The Senex Energy Ltd (ASX: SXY) share price is on the move today, up 8% in early afternoon trading.
The share price gains follow the company’s results for the financial half-year ending 31 December (H1 FY21).
What did Senex Energy report?
In today’s ASX announcement, Senex Energy reported it has successfully delivered on its $400 million Surat Basin natural gas development projects. The company credits these projects with the significant increases in its gas production, revenue and earnings.
Senex revealed its natural gas production for the half-year increased by 271% over the prior corresponding period, to 8.0 PJ, or 1.4 million barrels of oil equivalent (mmboe). Its Surat Basin gas reserves increased by 27% to 780 PJ.
The company’s sales revenues increased by 239% to $45 million, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $25 million was up $26 million from H1 FY20.
Senex Energy held $33 million of net cash as at 31 December, an increase of $78 million from the corresponding half.
Management response
Commenting on the results, Senex CEO Ian Davies said:
Production in the Surat Basin now exceeds 50 TJ/day, or more than 18 PJ/year and equivalent to around 10 per cent of Queensland’s natural gas demand, with natural gas production in the half of 8.0 PJ exceeding total FY20 production, demonstrating the increase in gas field production performance…
Also announced in the half, the sale of our Cooper Basin business to Beach Energy for $87.5 million will provide additional strength to our balance sheet and bolster the cash flow resilience of our natural gas portfolio.
Davies said that with the past half year’s strong performance, the board decided to accelerate dividend distributions to Senex shareholders.
Senex will pay an initial 1 cent per share annual dividend (paid half-yearly) along with an 0.5 cent special dividend after the Cooper Basin sale completes. That represents an annualised dividend yield of 4.3%, 97% franked. Senex said it aimed for a 20–30% dividend payout of its free cash over the long-term.
Senex Energy share price snapshot
Having tumbled more than 62% during the COVID-driven market rout last year, which hit ASX energy shares particularly hard, Senex shares are back in the green for the year, up 4% in 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is flat over the past year.
So far in 2021, the Senex Energy share price is up 11%.
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Motley Fool contributor Bernd Struben 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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