Strike Energy (STX) Q4 2024 TU earnings summary

Executive summary

• Achieved record quarterly production of 2.4 PJe and sales revenue of approximately AUD 20 million at Walyering, with average daily production of 25 TJ and 180–185 barrels of condensate, and realized gas prices up 4% to AUD 7.82/GJ.

• Walyering-7 confirmed a new gas and condensate accumulation with 23 m of net gas pay, higher heating value gas, and increased condensate-gas ratio, supporting future reserve and production growth; all test production sold into existing marketing arrangements.

• Advanced development at South Erregulla and West Erregulla, with South Erregulla shifting to a gas-to-power strategy and submitting a peaking power plant proposal to AEMO, and West Erregulla receiving key environmental approvals.

• Secured terms for a AUD 153 million financing package with Macquarie Bank to fund development and production upgrades, including AUD 53 million allocated to South Erregulla power project.

Financial highlights

• Quarterly revenue up 13% to approximately AUD 20 million, driven by increased production and realized pricing near AUD 7.82/GJ; gross gas sales revenue was AUD 17.7 million and condensate sales revenue was AUD 2.2 million.

• Liquidity at quarter-end was approximately AUD 86 million, with cash and cash equivalents at AUD 38.8 million and undrawn debt of AUD 46.8–47 million.

• Capital expenditure for the quarter was AUD 28.6 million, mainly due to Walyering-7 drilling/testing and seismic campaigns.

• Production costs at Walyering averaged AUD 0.60–0.62/GJ, supporting high margins and strong EBITDA.

Outlook and guidance

• South Erregulla peaking power station could generate AUD 40–50 million in annualized revenue, pending AEMO capacity award and final investment decision expected in late 2024 or November 2024.

• West Erregulla and South Erregulla on track for FID in the second half of the year, with construction and development phases to follow.

• Walyering-7 test results expected soon, with potential to boost reserves and production; Walyering East drilling planned for December 2024, and Ocean Hill-2 appraisal drilling planned for early 2025.