Strike Energy [ASX:STX] Shares Slip on Q4 2022 Activities Report

Strike Energy [ASX:STX] sought to address shareholders across a number of fronts that occurred in Q4 22 and off a bleak outlook on general gas in WA, saw its share price sinking near 3%.

Year to date, the company has spent more than $4 million in operating expenses over the past six months, $2.2 million in the last quarter alone, and received only $59k in customer sales.

Despite a negative drop in the last week of nearly 8%, the STX share price has experienced some strength longer term with a 67% gain over the last 52 weeks:

ASX:STX strike energy stock chart

Strike Energy talks projects and gas crisis

Earlier today, Strike provided a quarterly report including highlights for its ongoing activities for the Q4 22.

Strike’s production licence for its Walyering gas field has now been granted, and the development procurement program is now 98% complete, with fabrication 65% complete.

Walyering remains on schedule and on budget, the EP447 JV (joint venture) now includes a binding gas supply agreement with Santos, for 36.5 PJ gas from Q1 23, over five years.

Strike’s board has decided on a location for a domestic gas processing plant in Greater Erregulla, which it says will bring faster approvals, a central facility for processing gas, and flexibility to scale up its renewable energy strategy.

The energy company also mentioned its ongoing off-market takeover offer to acquire Warrego Energy’s outstanding shares in a one-for-one share swap. STX now awaits Warrego shareholder approval.

Strike Energy CEO Stuart Nicholls commented:

The Company made substantial progress in its pursuit of becoming a gas producer by the end of Q1/23 at the Walyering gas field.

Post engaging with the Warrego Energy Board on a proposed merger, significant corporate interest has precipitated for entry and access to Perth Basin gas, with Beach Energy, Mineral Resources and Hancock Energy emerging as bidders or acquirers of Warrego’s shares. This has culminated in a peak price paid of an equivalent $2.14 GJ on a 2P Reserve plus 2C Resource basis for Warrego. This transaction metric results in a multi-billion dollar look through for the value of Strike’s in ground gas.

The corporate activity for both Warrego and Norwest Energy Limited is validation of the rising value and increasing scarcity of gas in Western Australia, as well as recognition of the quality of the assets and gas discoveries of the North Perth Basin.’

Strike shared AEMO’s Gas 2022 Statement, flagging a deficit in the WA gas market that’s expected to increase as WA retires its coal-fired power generation fleet and moves to renewable alternatives.

The company said several gas suppliers in WA went down during the quarter, resulting in storage drawdown and rationing of gas.

STX warns this is evidence of the fragility of the WA gas market, and highlights a lack of future gas sources.

Age of scarcity: Australia’s next commodity boom

On the topic of a growing gas scarcity, Fat Tail’s resources expert and trained geologist James Cooper thinks the Australian resources sector is set to enter a new commodities boom brought on by something he calls the ‘Age of Scarcity’.

James is convinced ‘the gears are in motion for another multi-year boom in commodities’… a boom where Australia and its stocks stand to benefit.

The next big mining boom is predicted to happen in the next few years. The question is, are you ready for it?

You can access a recent report by James on exactly that topic, AND an exclusive video on his personalised ‘attack plan’ right here.

If that isn’t enough to sate your curiosity, you can also check out this recent interview with James and Greg at ausbiz.

Both are well worth a watch, so why not check them out right now?




Mahlia Stewart

For Money Morning

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