Senex Energy bankers up for Origin Energy's Ironbark

Via AFR

Listed oil and gas play Senex Energy is seeking to buy Origin Energy's up-for-sale coal seam gas development, Ironbark.

Street Talk understands Senex is running the numbers on Origin's wholly-owned Queensland-based project, as part of a two stage auction being run by RBC Capital Markets.

It is understood Senex has tapped investment bank Rothschild for advice, and has its bankers thinking about funding and other issues ahead of the binding bid date.

If successful, it would be expected to be Senex's largest ever acquisition. Ironbark is valued at $296 million on Origin's books, and sources said Origin was real chance of recouping such a figure as part of the auction.

Ironbark is a coal seam gas project slated for first gas in the 2021/22 financial year, according to Origin.
Ironbark is a coal seam gas project slated for first gas in the 2021/22 financial year, according to Origin.
Santos would be to the process, with CEO Kevin Gallagher firmly focused on bedding down the company's $US2.15 billion acquisition of Quadrant Energy made in August.

RBC is also understood to be talking to a couple of other potential buyers, on behalf of Origin.

While the auction is not slated to finish for another few weeks, Senex would be keeping a close eye on its share price to guide on its funding options. The oil and gas junior shares have been hit hard in October to be down 23.8 per cent.

The sharemarket drop has reduced the company's market value to $560 million.

The fall came as Senex also reported its results for the September quarter last week. The company told investors it had secured a new $150 million debt facility for its Surat and Cooper Basin developments, and had $57.6 million in cash as at September 30.

One thing in Senex's favour is the potential backing of its major shareholder, private equity firm EIG Global Energy Partners, which has a 12.3 per cent stake. EIG's managing director for Australia, Andy Zhmurovsky, is tasked with keeping a close watch on the company and has a seat on Senex's board.