Page 12 - AsianOil Week 42 2021

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Senex attracts multiple

takeover bids from POSCO

AUSTRALIAN independent Senex Energy’s
continued success in boosting production has
attracted an all-cash takeover bid from South
Korea’s POSCO International.
Senex said on October 18 that POSCO had
submitted a non-binding and indicative pro-
posal to acquire all of the Australian developer’s
stock for AUD4.40 ($3.29) per share on Sep-
tember 2, valuing the company at AUD815mn
($608.5mn).
This was POSCO’s third offer, with Senex not-
ing that the South Korean company had offered
to pay AUD4.00 ($2.97) per share on July 30 and
AUD4.20 ($3.13) per share on August 27.
Despite POSCO’s newly revised bid, the (19.98 bcm) of 2P reserves and 1,016
Australian independent appears to be holding PJ (26.47 bcm) of 3P reserves across its
out for a better offer. Senex noted that it had Surat Basin acreage.
agreed to extend the period of exclusivity to Senex said a 30-well drilling programme at
November 5 so POSCO could “assess a fur- Atlas and Roma North, which services provider
ther revised proposal at a price higher than Easternwell is conducting, was slated for com-
AUD4.40 per share”. pletion in early 2022.
Senex said it had originally granted the Higher production led to a 2% quar-
period of exclusivity, subject to various fiduciary ter-on-quarter rise in the company’s July-Sep-
carve-outs, on September 15 so POSCO could tember sales volumes at 4.8 PJ (125 mcm),
complete due diligence enquiries. while revenue climbed by 9% on the quarter
POSCO’s latest offer represents a 40% pre- to AUD35.4mn ($26.4mn). Senex noted that
mium to the 30-day volume-weighted average the revenue gains were also supported by a 7%
price (VWAP) on September 2 and repre- increase in the portfolio’s gas price to AUD7.4
sents a 19% premium to the 30-day VWAP ($5.53) per GJ.
on October 15, the last trading day prior to Senex had AUD80.1mn ($59.8mn)
announcement. of cash reserves at the end of the quarter,
If its bid is accepted, POSCO has indicated while its drawn debt remained at AUD75mn
that it will likely pursue an off-market takeover ($56mn). The company’s quarterly capi-
offer, which will be subject to a 50.1% minimum tal expenditure amounted to AUD15.8mn
acceptance condition and Foreign Investment ($11.8mn), while dividend payments
Review Board (FIRB) approval. However, the amounted to AUD6.7mn ($5mn).
transaction itself would not be subject to a The developer is working towards reaching a
financing condition. final investment decision (FID) for its planned
Senex has appointed Macquarie Capital and expansion of the Roma North project’s capacity
Rothschild & Co. as financial advisers and Clay- from 9 PJ (234.43 mcm) per year to 18 PJ (468.87
ton Utz as legal adviser. bcm) per year.
POSCO’s takeover attempt comes as the After having already completed a 50%
Senex progresses towards realising its stated expansion of Roma North’s production
natural gas production target of more than 60 capacity in August, Senex said it has now
PJ (1.56bn cubic metres) per year by the end of wrapped up front-end engineering and
financial year 2024-2025. design (FEED) work on the phase of devel-
opment. The project will receive a new 9 PJ
Production gains per year gas compression facility to the west
The Australian developer said on October 18 of the existing facility.
that its third-quarter gas production topped 5 PJ Senex, which announced in August that
(130.24mn cubic metres), up 6% from the previ- it had reached an FID on the AUD40mn
ous three-month period. ($29.86mn) expansion of Atlas’ production to 18
Senex said production from its Roma PJ per year, said this week that it was finalising
North and Atlas assets in Queensland’s arrangements with Jemena to build and fund the
Surat Basin peaked at 56 TJ (1.46 mcm) processing facility’s expansion under an exten-
per day in the July-September period, sion of existing tolling arrangements. It expects
with production continuing to expand to commission the facility in the third quarter of
at both fields. The company has 767 PJ next year.™

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