Strike’s Perth Basin gas reserve points to potential for more
Link copied to
Strike Energy (ASX:STX) has defined a gross proved and probable (2P) reserve of 300 petajoules for its West Erregulla field that highlights the emergence of the Perth Basin as Australia’s next gas province.
To top it off, this resource covers only the Kingia Sandstone. Internationally recognised subsurface consultancy Netherland, Sewell & Associates estimates that a further 128PJ of gross best estimate (2C) contingent resources could be present in the Kingia, High Cliff, and Wagina/Dongara sandstones.
Further potential of up to 155PJ could be present deeper in the Western Flank of the field, though a down dip well will be needed to confirm this resource.
The company has a 50% interest in West Erregulla (EP469) with Warrego Energy (ASX:WGO) holding the remaining 50%.
Strike will now enter into mandates with various banks in order to commence due diligence prior to finalising the terms of a project financing facility for the Phase 1 development that will see gas from the project headed to foundation customers Wesfarmers and Alcoa.
Construction of the upstream and midstream processing facilities is expected to commence in the second half of 2022 following the endorsement of upstream and midstream final investment decisions and receipt of necessary approvals.
Australian Gas Infrastructure Group will build, own and operate the 87 terajoule per day gas plant to process the EP469 Phase 1 gas.
The company plans to deepen the West Erregulla-3 well in the first half of 2022 to test the Kingia High Cliff and will also look to retest this and the West Erregulla-5 well along with other wells such as South Erregulla-1 and Lockyer Deep-1.
Both Strike and Warrego have also proposed to drill West Erregulla-6 in the 2023 financial year.
This will provide additional production capacity and redundancy for the Phase 1 production operations and may provide the opportunity to test some of the upside opportunities within the field.
Additionally, the definition of the West Erregulla gas resource to the southern boundary supports the company’s belief that the field is connected to the South Erregulla prospect in its wholly-owned EP 503 permit.
This bodes well for the success of the upcoming South Erregulla-1 well and as such, the company is seeking approval from the regulator to add a second South Erregulla well.