Orica to Make First Pre-Payment for Strike Energy's Gas

Orica Limited has decided to make the first pre-payment of A$7.5 million to Strike Energy under the terms of the 250PJ gas sales agreement, Strike said Wednesday.

The decision by Orica to proceed follows the completion of an independent review of the project by DeGolyer and MacNaughton, Strike said adding that independent review defined a significant contingent gas resource and a clear pathway towards commercial development.

It also validated the significant progress Strike has made in de-risking the Southern Cooper Basin Gas Project since July 2013.

Strike has earlier announced that it has accelerated phase 3 of the flow testing program – the Klebb pilot test, including the fracture stimulation and flow testing of the Klebb 2 and Klebb 3 wells. The fracture stimulation of the wells will be undertaken in June with flow testing of the upgraded wells continuing through the September quarter. The objectives of this phase of testing are to accelerate achievement of commercial gas flow rates and initial gas reserve certification, Strike stated.

The company will now progress to phase 4 of the program - the drilling, fracture stimulation and completion of additional wells at the Le Chiffre location. These activities are planned to follow completion of the phase 3 program.