The Senex Energy Ltd (ASX: SXY) share price has been a standout performer on the All Ordinaries index on Tuesday.
In afternoon trade the Australian oil and gas exploration and production company's shares are up over 10.5% to 31.5 cents.
Why is the Senex share price zooming higher?
The catalyst for today's gain appears to be the release of a positive broker note out of Credit Suisse in relation to Senex's announcement on Monday.
In case you missed it, on Monday Senex revealed that it has agreed to sell its Roma North natural gas processing facility and pipeline to major energy infrastructure operator Jemena for $50 million. It also revealed that the two parties have entered into a long-term gas tolling agreement.
Under the terms of the agreements, Jemena will take ownership of the facility and pipeline on the achievement of agreed performance tests, expected in September 2019. It will then process and transport natural gas from Senex's Western Surat developments to market under a long-term gas tolling arrangement.
Analysts at Credit Suisse were pleased with the agreement and believe it will strengthen its balance sheet and add a level of protection from lower oil prices.
And although it has downgraded its earnings estimate to reflect the toll agreement, it has upgraded its shares from a neutral rating to an outperform rating.
The broker has also lifted the price target on Senex's shares up to 37 cents, which implies potential upside of over 17% over the next 12 months, even after accounting for today's leap higher.
Credit Suisse isn't the only broker that is positive on Senex.
A note out of Morgans this morning reveals that its analysts have retained their add rating and increased their lofty price target to an even loftier 55 cents.
Its analysts believe this deal removes the risk of the company requiring additional capital and feels the market has undervalued Senex's organic growth prospects.
Elsewhere in the energy sector, Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) shares have pushed higher despite oil prices pulling back overnight.
