Facebook
Twitter
LinkedIn
Instagram
Youtube

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

Disclaimer

Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.