Ann: Senex completes asset portfolio review, page-22

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toneboy

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20/02/18

23:50

Post #: 31204819
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Originally posted by tt2000 ↑

The positive way of reading this:

The financing solution may now be contingent on SXY securing regulatory and environmental approval which was due in mid 2018, and it is highly plausible that given this is a whole of company financing solution, the financiers want all the approvals in place.

Also, SXY may be deciding to go down the path of constructing the processing facility, increasing the upfront capital requirement, resulting in the delay.

The negative way:

This is the first deadline SXY has missed in a while - SXY has previously always delivered against its timetable.

EIG is not as keen as they were last year given the 2TJ/day run rate from the 30 wells (below the 12TJ/day business case). Given this below than expected flow rate, they want another 3 months to consider whether these rates increase to more sustainable levels to which they would lend against.

The verdict:

Thursday is crucial, especially the issue if the flow rates. If they have stabilised toward 12TJ/day then this just about removes the negative scenario. If the rates are still at 2TJ/day then alarm bells start sounding. Especially when last year the WSG Project was considered the flagship asset, and now it sits behind Project Atlas...

The other key consideration is what price they area receiving for this gas being produced.

With volume and price it will be quick to assess how feasible this project is.

I am very much looking forward to the call on Thursday, as it will determine whether I stay on board or jump ship.

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What is the worst case on Thursday, for the SP and for the long term success of the company? In your opinion

SXY Price at posting: 36.0¢ Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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Ann: Senex completes asset portfolio review, page-22

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