Strike and Warrego Energy upgrade Wagina gas discovery

Strike Energy ASX STX Wagina Warrego WGO gas discovery
Joint venture partners Strike and Warrego Energy have firmed up the recent gas discovery made in the shallower target of its West Erregulla-2 well in WA’s Perth Basin.

Strike Energy (ASX: STX) and Warrego Energy (ASX: WGO) have upgraded a recent gas discovery made in the Wagina sandstone as drilling continues towards the deeper primary target of the West Erregulla-2 well onshore Western Australia.

At the start of August, the joint venture partners announced the discovery of conventional gas in the Wagina sandstone, the shallower of two reservoirs being targeted by the well.

In an update today, Strike revealed further analysis of log data has indicated an improved net reservoir to at least 10.2m across the Wagina sandstone with porosities up to 14%.

According to the operator, this upgrade positions the West Erregulla-2 Wagina discovery on par with the producing Beharra Springs gas fields, located 9km from the West Erregulla prospect.

As Strike has continued to drill deeper towards the well’s planned total depth of 5,200m, it also encountered an additional 5m of gas-bearing Wagina sands, bringing the total gas column to 79m.

Strike managing director Stuart Nicholls said these recent developments were “very exciting”.

“This is a significant gas discovery given the observed and interpreted quality of the formation and over-pressured reservoir,” he said.

Beharra Springs gas field

Beharra Springs and its associated fields were discovered in WA’s onshore Perth Basin in the 1990s and early 2000s and continue to produce sales gas today.

Flow testing from the fields recorded original reservoir pressures of around 5,780 psia, an average net pay of 10.4m and porosities of 9.5%.

This compares very favourably for West Erregulla-2, which boasts reservoir pressure in excess of 6,800 psia, a 10.2m net reservoir and up to 14% porosities.

In addition, West Erregulla-2’s 79m gross gas column compares to typical gross gas columns of about 40m at the Beharra fields.

“Our confidence is further enforced by the extensive analogue data from the Beharra Springs fields,” Mr Nicholls said.

He noted the Redback South-1 well, which tested at 38 million cubic feet of gas per day, is located directly to the west of West Erregulla and is only 244m shallower.

“This well and others are not only right next door but host a producing, conventional gas field in the same Wagina sands in the same basin,” he said.

The plan ahead

Drilling at West Erregulla-2 will continue to a planned total depth of 5,200m.

The well’s remaining primary target is the Kingia High Cliff sandstones, which are home to the Waitsia gas field and are known to have produced the highest natural gas flow rates of any onshore well in Australia’s history.

“With a conventional gas discovery already secured behind pipe and the primary target yet to be drilled, Strike is looking to deliver on further outcomes from WE-2 as predicted in the Strike geological model,” Mr Nicholls said.

“We are encouraged by the results to-date and look forward to a future flow test, which would allow for a declaration of a contingent resource,” he added.

Strike operates the West Erregulla permit EP469 with a 50% interest while partner Warrego holds the remaining 50% stake.

By early afternoon trade, Strike shares were up 14.17% on today’s news to $0.137. Shares in Warrego also climbed 12.12% to $0.185.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.