STX - Strike Energy

[greggles]

Gas discovery confirmed this morning at West Erregulla-2.

Wagina gas discovery at West Erregulla-2

Strike Energy Limited confirms that the Strike-Warrego Joint Venture has made a significant gas discovery in the Wagina sandstone as part of the West Erregulla-2 drilling campaign.

The Wagina sandstone was found to be ~74 meters plus in thickness and made up of sections of clean sand with interpreted blocky porosity development that was observed on drilling to have hydrocarbons present throughout. This section was observed and interpreted from 4,106 to 4,180m.

The well section was finished without observing the end of the Wagina and there is potential for further Wagina sands to be encountered in the next section. The wireline logs have been loaded into Strike’s geological model and formation tops have been correlated to nearby offset wells. This correlation suggests that the Basal Wagina sandstone which is the formal secondary target of the well, is yet to be encountered.

The sudden influx of over-pressured gas into the well whilst drilling through the Wagina exceeded expectations and required mud weight changes to re-establish appropriate well conditions. This increased mud weight in conjunction with the active formation resulted in bore-hole breakout along the well bore. This has meant that the logging tools were unable to form a close contact with the sides of the well bore and attempts to gather reservoir pressures and samples were not successful.

The hole condition in the lower parts of the Wagina did not enable reliable logging to be achieved, however where credible logging results were captured at the top of the Wagina, this confirmed 14.2% porosity over a 2.5m section. This upper section coincides with the significant drilling break, clean porous sands and gas flows observed over the 6m section (4,111-4,117m), as reported on the 24th of July.

Looks and sounds good but how much is this discovery actually worth to STX? Joint venture partner Warrego Energy has done even better today, up 17.6% to 20c at the moment. The market is trying to figure out how to value it but buyers are still diving in, hoping that there are more gains to come once the bean counters have been able to connect the dots.

STX currently up 12% to 14c on volume of around 37 million shares. Intraday high of 16c.

 

[barney]

Gas discovery confirmed this morning at West Erregulla-2.

Gotta love it when a plan comes together!! Don't hold … wish I did

 

[greggles]

Gotta love it when a plan comes together!! Don't hold … wish I did

Especially after today. You know when a company puts an announcement's headline in all caps it's serious business.

STAGGERING KINGIA GAS DISCOVERYAT WEST ERREGULLA

Strike Energy Limited confirms that the Strike-Warrego Joint Venture has made a significant gas discovery in the Kingia sandstone as part of the West Erregulla-2 drilling campaign. Logging While Drilling (LWD) tools have been recovered to surface and log interpretation has been undertaken.

The Kingia formation was encountered at 4,753 metres with gas on rock showing a gross gas column of at least 97 meters. The lower section from 4,790 metres onwards is made up of several high-quality large unitsof clean sand with thick blocky porosity development. This 67 metre section, which has high gas saturation throughout, is interpreted to have net pay of 41 metres and an average porosity of 14.3% with peaks of up to 19%.

The well has not encountered a gas water contact in the Kingia formation which, along with the excellent reservoir quality, is consistent with the seismic amplitude model that supports the interpreted field boundaries.

Looks like things are finally paying off for STX shareholders. Well done to those that hold!

STX up another 55.2% to 22.5c today.

 

[barney]

Especially after today. You know when a company puts an announcement's headline in all caps it's serious business.


Looks like things are finally paying off for STX shareholders. Well done to those that hold!

STX up another 55.2% to 22.5c today.

Indeed!

Bit of nearology at play with NWE also up 40% to 0.007 … They are just down the road from STX apparently, but dont have a lot of cash in the bank. Both charts are too vertical so I'll just sit back and watch the action from the sidelines. Nice pay day for anyone holding though

 

[greggles]

Both charts are too vertical so I'll just sit back and watch the action from the sidelines. Nice pay day for anyone holding though

Looks like we'll see some more gains today for STX but where it will eventually settle is anyone's guess. I don't know how to begin to value a gas discovery like this, so I'll leave that to the experts and watch from the sidelines with interest.

 

[barney]

Looks like we'll see some more gains today for STX but where it will eventually settle is anyone's guess. I don't know how to begin to value a gas discovery like this, so I'll leave that to the experts and watch from the sidelines with interest.

Peaked at 30.5 so far today … Currently 28.5 on lessening Volume, so going ok …..

On the nearology thing, KEY has also been pumped up on Wednesday and Today. Almost amusing they announce STX has found a staggering discovery … and because they are just up the road they will probably find one too (my paraphrasing)

KEY hit an intraday 0.011 and currently up 42% to 0.010 … with less than half a million in the bank, there could be a cap raise around the corner once the air compressor runs out of air.

 

[barney]

STX currently in a Trading Halt pending a further announcement on the Erregulla-2 Well ….. Given the vibe on the previous ann, you'd think this should be further good news.

 

[greggles]

STX currently suspended from trading pending an announcement regarding a capital raising that is expected to be released before the commencement of trading tomorrow.

I hope they get it away at a decent price for the benefit of those currently holding. The share price had been holding up OK until the last couple of days before the suspension when it fell from 30.5c to 24c.

 

[oilleak]

Should be a large year for strike with exploration and hopefully JAWS coming home.......

Been a long journey .......

 

[barney]

Should be a large year for strike with exploration and hopefully JAWS coming home.......
Been a long journey .......

Chart is looking interesting as well (not my chart below though! It is a bit of a mess!! …. read from left to right may help)

There is some positive appeal IF it behaves a certain way from here.

Recent short term low should form the base of any Ranging period over the next couple of months …

Under that, not good obviously but I'd be surprised to see that taken out for now.

 

[oilleak]

Is that Commsec Barney?

Did you add the extras on the chart ?

 

[barney]

Is that Commsec Barney?

Did you add the extras on the chart ?

Yeah … Commsec + Paint Oileak

All the "extras" are added on Paint and are my own "babblings" …

That was one of my messier charts, but I have grandkidz in the house lol

 

[oilleak]

Noice work !

 

[barney]

Noice work !

Lol … messy! … but you should see my room

I note recent cap raise of +$30 million at 23 cps .. .18 cents looks the potential new short term low.

Looks very interesting..... Watchlist

 

[oilleak]

Iran's smacking the Yanks at the mo.....

Good for oil.....

(Bad for world )....

 

[Trav.]

I am liking the setup here and added to watch list today.

Bouncing nicely of ascending triangle and racking up touches like Tom Mitchell for the Hawks.

If we get another HL then it will be interesting to watch for a BO

 

[Trav.]

If we get another HL then it will be interesting to watch for a BO

Wasn't to be, we got a LL and pattern failed so off the watch list you go.

 

[Dona Ferentes]

West Erregulla is one of the largest pre-drilled conventional onshore prospects in Australia and recent developments in terms of the understanding of the Wagina discovery are exciting. This outstanding discovery, from Australia’s deepest-ever onshore gas well, has confirmed STX’s subsurface interpretation of a high-quality reservoir with excellent productivity. Combined with what are expected to be commercial discoveries within the High Cliff and Wagina formations, STX believes these resources have the potential to produce some of the lowest-cost gas in Australia.

Furthermore, as a result of recent global economic conditions, two West Australian LNG projects have announced major delays. Both projects had previously been identified as significant contributors to the WA domestic gas market in the mid to late 2020s. As a result of these delays, STX is now forecasting a tightening of WA domestic gas market conditions.

What's next

Appraisal activity is the next step with respect to the West Erregulla Project. The proposed Appraisal Plan involves the drilling of the West Erregulla 4 & 5 wells, in addition to the West Erregulla 3 well to be drilled during H2 2020.

West Erregulla 3 has been located with the aim of confirming the continuity of the field on the northern side of the saddle feature that makes up the West Erregulla gas field. Several drilling rigs have been identified as available to drill the West Erregulla 3 well during H2 2020. Civil works for the preparation of the drilling lease at West Erregulla 3 are expected to commence in May.

West Erregulla 4 & 5 are designed to broaden the understanding of the Kingia and High Cliff reservoir quality distribution, as well as to provide well productivity at a notional field development spacing of 500 acres. West Erregulla-4 will also aim to collect the remaining subsurface parameters required to bring the Wagina gas discovery into the field development planning process. Both West Erregulla 4 & 5 are proposed to be drilled and tested to gather the required appraisal data and to be completed as future producers for the planned Phase 1 project. Subject to the timing of requisite approvals and Joint Venture processes, STX is aiming for commencement of these operations during Q1 2021.

Once FEED is initiated, STX will have sufficient ‘firm’ information on its project economics to move from its preliminary inquiries for project financing to commencing formal discussions with select finance partners for the Phase 1 development. Strike is currently in discussions with several Tier-1 lending institutions and will look to broaden the participants this coming quarter. STX is looking to confirm the debt facility over the coming months in preparation for a targeted Q4 2020 final investment decision.

STX has also been working on the necessary inputs to convert EP469 to a Production Licence (PL). During February, the West Erregulla Kingia-High Cliff gas discovery was declared a discovery by the regulator, which is the precondition to the PL application process. This is a positive step towards achieving the permitting milestones for the targeted start-up of production operations during 2022.

 

[InsvestoBoy]

Gas discovery, lending, blah blah blah.

What does any of that matter if one of your directors is on the NCCC barracking for the Government to subsidise gas development, underwrite gas prices, deregulate development?

https://www.abc.net.au/news/2020-05...-commission-gas-manufacturing-report/12269100

What a joke to think this is capitalism, when even 30 year investment bankers think it's dumb.

Probably good for STX holders though

"It's a blueprint for the gas industry, it's not a manufacturing blueprint, it's pathetic," said Tim Buckley, director of energy research at the Institute for Energy Economics and Financial Analysis, who spent 30 years in senior roles in investment banking.

"They say we need to correct the 'market failures' of our current energy supply to reduce electricity costs and 'break the investment logjam'.

"As far as I am concerned, spending 80 billion dollars in east coast gas markets in the last eight years is an exact opposite of an investment logjam."

Mr Buckley said there was a huge irony that the gas industry's massive, unprofitable investment in three giant gas export terminals off the coast of Queensland was responsible for a massive rise in gas prices for Australian industry.

"The very industry that has created a massive inflationary pressure that has undermined our manufacturing base is now saying the gas industry should get massive subsidies," he said.

"Their answer to the gas industry absolutely decimating the manufacturing industry is for tax payers to underwrite a rescue of the gas industry.

"They say they want 'a free and open trading regime', yet they are calling for taxpayers to provide massive capital subsidies and to underwrite gas prices."

 

[Trav.]

Announcement out today and looks like some delays due to higher than expected pressures. So I am thinking that is good news to find the gas, but bad news due to delay in drilling and re-engineering. It will be interested to see how the market reacts on this one.

Extracts below