Join our daily newsletter At The Bell to receive exclusive market insights
- Strike Energy (ASX:STX) has made a fresh gas discovery in Western Australia
- The company confirmed a 16-metre gas-bearing pay zone downhole in its second South Erregulla project well
- The project taps the northern end of the Perth Basin
- WA Premier Roger Cook recently announced an export gas ban for gas produced onshore in WA
- Permian age targets were hit by the rigs
- Shares are up 7.69 per cent, trading at 42 cents at 11:25 AEDT
As Western Australia’s energy sector continues to make sense of Premier Roger Cook’s controversial move to ban onshore WA gas from export markets, Strike Energy (ASX:STX) has announced a fresh WA gas discovery.
The company hit a 16-metre thick gas-bearing pay zone downhole the company’s SE2 well located in the South Erregula gas field. That gas field is part of the larger underlying Perth Basin.
Porosity of the rock was calculated at 18 per cent – porosity is a measure of how much gas is held within a sample of rock or sediment.
While further drill testing will need to be conducted, the company has nonetheless proven that gas is there underground. More importantly, right where geotechs expected.
The company previously saw shareholder interest grow when the company formalised its SE1 target, first spud back in early 2022, with investors speculating today the company may be on the brink of another high-impact discovery.
SE1 resource estimates remain in a lower-confidence ‘contingent’ status.
The South Erregulla project is a fairly comprehensive one which will see onshore WA embrace a new gas plant. The modular buildout slated for the project is supported by the WA state government via its Gas Acceleration Strategy.
That was back in June, of course, when then-Premier Mark McGowan hadn’t yet announced a surprise resignation, handing the role of Premier to his long-serving righthand man, Roger Cook.
The WA government said no exemptions would be given. Then Beach Energy (ASX:BPT) got one, interestingly so, given it’s backed by billionaire Kerry Stokes.
Cook’s gas export ban is meant to protect domestic supply as some predict Australia to hit gas shortages nationwide in the coming years.
Critics say we should just stop exporting so much gas from the northwest shelf and Queensland.
Countercritics note many of those exports are important revenue-building exercises for the national accounts. That debate is starting to adopt a bit of a culture-war-type fanfare and may well prove to be eternal.
Zooming back in to Erregulla, Strike Energy also noted its SE2 well intersected Permian-age rocks in the Kingia sandstone target.
Permian age rocks are widely associated with petroleum and gas deposits with the USA’s Permian Basin, located mainly in Texas, the most famous example.
Many Permian marine basins contain petroleum, not just those located in the Lone Star State.
Sediments deposited across geological time nearly half a billion years ago would transfigure into hydrocarbons during the Permian. It crescendoed with a mass extinction thought to be due to oceanic turnover pushing methane into the atmosphere, methane being natural gas.
But one can’t deny it’s been a busy year for Strike. The company is set to acquire Talon Energy (TPD), something it announced in August – and only late last month, the company kicked off production from the WA Walyering field.
STX shares were up 7.69 per cent, trading at 42 cents at 11:25 AEDT.
