Senex Energy today reported full year FY20 results, delivering its promised transformation into a material east coast natural gas producer with production and underlying EBITDA growth at the top end of upgraded guidance.

FY20 Highlights

• Senex transformation complete with $400 million Surat Basin gas development projects delivered; platform now in place to support material production expansion and acceleration from extensive gas reserves position
• Production up 73% to 2.1 mmboe, with Roma North gas production up 278% to 1.2 mmboe (7.2 PJ)
• Sales revenue up 28% to $120 million, underlying EBITDA up 51% to $53 million and operating cashflow up 16% to $52 million
• 2P oil and gas reserves up 19% to 134 mmboe following continued production outperformance
• Surat Basin 1P gas reserves up 108% to 210 PJ; 2P gas reserves up 21% to 739 PJ

Outlook

• FY21 to deliver continued strong growth in production, earnings and cashflow, with peak net debt of <$60 million (< 1x EBITDA) and a reduced free cashflow breakeven Brent oil price of <US$15/bbl
• Reflects a cash generative asset portfolio with resilient and diversified revenue streams
• FY22 Foundation Asset Base targets maintained despite lower commodity price outlook; targeting free cashflow of $70 – 90 million and deleveraging to a net cash position by the end of FY22
• Core focus remains on cash generation, shareholder returns and low-risk high-return growth

Managing Director and Chief Executive Officer, Ian Davies said Senex outperformed throughout FY20, delivering outstanding project, operating and financial results as the company continued its trajectory towards high-yielding free cashflow generation in FY22.

“Following the onset of COVID-19, Senex rapidly implemented broad ranging protocols and procedures to mitigate impacts of the pandemic. This ensured business continuity and uninterrupted operations throughout this critical period, while our large capital works programs continued on schedule.

“We also undertook decisive action to streamline operations which will deliver material and ongoing cost savings. Senex remains a highly cost competitive, agile and scalable business well positioned to deliver on its growth strategy.

“Our success in FY20 sees Senex’s transformation to a diversified oil and gas producer now complete. We have a low-cost business model with a diversified asset portfolio and material acceleration and expansion growth opportunities.

“Outstanding production performance in FY20 has re-set our expectations for FY22. We now target production of 3.6 – 4.1 mmboe from our Foundation Asset Base in FY22, up half a million barrels from our baseline guidance earlier this year and before any expansion opportunities.

“With production targets re-set and an ongoing focus on operating and cost efficiencies, Senex has maintained FY22 earnings and cashflow targets despite the lower commodity price outlook. We are targeting Foundation Asset Base underlying EBITDA of $100 – 110 million and free cashflow of $70 – 90 million in FY22.

“As always, our Balance Sheet remains strong, with $80 million of liquidity as at 30 June 2020, deleveraging underway and a targeted net cash position by the end of FY22. We have a resilient business model and expect a free cashflow breakeven of less than US$15/bbl in FY21.

“After an incredibly successful year, Senex has unquestionably delivered the foundations to achieve a stepchange in annual production, cashflow and earnings”, Mr Davies said.

FY21 Guidance

• Production: 3.2 – 3.6 mmboe
• Underlying EBITDA: $65 – 75 million
• Capital expenditure: $40 – 50 million
• Free cashflow: $20 – 30 million
• Depletion, depreciation & amortisation: <$15/boe
• Free cashflow breakeven: <US$15/bbl

KeyFacts Energy: Senex Australia country profile