- Senex Energy (SXY) says it well-placed to continue operations, amid the (COVID-19) and the lower oil prices
- The company said it is in a strong financial position from its low-cost oil and gas operations, with its Surat Basin program to be completed soon
- From February 2020, the company had strong liquidity with cash reserves of $105 million and drawn debt of $125 million
- Senex Energy is up 8.62 per cent and is selling shares for 15.8¢ apiece
Senex Energy (SXY) is in a well-placed position to deliver material operating cashflow in a lower oil price environment.
The company claims it is in a strong financial position from its low-cost oil and gas operations.
The oil and gas company generates revenue from fixed-price domestic gas contracts, oil-linked gas contracts and oil production with material downside hedging in place.
From February 2020, the company had strong liquidity with cash reserves of $105 million and drawn debt of $125 million.
CEO Ian Davies said that Senex’s resilient and low-cost business model and decisive actions amidst this crisis, position the company well to continue delivering material operating cashflow in a lower oil price environment.
“Senex is in a strong financial position to complete our transformational Surat Basin gas projects and begin generating material free cash flow,” he said.
“Our low-cost operating model, diversified revenue streams and 100 per cent operated asset position provide full discretion in respect of growth capital expenditure, and we will continue to be very disciplined in our approach,” he added.
The company reported there is no change to the expected 2020 financial year production of 1.8-2 million barrels of oil equivalent and expected earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $40-$50 million.
Senex said its Surat Basin work program is to be completed in the coming months.
The Easternwell Rig 27 returned to Atlas in early March and has drilled and completed four wells.
Gas production in the Surat Basin continues to perform well as Roma North and Atlas production ramps towards the initial capacity of 48 terajoules (TJ) per day.
“We remain focused on the safety and well-being of our staff, contractors and communities as our operations contribute to the ongoing vital energy needs of our customers and the east coast gas market”, Ian said.
Senex Energy is up 8.62 per cent and is selling shares for 15.8¢ apiece at 3:20 pm AEDT.