Transcription of Finance News Network Interview with Strike Energy Limited (ASX:STX) Managing Director, David Wrench
Carolyn Herbert: Hello I’m Carolyn Herbert for the Finance News Network and joining me from Strike Energy Limited (ASX:STX) is Managing Director, David Wrench. David, welcome back.
David Wrench: Thank you, it’s a pleasure to be here.
Carolyn Herbert: Can you start by giving us a quick overview of Strike and its key assets?
David Wrench: Strike’s an oil and gas company and we’re currently developing a large gas project, in the Cooper Basin. We also have some oil and gas production in the US.
Carolyn Herbert: The Southern Cooper Basin gas project continues to be a key focus for the company. Can you outline some of your achievements in the first quarter of FY2016?
David Wrench: The September quarter was a pretty active quarter for us in the project. Our focus was on the upgrading of the Klebb pilot production program. And we did a lot of work at the various wells, including fracking two of the wells, Klebb 2 and Klebb 3 and installing new pumping systems. We’re very pleased with the way that went and by the end of the quarter, production was back up and running. And we were very pleased with the kind of rates and performance we were seeing, from the wells.
Carolyn Herbert: What are some of the unique characteristics of the Southern Cooper Basin gas project?
David Wrench: The project has a very very large gas resource. It’s of the order of 4.5 Tcf of gas. It’s located directly under major gas pipeline infrastructure, which is connected directly to the major gas markets in eastern Australia. The resource itself is hosted in a series of very thick coals. And the resource concentration, or the amount of gas per square kilometre is incredibly high, which means that the economics of development of the project are incredibly favourable.
Carolyn Herbert: What’s Strike aiming to achieve over the next six months?
David Wrench: Our primary focus over the next six months is to continue to build on the success that we’ve achieved over the prior periods. Specifically we’re looking to generate commercial gas flows from the wells that we’re currently testing. And then use those results to develop the next round of wells, which will enhance and optimise economics.
Carolyn Herbert: Given the recent corporate activity in the sector. What are your thoughts around Strike’s position in the market?
David Wrench: Well we’re just focused on our own assets and moving our own project forward, we’re trying to move as fast as we can. And we believe there are great opportunities for us to develop this project over the coming 12-month period and create value for our shareholders.
Carolyn Herbert: Strike’s used a range of innovative funding sources. Can you give us some more details about these and why they’re so important to the company?
David Wrench: We have raised funding from two main sources over the past couple of years. We’ve raised about $19 million from our gas offtake partners. And we’ve also been able to raise about $15 million, by way of search and development tax rebates. Those two sources have been incredibly important for the company, because it’s meant that we’ve been able to fund quite a significant program, without having to dilute shareholders. And at the end of the September quarter, we have $9.6 million in the bank and we’re comfortably funded for the foreseeable future.
Carolyn Herbert: Finally David, Strike says it’s planning to process and treat gas in the field. How are your plans to achieve this progressing?
David Wrench: We’ve done a lot of work over the last quarter with respect to the designs and preliminary engineering for a gas processing facility. We’re very pleased with those results and we think that we’ll have a very economic and innovative solution, to gas processing over the next six months.
Carolyn Herbert: David Wrench, thanks for the update on Strike Energy.
David Wrench: My pleasure.