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Senex Announces Roma North Expansion FID

Source: 10/13/2020, Location: Not categorized

Senex Energy has announced the Final Investment Decision (FID) for expansion of natural gas production at Roma North by 50% to 24 TJ/day (~9 PJ/year), expected to be online in Q1 FY22.

Key highlights:

- Capital expenditureof $20 million net to Senex on natural gas wells, gas gathering infrastructure and water management infrastructure, to be funded through existing cash reserves

- Jemena intends to construct and fund Roma North compression facility expansion, with commissioning expected in Q1 FY22

- 50% increase in production capacity to 24 TJ/day (~9 PJ/year), with a >15% reduction in the unit cost gas processing tariff payable by Senex

- Existing 15-year gas sales agreement in place with GLNG for additional volumes at oil-linked gas prices with significant down-side protection

- Low-cost, high-return, long-life investment: IRR >60% with 32-year 2P reserves lifeat 24 TJ/day

Senex Managing Director and CEO Ian Davies said the Roma North expansion project is an excellent example of the low-risk, high-return organic growth opportunities available to Senex with its established hub-and-spoke infrastructure operating model.

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

'Senex and Jemena have proven ability to partner to efficiently deliver natural gas projects, with the Roma North expansion representing our first investment to accelerate development of Senex’s significant Surat Basin natural gas reserves.

'Senex is committed to contributing to Australia’s gas-fired recovery from the COVID-19 recession, with this Roma North expansion project the first example of our high-quality investment opportunities,' Mr Davies said.

Under the terms of the Roma North agreement, Jemena will procure and install two additional compression units to take capacity to 24 TJ/day(~9 PJ/year), having already placed orders for all long-lead items. Commissioning of the facility is expected in Q1 FY22.

Senex will drillup to 15 additional natural gas wells commencing inlate FY21, install gas and water gathering systems and expand the existing Senex-owned Roma North water infrastructure.

Natural gas production from the Roma North expansion will continue to be delivered to GLNG under the existing 15-year gas sales agreement (GSA). The GSA provides Senex with oil-linked gas prices, significant down-side protection at low oil pricesandexposure to a future recovery in oil prices.

As at 30 June 2020, Roma North had booked Proved and Probable (2P)gas reserves of 283 PJ, with an additional 222 petajoules of 2P gas reserves booked in the broader Western Surat acreage.

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