PERTH (miningweekly.com) - ASX-listed Senex Energy would cut its 2015 capital spend by some 20%, the oil producer said this week, as a move to protect margins in the current oil price environment.
Senex revealed that capital expenditure (capex) for the 2015 financial year would be reduced from the initially planned A$100-million to A$120-million, to between A$85-million and A$90-million.
The cost savings would be achieved by deferring higher-risk exploration spend and focusing the company’s capital programme on development and production enhancing activities.
MD Ian Davies said that the company would also save about A$6-million a year through cost-saving initiatives that would be implemented across the company’s corporate and operating cost base.
“The right-sizing of our spending programme, in combination with our recently implemented hedging programme, will ensure we preserve our strong funding position and exit 2015 in a strong net cash position.”
Davies said that the company had a large portfolio of growth projects with long-term tenure, but noted that in the current environment, the company had to continue its disciplined approach in prioritising these projects.
Despite the cutback on capex, Senex has maintained its full-year production guidance of some 1.4-million barrels of oil equivalent.
During the three months to December, Senex produced 360 000 bbl of oil equivalent, generating sales revenue of A$28.8-million. Production was down 5.4% on the September quarter; however, the sales revenue had fallen from the A$42.4-million reported in the September quarter, on the back of the lower oil price.