Strike Energy posts 300PJ gas resource for WA Ocean Hill jurassic gasfield with mid-range confidence

Strike Energy (ASX:STX) shareholders may be raising eyebrows today as the company’s shares remain flat, even as Strike announces a new 2C Contingent Resource for its Ocean Hill onshore gasfield development in WA’s Perth Basin.

This same lack of movement comes while high oil prices predict a contagious rise of gas prices in the near future (though, perhaps dampening sentiment is that the development is at least three years away.) 

The 2C Contingent resource posits there are some 300PJ of gas available for extraction at Ocean Hill. A ‘Contingent’ resource is a resource estimate, contingent on assumptions about a chance of success. It reflects the third lowest confidence tier, following ‘Probable’ and ‘Proven’ at the top. 

Its higher confidence 1C Contingent resource sits lower at 185PJ. However, that figure still resembles a boost to an existing 1C resource, published in 2013, of 700%. 

RISC Advisory certified the new resource posted today. 

What is Ocean Hill? 

Strike has multiple target projects in the Perth Basin, Ocean Hill is one of its 100% owned tenements. All in all, those projects are: 

• Walyering 

• Ocean Hill 

• South Erregulla 

• West Erregulla

Regular readers may recognise the name Walyering. The Walyering project is where Strike, alongside partner Talon Energy (ASX:TPD), has recently moved to a positive FID to develop that onshore gasfield for natgas sames into WA’s domestic spot price market. 

The success of the Walyering project will no doubt be observed as an indicator of the likelihood of development at Ocean Hill. At this current rate, Talon and Strike expect to commence sales of natgas into WA’s domestic channels by as early as Q1 2023. 

The Walyering project has 2P (“probable”) reserves of 54.2PJ natural gas; significantly less than the 2C and 1C readings for Ocean Hill. The latter’s readings were also ticked off on by RISC. 

Worth noting is that the 1C/2C estimates should be considered preliminary at this current time, but, a confirmation of hydrocarbon deposits on-site at Ocean Hill. 

3D seismic planned 

Strike Energy will next move ahead to the production of 3D seismic imagery at Ocean Hill to inform the direction of future exploration drilling. Strike is targeting Ocean Hill to come online by 2025. 

Ocean Hill is located relatively nearby (6km) an existing gas pipeline station which connects to the Dampier-Bunbury natgas network, allowing sales to industrial customers in the state’s south including Aluminium giant Alcoa. There is currently no guarantee, formal or informal, Alcoa will buy any.

“Strike’s success at the recently sanctioned Walyering field has increased the value and confidence in its existing acreage position,” Strike Energy CEO Stuart Nicholls said. 

“This includes the Ocean Hill gas field, where RISC ahs confirmed a substantial 2C Resource of 300PJ.” 

“Completion of this resource rounds out the full certification of all Strike’s Perth Basin portfolio…our total portfolio now totals approximately 889PJ, combining probable and contingent resources.” 

The current state of Strike Energy's three month charts