Ann: Senex partners with Jemena - Project Atlas, page-11

For those of you that wish to listen, the link is here

http://www.openbriefing.com/OB/2921.aspx

My notes below:

• Partnered with Jemena to fast track gas Atlas by end of 2019
• Jemena will build own operate processing plant $140M cost with initial capacity of 40TJ/day
• Project Atlas is top tier development ready, expext to book first reserves this year
• 2nd half 2019 very busy - drilling campaigns, processing plant construction
• Jemena will focus on downstream, allowing Atlas to focus on upstream business. Value accretive following competitive process
• Tariff to be paid for 220PJ firm capacity, which represents roughly half our gas in place (baseline 32TJ/day, ability to expand at SXY's request at 8TJ/day)
• Remaining funding cost is $140M in next couple of months (funding not required for next 8 months, as we have available $80M cash)
• Conversations occurred with customers - binding gas contracts following commercial/legal risk review relating to infrasrtructure, remaining financing package
• Deal derisks critical path substantially, next milestone on critical path is approvals - mid 2019
• Selling from Wallumbilla gas hub through a number of different delivery points (which is important to signing gas sale agreements)
• Atlas has announced resources of 201PJ at the moment, they have signed 220PJ as they expect to book 220PJ of 1P reserves by 30 June
• Atlas increased creditworthiness, Jemena first of 2 whole of company financing deals. No need or want to tap equity markets for a capital raise (24.30) - reiterated again today

What this means:

1. There is no capital raising (though I'm sure someone will ask this again)
2. We should see reserve upgrade by 30 June (though its possibly priced in)
3. Half the financing solution is complete, with the remaining $140M likely to come in the next couple months (no rush as no requirement for next 8 months or so)
4. Gas sale agreements to follow financing (as they want to understand any commercial/legal issues prior to committing to sales contracts).

Great announcement, great transaction as SXY has transferred the risk of infrastructure ownership/operations to Jemena who are better placed to wear this risk.

All that was missing was news of when are we progressing the next phase of WSGP!