Senex Energy has raised $55 million to fast-track development of its Western Surat Gas Project north of Roma through an agreement with specialist energy investor EIG Global Energy Partners, which will become a substantial shareholder.
The company is offering also eligible shareholders the ability to participate in a Share Purchase Plan, to be capped at $40 million
Senex managing director and chief executive officer Ian Davies said that the transactions would provide Senex with the strength and momentum to develop and expand its significant upstream positions in the Surat and Cooper Basins to address substantial opportunities in the east coast gas market.
“We know the Western Surat Gas Project is a great asset, given our understanding of the subsurface and our ability to operate safely and at low cost,” he said.
“EIG is a respected global energy investor and their support shows they also see the opportunity for Senex to build a significant east coast gas business.”
EIG chief executive officer R. Blair Thomas said the Western Surat Gas Project was in prime position to supply gas into the structurally short east coast gas market.
“EIG has been an early investor in coal seam gas in Queensland since the late 1990’s, and we believe now is the opportune time to develop these assets as fundamentals are supportive. Senex has the right people to develop the project and in long-term partnership with EIG we believe the Company will build a tier-one asset.”
The partnership will see Senex and EIG work together to develop an appropriate funding model for the Western Surat Gas Project and other growth projects within Senex’s portfolio, with EIG providing development funding of up to $US300 million for Western Surat Gas Project acceleration.
Senex brought its first Western Surat Gas Project appraisal wells online at the end of 2016 as part of its pilot program and is progressing full field development planning in parallel with regulatory approvals, native title and land access activities.
Queensland Resources Council Chief Executive Ian Macfarlane said news of the EIG investment support was yet another sign that Queensland was getting on with business.
“The QRC is pleased that foreign investors continue to have confidence in Queensland projects, despite recent reports that foreign investment was cooling due to the uncertain political climate in Australia,” Mr Macfarlane said.
“This international negative perception is due to political interference in the NSW and Victoria gas exploration sector. This politicisation has completely stalled gas exploration in southern states.
“It’s great to know that Queensland continues to lead the way and prop up our southern neighbours.”
Natural Resources and Mines Minister Dr Anthony Lynham last week announced that the State Government would release land in the Surat Basin for a pilot gas exploration project with an “Australia-only” sale condition.