Junior oil and gas producer Senex Energy has suffered a 36 per cent fall in December quarter sales revenue to $18.
1 million, as its numbers were hit by a slump in oil prices.
But the company has been largely shielded from the falls by a strong hedging position.
Compared to the September quarter, however, its revenue dipped just four per cent despite crude oil prices declining 11 per cent in the three-month period, with the company benefiting from hedging gains and a lower Australian dollar.
Under its current hedging contract, Brisbane-based Senex is guaranteed an average Brent crude floor price of $A75 a barrel for one million barrels of oil sales over the 2016 financial year.
Crude oil prices tumbled 35 per cent in 2015, and this week slid further to a 13-year low of $US26.30 a barrel.
“We are actively monitoring the market to take out further hedging contracts for FY17 and beyond,” chief financial officer Graham Yerbury told an analysts call on Thursday.
The company’s production and sales volumes dropped by more than a quarter to 0.26 million barrels of oil equivalent (mmboe), but were largely flat on the previous quarter.
Senex, which has operations in Queensland’s Surat Basin and the Cooper Basin in South Australia, expects to achieve its FY 2016 production guidance of 1.0 to 1.2 mboe.
The company said it has strengthened its financial position after signing a large gas sales deal with Santos’s GLNG venture in Queensland in September. It currently holds $100 million in cash.
Despite its cash-rich position, managing director Ian Davies told analysts the company was holding back capital expenditure plans in the current low price environment.
In August, the oil and gas producer nearly halved its capital expenditure guidance for 2015/16 to $35 million to $45 million, and says it will spend only where critical.
It expects to achieve its production guidance of 1.0 to 1.2 mmboe for the financial year.
Senex Energy shares closed 0.5 cents, or 4.2 per cent higher at 12.5 cents.