Strike Energy (ASX:STX) and Warrego Energy (ASX:WGO) have now made gas discoveries in all three formations hosted within their jointly owned West Erregulla project in the Perth Basin.

News emerged today that a new discovery was made in the High Cliff sandstone as part of the West Erregulla-2 drilling campaign.

“Now with gas discoveries in the Wagina, Kingia and High Cliff sandstones the West Erregulla trifecta has been achieved,” managing director Stuart Nicholls told investors this morning.

Strike hit the High Cliff sandstone formation at 4918m and reported a gross gas column of at least 22m.

The company said the entire 22m section was gas saturated with a net pay of 10m and an average porosity of 10.3 per cent, with sections up to 16 per cent, which Strike said was “well-developed” porosity.

Nicholls said the High Cliff sandstone quality at West Erregulla was comparable to the High Cliff in the Waitsia-1 well which flowed 25 million cubic feet per day when tested.

The Waitsia gas discovery was made by AWE Limited in the Perth Basin in 2014 and led to the company being swallowed up by Japanese giant Mitsui for $600m four years later.

The news didn’t seem to impress shareholders though, with Strike slipping 14.1 per cent to 23.5c and Warrego tumbling 14.3 per cent to 33c.

“West Erregulla-2 has finished drilling at 5,100m and is now not only the deepest well in onshore Australia but has also discovered the deepest ever hydrocarbons,” Nicholls said.

While the East coast gas shortages are widely publicised, there is very little news about the emerging shortages on the West coast.

Warrego CEO David Casey told Stockhead this week that Western Australia would be facing gas shortages in the next couple of years.

“The East Coast has a number of issues that need to be resolved and there’s a number of companies that are positioning themselves in the market to be that company that resolves those issues,” he said.

“Don’t assume that the same issues aren’t emerging on the West Coast. The North West Shelf is short gas in a couple of years.”

Casey said that right now there was no “logical supplier” to fill that shortfall.

“You’ve got infrastructure in place that needs gas, that needs a feedstock, and I think we can be that feedstock,” he said.

Meanwhile, Nicholls said Strike was looking to ensure gas markets were sustainable.

“Gas is an affordable, clean and abundant energy source as the world transitions into a lower carbon footprint,” he told Stockhead.

“It’s great that Strike has been able to find such a large quantity of high-quality gas because that will allow affordable gas to make its way into the market in a timely fashion.”

In other ASX energy news today:

Whitebark Energy’s (ASX:WBE) shares went on a run this morning after it revealed its Rex-2 well had done better than its Rex-1 well. The average production rate for the final 24 hours of the test period was about 350 barrels of oil per day and 700 barrels of oil equivalent per day.

Whitebark said that exceeded the flowrates from Rex-1 and oil production from Rex-2 continued to trend upwards. Shares gained over 33 per cent to hit a morning peak of 1.2c.

Bass Oil (ASX:BAS) has reported its second highest monthly production from its Indonesian operations. Average oil production from the Tangai-Sukanant field in August was 718 barrels of oil per day. Total joint venture production was 22,273 barrels of oil, with Bass’ share amounting to 12,250 barrels of oil.


At Stockhead, we tell it like it is. While Warrego Energy is a Stockhead advertiser, it did not sponsor this article.