EIG PROVIDES MILLIONS FOR SENEX SURAT BASIN PROJECT

EIG PROVIDES MILLIONS FOR SENEX SURAT BASIN PROJECT

SENEX Energy has raised $55 million in an institutional placement at $0.315 per share that has brought EIG Partners on board as a major shareholder in the company as it seeks to develop the Western Surat Gas Project.

The Washington DC-based oil and gas explorer has increased its shareholding in Senex (ASX:SXY) from 2.7 per cent to 15.4 per cent as part of the deal, which is partly subject to approval from the Foreign Investment Review Board.

EIG Partners will provide up to US$300 million towards the development of the Western Surat Gas Project, alongside the money raised from the institutional placement and up to a further $40 million through a
placement to retail shareholders.

Senex resumed trading this morning and the company is trading up 6.07 per cent at $0.297 per share at 12.51pm AEDT.

Senex Managing Director and CEO Ian Davies says the transactions will allow Senex to develop and expand its upstream positions in both the Surat and Cooper Basins, and to address substantial opportunities in the east coast gas market.

"We know the Western Surat Gas Project is a great asset, given our understanding of the subsurface and our ability to operate safely and at low cost," says Davies.

"EIG is a respected global energy investor and their support shows they also see the opportunity for Senex to build a significant east coast gas business."

EIG CEO, R. Blair Thomas, says the Western Surat Gas Project is in prime position to supply gas into the structurally short east coast gas market.

"EIG has been an early investor in coal seam gas in Queensland since the late 1990's, and we believe now is the opportune time to develop these assets as fundamentals are supportive," he says.

"Senex has the right people to develop the project and in long-term partnership with EIG we believe the Company will build a tier-one asset."

An EIG representative is expected to join the Senex board in the future.

The institutional Placement includes around 173 million new shares, representing 15% of Senex issued capital.
Of those, EIG bought 146 million (12.6% of issued capital), which will be placed in two tranches.

Under the first tranche, around 96 million shares will be placed with EIG, to be settled on usual terms.

The second tranche of 50 million shares is conditional on FIRB approval.

Around 27 million shares were taken up by institutional and sophisticated investors.

The new shares are expected to settle on Monday, 6 February 2017 and be issued, and commence trading on ASX, on the following business day, Tuesday, 7 February 2017. The second tranche of the EIG placement shares will settle after FIRB approval.

Business News Australia

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Brisbane Airport forecasts arrivals lift over winter school holidays

Brisbane Airport forecasts arrivals lift over winter school holidays

An estimated 2.5 million people are set to pass through Brisbane Ai...

Women's jobs site Freelancing Gems sells membership business to owner of Beam Awards

Women's jobs site Freelancing Gems sells membership business to owner of Beam Awards

Rockhampton-based Beam in Business, the company behind the diversit...

Record Australian vintage buoys Penfolds amidst China re-entry, higher earnings

Record Australian vintage buoys Penfolds amidst China re-entry, higher earnings

The company behind Penfolds wine is reporting an expected 14.6 per ...

Eagers back-pays $16m in underpayments to staff

Eagers back-pays $16m in underpayments to staff

Australia's largest car dealership group Eagers Automotive (ASX...