Perth Basin gas players fire up as Strike hits home run

Special Report: Strike’s success in the Perth Basin has reaffirmed the region’s high prospectivity and put a rocket under fellow Perth Basin explorers.

Following news just before Christmas that Strike Energy (ASX:STX) made a significant gas discovery during the drilling of its West Erregulla-3 well, Talon Petroleum (ASX:TPD) – which also counts Strike as a partner in its Walyering permits in the Perth Basin – surged 50 per cent.

Other explorers in the region also went for a run, with juniors like Pilot Energy (ASX:PGY) and Norwest Energy (ASX:NWE) climbing 30 per cent and 100 per cent, respectively, on the back of the news.

Strike first revealed it had hit 6m of net gas pay in the Dongara and Upper Wagina sandstones within its West Erregulla-3 well on December 23. And last week it announced it had intercepted “a very high and abnormally over-pressurised Permian gas column” while drilling through the Carynginia Shale.

Strike CEO and managing director Stuart Nicholls said the over-pressurised gas column encountered was diagnostic of a significant Permian gas resource, which was a major positive.

“The high-pressured reservoirs of the Permian gas fairway, whilst in this case abnormally high, are one of the key attributes that supports the West Erregulla resource as a top quartile, competitive future gas supply.”

Exploration in the Perth Basin began in the late 1940s, and more than 200 wells have been drilled onshore since that time.

West Erregulla-3 is the first of three appraisal wells that Strike is drilling in the West Erregulla field.

The highly successful West Erregulla-2 well flowed 69 million standard cubic feet of gas per day during testing. That ignited interest in the gas potential of the Perth Basin.

Following its West Erregulla wells, Strike will continue to pursue further resources in the Perth Basin with the drilling of the Walyering-5 appraisal well with Talon Petroleum.

Strike leveraged its knowledge from the drilling of the West Erregulla wells to de-risk the Walyering play, which made it an easy decision for Talon to buy a 45 per cent stake in the project.

“The results at WE-3 are yet further proof that Strike has cracked the code in the Perth Basin, and based on analogous interpretation methodologies gives added confidence for a successful Walyering outcome later in the year,” Talon managing director David Casey said.

Walyering-5 will test an in-place best estimate prospective resource net to Talon of up to 38.7 billion cubic feet of gas and 0.98 million barrels of condensate.

Drilling is expected to begin after completion of the current West Erregulla program, with Strike and Talon in October 2020 securing the same rig that drilled Strike’s headline grabbing West Erregulla discovery.

Casey said previously that Walyering had already established porosity and permeability capable of producing at commercial rates – albeit for a short period.

The JV has determined that Walyering-5 has good quality gas, containing less than 1 per cent carbon dioxide, which requires very minimal processing. This also lowers the cost.

Additionally, the high condensate ratio has the potential to further enhance the economics of Walyering.

That along with the permit’s proximity to both existing pipeline infrastructure and potential commercial gas users could see very early and rapid commercialisation of any discovery, Talon says.

This article was developed in collaboration with Talon Petroleum, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.