Highlights

  • Strike selected Hancock Energy’s proposed Belisama facility as its preferred processing route for future West Erregulla gas.
  • The company agreed terms for a conditional $30 million loan to support drilling and other pre-investment work.
  • Quarterly net production increased to 1.13 petajoule equivalent, while sales revenue reached $14.08 million during September.
  • Strike targeted November energisation of its 85 megawatt South Erregulla power project before a commissioning period.

A gas processing route is taking shape at West Erregulla, but the financing needed to advance it is not yet finalised. Strike Energy Limited (ASX:STX) used its September 2026 quarterly update to outline an agreement with Hancock Energy, improved production at Walyering and the next steps towards energising its South Erregulla power project. The developments come alongside a cash balance of $40.16 million and drawn debt of $188.01 million at quarter end.

Hancock Route Moves Forward, With Conditions Attached

Strike has selected Hancock Energy’s proposed Belisama gas processing facility as the preferred pathway for its share of future West Erregulla gas. An Implementation Agreement has been executed, and the contemplated tolling arrangement provides capacity of 43.5 terajoules a day at a fixed capital charge.

The parties have also agreed terms for a loan of up to $30 million to fund work before a final investment decision. However, the loan remains conditional on a gas processing agreement, final documentation and Macquarie’s consent. Proposed uses include drilling and completing West Erregulla-6, workovers at West Erregulla-2 and -4, and a gradient survey at West Erregulla-3. Repayment would come from first gas.

Strike is targeting an upstream final investment decision in mid-FY28 and first gas in mid-calendar 2029. Both dates remain development targets.

Walyering Production Lifts Quarterly Revenue

Net production increased to 1.13 petajoule equivalent from 0.99 in the June quarter. Sales gas production reached 1.09 petajoules, alongside 5.70 thousand barrels of condensate. At Walyering, both compressors were commissioned, and late-September rates reached up to 20 terajoules a day against a quarterly average of approximately 12.

Total sales were 1.90 petajoule equivalent, including gas purchased from third parties. Revenue rose to $14.08 million from $13.08 million, comprising $13.36 million in gas revenue and $0.72 million from condensate. The average realised gas price was approximately $7.15 per gigajoule. Strike bought and resold 0.78 petajoules of third-party gas to meet a firm offtake agreement.

South Erregulla Nears Grid Commissioning

The 85 megawatt South Erregulla gas power project has reached practical completion at the site, with Strike’s construction deliverables completed after the September quarter. Energisation is targeted for November 2026.

That step would be followed by six to eight weeks of commissioning with the Australian Energy Market Operator before approval to generate and commercial operations. Strike is also assessing data centre interest in the location, although no agreement has been announced.

Cash, Debt and Upcoming Decisions

Cash declined from $46.28 million to $40.16 million during the quarter. Drawn debt rose to $188.01 million after a $30 million Macquarie drawdown on 7 September, and Strike reported no undrawn facilities. Capital expenditure totalled $10.40 million, including approximately $8 million associated with South Erregulla.

The cash flow statement recorded a $6.16 million operating outflow, including $5.97 million in interest and finance costs, and a $29.84 million investing outflow. Strike estimated 5.2 quarters of funding. The company also announced that Felicity Hughes would succeed Tim Cooper as chief financial officer from 2 November 2026.

Attention now turns to November energisation, the subsequent commissioning period and completion of the Hancock processing and loan documents. Planning for a Minjiny 3D seismic survey also continues.