hmmm...?, page-11

Stacker says "management said it's a gas story yet we drill for oil" .
It might be apt if I post some extracts from last year's Senex Annual report to remind us what pays the bills for Senex and believe me it isn't gas or a fictitious recent capital raising.
No it is Cooper Basin oil by the truckloads and now by the pipelines full.
Last year Senex delivered 1,250,000 barrels of oil to Moomba production plant and that was with all three oil pipelines only in operation for the latter part of the year.
From the Annual Report for 2012/13.

Outlook: Continued strong performance
2013/14 will be a year of unprecedented activity for Senex.
Our focus is on the continued development of our high
growth, high margin oil business and early commercialisation
of our gas resources:
• Extensive oil drilling: Senex will drill more than 30 oil wells in its South Australian Cooper-Eromanga Basin permits with a combination of exploration, appraisal and development wells.
• Ongoing 3D seismic acquisition and analysis:
Work is already underway on the acquisition of more than 1,000 square kilometres of 3D seismic data across Senex’s permits in the northern Cooper-Eromanga Basin.
Analysis and interpretation of this survey and the
1,300 square kilometres already collected will yield the
next generation of oil and gas targets across our acreage.
• Oil production increase: We anticipate production for the year of between 1.4 million and 1.6 million barrels of oil, representing a 12% to 28% increase on the 2012/13 result.
• Oil reserves growth: Senex is targeting further growth in proved and probable oil reserves of between 4 million and 6 million barrels, representing a reserves replacement ratio of 333% (to the midpoint of guidance).
• Hornet gas field development planning: Following
the discovery of a new conventional tight gas field at
Hornet in the southern Cooper-Eromanga Basin, Senex
will progress plans for early development and will seek to
introduce the right partner at the right time.
• Unconventional gas business development: Building
on the results of successful exploration in 2012/13,
Senex will seek to identify commercial opportunities to
develop its significant unconventional gas assets in the
South Australian Cooper-Eromanga Basin.
• Realising the value of CSG assets: The 2013/14 work
plan for our Surat Basin coal seam gas permits will see
us drill up to 11 wells to further define the resource and
increase the value of the assets.

I can assure you that the growing team at Senex is working
hard to deliver on our business objectives for 2013/14.

The announcement of a 15 year tenure security agreement
with the South Australian Government on 19 August
2013 is an excellent example of our continuing focus on
delivery. I would like to acknowledge our team’s efforts
over the past year and commend them for their relentless
focus on delivering results. I would also like to express my
appreciation for the ongoing support of my fellow Directors
throughout the year. It is the collective energy and expertise of the entire team of Senex that will deliver results – and generate wealth – for our shareholders.
Ian R. Davies
Managing Director and Chief Executive Officer
27 August 2013

Financial Analysis [from the same document]

Senex delivered another year of exceptional financial
performance, with revenue increasing by 110% to
$147.9 million (2012: $70.4 million). Crude oil sales revenue increased by 113% to $137.3 million (2012: $64.4 million), following another year of record growth in production (refer graph below). This growth in production was achieved primarily from continued development of the Company’s prolific oil fields on the western flank of the South Australian Cooper-Eromanga Basin. Oil prices were strong for the majority of the year with average revenue per barrel of $113 (2012: $111). However, this was offset by a relatively strong Australian dollar with an average exchange rate of 1.014 to the US dollar during the year.
The strong production growth and a focus on tight cost control resulted in Senex achieving a 14.6% decrease in operating costs per barrel, down to $39.20 (including all costs and royalties) compared to $45.90 per barrel in the prior year.
Total cost per barrel (including depletion, depreciation and amortisation) decreased by 17.8% to $53.90, down from $65.60 per barrel in the prior year.
These strong results combined to produce a gross profit of $80.5 million (2012: $31.0 million) and an average cash margin of $75 per barrel. Other income recognised in the current financial year includes $15.5 million resulting from the net gain on the sale of the Group’s 15% interest in ATP 752P and PL 303 (Cuisinier field, effective from 15 March 2013) and $3.6 million from the sale of the Port Bonython Fuels project.
Earnings before interest, tax, depreciation, amortisation,
impairment and exploration expenses (EBITDAX) increased
by 265% to $91.0 million, compared to $24.9 million in the prior year.
Net profit after tax was a record $61.0 million, an increase of 585% over the prior year result of $8.9 million.
This was despite Senex recording an exploration expense of $12.8 million (2012: $5.2 million) and investing in a significant increase in human resources to help grow the business, with the number of Senex employees increasing to 160 by 30 June 2013.
Senex continued to invest heavily throughout 2013 in the continued development of its Cooper-Eromanga Basin oil business, with $43.7 million incurred on oil and gas properties, facilities and plant and equipment during the year. These investments include both projects to facilitate increases in production from new and existing fields, along with projects focusing on increasing efficiency and reducing future operating costs. This included construction of the Snatcher-Charo oil pipeline, workovers and recompletions of several key producing wells and construction of a bulk storage facility, warehouse and other facilities at Growler oil field.
As foreshadowed in 2012, Senex undertook a substantial exploration program during 2013 with the key priorities being the appraisal of the gas resource potential of its Cooper-Eromanga Basin acreage and the identification of the next generation of oil targets by way of a significant 3D seismic acquisition, processing and interpretation program. Senex invested $88.0 million in exploration during 2013, with further details on the results of these activities included on pages 11 to 19 of this Annual Report.

Senex ended the financial year in an enviable fiscal position, with $126.8 million in cash (2012: 124.0 million), no debt and a $20.0 million receivable from the sale of its interest in the Cuisinier field.
These cash reserves, along with forecast operating cash flows from the high margin oil business, mean that Senex’s 2013/14 work programs are fully funded.