Why the Senex Energy Share Price Jumped 22% Today

The share price of Senex Energy Ltd [ASX:SXY], has jumped up 22.2% today thanks to a successful tender.

What happened to Senex Energy Price?

Senex has secured rights to Surat Basin, a Queensland coal seam gas project. The 58 square kilometre area was hotly contested, with 12 other companies fighting for the rights. As the east coast continues to guzzle gas supplies, it is naturally a big win for Senex.

Senex will end up spending about $200 million to get the project up and running. Which includes the drilling of roughly 100 wells. Though it will all be worth it, as it looks set to triple the company’s total annual output.

What now for Senex Energy?

Managing Director and CEO Ian Davies comments (emphasis mine):

We plan to engage with domestic gas customers in early 2018 with a view to signing gas supply contracts, with first gas targeted for 2019. This award enables Senex to materially expand its gas business while delivering energy security to domestic customers and opportunities for the local community.

The crucial part of the deal is just that — the customer. Senex can’t sell any gas to exporters. And while domestic supply is certainly in high demand at the moment, Senex hopes that won’t change in the next year or two.

But with a 22% rise in Senex’s share price, the market is clearly ecstatic with the result. Hopefully, for investors, the good mood lasts.

For other potential star-performing stocks, check out Money Morning’s top four ASX picks for 2017 in our free report. Details here.

Regards,

Ryan Clarkson-Ledward,
Junior Analyst, Money Morning


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

To find out more about the publications Ryan works on and how you can subscribe, please click on the corresponding link here:


Money Morning Australia