Etherazer, Sentient got on board on 3 October 2008 by purchasing Glory Run's 49m shares at about 19.4 cents each. Sentient are a very experienced investment group that attracts institutioonal investors , pension funds and corporates.
Sentient typically seeks potential high return projects with companies that have committed and talented management.Their short term horizon is 5 years but they expect closure within 10 years.
Their Directors are from a very diverse and senior background ( one of which served as an Energy Policy adviser to the White House. )
Ben McKeown from Sentient sits on the Senex Board.
Sentient's additional investment in Senex ( SXY ) last week brought their shareholding up to 15 %. The reasons for this could be one or all of the following.
1.SXY is considerably undervalued ( due to a number of factors especially as a consequence of the Cooper Basin floods )
2.It is aware of the value of SXY CSG permits which are shared with heavyweight British Gas. I rate this value at well over 50 cents per share for the CSG alone.Possibly much higher.
3.SXY has spent the last few years developing it Cooper Basin Oil opportunites. The latest seismic has shown a lot of potential drill sites and a drilling plan is underway.
4.The Board of SXY recently aquired Stuart Petroleum at a very good price. Stuart also has an attractive Cooper Basin oil portfolio.
5.But perhaps the biggest reason why Sentient increased its SXY shareholding is the Shale Gas potential lying under the STU permits aquired by SXY ealier this year. These permits have already been reviewed by MHA consultants as having a prospective Gas in Place of about 80 TCF. Now that is one awful lot of gas.... And the best news was that these shales were WET. Which is an enormous bonus as drilling in the USA Eagleford has shown.
6.Sentient will also be aware that consolodation in the Cooper Basin is bound to happen at some stage. There are several other players including Santos, Beach, and to a lesser extent Cooper Oil. The resource , both in conventional oil and shale is enormous and if today's oil prices hold then a huge cashflow will be generated in future years.
If a bid is made for SXY then Sentient and other major shareholders are in a good position to defend the company by virtue of the fact that they own over 50% of the capital. But in the face of an offer they may need more. Sentient or others on the register do have the contacts to proffer a 'White Knight"...well I hope so.
8. Another reason for Sentient's additional purchase is that the Aussie minor oil caps have been knocked down over the last 18 months, particularly in the CSG sector. That may be about to change. Gas is about to get a lot hotter. Even the IEA admit that a Golden Age of Gas is now emerging as conventional world oil production declines.
SXY has always been a good story. The Vintage Crop well was a major success and Sentient has recognised it before others. I would not expect Sentient to be a short term player. They recognise that SXY has built a very strong platform around an expanding and highly profitable Cooper Oil program, some very gassy CSG permits and an exciting wet shale gas acreage that be a major contributor to Australia.( The Lucky Country )
Just my thoughts.
SXY Price at posting:
41.3¢ Sentiment: Buy Disclosure: Held
