Australia's Senex Energy Manages to Cut FY 2016 Loss

Australia’s Senex Energy has managed to reduced its loss for the fiscal year 2016 that ended on June 30.

The Brisbane based company on August 23 reported a net loss after tax of A$33.2mn (US$25.26mn) in FY 2016. This is a sharp improvement over FY 2015 when the company reported a loss of A$80.6mn. Sales revenue in FY 2016 was down 40% to A$69.3mn, on lower volumes and lower oil prices received.

Senex recognised A$38.2mn gain on sale of the Maisey block to Santos GLNG in the Surat Basin, offset by a non-cash impairment of A$69.7mn recognised in the first half on some of its longer-dated Cooper Basin exploration assets.

Although Australian energy companies such as Santos, Origin and Woodside have had a terrible result season, they have managed to significantly improve their operational efficiencies over the past year. Senex too has been able to cut operating cost by 14% to $28/barrel. More good news is that company’s 2P oil and gas reserves were up 15% to 83.4mn barrels of oil equivalent (net of the Maisey block sale).

                                                                                                        Senex at the recent APPEA conference in Brisbane (Credit: Senex)

Outlook for FY 2017, focus on gas

Senex derives most of its revenue from oil but its focus is shifting towards gas. Its largest growth project, the Western Surat Gas project in Queensland's Surat Basin, is appraisal ready and the first well is expected to be online by the end of 2016. It has a binding, 20-year agreement with the Santos-led GLNG project to supply gas from Western Surat Gas project.  

The Vanessa gas field in Cooper basin is anticipated to be online in Q3 FY 2017, following infrastructure upgrades. Senex will deploy additional capital to further unconventional gas opportunities in Cooper Basin. 

The company has provided a capital expenditure guidance of A$60mn to A$70mn, with potential for further deployment of capital in the Cooper Basin in the event of a sustained oil price recovery.

Senex has issued a lower production guidance for FY 2017 of between 800,000 and 1,000,000 boe, but says it is in a position to increase production if oil prices improve.

Shardul Sharma