Strike Energy (STX) Q1 2025 TU earnings summary

Executive summary

• Achieved record quarterly production of 2.4 PJe, up 2% quarter-on-quarter, with all test volumes sold and major discoveries at Walyering-7 and Erregulla Deep-1, the deepest and one of the highest-performing wells in the Perth Basin.

• South Erregulla Peaking Gas Power Station awarded 85 MW of capacity credits and full network access, securing a fixed government-backed revenue stream of AUD 18.3 million for the first year.

• Major discovery at Erregulla Deep-1 exceeded expectations, with exceptional flow test results and potential to significantly increase reserves.

• Lifting of the WA gas export ban allows up to 20% of natural gas production to be exported via LNG facilities until 2030/2031.

• Progressed towards final investment decisions for West Erregulla gas field and South Erregulla power project.

Financial highlights

• Quarterly sales revenue was $16.2 million (down 8% quarter-on-quarter) with realised gas price at $7.04/GJ (down 10% q-o-q) and condensate at $121/bbl (down 7-13% q-o-q), mainly due to FX and oil price impacts.

• Capital expenditure for the quarter was $12.6 million, with $4.7 million on Walyering-7 and $7.9 million on exploration; E&E costs of AUD 9.3 million related to Erregulla Deep-1.

• Cash and cash equivalents at quarter end were $44.5 million, with total liquidity of $61.5 million including undrawn debt.

• Net cash from operating activities was $9.3 million for the quarter.

• Drawn debt at quarter end was $36.3 million, with $153 million in new financing being finalized.

Outlook and guidance

• No equity raise anticipated; major project financing expected to be fully supported by Macquarie Bank and Rabobank facilities, with a $153 million development funding package agreed.

• Moving into a lower discretionary capital spend phase, focusing on construction at South Erregulla and West Erregulla.

• South Erregulla power station to generate minimum $18 million in capacity revenue in its first year, with $40-50 million annual revenue expected in the first five years.

• Significant cash generation expected from 2027 onwards as new projects come online.

• Multiple catalysts ahead, including 3D seismic campaigns, further drilling, and FID decisions for South and West Erregulla.