Strike to Supply Additional Gas to Orica

Strike Energy has agreed to supply Orica a further 100PJ of gas to the 150PJ agreed in July 2013 for a total prospective gas supply of 250PJ. The additional gas will be supplied over 10 years from 2020.

In July 2013, Strike announced the signing of a binding term sheet with Orica as the foundation customer for the Southern Cooper Basin Gas Project (SCB Gas Project) within the PEL 96 permit area in Australia.

Meanwhile Strike announced that the PEL 96 Joint Operating Committee has committed to proceed with the first phase of the Pilot Production Test Project (PPTP). This first phase of the Project will involve a multi‐stage fracture stimulation of the target  Patchawarra  coals  in  each  of the Le Chiffre 1 and  Klebb  1 wells.  Following fracture stimulation, the wells will be completed to enable flow and extended production testing to be undertaken.

Strike announced last month an upgrade of the PEL 96 estimated prospective resource of 4.5 Tcf net to Strike.

In  addition, the PEL 94 Joint  Venture (Strike  35%) has committed to fracture stimulation and extended production testing of the Patchawarra coals in the Davenport 1 well. The Davenport 1 well is in the adjacent permit to PEL 96. These three wells across PEL 96 and PEL 94 will be fracture stimulated back to back in a coordinated program.

Fracture stimulation operations are scheduled to start during May with initial flow results anticipated to be available during July 2014.

The initial goal of the first phase of the PPTP program is to demonstrate that the Patchawarra coals in PEL 96 are capable of sustained gas flows to surface. 

Concurrent with the above, Strike is  planning an expanded program of activities which will include the drilling, stimulation and production testing of additional wells within the PEL 96 permit area. 

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