Shares of Cooper Basin oil and gas producer Senex Energy Ltd (ASX: SXY) are today pushing higher, following weeks of share price falls.
Source: Google Finance
Alongside Senex, rivals such as Drillsearch Energy Limited (ASX: DLS), Santos Ltd (ASX: STO) and Beach Energy Ltd (ASX: BPT) have come under immense selling pressure as a result of the rapidly falling oil price. According to Bloomberg, the current Crude Oil (WTI) price is just $US62.92 per barrel, down from over $US100 in June.
Despite the weakening AUD providing some buffer on the spot price falls for Australian producers, share prices are under the pump.
As can be seen above, prior to the oil price fall, Senex shares were sitting comfortably around 70 cents, but today at 25 cents per share the market has clearly lost faith in the company's ability to weather a continued low oil price environment.
However this morning Senex released an operational update to the market, which was well received by investors. Its share price is up 4% in mid-afternoon trade.
In the update, Senex noted the first production from the Namur reservoir in the Martlet oil field and sustained gas production from the Hornet gas field.
The results "demonstrated material progress towards both the FY15 production targets and the longer term Growth Acceleration Strategy," according to managing director Ian Davies.
Earlier in the day, the company also said it'll be reviewing its spending program and, with no debt on the balance sheet, intends to retain its strong funding position. It noted it will not need to raise equity and was going into the reduced oil price environment with a strong cash position.
Foolish takeaway
A lot can change in just six months. Indeed I bought more shares in Senex right before it started falling. However with growing low cost production, no debt and a large amount of 2P reserves, I still think Senex offers the best value of the listed Cooper Basin oil and gas producers.
