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Strike Energy (ASX:STX) share price slips 7% despite ‘significant upside’ find

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The Strike Energy Ltd (ASX: STX) share price is sliding today amid the company releasing details of a gas discovery.

The oil and gas explorer’s shares are swapping hands at 28 cents today, a 6.67% fall. In comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.68% today.

Let’s take a look at what the company reported to the market.

Gas discovery

Strike announced it has made a “high quality conventional gas discovery” at the Kingia Sandstone in its South Erregulla-1 well.

The gas project is located in the North Perth Basin in Western Australia. Strike has 100% ownership of the well.

Logging and petrophysical interpretation of Kingia Sandstone found net pay of 14 metres in a gross 52-metre gas column. Porosity is up to 20.2%, while the reservoir pressure is about 6800 psia.

Commenting on the results, managing director and CEO Stuart Nicholls said:

The completion of South Erregulla marks the end of a very successful exploration campaign for the company. The results of this campaign, will, via Walyering, bring the company’s first cashflows forward. And, with South Erregulla, release significant upside through the integration of value-added, domestically focussed and low carbon downstream activities.

Strike entered a trading halt on 3 March, pending the release of this announcement. The company emerged from its trading pause this morning.

Strike noted it has been pursuing many milestones at Project Haber in the past 18 months. Nicholls said:

With this new resource confidence, Strike will now look to execute several pending workstreams that will see the development of the project accelerate substantially.

The Strike Energy share price has slipped around 12% over the past year although it has surged 36% this year to date.

In the past month, Strike Energy shares are up 12%, gaining almost 10% in the past week alone.

For perspective, the benchmark ASX 200 has returned 5% over the past year.

Strike Energy has a market capitalisation of about $567 million based on its current share price.

Source: Read More

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