BHP Billiton’s (BHP) US oil and gas cuts naturally dominated business news yesterday. So a much smaller hacking and slashing by oil and gas tiddler, Senex Energy (SXY) was overlooked by most investors.
Bringing sexy back into the Australian oil and gas sector? This time the privilege is not Justin Timberlake’s, but a small cap oil and gas exploration company mainly focused on Australia’s Cooper Basin, Senex Energy ((SXY)). You can tell from the company’s ASX-code there might be some pre-determined destiny in play.
The Roma North gas facility was commissioned on May 27. The company is on track to deliver processed sales gas to GLNG by mid-2019. The main concern for Credit Suisse is the pace of the production ramp-up upstream rather than the processing facility.
Credit Suisse believes Senex Energy is well positioned to benefit from higher domestic gas prices, as Project Atlas ramps up over the next two years. Yet, while the company has been touted as a takeover target, no bid has emerged.
Citi analysts have decided to downgrade to Sell/High Risk with an increased price target of 35c (was 31c). The analysts make an effort to emphasise they do like the potential as well as company management, but the share price has simply run too hard too fast.