Strike Energy (ASX: STX) has announced a significant 19% increase in its West Erregulla 2P Reserves to 251 PJ, independently audited by Miller & Lents.
The company maintains a 50% operated interest in the L25 and L26 licences, reinforcing its control over these important gas assets.
Beyond the 2P Reserves, the update also detailed substantial contingent and prospective resources.
West Erregulla has Contingent Resources of 10 PJ (2C) and 18 PJ (3C), while West Erregulla Prospective Resources were detailed as 32 PJ (1U), 63 PJ (2U), and 114 PJ (3U).
Erregulla Deep also features 38 PJ (2C) Contingent Resources, underscoring the area's ongoing exploration potential.
Development Timeline Firming
The pathway to production for West Erregulla is becoming clearer, with first gas targeted around 2029.
This follows a planned Final Investment Decision (FID) in 2027, marking key milestones in the project's development schedule.
Importantly, Strike Energy has secured the necessary upstream environmental approvals for the **West Erregulla **development, de-risking the project's progression towards production.
Concurrent with this, the company's South Erregulla 85 MW peaking power project is making significant headway.
Construction is 82% complete, with dry commissioning already underway.
The project remains on track for completion by 1 October 2026, providing a clear timeline for new energy supply.
Exploration Upside and Production Outlook
Further exploration activity is ramping up, with the Walyering West-1 exploration well expected to spud by mid-April 2026.
This well, located in Production Licence L23 (where Strike holds a 100% interest), aims to test a 2U Prospective Resource of 46 PJ.
A successful outcome at Walyering West-1 could significantly enhance Walyering's production profile and open up additional opportunities for gas marketing.
While Strike Energy continues its development efforts, recent Q1 FY26 quarterly reports noted a modest quarter on quarter decline in near-term production from Walyering.
Despite this, the sustained development expenditure across various projects, including the South Erregulla power station, signals a focus on longer-term growth.
Financial Strength and Funding
The company's Q1 FY26 update revealed a robust financial position, with cash and cash equivalents of $105.1 million and total liquidity reaching $140.2 million.
This strong liquidity provides a solid foundation for its capital-intensive development projects.
In a boost to its balance sheet, Strike Energy received a strategic investment of approximately $86 million from Carnarvon Energy via a two-tranche placement.
This was complemented by approximately $1.7 million raised through a Share Purchase Plan, further strengthening financial capacity.
Strike also benefits from a $217 million financing package with Macquarie Bank, providing essential financial flexibility.
This package supports the ongoing development of its Perth Basin assets and its broader vertically integrated gas and power strategy.
