66% lower than FY15, and in line with guidance of $25 - $30 million.
The company is entering FY17 with total liquidity of $180 million at 30 June 2016, comprising $102 million of cash reserves, and $77 million of undrawn debt. Total liquidity increased from $129 million at 30 June 2015, comprising $49 million of cash and $80 million of undrawn debt.
Senex has allocated capital expenditure guidance of $60 -$70 million, and is targeting net production of 800,000 – 1,000,000 boe in FY17. The firm will also commence the Western Surat Gas project appraisal, aiming to bring wells online by end 2016.
“Our focus for FY17 is on the company’s major growth project in the Surat Basin, where we commence appraisal in parallel with full field development planning,” said Senex managing director, Ian Davies.
“The Cooper Basin remains core to Senex’s growth strategy, and in line with a more optimistic macro outlook we have planned for a measured increase in work activity this year. We look forward to further increasing capital deployment as the oil pricing outlook improves.”
Ian said over the last 18 months, their company have demonstrated the capacity to deliver in a tough environment. “We acted quickly to reduce operating costs and capex, strengthened our balance sheet and remained true to our strategy,” he said.
“At the same time we have made significant progress on the Western Surat Gas Project, our most material, near term growth project. As the operating environment improves we remain committed to delivering profitable growth for shareholders.”
FY17 work program
The 100% owned Western Surat Gas project in the Suran Basin represents a near term opportunity for Senex to develop a material revenue stream from a large and low risk gas resource. Access to infrastructure and the global liquefied natural gas (LNG) market have been established through a binding 20 year gas sales agreement with the Santos GLNG project.
During FY16, Senex completed pre-works for the appraisal program to begin, including subsurface, surface and stakeholder activities. Senex plans to invest $30 - $35 million on appraisal activities in FY17, involving production testing wells on the Glenora and Eos blocks, and the construction of associated gas and water infrastructure.
The firm expects to have the first of these wells online by end 2016, with the reservoir and cost data generated to further inform the full field development plan. Senex is currently progressing a raw gas sales agreement with GLNG which would see appraisal gas commercialized as well.
In the Cooper Basin, the firm expects to deliver total production of 800,000 – 1,000,000 boe in FY17, and anticipates that the Vanessa gas field will be online in Q1 FY17. The firm plans to invest $30 - $35 million on an expanded program of exploration and development activities during FY17. A minimum of six wells will be drilled.
Senex said it will also continue to drive western flank secondary recovery opportunities and Murta tight oil growth projects on this basis. Senex as operator with Origin Energy will progress their material unconventional gas exploration project in FY17, deploying between $25 - $45 million on the work program.
This will involve extended production testing the two gas exploration wells drilled in the southern area during FY16, as well as drilling a high-impact gas exploration well in the northern area in Q2 FY17.
Image: Ian Davis / Senex
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