Senex and Beach ink A$87m deal

The transaction will see Beach become the sole Western Flank operator, and will deliver material synergies to the company through the simplification of the Western Flank field operation.

The transaction will see Beach take full ownership of the Western Flank infrastructure, including the Growler to Lycium flowline system and the Lycium to Moomba flowline system.

“From a Beach perspective, it was a logical acquisition given our proven track record of extracting value from permits we operate, combined with the fact we are building on our extensive position in the Western Flank across the South Australian Cooper basin,” said Beach MD Matt Kay.

“The transaction is immediately earnings accretive for shareholders, with initial estimates pointing to approximately A$5-million in annual operating cost savings, expected to be realised in the first year post acquisition.”

Kay said that the new acreage also contained more than ten drill-ready oil and gas prospects, providing additional potential upside. These prospects will be integrated into the company’s growth portfolio as drilling candidates for the 2022 financial year.

Senex told shareholders on Tuesday that its exit from the Cooper basin after more than 20 years, would support plans to accelerate the development of the company’s Surat basin natural gas assets, including the supply of natural gas to the east coast.

“The sale of our Cooper basin asset will strengthen Senex’s balance sheet to accelerate the development of our material Surat basin natural gas asset position,” said MD and CEO Ian Davies.

“Senex is uniquely positioned to increase supply of affordable natural gas to the domestic market. Our hub-and-spoke infrastructure operating model is established in the Surat basin, and we have a diverse portfolio of low-risk, high return investment opportunities to pursue from our extensive gas reserve position.”

Davies said the sale of the Cooper basin assets followed a deliberate and considered strategic review of the company’s asset portfolio.

“Beach’s existing operations and experience in the Cooper basin, including as joint venture partner in our Western Flank oil assets, means it is ideally placed to acquire these assets and ensure a smooth transition and ongoing stewardship, as well as providing a number of ongoing employment opportunities.”

The sale is effective from July 2020, and completion is expected in early 2021, subject to Senex financier consent and regulatory approvals.