- Strike Energy (STX) is collapsing its Southern Cooper Gas Project in South Australia, along with the project’s Jaws pilot program
- Strike has provided notices to the relevant parties to terminate the project's three offtake agreements
- The company also recently noted a $12.3 million impairment in its full-year 2020 report, due to unearned revenue from the project
- Strike now intends engage with the joint venture and begin logistically planning the project’s winddown
- Strike will now turn its attention to its operations at the West Erragulla field, where last year it struck a major gas discovery
- Strike Energy closed in the grey for 28 cents per share
Strike Energy (STX) is collapsing its Southern Cooper Gas Project in South Australia, along with the project’s Jaws pilot program.
Through the pilot program, Strike drilled a horizontal well to intersect the projects vertical well back in 2018, which was undergoing long term production testing. However, the company has now revealed its intension to close the project.
Toward this end, Strike has now provided notices to the project’s related parties to terminate three previous offtake agreements.
In connection, the company noted a $12.3 million impairment due to unearned revenue in its full-year 2020 report and is continuing to extinguish other liabilities associated with the charges.
With the impairment noted and the offtake agreements terminated, Strike now intends engage with the joint venture and begin logistically planning the project’s winddown, which is scheduled for some time in the new year.
The news comes at the end of an otherwise impressive year’s trading for Strike Energy shares. After shaking off a pandemic-induced dip at toward the beginning of the year, Strike shares have been on a rapid rise and are currently valued 33 per cent higher than their price at the start of 2020.
Once the project is wrapped up, Strike will turn its attention to the other operations on its books, namely the West Erragulla field, where last year it struck a major gas discovery. Strike currently operates West Erragulla in a 50-50 split with Warrego Energy and recently completed a second intermediate hole at the site.
Strike Energy closed in the grey for 28 cents per share.