The Senex Energy Ltd (ASX: SXY) share price is charging higher today on the back of a trading and earnings update. After sitting as much as 17.5% higher before midday, Senex shares have slightly pulled back to be up by 15% at the time of writing at 23 cents per share.

Senex Energy is an independent Australian oil and gas exploration and production company. It has a portfolio of onshore oil and gas assets in Queensland and South Australia, with access to the nation’s east coast energy market.

What did Senex announce?

The highlight of this morning’s announcement was upgraded FY20 guidance.

Following strong production performance across the company’s Surat Basin assets, Senex has increased its full-year FY20 production guidance to between 2.0 and 2.1 million barrels of oil equivalent (mmboe). This is up from the previously guided range of 1.8 to 2.0 mmboe. 

In addition, Senex also increased its full-year FY20 guidance for earnings before interest, tax, depreciation and amortisation (EBITDA). The company now expects EBITDA in the range of $45 million to $55 million, up from previous guidance of between $40 million and $50 million.

These upgraded figures assume continued normal operations in the current COVID-19 environment.

Atlas drilling campaign update

Senex also revealed that natural gas production continues to outperform at both Roma North and Atlas in the Surat Basin. As a result, production now exceeds 34 terajoules (TJ) per day.

Given the continued production and reservoir outperformance, the company announced it will further reduce the number of wells to be drilled at Atlas from 50 wells to 45 wells.

The company expects to complete the current drilling campaign in the coming weeks, with final wells to be brought into production during June 2020. Additionally, Atlas water infrastructure is on schedule to commence commissioning and water intake in June. The completion of all works is expected in early FY21.

Roma North gas production update

Also detailed in today’s announcement was the agreement between Senex and GLNG to re-direct around 1 petajoule of natural gas from Roma North to the domestic market.

Following currently lower LNG offtake requirements at GLNG, the two parties have agreed to re-direct these volumes to the Wallumbilla natural gas supply hub over the period of June to August 2020.

Senex will market this natural gas, along with higher than expected production from Atlas, to east coast gas customers as part of the company’s supply portfolio.

Management commentary

Commenting on today’s update, CEO Ian Davies said:

“In October 2018, Senex reached the Final Investment Decision for our $400 million capital program in the Surat Basin. Less than two years later, the transformational Roma North and Atlas natural gas development projects have established Senex as an important producer of gas for the east coast market.”

“Our announcement today of an increase in full year FY20 production and EBITDA guidance further reinforces the underlying strength of our transformed east coast natural gas business and our ability to adapt and grow in the current lower oil price environment,” he added.

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are you wanting to buy ASX shares today but are unsure where to look? Below are two ASX shares I would consider placing $5000 in for the next 3–5 years.

Medical Developments International Ltd (ASX: MVP)

Familiarity is a great place to start when looking at what shares to buy. On the other hand, investing in an esoteric business can make you feel disconnected from the company. This can easily lead to a panic sale from a bump in the road. While Medical Developments may not be a household name, there’s a chance you’ve either used or heard of its products.

Medical Developments’ flagship product is the ‘green whistle’. Less commonly known as the drug Penthrox. Penthrox has been reining superior over other pain relief drugs as it’s fast-acting, non-addictive and self-administered. Its growth has, therefore, exploded in Australia and overseas, being used by paramedics, medical practitioner the defence force and more.

Medical Developments announced that it expects any negative impact caused by COVID-19 to be limited. In the last month alone it announced the approval for the sale of Penthrox in Thailand, Netherlands, Bosnia-Herzegovina and Hungary.

The list of countries where Penthrox is sold is growing fast, while sales are continuing to grow strongly in its first market, Australia. However, Penthorx only accounts for a little over half its revenue with the remaining coming from its medical devices segment. This segment accounts for medical devices including Space Chambers, masks and Breath-Alert Peak-Flow meters. These are also growing strongly in Australia with 1H20 up by approximately 45% compared to the prior corresponding period.

Its share price has rebounded strongly over the past two months following the market low at the end of March. However, it still has some 39% to go to reach its share price high prior to the market crash.

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is a gaming technology company which operates in over 90 countries. Its land-based business serving a range of products including electronic gaming machines and casino management systems saw revenue fall 6% in its recent half-year results. However, its digital portfolio which offers a range of apps is still growing strongly and was up 19% for the 6 months to 31 March 2020.

Aristocrat’s shares are trading at just over half of what they were in February. This is after another fall following the release of results which were short of consensus expectations. However, North America and New Zealand venues plan to open again through a phased approach in May and June while the larger Australian states look to re-open in July.

The steady re-opening will see its land-based businesses begin to return to somewhat normal. Although, there’s no knowing how long this may take. While this plays out, I believe Aristocrat’s digital business can continue to grow strongly, making this, in my eyes, a great time to buy shares and open a position in the company.

More reading

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Michael Tonon owns shares of Medical Developments International Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX 200 shares:

Afterpay Ltd (ASX: APT)

According to a note out of UBS, its analysts have retained their sell rating but lifted their price target on this payments company’s shares slightly to a lowly $14.00. The broker made the revision to its price target after factoring in Afterpay’s recent U.S. update this month. While it acknowledges that the pandemic could accelerate positive structural changes for Afterpay, it has warned investors not to extrapolate the magnitude of recent growth in online sales. The Afterpay share price broke through the $50.00 mark earlier today.

Vicinity Centres (ASX: VCX)

Analysts at Morgan Stanley have retained their underweight rating and $1.25 price target on this shopping centre operator’s shares. According to the note, the broker believes that Vicinity will experience a material drop in rent rates once the crisis is over. And while it believes Vicinity has some high quality assets, there are other assets in its portfolio which it is less enamoured with and fears could struggle. The Vicinity share price is trading at $1.67 this afternoon.

Wesfarmers Ltd (ASX: WES)

A note out of Citi reveals that its analysts have retained their sell rating but lifted the price target on this conglomerate’s shares to $36.60. The broker was pleased to see the company take action on its underperforming Target business. And while it has lifted its earnings estimates for FY 2020 and the coming years to reflect stronger than expected sales growth, it still has issues with its current valuation. As a result, it appears to see better value elsewhere and has retained its sell rating. The Wesfarmers share price is fetching $40.27 on Tuesday.

More reading

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• The ASX 200 stocks in the tax-loss selling firing line
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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