The Senex Energy Ltd (ASX: SXY) share price is on the rise, despite most ASX shares spending the day in the red.
This follows the energy producer’s positive announcement during early morning before market open.
At the time of writing, Senex shares are up 2.33% to $3.295, while the All Ordinaries Index (ASX: XAO) is down 1.67% to 7,677 points.
What did Senex announce?
Investors are sending the Senex share price higher regardless of the overall negative market sentiment today.
According to its release, Senex advised that it has entered into a new gas sales agreement with New Century Resources Ltd (ASX: NCZ).
Established in 2010, New Century Resources is an Australian base metal producer operating the Century Mine in Queensland. The company mines and produces coal, zinc, and other minerals, whilst providing mining services such as plant operations, drilling, dewatering, and project management.
Senex will provide around 7 petajoules of natural gas to New Century at the Diamantina Power Station in Mount Isa. This will be used to generate enough power required to operate the Century Mine. One petajoule is equivalent to powering 19,000 homes for an entire year, or almost 100,000 dwellings with 5.1 petajoules.
The Diamantina Power Station is owned and operated by APA Group (ASX: APA).
Under the terms of the contract, the gas supply will be at a fixed price, in line with current market levels.
Senex will also supply another 1 petajoule of natural gas by mid-2022 in support of material increases in production levels.
The agreement is for a 3-year term and is scheduled to commence on 1 January 2022.
Senex managing director and CEO, Ian Davies noted the proud achievement of supplying gas to its regional Queensland customer, saying:
Century Mine generates significant state royalties and export earnings and is a critical project in the Queensland Government’s Strategic Blueprint for the North West Minerals Province.
Senex looks forward to building another strong, long-term and mutually beneficial relationship that supports jobs, the economy and helps meet Australia’s energy demand as it transitions to a lower carbon future.
About the Senex share price
The Senex share price has been gradually trekking higher over the past 12 months, up almost 40%. The company’s shares hit a multi-year high of $3.64 cents in June before some profit-taking swooped in.
Based on today’s price, Senex commands a market capitalisation of around $606 million and has 184 million shares outstanding.
The post Why the Senex (ASX:SXY) share price is pushing higher today appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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