Strike’s West Erregulla-4 hits the right notes in the Perth Basin
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The Perth Basin’s future as Western Australia’s next source of domestic gas is looking all the more secure now after Strike Energy (ASX:STX) reported better than expected results from its West Erregulla-4 appraisal well.
Initial wireline logs and petrophysics across the primary targets have indicated that the well has made the thickest intersection of the Kingia Sandstone in the Perth Basin to date at 155m.
It doesn’t stop there.
The intersected Kingia Sandstone at West Erregulla-4 has high gas saturation throughout and is made up of several large units of clean sand with thick blocky porosity development and bands of very high-quality reservoir.
It is interpreted to have net pay of about 28m with porosity averaging about 11 per cent and topping up at 19 per cent across this section, comparable to the porosity observed at the instrumental West Erregulla-2 discovery well.
Strike expects these excellent reservoir characteristics and measured gas at high pressures to translate into high gas flow rates when the well is production tested.
The excellent Kingia results more than make up for the High Cliff sandstone, which at 18m appears to be thinner than seen at the earlier well.
These High Cliff results are in line with the company’s modelling that the formation should thin to the east into the Dandaragan Trough leaving the void for the thickening of the Kingia Sandstone.
All in all, West Erregulla-4 has substantially de-risked the company and its equal partner Warrego Energy’s (ASX:WGO) planned Phase 1 gas development, which will see the construction of an 80 terajoule per day plant to process gas from the field.
The appraisal result is timely.
While Western Australia remains well supplied for gas in the short-term, the gas supply situation could tighten in 2029.
Woodside Petroleum (ASX:WPL) is expected to prioritise its liquified natural gas exports post-2023/24 while Santos (ASX:STO) recently announced that production at its offshore Reindeer field – a major contributor to the state’s domestic gas supply – would cease earlier than expected.
Gas is still expected to play a major role in Western Australia’s energy mix going forward and the West Erregulla field is looking likely to have a substantial piece of that pie.
Strike is finishing the wireline logs to procure fluid samples and additional pressures across other formations.
Once this is completed, the company will then condition the hole ahead of running final production casing and completed for a flow test across the Kingia Sandstone.
It will then be kept on inventory as a future producer for the Phase 1 development while the rig moves on to drill the West Erregulla-5 appraisal well.