Strike Energy (ASX: STX) has reached a binding gas offtake agreement with Orica (ASX: ORI) that could result in the latter making up to $52.5 million in pre-payments as appraisal and development milestones are met.
Under the term sheet, Strike will supply up to 150 petajoules of gas over 20 years from PEL 96 in the Cooper Basin, South Australia.
The deal provides Strike with the opportunity to progress appraisal and development of its Southern Cooper Basin Gas Project, which consists of PEL 94, PEL 95 and PEL 96.
PEL 96 has estimated prospective resources of between 2.7 trillion cubic feet and 6.3Tcf of gas net to Strike, which holds a 66.67% operating interest.
Strike will commence field activities in the current quarter.
The other partner in PEL 96 is Energy World Corporation (ASX: EWC) with 33.33%.
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