The Senex Energy Ltd (ASX: SXY) share price soared 8% higher today to close at $0.27 following an update to the market on drilling at its Roma North location.
Senex Energy is an Australian oil and gas exploration and production company, operating in Queensland's Surat Basin and South Australia's Cooper Basin.
What did Senex Energy announce?
This morning, Senex Energy announced that it had successfully completed its current Roma North drilling campaign. This campaign saw 35 wells drilled while also successfully managing to achieve industry-leading cycle times and well costs.
Additionally, the company announced that drilling is scheduled to re-commence this week at Easternwell Rig 27. With this, Senex Energy is focused on completing the Atlas drilling campaign to be completed by the end of FY20.
Senex Energy further revealed that the company's gas production at the Surat Basin is continuing to outperform and is tracking towards initial plateau production of 18 petajoules (PJ) per year.
The company believes it is currently sitting in a very strong financial position, noting that around two thirds of its oil production is currently hedged at an average price of US$70/barrel (A$95/barrel). Additionally, the company had $123 million of cash reserves on its books at the end of last year.
Senex noted that its work programs and project execution remain firmly on track despite recent market volatility.
Commenting on today's announcement, Managing Director and CEO Ian Davies said:
"We are very pleased to have successfully completed the current Roma North drilling campaign. With production nearing the plant's initial capacity of 16 TJ/day, we are currently reviewing requirements for future drilling."
"Senex is in a very strong financial position, with revenue well protected from oil price declines through a proactive and material oil hedging program strong fixed price gas contracts from Atlas," he added.
Davies also noted that Atlas production continues to increase, with 95% of expected volumes for 2020 contracted to customers at fixed prices.
Previous 1H20 results announcement
Recently on 21 February, Senex Energy released its first-half results for the six months to 31 December 2109. In these results, the company revealed that first-half oil and gas production was up 40% to 779 kilo barrel of oil equivalent (kboe). Meanwhile, Senex's underlying earnings before interest, tax, depreciation, amortisation, and exploration expense (EBITDAX) was up by 54% to $24 million. The company's operating cashflow came in 31% higher at $18 million.
While this appeared to be a solid result, it seems to have fallen short of the market's expectations. The Senex share price fell 2.86% lower on the day of reporting and 28.57% last week amidst the broader ASX weakness.
