Strike Energy (ASX: STX) has signed an option agreement to supply 12.5 petajoules of gas to Austral Bricks that will facilitate rapid commercialisation of the company’s Southern Cooper Basin Gas Project in South Australia.
This complements a previous option agreement to supply Orora Limited with 30PJ of gas and a binding term sheet with Orica for the supply of up to 150PJ over a 20 year period.
Under the Gas Supply Option Agreement, Austral Bricks – a subsidiary of Brickworks Limited (ASX:BKW) – can purchase 1.25PJ per annum at a fixed price over a 10 year term from 2017.
Austral will pay Strike an option fee as a gas pre‐payment, conditional only upon the PEL 96 joint venture proceeding with a pilot production test project.
It can then exercise the option when a decision is made by the PEL 96 joint venture to proceed with development of the Project.
Strike will use the option fee to accelerate the PEL 96 work program following the recent confirmation of a substantial, continuous gas resource directly under the Moomba to Adelaide gas pipeline.
The company had recently increased prospective gas resource at the PEL 96 permit in the Cooper Basin to 6.8 trillion cubic feet.
Strike is the operator of the PEL 96 permit with a 66.667% interest while Energy World Corporation (ASX: EWC) has 33.333% interest.
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