Australia's Strike Energy Raises A$9.1mn - Update on Gas Contract
Australian Strike Energy has raised A$9.1mn ($7.3mn) via share placement to fund the Jaws‐1 appraisal program planned for its Southern Cooper Basin Gas Project in PEL96 in South Australia.
The placement is expected to settle on September 26 with the placement shares expected to be issued and to commence trading on the ASX on September 27. Strike has a 66.67% interest in PEL96 while the remaining interest in held by Energy World Corporation.
The Jaws-1 well, upon successful execution and testing, is expected to lead to a declaration of commercial success over the Klebb area of the Southern Cooper Basin Gas Project, Strike Energy said September 21. Surface works and long lead item procurement is currently underway with spud targeted in Q12018.
“Proving the commerciality of the Southern Cooper Basin Gas Project is the next step in the company’s value staircase, which we plan to immediately follow with the targeted Phase 1 50 TJ/d development. This capital raising provides the requisite funds for Strike to execute the Jaws-1 well which is expected to be the catalyst for the commercial definition of the deep coal seam play in the Southern Cooper Basin,” managing director, Stuart Nicholls said.
On success, the Jaws-1 well is expected to allow Strike to book a reserve, commit to the drilling of Jaws-2 and support a final investment decision on the first phase project to support the delivery of gas into the South Australian energy system by the end of 2019.
Update as of September 22:
Strike Energy said September 22 it has signed a new gas sales agreement with mining firm Orica International to supply up to 64PJ (1.7bn m3) of gas from its Southern Cooper Basin Gas Project in PEL96 in South Australia to Orica, though did not say over what period. It follows a binding term sheet signed by Strike with Orica last month for negotiation of a new agreement to replace the existing one entered in 2014. It said the new agreement replaces the 2014 agreement for the supply of up to 250 PJ of gas, with the gas to be supplied post ramp-up at a rate of 6.4 PJ/yr, at an improved price. The date of repayment for Strike's A$2.5mn loan to Orica has been extended to 2021 from 2018.
Shardul Sharma