Senex has entered into a binding agreement with Beach Energy to sell its South Australian Cooper Basin assets for an $87.5 million cash consideration.
The sale will result in Senex’s exit from the Cooper Basin after more than 20 years, and will support plans to accelerate the development of its Surat Basin natural gas assets, increasing the supply of natural gas to the east coast to support manufacturing and jobs.
Senex said that together with strong and increasing cash flow generation from its low-cost, high-margin natural gas assets, the company is well positioned to materially enhance shareholder value through its suite of Surat Basin natural gas production acceleration and expansion opportunities, and resultant capital management initiatives.
Senex Managing Director Ian Davies said the sale of Senex’s Cooper Basin assets represents a milestone in the evolution of Senex, and strengthens its position as an important and independent supplier of natural gas to the east coast market.
“The sale of our Cooper Basin assets will strengthen Senex’s balance sheet to accelerate the development of our material Surat Basin natural gas asset position.
“Senex is uniquely positioned to increase supply of affordable natural gas to the domestic market. Our hub-and-spoke infrastructure operating model is established in the Surat Basin, and we have a diverse portfolio of low-risk, high-return investment opportunities to pursue from our extensive gas reserves position.
“The sale of our Cooper Basin assets follows a deliberate and considered strategic review of Senex’s asset portfolio. Beach’s existing operations and experience in the Cooper Basin, including as joint venture partner in our western flank oil assets, means it is ideally placed to acquire these assets and ensure a smooth transition and ongoing stewardship, as well as providing a number of ongoing employment opportunities,” Mr Davies said.
Senex said that in the past 10 years alone it had paid more than $100 million to South Australian businesses and contributed about $80 million in royalties, taxes and payments to Traditional Owners.