What are Strike Energy's plans following the SE-3 well testing?
Strike Energy Limited
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What are Strike Energy's plans following the SE-3 well testing?

South Erregulla Update: Testing Anomalies and Strategic Shifts by Strike Energy

Strike Energy Limited has provided an update on its South Erregulla-3 (SE-3) well testing operations within the Perth Basin production licence L24, revealing unexpected results. Despite initial setbacks, including the failure of the well to flow as anticipated, Strike Energy has collected valuable data that will contribute to refining its subsurface model.

The company is now shifting focus to the up-dip SE-2 well for production testing, while also looking ahead to future drilling opportunities that could significantly enhance its portfolio.

Unexpected Testing Outcomes at SE-3

On February 5, 2024, Strike completed the SE-3 well with production tubing and perforated the primary zones in the Kingia Sandstone. However, the well did not flow as expected, leading to efforts to displace well fluid and adjust the well's balance.

Although initial attempts did not produce immediate flow, subsequent observations indicated the production of reservoir fluid, suggesting a potential gas-water contact. This development diverges from the net gas pay and petrophysical properties anticipated based on similarities with the SE-1 well, which had a maximum flow rate of 80 mmscf/d on test.

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Strategic Response and Forward Plans

In response to the SE-3 testing results, Strike Energy will now focus on the SE-2 well, positioned up-dip from SE-3 and poised for production testing. This move is part of Strike's broader strategy to reassess its subsurface model and reserves based on the new data collected from SE-3.

The company remains optimistic about its upcoming drilling plans, including the Walyering-7 and Erregulla Deep-1 wells, which promise to add significant volumes to its developed and undeveloped reserves if successful.

Commentary from Strike’s Leadership

Stuart Nicholls, Strike’s Managing Director & Chief Executive Officer, expressed disappointment over the SE-3 flow test results but emphasized the ongoing analysis and the potential for revisiting the well. Nicholls also highlighted the commencement of the Ocean Hill 3D seismic acquisition as a critical step towards identifying new drilling locations, such as the contingent appraisal well Ocean Hill-2, later in the year.

Despite the unexpected results from the South Erregulla-3 well testing, Strike Energy is adapting its approach and leveraging the insights gained to refine its exploration and development strategy. With several promising projects on the horizon, Strike is positioned to continue its pursuit of significant gas reserves in the Perth Basin, contributing to the region's energy landscape and its own portfolio growth.

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