Senex, Buru and Fitzroy River are making barrels of money from oil
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Senex Energy has pocketed $25.6 million in revenue after its oil fetched a decent price in the last quarter.
The Cooper Basin-focused company (ASX:SXY) produced 281,000 barrels of oil equivalent — a measure that includes oil, gas, and heavy gas called condensate — and sold 270,000 barrels of oil at an average realised price of $114 — which is about midway between the September quarter range of $US78.16 to $US82.88.
Revenue was 4 per cent lower than the June quarter, mainly due to more gas in the sales mix, but it was more than double the same quarter last year.
The extra cash boosted Senex’s kitty to $57.6 million by the end of the quarter.
In June, Senex had 2P oil reserves of 8.3 million barrels in the Cooper Basin — Australia’s largest onshore oil and gas province.
Oil and gas reserves are measured as 1P, 2P and 3P. 1P reserves are proven while 2P reserves and proven and probable.
Senex operates 14 oil fields which produced 750,000 barrels of oil in FY18.
Brent oil has traded at between $US57.04 and $US86.74 over the past year. It reached its 52-week peak in early October but has since slipped back to trade at $US76.41.
Finally an investment that pays
Royalty investor Fitzroy River Corp (ASX:FZR), meanwhile, has made a nice chunk of change from Buru Energy’s oil production success and is undertaking its second on-market share buyback.
Fitzroy’s business model is to strike royalty agreements over oil and gas projects onshore in the Canning Basin of Western Australia.
Instead of handing over cash for equity, royalty investors lend money for a guaranteed percentage of revenue once resources are produced and sold.
Fitzroy doesn’t do any exploration, development or production itself, it makes its money simply through royalty interests, free carried interests and minor equity positions.
The company reported that it received $65,948 from Buru’s (ASX:BRU) production of 72,722 barrels of oil in the September quarter which sold for $90.28 a barrel.
Fitzroy is also due to receive a payment in late October from Buru’s Ungani production of 105,000 barrels sold in the current quarter.
The company is now offering to buy back roughly 8.9 million shares, or 10 per cent of its capital, on-market.
An on-market buyback is where a company repurchase its own shares at whatever the market price is at the time, as opposed to setting a price for the buyback that shareholders can choose to accept or not.
The shares are then cancelled.
This reduces the number of shares on issue which is supposed to boost per share figures for earnings, revenue and cash flow more quickly, and it is supposed to lift the market value of the remaining shares.
Fitzroy had been planning to buy fellow royalty investment firm Royalco Resources’ (ASX:RCO) 1 per cent royalty interest in the Weeks hydrocarbon project in the Bass Strait, but withdrew its proposal.
The company said it has more than enough cash at $2.3 million to execute its strategy in the next 12 months and it thinks shareholders would benefit from a second share buy-back in the current market environment.