The Senex Energy Ltd (ASX: SXY) share price exploded 25% higher today after the Cooper Basin-based oil and gas producer received a double valuation upgrade from analysts at Macquarie Group Ltd (ASX: MQG) and Credit Suisse.
Consequently, Senex shares are up to 33.5 cents and according to The Australian newspaper the gun analysts at Credit Suisse reckon the shares are worth 40 cents and even flagged the potential for Santos Ltd (ASX: STO) to make a takeover bid for the company.
Santos already has a substantial debt pile and with Senex currently valued at around $390 million any Santos takeover bid would almost certainly require a request from Santos for its shareholders tip more capital into the Adelaide-based energy operator.
The upgrades to analysts' price targets are also being triggered by yesterday's news that Senex was successful in acquiring a 58 square kilometre coal seam gas acreage from the Queensland government for domestic gas supply.
Interestingly, "senex" means "old man" in latin and some of its shareholders might be feeling a little long in the tooth with the stock down 54% over the past 5 years. Like its peers, Senex remains leveraged to oil prices and given they're in a long-term bear market, I'm not a buyer of Senex or Santos shares.
