The Senex Energy Ltd (ASX:SXY) share price was on fire on Monday and surged 13% higher. Here’s why its shares were on form…
The post Why the Senex Energy (ASX:SXY) share price surged 13% higher today appeared first on Motley Fool Australia. –
The Australian share market may have tumbled lower on Monday, but that didn’t stop the Senex Energy Ltd (ASX: SXY) share price from surging higher.
The energy producer’s shares were up as much as 13% higher at one stage before finishing the day 8% higher at 33 cents.
Why did the Senex share price surge higher on Monday?
Investors were fighting to get hold of Senex shares today after the release of a very positive announcement.
According to the release, Senex has been awarded preferred tenderer status for natural gas acreage in the Surat and Bowen basins. This is part of the Queensland Government’s domestic gas acreage tender process.
This award includes additional highly valuable Atlas acreage immediately adjacent to Senex’s existing development. It also comes with high-potential exploration acreage in the Bowen Basin on trend with the Scotia and Meridian gas fields.
Management notes that the new Atlas acreage will enable the rapid expansion of natural gas production to ~18 PJ/year. This is a sizeable increase of 50% on its current production.
Pleasingly, the new Atlas acreage is development-ready, subject to project approvals.
The company’s Managing Director and Chief Executive Officer, Ian Davies, was pleased with the news and believes the company is uniquely positioned to contribute to Australia’s gas-fired recovery from the COVID-19 recession.
He commented: “Senex is a material new entrant in a strong domestic market with high barriers to entry. We are increasing the supply of natural gas on the east coast to help our manufacturing sector, and we are here for the long term.”
“The Queensland Government’s award of acreage to Senex strengthens our ability to leverage our established hub-and-spoke infrastructure model for accelerated supply of affordable natural gas to the domestic market,” Mr Davies added.
Looking ahead, Mr Davies advised that the company is focused on its long term opportunities.
He explained: “Senex is committed to investing for the long-term to unlock both development-ready and exploration opportunities. We welcome the proactive policies in place to encourage development of Australia’s vast natural gas resources, which will help deliver affordable and sustainable gas supply.”
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.