Ann: June 2018 Quarterly Report, page-2

HIGHLIGHTS During the fourth quarter of FY18, Senex Energy (Senex, the Company, ASX:SXY) delivered materially higher revenue driven by increased production and a higher realised oil price. Highlights include:
• Net production: Senex produced approximately 270,000 barrels of oil equivalent (boe), up 42% for the quarter. Full year production was 840,000 boe, up 12% compared to FY17 and in line with guidance of 750,000 - 900,000 boe.
• Project Atlas: Senex reached a significant milestone by partnering with Jemena to bring Project Atlas gas to the domestic market in late 2019. Jemena will fund capital expenditure on downstream infrastructure and Senex will pay an agreed tariff over a 25-year term. The agreement delivered both the path to market for Project Atlas gas and also a material component of Senex’s overall funding requirement.
• Western Surat Gas Project (WSGP): Senex was granted a Petroleum Lease (PL) over the initial development area of the Glenora and Eos blocks. Production from Phase 2 wells continues to increase, averaging above three terajoules per day.
• Cooper Basin western flank: Senex agreed with Beach Energy the western flank drilling program for FY19, to include at least three development wells and seven exploration wells and associated infrastructure, commencing in August 2018. Senex will be free carried by Beach for up to $43 million.
• Capital expenditure was $23.1 million for the quarter, and $80.1 million for FY18, in line with annual guidance of $80 - $100 million.


Looks the be one of the better quarterlies for SXY for some time. Revenue up, production up (and most importantly exceeding field decline) and reserves up - also debt funding sorted.

The language used for Western Surat production is odd. Almost as though the wells are producing but below expectation, otherwise they would be shouting from the ceilings. What implications that has for future returns maybe other more knowledgeable shareholders can say.

I have been critical in the past of SXY always kicking the can down the road in terms of when it will start generating a return on its assets and for shareholders, and while this report is more of the same in that regard - ie "transformational in 2019" - some of the promise is turning into production. There is probably enough in it to suggest its worth me holding onto SXY a bit longer.