Shares in Senex Energy Ltd (ASX: SXY) were down 2.5% to $0.40c on Thursday, following the release of the company's quarterly report.
Most key performance metrics weakened from the previous quarter. Production volumes declined 5% to 190,000 barrels of oil equivalent (boe), while the average realised price fell 8% to $87 per barrel, driving sales revenue down 18% to $14 million.
Despite these figures, the company ended the quarter with a marginally improved cash balance of $83 million thanks to lower capital expenditure in the period, with exploration and appraisal costs halved from the December 2017 quarter.
As production volumes from active oil projects decrease, the company's growth prospects depend on the development of its gas assets. In the three months to March 31, Senex's gas output stood at 30,000 boe – a 200% increase on the previous quarter stemming from higher production at the Western Surat project. The company is prepared to invest in a new phase of drilling and in expanding processing capacity.
During the quarter, Senex also received preliminary approval from the Queensland government to develop its Project Atlas in the Surat basin. It is expected to supply gas to the east coast market by the end of 2019.
