The put options provide revenue protection over 400,000 barrels of oil, without limiting Senex's exposure to the upside from higher oil prices. These put options guarantee a Brent oil floor price of US$45 per barrel (~A$62 equivalent) over the six month period, and Senex will fully participate in any rise in Brent oil prices above this level. The details of the hedging program are below.
Senex Managing Director Ian Davies said the implementation of the program provides downside risk protection and allows the Company to cover its operating and corporate cash costs as well as lock in a margin on its oil sales.
"We are committed to remaining agile in this volatile environment and have taken decisive steps to ensure the Company remains cash-flow positive before capital expenditure in H1 FY17.
"Coupled with our recent success in reducing our cost base in support of profit margins at lower prices, our ability to lock these hedges away quickly demonstrates the Company's resilience in a low oil price environment," he said.
Details of hedging program: | |
Type of option | Put options over ICE Brent |
Strike price | US$45/bbl |
Volume | 400,000 bbls |
Tenor | H1 FY17 (1 July 2016 - 31 December 2016) |
Premium | US$2.4 million |
Upside to oil price preserved | Yes |
FURTHER INFORMATION
Investor Enquiries: Ian Davies Managing Director
Senex Energy Limited Phone: (07) 3335 9000
Tess Palmer
Investor Relations Manager Senex Energy Limited Phone: (07) 3335 9719Media Enquiries: Karen Cottier
Corporate Communications ManagerSenex Energy Limited Phone: (07) 3335 9859
ABOUT SENEX ENERGY
Senex is a growth focused exploration and production company based in Brisbane. With a 30-year operating history, Senex holds extensive onshore oil and gas acreage in the Cooper and Surat Basins. Senex operates the majority of its assets, produces over one million barrels of oil annually, and is successfully developing a gas business including the Western Surat Gas Project in Queensland.
Senex Energy Limited ABN 50 008 942 827 ASX : SXY
Head Office
Level 14, 144 Edward St, Brisbane Qld 4000 GPO Box 2233, Brisbane, Qld, Australia 4001
Phone +61 7 3335 9000
Facsimile +61 7 3335 9999
Web www.senexenergy.com.au
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Senex Energy Limited issued this content on 14 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 14 March 2016 21:58:18 UTC
Original Document: http://www.senexenergy.com.au/investor-centre/files/senex-executes-h1-fy17-hedging-program/