Senex takes impairment charge on lower oil prices

OREANDA-NEWS. Australian independent Senex today said it would incur a A\$60.5mn (\$47.34mn) after-tax impairment charge, reflecting a write-down in the value of its assets in the Cooper basin in South Australia because of lower oil prices. Senex did not take any charge on its gas assets in east Australia.

Senex said the write-down is based on Brent crude price assumptions that are based on short-term market consensus and reverting to an average of \$73/bl after the 2017-18 fiscal year ending 30 June. Senex follows other Australian independents that have suffered write-downs in the value of their oil and gas assets in the wake of the sharp decline in oil prices during the past six months.

Senex last month made a 20-25pc cut to its capital expenditure (capex) guidance for 2014-15 to A\$85mn-\$90mn from A\$100mn-120mn previously. It has left its production guidance unchanged at around 3,800 b/d of oil equivalent. The firm has cut its capex guidance because of an expected fall in full-year revenue. Its 2014-15 drilling programme has been reduced to around 16 wells from 26 wells as a result.