The share price of Strike Energy Limited (ASX: STX) has jumped 55% in early trade on Tuesday after the company announced a “staggering” gas discovery in the Kingia sandstone as part of the West Erregulla-2 drilling campaign north of Perth.
The Kingia formation was encountered at a depth of 4,753m with gas on rock showing a gross gas column of at least 97m. Log interpretation shows the lower section from 4,790m onwards is made up of several high-quality large units of clean sand with thick blocky porosity development. This 67m section, which has high gas saturation throughout, is interpreted to have net pay of 41 metres and an average porosity of 14.3% with peaks of up to 19%.
Importantly, the well has not encountered a gas water contact in the Kingia formation which, along with the excellent reservoir quality, is consistent with the seismic amplitude model that supports the interpreted field boundaries.
Strike’s managing director, Stuart Nicholls, said this was a truly an exceptional outcome.
“The Kingia results at West Erregulla have exceeded Strike’s highest expectations and indicate a significant discovery that appears to have higher reservoir quality than the Waitsia gas field.”
“With West Erregulla-2 now being one of the deepest wells ever drilled onshore Australia and finding such excellent quality sandstone reservoirs, the subsurface paradigms of the Perth Basin are shifting.
“Strike believes it has unveiled a new conventional gas fairway, with these initial results validating our geological model. With gas discoveries in the Wagina and now the Kingia sandstones the West Erregulla campaign is company-changing for Strike. With the well drilling ahead to the High Cliff sandstones which show an even better anomaly than the Kingia at West Erregulla, the chance of adding a further material discovery looks promising.”
Strike has completed drilling through the Kingia sandstone and has encountered the Bit Basher shale. Since then a bit change has occurred and as of the time of this announcement the depth is 4,895m and the well is yet to encounter the High Cliff sands.
Mr Nicholls said Strike will continue drilling through to a nominal final depth of 5,200m at the top of the Holmwood Shale. This will be followed by wireline logging, side wall coring, casing and running of a production completion followed by a flow test.
Strike Energy Limited (Strike – ASX: STX) is the operator and the holder of a 50% joint venture interest in EP469, and Warrego Energy Limited (ASX: WGO) the holder of the other 50% joint venture interest.
