Strategy

Globally, the medium and longer term market fundamentals for oil remain robust. Supply continues to flex while investment into
new discoveries has declined and low cost sources of oil production declines. In contrast, global demand remains strong, enhanced by increasing demand from developing economies.

In the nearer term, the oil pricing outlook remains volatile in line with the sharp and prolonged period of market correction since 2015. Senex remains a low cost upstream operator with quality oil acreage in the Cooper Basin. Our lean operating capability, existing infrastructure and pathways to market, as well as strong relationships across the value chain, support Senex’s position as a leading oil producer in the region.

In the near term, our strategic focus centres on stabilising production, maintaining low costs and generating cash from the base portfolio. We will prioritise capital investment into high value opportunities on the western flank of the Cooper Basin, which offer high returns at low oil prices and can be brought online quickly to generate income.

The near- and longer-term demand for affordable and reliable energy is unprecedented in modern Australia’s history. On the east coast, gas supply has continued to tighten, largely driven by domestic energy consumption and export demand from Queensland’s LNG producers.
As reaffirmed by the nation’s Chief Scientist Dr Alan Finkel during 2017, natural gas will play an important role in the energy mix particularly as the world transitions to a low-carbon future.

Senex is continuing to leverage its strategic position as an agile, independent operator to bring new gas supply into the market. Our focus remains on building our position as a low cost coal seam gas producer in Queensland, along with new conventional and unconventional gas opportunities in the Cooper Basin. The Western Surat Gas Project represents a material, near-term revenue stream in a supportive regulatory and operating environment. Similarly, South Australia’s gas producing regions of the Cooper Basin offer material reserves potential and existing pathways to market.

Our capabilities in gas exploration, development and production are highly transferable. Senex will apply these capabilities to future organic and inorganic opportunities to bring more gas supply to the east coast.

Senex continues to evaluate its position in the upstream value chain, addressing opportunities to position the business for future supply and demand changes in Australia’s energy markets. This includes inorganic and organic opportunities where these align with strategy, operating capability and financial capacity. We are actively establishing financial facilities to support these growth activities.