The Queensland government has awarded ASX-listed oil and gas company Senex Energy preferred tenderer status for a 486 km2 natural gas exploration block, PLR2020-1-9, located on trend between the Scotia and Meridian gas fields in the Bowen basin.
This was done as part of the Queensland government’s domestic gas acreage tender process.
The award allows Senex to expand gas production at the Atlas block by 50% to about 18 PJ/y.
Senex MD and CEO Ian Davies says the Queensland government’s award of acreage to Senex strengthens the company’s ability to leverage its established hub-and-spoke infrastructure model for accelerated supply of affordable natural gas to the domestic market.
“Senex is committed to investing for the long-term to unlock both development-ready and exploration opportunities. We welcome the proactive policies in place to encourage development of Australia’s vast natural gas resources, which will help deliver affordable and sustainable gas supply.”
The commercialisation plan to expand Atlas gas production will leverage the existing hub-and-spoke infrastructure model by expanding the existing Jemena gas processing facility, with the availability for additional production volumes expected in the first half of 2022, subject to completion of definitive agreements with Jemena.
In addition, Senex’s infrastructure model will also be advantageous because the Atlas project will use existing water management infrastructure, and development drilling for expansion of production will be funded by free cashflow and existing debt facilities.
Further, the infrastructure model will also mean ongoing marketing of gas to Queensland manufacturers and other domestic users, providing further support for Australia’s gas-fired recovery from the Covid-19-induced recession.