Senex Energy (ASX: SXY) is focusing on its core upstream oil and gas assets with its deal to sell the Port Bonython Fuels Terminal project to Mitsubishi Corporation for an undisclosed sum.
The company is pursuing a rapid growth strategy focused on its Cooper and Surat basin assets that cover both conventional and unconventional oil and gas plays.
This has paid off with company's current market capitalisation of just under A$1 billion representing a 180% gain from its market capitalisation of about A$357 million a year ago.
Senex had earlier this month resumed coal seam gas exploration in the Surat Basin and is currently drilling the Thunderchief-1 oil exploration well in the Cooper Basin western flank.
The company had inherited the project when it acquired Stuart Petroleum but has obviously decided that Mitsubishi would be better suited to develop it.
Senex noted that it was an upstream business, focused on the exploration, development and production of oil and gas assets while Mitsubishi had capabilities across the entire petroleum products value chain.
Senex will initially sell 90% of the project to Mitsubishi and place the remaining 10% on a put and call option arrangement.
This will allow the two companies to transfer the remaining interest to Mitsubishi for an additional payment within 13 months of the date of arrangement.
The initial stage of the Port Bonython Fuels project is focused on delivering up to 1 billion litres of diesel annually to fuel growth and industry in the north and west of South Australia.