Senex Energy Limited, strengthened balance sheet

Team Veye | 23 Feb 2021 ASX - SXY
Senex Energy Limited, strengthened balance sheet

Senex Energy Limited (ASX: SXY)

Senex delivers strong production and earnings growth and commences dividend distributions

Senex Energy Limited (Senex, ASX: SXY) on 22 February 2021 announced the commencement of dividend distributions to its shareholders at an initial rate of 1 cent per share per annum for FY21 (to be paid half yearly) and an additional 0.5 cent per share special dividend following completion of the Cooper Basin sale, representing an annualised dividend yield for FY21 of 4.3%.

(Graphic Source – Company Reports)

FY21 half year results performance summary:

  • Natural gas production of 8.0 PJ (1.4 mmboe), up 271%;
  • Sales revenue of $45 million, up 239%;
  • Underlying EBITDA of $25 million, up $26 million;
  • Net cash of $33 million, up $78 million;
  • Surat Basin gas reserves of 780 PJ, up 27%; and
  • Dividends determined of 1 cent per share for the half year, franked to 97%.

(Chart source: TradingView)

Updated FY21 Guidance

Senex has now reached plateau production at its Roma and Atlas natural gas fields and has finalised execution plans for the Roma North expansion project accelerating part of this FY22 work program into Q4 FY21. Accordingly, Senex FY21 guidance has been updated as follows:

  • Natural gas production guidance narrowed to 17 – 18 PJ (2.9 – 3.1 mmboe), from 16.3 – 18.6 PJ.
  • Capital expenditure guidance updated to $35 – 45 million, from $30 – 40 million. Sustaining capital expenditure estimates are unchanged.
  • Free cashflow ($10 – 20 million) and Underlying EBITDA ($30 – 40 million) guidance remain unchanged, with the latter tracking to the top half. (Data Source – Company Reports)


Veye’s Take

Senex delivered strong production growth, a material step change in earnings and cash flow. Senex’s inaugural dividend followed the successful delivery of its $400 million Surat Basin natural gas development projects, providing a step change in gas production, revenue and earnings. The sale of its Cooper Basin business to Beach Energy for $87.5 million will provide additional strength to its balance sheet and bolster the cash flow resilience of its natural gas portfolio. The stock has become bullish on both daily/monthly t/f. After taking the support of the middle band of the Bollinger, it is making an upside move. It faces resistance at $0.365-$0.370 above which it can have the potential for significant growth. Veye maintains a "Hold” on “Senex Energy Ltd” at the current price of $0.355


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