Australian oil and gas explorer and producer Senex Energy Ltd's (ASX: SXY) share price gained 17.4% in July, closing the month at 27 cents per share. That far outpaced the gains of the broader All Ordinaries Index (ASX: XAO), which ended last month up 0.9%.
It's been rocky
The Senex Energy share price sank by 63% from 21 February through 23 March when oil prices tumbled because of the global COVID-19 outbreak, although the company rebounded well before crude hit its own low. Brent crude oil plummeted 68% from 20 February before hitting a low of US$19.33 (AU$26.85) per barrel on 21 April.
Since its 23 March low, Senex Energy's share price rebounded a whopping 108% by 31 July.
Despite that phenomenal surge, year-to-date, the company is still down 22% in trading.
What does Senex Energy do?
Senex (formerly known as Victoria Petroleum NL) is an Australian oil and natural gas explorer and producer. It operates in leading onshore energy regions in the Surat and Cooper Basins. The company is based in Brisbane and also has office locations in Roma, Wandoan and Adelaide.
Senex listed on the ASX in 1984.
Why did the Senex Energy share price rise again in July?
There's no way around it. When you're an oil and gas producer, your share price is closely tied to the price of energy.
The Senex Energy share price almost certainly benefited from the 4.3% gain in Brent crude prices in July. More importantly, Brent crude prices rebounded 133% since the 21 April low, which continued to offer major tailwinds to energy stocks.
Senex also reported a major Surat Basin gas reserves upgrade on 14 July. The following day, the company released a positive quarterly report for the period ended June 2020.
The report indicated total production increased 20% compared to the previous quarter. Senex's total sales volume also increased 4% while revenue climbed 1%.
The report highlighted how Senex's diversified revenue streams and low-cost model enabled the company to deliver operational cash flows despite the low oil prices. Pre-existing agreements and a hedging program helped offset some of the burden from the falling crude prices.
Senex forecast its earnings before interest, taxation, depreciation, and amortisation (EBITDA) would come in on the higher end of its $45–$55 million guidance range for the 2020 financial year.
Senex Energy's share price gained 15% in the five trading days following the release of the quarterly report.
