KeyFacts Energy: Senex Australia country profile

Senex Energy today announced the Final Investment Decision (FID) has been taken for the $40 million expansion of natural gas production at Atlas by 50% to 18 PJ/year.

Key points:

• Atlas to be expanded by 50% to 18 PJ/year (48 TJ/day firm capacity) from 12 PJ/year (32 TJ/day)
• Low-cost, low-carbon, high-return and long-life investment to support increased domestic natural gas supply to Australian manufacturers and other domestic users
• Capital expenditure of around $40 million for natural gas wells, gas gathering and water management infrastructure, funded from existing cash reserves
• Finalising arrangements with Jemena to construct and fund the Atlas processing facility expansion under an extension of existing tolling arrangements, with commissioning expected in Q1 FY23
• Drilling program expected to commence September 2021 in conjunction with Roma North program
• 15-year remaining reserve life with existing Atlas 2P reserves of 270 PJ
• Atlas expansion supported by recent domestic manufacturer gas sales agreements, including with metals processor Nyrstar and construction materials company Adbri Limited
• Latest investment in Senex’s drive to its 60 PJe/year annual production target by the end of FY25

Senex Managing Director and CEO Ian Davies said the Atlas expansion project is yet another example of the low-risk, high-return organic growth opportunities available to Senex with its established hub-andspoke infrastructure operating model.

“Atlas is a high-quality development, providing material and reliable supplies of natural gas to Australian manufacturers, supporting the economy and jobs in local communities.

“This investment follows strong project execution and natural gas production performance at Atlas, with reservoir performance and well availability continuing to excel.

“The Atlas expansion project will inject around $15 million into regional communities, supporting more than 100 jobs during construction”, Mr Davies said.

The progression of Atlas to 18 PJ/year is the next phase of growth to drive Senex towards its stated annual production target of more than 60 PJe/year by the end of FY25. With development drilling to start in September, Senex is on track to deliver a material increase in gas sales in the next 12 months.

Senex natural gas portfolio and organic growth plans

This investment decision for the Atlas expansion project will take the production capacity of Senex’s portfolio to 27 PJ/year, realising annual EBITDA of more than $130 million per year at prevailing prices.

Outside of Atlas, the Roma North area holds 2P gas reserves of 497 PJ. This large reserve base supports a master development plan to continue expanding production at Roma North to up to 36 PJ/year (from 9 PJ/year currently) with a 2P remaining reserve life of 14 years.

The expansion of the existing Roma North processing facility to 9 PJ/year represents the completion of the first stage of this wider Roma North development, with Senex expected to take the Final Investment Decision for the second stage of expansion (Roma North Stage 2) to 18 PJ/year in the coming months.

Planning for the third stage of expansion (Roma North Stage 3) has already commenced, which is targeting annual Roma North production of 27 PJ/year, with additional appraisal to be undertaken concurrently.

Each stage of expansion in the Roma North area provides valuable subsurface and production data, de-risking future expansion decisions.