Senex raises A$55m as it pursues east coast gas opportunities

PERTH (miningweekly.com) – The Queensland government has welcomed the A$45.9-million investment from energy investor EIG Global Energy Partners into ASX-listed Senex Energy.

Senex this week announced that it has raised A$55-million through a share placement to EIG and other institutional and sophisticated investors.

Some 146-million shares, at A$0.315 each, will be placed with EIG, taking the company’s shareholding to 12.6%. The placement will be conducted in two tranches, with the first consisting of 96-million, and the second around 50-million shares, subject to Foreign Investment Review Board approval.

A further 27-million shares will be taken up by other institutional and sophisticated investors.

The share placement falls within Senex’s 15% placement capacity and will not require shareholder approval.

Senex and EIG will work together to develop an appropriate funding model for the Western Surat gas project, as well as other growth projects within the Senex portfolio, with EIG expected to provide development funding of up to $300-million for the Western Surat gas project’s acceleration.

Senex MD and CEO Ian Davies said the transaction would provide Senex with the strength and momentum to develop and expand its significant upstream position in both the Surat and Cooper basins, to take advantage of opportunities in the east coast gas market.

“We know the Western Surat gas project is a great asset, given our understanding of the subsurface and our ability to operate safely and at low cost. EIG is a respected global energy investor and their support shows they also see the opportunity for Senex to build a significant east coast gas business.”

In addition to the share placement, Senex was also hoping to raise up to A$40-million in a share purchase plan, under which shareholders will have the opportunity to subscribe for up to A$15 000 of new Senex shares, at a similar price to the share placement.

Queensland Natural Resources and Mines Minister Dr Anthony Lynham said the investment by EIG showed real market confidence in the state’s resources sector, and particularly its A$70-billion coal seam gas-liquefied natural gas industry.

“This industry already directly employs 5 000 people and supports more than 60 000 full-time jobs.

“We understand this project will generate up to 100 jobs, of which 80 will be local roles in drilling and construction.”

The project, which covers some 915 km², has a 50 TJ/d targeted production, based on a 2P gas reserve of 72.6-million barrels of oil equivalent, and a 1P reserve of 8.3-million barrels of oil equivalent.