Strike Energy Ltd (ASX:STX) is acquiring a 50% interest in a hydrocarbon exploration permit in the highly prospective Perth Basin of Western Australia.
The company has entered a definitive agreement with Warrego Energy Pty Ltd to acquire a stake in the West Erregulla block, which is near the recent high-profile Waitsia gas discovery.
Strike to operate project
Strike and Warrego will form a joint venture for the further exploration, appraisal and ultimate development of the permit with Strike to operate the project.
The company will fund Warrego’s share for one exploration well inclusive of associated costs.
Permit within a proven petroleum system
The permit is in the underexplored and evolving proven petroleum system in the Northern Perth Basin.
It contains extensions of the known commercial plays from within the basin.
These include the recent Kingia-High Cliff sand sequence (Waitsia), Irwin Coal Measures and Dongara-Wagina formation (Beharra Springs).
Subject to confirmation, the Kingia-High Cliff sands are believed to be present with thickness and porosity development interpreted to be similar in quality to Waitsia.
Initial views of the prospect are that it would be more than sufficient in size to support a stand-alone development.
The block is about 300 kilometres north of Perth and near the Dampier to Bunbury Gas Pipeline allowing a simple and cost-effective path to market for commercial hydrocarbons.