Senex Energy has agreed to sell its Cooper Basin assets in South Australia to Beach Energy for $87.5 million.
The deal will see Senex exit the Cooper Basin after more than 20 years and supports plans to accelerate the development of its Surat Basin natural gas assets.
By focusing on its Surat Basin assets, the company will also increase the supply of natural gas to the east coast to support manufacturing and jobs.
Senex managing director and chief executive officer Ian Davies said the sale of the Cooper Basin assets represented a milestone in the evolution of the company and strengthened 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,” Davies said.
“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.”
In addition, Davies outlined at a company investor briefing that he backed the company’s strategy to grow production following the sale of its Cooper Basin assets and delivery of its Surat Basin gas projects.
“Senex’s growth transformation has created a natural gas business with a robust balance sheet and a strong and growing production profile,” Davies said.
Davies added that the sale of its Cooper Basin assets followed a strategic review of the company’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,” he said.
Beach managing director Matt Kay said the acquisition would enable the company to apply its exploration, appraisal and development expertise across a broader footprint.
“From a Beach perspective this was a logical acquisition given our proven track record of extracting value from permits we operate, combined with the fact we are building on our extensive position in the Western Flank across the South Australian Cooper Basin,” Kay said.
The transaction sees Beach become the sole Western Flank operator, delivering material synergies through the simplification of Western Flank field operations and enabling the company to apply its proven technical capabilities to explore, appraise, develop and produce the reserves and resources.
“Pleasingly, the new acreage contains more than 10 drill-ready oil and gas prospects, providing additional upside potential. These prospects will be integrated into our growth portfolio as drilling candidates from 2022 financial year,” Kay added.
The sale is set to be completed in early 2021, subject to approvals.