Australian Senex Embarks on Fund Raising

Australian Senex Energy has embarked on fund raising and is offering a A$40mn (US$30.5mn) share purchase plan for its existing shareholders at a discount to market price.

“Last week we announced a strategic arrangement with EIG which will provide Senex with the strength and momentum to address substantial opportunities in the east coast gas market. Today we offer shareholders an opportunity to participate in the value to be created by this strategic arrangement,” Senex managing director and CEO Ian Davies said February 8.

Senex February 1 said it has brought in US private equity fund EIG Global Energy Partners as a "substantial shareholder." The two will work to establish a funding model to accelerate development of the Western Surat Gas project, Senex’s flagship coalbed methane (CBM) scheme, in Queensland.

Earlier that week, Senex had conducted a raising of about A$55mn via a placement to certain EIG-managed funds and other institutional investors.  

Under the current share purchase plan, each eligible Senex shareholder will have the opportunity to subscribe for up to A$15,000 of new Senex shares, subject to scale back, without incurring brokerage or transaction costs. The issue price of the new Senex shares under the plan will be the lesser of the issue price under the institutional placement and a 5% discount to the volume weighted average price of fully paid ordinary Senex shares traded on ASX over the five trading days up to, and including, the last day of the offer period.

The company plans to use the funds to progress and accelerate development of the Western Surat Gas project, maximising the value of Senex’s material gas reserves in the Surat Basin, exploit Senex’s large acreage position in the Cooper Basin to support building a material gas business and increasing oil production and pursue growth opportunities to deliver gas into the undersupplied east coast gas market.

Shardul Sharma