Strike Energy Ltd

Strike signed the Eagle Landing JV agreement, confirming its 27.5% Eagle Ford interest. JV leases total 12,400 acres (3,410 net), mostly in Fayette County. Net target potential is 10-21 million barrels of oil equivalent; leasing continues. Finalises the position announced 28 April.

farm in farm out agreement

Strike is taking a 27.5% interest in an Eagle Ford shale joint venture in Texas, with about 8,500 gross acres (2,300 net) in the oil window. Target potential is 7-14 million barrels net. New oil-focused strategy; documentation still being finalised and no price stated.

farm in farm out agreement

Sadie 1 reached total depth of 12,400 feet. Gas shows and logs indicate potential gas pay in the main Wilcox target; the well is being prepared for completion and testing. Prospective resource 15-20 Bcf (40% Strike). Commerciality is not yet shown.

drilling result

Executive Director and COO Derrick O'Keeffe resigned from the board, effective immediately, after an internal reorganisation to cut operating management and focus on high-impact exploration. This follows the January sale of two producing fields.

director officer appointment

Strike bought a further 10% of the Louise gas-condensate field and Eaglewood JV for US$3.75m, lifting its stake from 30% to 40%. Louise has produced a steady 5 MMcfe/day since May 2010 with no decline; Strike's share rises to about 2 MMcfe/day.

asset acquisition disposition

Steindorf 1 flowed gas from four zones, but on current indications below commercial rates, which the company calls disappointing. One horizon is still being evaluated before a decision to extend testing or abandon. Sadie 1 is drilling ahead at 2,370 feet.

well test result

Strike sold its Rayburn and Mesquite US gas fields for US$21.7m net cash (US$2.63/Mcfe of 1P reserves). Debt of US$5.8m is repaid and hedges closed, leaving A$20.4m cash. Louise (30%) and Eaglewood remain, with a six-well US program proposed.

asset acquisition disposition

Steindorf 1 logs and samples suggest commercial gas intervals may exist in the Wilcox target. The joint venture approved casing so the zones can be tested. Management says commercial viability is unproven. Testing timing awaits equipment.

well test result

Lab tests on Forge 1 coals show gas of about 40 scf/ton, even in weathered coal, which the company says points to better gas in deeper coals. Next Southern Cooper drilling is likely delayed to first half 2011 (weather, rig availability).

drilling result

Net 2P reserves at the Rayburn, Mesquite and Louise fields rose 77% to 13.22 Bcf gas and 0.21 MMbbl condensate at 30 June 2010, mostly from the Louise discovery. 1P rose 62% to 12.11 Bcf. An independent report is due in the December quarter.

resource reserve update

Steindorf 1 on the 200 Bcf Deerslayer prospect (Strike 30%) spudded 16 September and was at 2,357 feet. Planned depth is 14,500 feet, about 40 days. It is the third well of the 350 Bcf program after Starnes dry and Muegge suspended.

drilling spud

Chairman Jeff Schneider, a director since before the 2004 listing, stood down on 19 August 2010. Tim Clifton becomes non-executive chairman. Substantial shareholder Timothy Goyder joins as non-executive director.

director officer appointment

Forge 1 has been suspended at 1,351m, before reaching the deeper Patchawarra coals, so drilling can resume later with different equipment. The 15m Epsilon coal is called promising. A rig for the next stage is not yet confirmed. Texas drilling to resume this quarter.

drilling result

Muegge 1 reached 13,650 feet with gas shows in the Wilcox, but log interpretation is inconclusive and the well is suspended pending evaluation. Not a declared discovery. Steindorf 1 timing is undecided but still expected this quarter.

drilling result

Forge 1, Strike's first Cooper Basin coal seam gas well (PEL 96, 66.7%), cored a 15-metre gassy coal seam at 1,311-1,326m. Gas was seen in mud logs and core, an early encouraging sign for the 3,700-9,300 PJ prospective estimate. Deeper coals remain untested.

drilling result

Maiden CSG drilling began at PEL 96 with the Forge 1 spud on 28 June, after months of flood delays. Strike (66.7%) targets 3,700-9,300 PJ of prospective gas, starting with two to four wells of up to 1,600m.

drilling spud

Starnes 1 reached 13,030 feet with gas shows but no commercial pay; it is being plugged and abandoned. This is the program's first dry hole. Muegge 1 is delayed by mechanical problems, with total depth now expected late June to early August.

drilling result

Gardner Duncan 1 tested at 3.7 MMcf/d gas, 111 bbl/d condensate and 80 bbl/d water gross, at the upper end of expectations. Strike's 30% lifts its production by 25% to about 600 boe/d, with no fracture stimulation needed.

flow test result

Gardner Duncan 1 on the Louise prospect (Strike 30%) is flowing to sales at commercial rates, expected at 2-5 MMcf/d like adjacent wells. Muegge 1 is at 7,740 feet; Starnes 1 due to start within a week.

production update

Eaglewood JV (Strike 30%) has contracted two rigs for a three-well Texas program (Homestead, Pathfinder, Deerslayer) targeting up to 350 Bcf, about 100 Bcf to Strike's share. First drilling starts within a week. Louise production facilities near completion.

drilling scheduled

Strike ended its Cadlao oilfield pursuit: mutually acceptable farm-in terms could not be agreed with Blade Petroleum. This resolves the thread that began with the December option. Strike will keep looking for new opportunities and focus on its US and Cooper assets.

material agreement termination

Strike will not exercise its option to buy Blade Petroleum (Cadlao oilfield), preferring to pursue a farm-in; talks with Blade continue. This ends the proposed A$20m acquisition. Gardner Duncan 1 is cased with gas sales expected in 4-6 weeks. PEL 96 drilling delayed again by flooding.

asset acquisition disposition

Strike reports a significant gas discovery at Gardner Duncan 1 (30% interest), with gas pay from logs. Testing to confirm commerciality takes 4-6 weeks. The company says its share could double reserves; a 100 Bcf Wilcox prospect is next, offsetting the Louisiana dry hole.

drilling result

Gardner Duncan 1 on the Louise Prospect (Eaglewood JV, Texas, Strike 30%) spudded, targeting 30 Bcf to 10,300 feet under a turn-key contract that limits cost overruns. Success could double Strike's reserves. Spud date was later corrected.

drilling spud

The Driskill Land Co 1 well in Louisiana reached 8,962 feet and found no commercial hydrocarbons, so it is being plugged and abandoned. The Eaglewood JV's Gardner Duncan 1 well in Texas, with Strike at 30%, is due to spud within days.

drilling result

Strike secured an option to buy Blade Petroleum, holding the Philippines Cadlao oilfield (2P reserves 6.3m barrels, first oil targeted Q4 2010). Price is up to A$20m: 33⅓m shares at A$0.30 (A$10m) plus up to A$10m performance payments. Option expires 31 January 2010. New oil-weighted strategy.

asset acquisition disposition

Strike won new permit CO2009-D (100%) and bought Magellan's interests in PEL 94 (35%), PEL 95 (50%) and the Aldinga oilfield PPL 210 (50%, 15 bbl/d) for A$1.3m. Southern Cooper acreage rises from 10,000 to 17,600 sq km; PEL 96 drilling still due January 2010.

asset acquisition disposition

Strike signed a second US Gulf Coast joint venture with Houston-based Texana Resources Partners, earning at least 12% in the first Louisiana well (December 2009). Production is back to 700 boe/d net. Eaglewood drilling resumes January/February 2010 (30%). Up to 10 US wells are possible in 2010.

farm in farm out agreement

Unaudited FY2009 results: revenue A$41.2m, net profit A$10.2m, oil and gas revenue up 128% to A$36.4m, 60% gross margin, A$13.3m cash. A put option secures a minimum US$3.00/Mcf to June 2010. US drilling starts November 2009, PEL 96 drilling by year-end.

annual report

Independent review by MBA confirms PEL 96 prospective CSG resource: best estimate 3,712 PJ, high 9,281 PJ gross (Strike share 2,475-6,188 PJ). Drilling tenders are out, three wells planned Nov/Dec 2009 subject to approval. Key gas content and permeability are still untested.

resource reserve update

Strike sold 5.75 million Comet Ridge shares for A$2.6m, a A$1.4m profit, to fund its share of the PEL 96 drilling. Its holding falls from 8.75m to 3.0m shares, so the Comet Ridge stake is largely realised. Drilling awaits approvals and a rig.

asset acquisition disposition

Strike granted coal seam gas licence PEL 96 in South Australia's Southern Cooper Basin, 66.7% and operator, with Australian Gasfields 33.3%. It covers 4,050 km2 with 8-20 Tcf prospective resource. Drilling approvals are targeted for the September quarter. Resolves the long native title delay.

asset acquisition disposition

Backs the presentation's Kingston lignite figure with a JORC resource of 578.3 million tonnes (523.5Mt Measured, 54.8Mt Indicated) in South Australia. This is the FuturGas coal-to-liquids deposit, whose work had been delayed pending a partner.

resource reserve update

December quarter revenue was A$13m, up 8%, with gas output up 55%. Cash was A$14.5m and A$8.6m of debt remains. The company is cutting staff and overheads, focusing almost solely on the Gulf Coast, delaying FuturGas pre-feasibility work and seeking partners for Carnarvon and Cooper.

quarterly activities report

The Tumbleweed well, Hart Estate Gas Unit 1-1, reached 12,100 ft. It found gas but low permeability, so it is unlikely to flow commercially and is temporarily abandoned. Strike's net output is 9.6 mmcf/d and 215 bpd. A Duncan Ansley shallow zone is selling 0.5 mmcf/d.

drilling result

Tumbleweed well Hart Estate Gas Unit 1-1 spudded 19 December to test 40 Bcf (Strike 30%). Gilbert Freeman 3's shallowest zone flowed 1.5 mmcf/d. Because of lower prices, some Gulf Coast drilling is deferred, with a pause after Tumbleweed until April/May 2009.

drilling spud

Technical Director Jim Durrant, a founder since 1997, and non-executive director Peter Gunzburg resigned from the board. The Technical Director role is abolished, as part of cost cutting and the sharper focus on non-operated US Gulf Coast interests. Further cost reductions are under consideration.

director officer appointment

Duncan Ansley Gas Unit 1-1 reached 12,200 ft with no commercial pay in the Wilcox, the third weak Rayburn appraisal well. A shallower gas zone will be flow tested. The MD says proved reserves may be affected by around 10%. Production is 46 mmcf/d.

drilling result

The chairman's AGM address says the company will focus its funds on the US Gulf Coast, contain discretionary spending, and seek to limit its own funding of Hybrid Energy, Carnarvon and Cooper. It notes revenue of about A$4m a month and the low share price.

investor presentation

Independent review puts Rayburn and Mesquite proved plus probable reserves at 86.2 Bcfe (19.3 Bcfe net to Strike) at 30 June 2008. Unrisked prospective gas resource is 870 Bcf (240 Bcf net). This follows the reserves report promised since October.

resource reserve update

Duncan Ansley Gas Unit 1-1, the tenth Rayburn well, spudded 7 October. A 12-month drilling programme follows, with exploration wells from November: Tumbleweed (40 bcf, 30%) then Flint (50 bcf, 35%). Revenue is still above A$4m a month; a reserves report is due.

drilling spud

Duncan 4 reached 12,250 ft but the Wilcox sands were poor quality and unlikely commercial, so the lower section was abandoned untested. It is the second weak Rayburn appraisal well after Hlavinka. The rig moves to Duncan Ansley Gas Unit 1-1.

drilling result

Gilbert Freeman 2 tested at 8.976 mmcf/d gas and 245 bpd condensate, lifting Rayburn output about 25%. Gross Gulf Coast production is now 46.5 mmcf/d and 1,175 bpd; Strike's net share is 10.7 mmcf/d and 270 bpd. Revenue forecast stays above A$4m a month. This resolves the Gilbert Freeman 2 thread.

flow test result

Logs at Hlavinka Gas Unit 1-1 show gas in multiple Wilcox sands, but interpreted as poorer quality than earlier Rayburn wells. Partners deferred choosing test zones and plugged the well for later re-entry. Commerciality is unproven. Gilbert Freeman 3 testing is due early September.

drilling result

Duncan 3 tested at 10.1 mmcf/d gas and 234 bpd condensate, adding to Rayburn output. Gross Gulf Coast production (Rayburn and Mesquite) is now 38 mmcf/d and 900 bpd; Strike's net share is 8.8 mmcf/d and 214 bpd. This resolves the Duncan 3 test thread.

flow test result

Gilbert Freeman 3 reached 12,100 ft on 29 June with gas confirmed over several Upper and Middle Wilcox intervals, and will be cased for testing. Partners will drill an eighth Rayburn well, Hlavinka Gas Unit 1-1. Duncan 3 early test results are comparable to the other producing wells.

drilling result

FuturGas is now framed as a coal-to-liquids project with 40MW of power, targeting 10,000 barrels a day from the 578 Mt Kingston lignite. Pre-feasibility is due by end of Q1 2009 and the bankable feasibility by end-2012, with about A$7.5m a year initial funding and ~A$50m later. Partners and grants are being sought.

regulatory community update

Strike lifts its Eaglewood Gulf Coast interest from 25% to 30% (Flint prospect 25% to 35%) for about US$0.9m of past costs, and sells its Rocky Mountains interests to Pine Ridge for US$2m plus ~US$0.5m reimbursement. This ends the Tow Creek/Bear River/Florence position.

asset acquisition disposition

Gilbert Freeman 2 reached 12,200 ft two days early, with logs showing a high-quality pay section like nearby wells. It will be cased for testing. The rig moves to Gilbert Freeman 3, the seventh Rayburn well. Production holds near 24 mmcf/d.

drilling result

Gilbert Freeman 1 tested at a stabilised 3.8 mmcf/d gas and 126 bpd condensate, lower than Duncan 1 and 2 but still a producer. Rayburn now makes about 24 mmcf/d and 600 bpd. Gilbert Freeman 2 has drilled to 7,900 ft.

flow test result

Duncan 2 ST tested at a stabilised 10 mmcf/d gas and 224 bpd condensate, matching Duncan 1 and roughly doubling Rayburn to about 20 mmcf/d. Strike's share is US$1.8m a month at current prices. Mid-year revenue target raised to A$3-4m a month.

flow test result

Strike secured a US$11.7m five-year borrowing base facility with Commonwealth Bank, secured on Mesquite and Rayburn production. It funds up to eight more Gulf Coast wells by December 2008. Revenue is expected to reach about A$3m a month by end June.

debt financing

Freedom Natural Resources withdrew from the Tow Creek/Bear River farm-in, so Strike keeps its 37.5% and 33.75% interests rather than cutting to 10% and 6.25%. Florence drilling begins in early May with two wells, and Gilbert Freeman 2 is due to spud.

farm in farm out completion

Duncan 3 reached 12,300 ft and logs show the main Middle Wilcox sand is gas bearing, as expected. It will be completed for testing and production. Duncan 1 continues at about 10 mmcf/d and 260 bpd. The managing director expects another well to be proposed immediately.

drilling result

Comet Ridge announced a letter of intent with Freedom Natural Resources to fund drilling at Tow Creek and Bear River, with Strike's subsidiary joining. Combined Comet/Strike interests fall to 20% at Tow Creek and 12.5% at Bear River. Drilling starts by July 2008.

farm in farm out agreement

Hlavinka-Duncan 1R reached 12,800 ft but the Middle Wilcox main target sand is unlikely to hold hydrocarbons, a disappointing result for the step-out. A shallower interval looks gas-bearing and will be tested. Fifth well, Duncan 3, will be drilled next.

drilling result

Duncan 1 stabilised at 10.1 mmcf/d of gas and 260 bpd of condensate, and the field is named Cypress Eagle. Management says net revenue could reach about A$2m a month by mid-2008. Hlavinka Duncan 1-R redrill is due to start in early February.

flow test result

Hlavinka Duncan 1, the fourth Rayburn well and a step-out about 9,700 ft northeast of Duncan 1, spudded 2 January targeting 12,650 ft. Gilbert Freeman 1 is cased for testing. Duncan 1 is still flowing, with rates comparable to nearby wells.

drilling spud

Gilbert Freeman 1 reached 12,205 ft and penetrated the Middle Wilcox pay sands, plus extra potential pay above, per gas shows and logs. It is being cased for testing. Management calls Rayburn three for three. Fourth well Hlavinka Duncan 1 is a 9,700 ft step-out.

drilling result

Duncan 1 Middle Wilcox testing is producing gas and condensate at commercial rates, with a stabilised rate due in about four weeks. Duncan 2 sidetrack is cased. A third Rayburn well, Gilbert Freeman 1, spudded 5 December targeting 12,200 ft.

drilling spud

The Duncan 2 sidetrack reached 12,150 ft and logs show a full section of Middle Wilcox pay sand, resolving the earlier faulting problem. Duncan 1's Lower Wilcox testing is finished, and Middle Wilcox flow tests are expected to report in four to five weeks.

drilling result

Duncan 2 reached 12,200 ft but the target Middle Wilcox sand is faulted out, so a sidetrack of 2-3 weeks is planned. Duncan 1's poorer Lower Wilcox sands stabilised at only 0.5 mmcf/d. Production is still targeted for January 2008.

drilling result

Duncan 2, the first Rayburn development well, spudded on 22 October targeting Middle Wilcox gas to 12,200 ft, and was at 2,670 ft. Lower Wilcox testing at Duncan 1 is progressing, with interim results expected in 30-40 days.

drilling spud

Strike plans to demerge its FuturGas lignite project (578 Mt JORC resource) into Hybrid Energy SA and list it on the ASX in the first half of 2008. Shareholders would get pro-rata shares and an IPO entitlement. Barry Ford is the new managing director, with terms due in the December quarter.

business combination

Strike details its A$10m non-renounceable 1-for-6 entitlement issue: about 46.7m shares at 21.5c, a 14% discount, not underwritten. Proceeds fund part of the Rayburn drilling programme. Total shares would rise to about 327m. Record date 20 September, closing 8 October.

capital raising announcement

The Coal View 31-4 sidetrack (37.5%) was temporarily abandoned after the drill string became irretrievably stuck above the primary target, following the rig failures. Oil shows in the Niobrara remain untested, and the partners are reassessing how to proceed.

drilling result

The board approves a US$15m (net) Gulf Coast programme of six mostly development wells from October 2007, and plans an A$10m entitlement issue (details to follow). Funding also includes Mesquite cash flow, Rayburn revenue and a possible small debt facility. Targets revenue above US$20m in 2008/09.

capital raising announcement

The Department of Defence has commissioned Strike (44.5%, operator) to study supplying gas from the Rivoli field near Exmouth to power a Defence station, about 8 PJ over 20 years. First gas is possible in 2009 if approved. A feasibility study only, not yet a development approval.

contract award

Wireline logs confirm further gas pay in the Lower Wilcox at Duncan 1 (22.8%), adding to the shallower Middle Wilcox pay. Production testing is planned. Reserves are not yet estimated, and the Rayburn prospect had pre-drill potential of 500 Bcf. Management expects an early cash flow improvement.

drilling result

Wireline logs on Duncan 1 (22.8%) indicate gas pay in the shallower Wilcox. Its commercial value awaits flow testing after total depth near 16,500 ft. Strike calls results encouraging for deeper targets. This contrasts with McGall 1's main targets, which showed no pay.

drilling result

Comet Ridge says it is raising its Florence interest from 26% to 39% after AJ Lucas withdrew from US exploration. It states Strike is also increasing to 39%. The 3D survey starts next week, with drilling expected late in the third quarter.

farm in farm out agreement

Duncan 1 on the Rayburn Prospect (25%, potential 500 Bcf gas) spudded 9 May 2007, with proposed depth 16,500 ft. Casing is set at 2,768 ft. Florence 3D seismic is due to start next week.

drilling spud

Strike and the operator abandoned completion of McGall 1 because the gas zone needs fracturing and sits too near water-bearing sand. Completion would cost about US$2.5m. This ends the Flint well without production. Rig moves to Duncan 1 at Rayburn. Peltier still flows 15 bopd.

drilling result

McGall 1 (25%) reached 16,510 ft but found no commercial pay in its main targets. One secondary Wilcox zone is likely commercial gas and will be production tested. The rig then moves to Rayburn's Duncan 1, where Strike funds 33% of cost to earn 25%.

drilling result

Kewarra 1, Strike's first Cooper Basin well (15%), reached 1,630 m and found only a small oil accumulation in the Hutton Sandstone judged uneconomic. It is being plugged. McGall 1 shows elevated gas at 15,459 ft.

drilling result

Strike plans a private placement of 34 million shares at 26c to raise A$8.84m, lifting shares to about 279.9m. It cites funding Rayburn (500 Bcf), finishing McGall 1 and A$2.7m of cost overruns on three recent wells.

capital raising announcement

Attempts to recover stuck pipe in Coal View 31-4 were abandoned. The plan is to re-enter after the spring thaw and redrill the last 2,000 ft, about 3 to 4 days of drilling. A pump goes into Peltier 11-12 this week.

drilling result

Peltier 11-12 reached 6,700 ft with all three Niobrara targets appearing fractured and oil and gas shows, including free oil. It will be completed now. Coal View 31-4 pipe is still stuck. Comet Ridge says both wells met pre-drill objectives.

drilling result

McGall 1 on the Flint prospect (25% WI, ~200 bcf potential, 16,500 ft target) spudded on 28 January and was at 751 ft. Strike funds 33⅓% of the A$7.8m dry-hole cost, about A$2.6m. Webernick 5 is testing a small Frio gas zone, and Coal View 31-4 has stuck pipe but is producing oil.

drilling spud

The 1-for-10 entitlement issue at 22 cents closed, raising $4,917,808 before costs. Acceptances were 17,915,219 shares ($3.94m); the remaining 4,438,454 shares ($976k) go to shortfall applicants. Allotment is 18 January. This completes the raising proposed on 29 November.

capital raising announcement

Webernick 5 at Mesquite (32.3% WI) spudded on 3 January, targeting shallow zones above 5,000 ft. The Flint McGall 1 well (25%, ~200 bcf potential) has been brought forward to spud within a week. Peltier 11-12 is due to spud next week.

drilling spud

Coal View Unit 31-4 reached 6,600 ft on 25 December with oil and gas shows over 245 feet of the main Niobrara target, which logs suggest is fractured. It will be completed for testing in January. Webernick 5 and Flint wells are also scheduled.

drilling result

Strike announces a smaller one-for-ten entitlement issue at 22 cents to raise about $4.9m, replacing the withdrawn $8m offer. Funds go to Mesquite work including a shallow gas well, Gulf Coast seismic and Florence.

capital raising announcement

Strike withdraws its 7 November entitlement issue after the Mesquite operator deferred the Shefcik 2 and 4 wells, possibly for up to 12 months, following inconclusive Webernick 2 shallow-zone tests. Mesquite output stays at 10-11 mmcf/d, not 15. Funding is under review.

capital raising announcement

Coal View Unit 31-4 at Tow Creek began drilling at 3:30pm on 16 November 2006, delayed by a winter storm. It takes about 30 days to drill, targeting 200,000-500,000 barrels. Strike holds 37.5%. This is the first of three Rocky Mountain wells.

drilling spud

Strike announces a one-for-seven non-renounceable entitlement issue at 25 cents to raise up to $7,983,455, to fund expanded US work: Mesquite development (Shefcik 2 and 4), more Gulf Coast seismic and Florence. Follows the September quarter's cash and spending estimates.

capital raising announcement

Strike exercises its option to join the Florence oilfield redevelopment in Colorado, getting a 26% working interest after the earning phase. This resolves the open Florence decision and adds a third Colorado oil project beside Tow Creek/Bear River.

asset acquisition disposition

Comet Ridge contracted a rig for a three-well Tow Creek/Bear River program, with the first well to spud by 10 November 2006 and estimated to cost $1.8m. Comet Ridge holds 37.5% and 33.75% of the two projects, and it and Strike each pay 50% of the first two wells.

joint venture update

September quarter Mesquite output was flat on June, but revenue fell 5% on lower prices. Mesquite proved plus probable reserves are 5.5 Bcf to Strike's working interest, well below the earlier 15-20 Bcf indication. Flint and Rayburn exploration wells are now early 2007.

quarterly activities report

Webernick 2 tested at 3.48 MMcf/d gas and 97 bbl/d condensate, so all four Mesquite wells have flowed commercially, though below the 15-20 MMcf/d hoped for. Field output is 11-12 MMcf/d. Shallower zones will not be tested for now. Rig-drilled Lasso, Flint and Rayburn prospects (25% WI) start October 2006.

well test result

All four Mesquite wells are drilled; Webernick 1 and 2 testing is expected to take 1-2 more months. Colorado oil wells at Tow Creek and Bear River are due to start in July, with Texas drilling resuming in September. Regular drilling reports will now be issued as needed.

drilling scheduled

Strike says four wells support Mesquite's pre-drill potential of 25-35 billion cubic feet. Current net revenue is about A$750,000 monthly, below the earlier A$1 million by mid-2006 target, which it attributes to testing delays on the two Webernick wells.

production update

Webernick 2 reached total depth of 13,000 feet, deepened from the planned 12,300. Extensive gas shows across multiple zones from 10,780 to 13,000 feet suggest potentially commercial gas similar to the offset wells. It is not yet tested; further Mesquite drilling awaits testing.

drilling result

The entitlement issue closed with 72% take-up (26,977,847 shares), and the shortfall of 10,135,358 shares was placed with existing shareholders. The full $10,391,697 was raised at 28 cents. Shares were allotted 31 March.

capital raising announcement

Shefcik 3 achieved its first commercial test, so all of the first three Mesquite wells now flow at commercial rates. Webernick 2, the fourth well, spudded 22 March and was at 3,875 feet, with a planned depth of 12,300 feet.

drilling spud

Strike finalised raising its Eaglewood Participation Agreement interest from 10% to 25%, resolving the earlier negotiation. Testing at Shefcik 1 and Webernick 1 shows individual zones at 2-7 million cubic feet daily; testing runs another 4-6 weeks. A second pipeline lifts sales capacity to 12-13 million daily.

joint venture update

Beach Petroleum was awarded Cooper Basin permit ATP633P after an 8-year native title delay; Strike is entitled to a 15% interest. A 3D seismic survey is planned for Q2 and a follow-up well to Gidgee 1 around year-end. PELA 71 and 96 are expected mid-year.

regulatory community update

Strike announced a one-for-five non-renounceable entitlement issue at 28 cents to raise up to about $10.4 million (up to 37.1 million shares). Funds are for expanding Mesquite gas development and nearby exploration in Texas. It follows the 18 cent placement in January.

capital raising announcement

Shefcik 1 now flows 7.1 million cubic feet of gas and 170 barrels of condensate daily, and Webernick 1 testing confirms it is commercial. Webernick 2 is planned next, and Strike's Gulf Coast exploration interest is to rise from 10% to 25%, subject to formal agreement. Debt and equity funding are under consideration.

flow test result

Interim testing at Shefcik 1 shows a constrained stable flow of over 6 million cubic feet of gas per day plus about 158 barrels of condensate daily, flowing to a sales pipeline. Strike calls it an important step toward confirming commerciality.

flow test result

Strike secured firm commitments for a 22 million share placement at 18 cents per share, about $3.96 million (calculated from text). Funds go to testing and developing the Mesquite gas discoveries and drilling Shefcik 2 in Texas.

capital raising announcement

Strike will acquire a 37.5% interest in the Bear River oil prospect in Colorado, next to its Tow Creek project, via operator Comet Ridge. Mostly a cover note attaching the Comet Ridge release.

asset acquisition disposition