Strike Energy (ASX: STX) has forecast a conservative cash flow of $5 million for the 2013 financial year, with the main driver production from its Eagle Ford Shale assets in Texas.
David Wrench, managing director, told attendees at Proactive Investors "Stars in 2012" One2One Investor Forum in Sydney recently the $5 million is basically “steady as she goes” from the existing assets plus a very conservative contribution from the Eagle Ford.
The presentation on the night can be ACCESSED HERE.
“The main driver of cash flow for us in 2013 will be production out of the Eagle Ford. Depending what production rates we get out of the first couple of wells (this) will really drive additional cash flow.
“If we achieve what we think we can achieve, there will be significantly greater cash flow for 2013.”
Strike’s first Eagle Ford Shale production test well, Bigham 1H, has reached a total measured depth of 17,700 feet (~5,400 metres) and is awaiting fraccing.
The well is due for completion and first production around October.
Success at the Bigham-1H well will de-risk Strike's assets in Lavaca and Fayette counties, Texas. Bigham 1H aims to demonstrate production potential.
Sanchez Energy has estimated ultimate recovery of 350,000 to 550,000 barrels of oil equivalent (boe) per well based on a 120 acre well spacing at its Marquis area, which is adjacent to Strike's acreage.
This equates to 285 unrisked well locations across Strike's 34,793 acre position with resource potential of 25 to 40 million barrels of oil equivalent net to the company’s 27.5% working interest.
Meanwhile, Strike is finding itself in a unique position in the Cooper Basin, South Australia, with coals unlike any other players in the region, according to Wrench.
“We believe we have quite a unique situation, nobody else in the Cooper Basin has coals like those that we’ve discovered and we believe therefore we have a unique opportunity to try and push the development and understanding of those coals in parallel.”
In the Cooper Basin, Strike has intersected 116 metres of net coal, the thickest coal seams ever in the basin, with its Davenport-1 unconventional evaluation well.
The company observed elevated gas readings across the target formations and liquids shows.
Exceptionally thick, gas-saturated coal formations indicate very large resource potential.
It follows on the success of the Marsden 1 well and cores from both wells are currently undergoing laboratory analysis to confirm hydrocarbon content and other properties.
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