Join our daily newsletter At The Bell to receive exclusive market insights
- Strike Energy (STX) and joint venture partner Warrego Energy (WGO) are re-entering the West Erregulla (WE3) well in the Perth Basin
- Operations at the well were suspended in January 2021 after drilling intersected an over-pressured gas zone in the lower Carynginia Formation
- Since the suspension, the companies proceeded to drill three more wells within the West Erregulla gas field but have determined it’s safe to recommence work at WE3
- The rig has mobilised to the well site, and is set to re-enter the WE3 well today
- Strike last traded at 30 cents and Warrego shares last traded at 13 cents on May 31
After a long suspension, Strike Energy (STX) is re-entering the West Erregulla-3 (WE3) well in the Perth Basin.
The WE3 well is found in the West Erregulla gas field and held in a 50:50 joint venture (JV) between Strike and fellow ASX-listed Warrego Energy (WGO). Strike Energy is the operator of the JV.
After intersecting an unexpectedly over-pressured gas zone in the lower Carynginia Formation in January 2021, the JV partners decided to temporarily suspend operations at the well until it was safe to recommence drilling.
Suspending the well meant a final investment decision (FID) would be pushed back and was expected to still be reached in the first half of 2021. However, the companies are yet to reach a FID as it’s still in the project financing stage.
Since the suspension of WE3, the JV partners moved to drill WE4, WE5 and most recently, WE6.
The companies have also adapted the well design and added additional services to the rig in the form of managed pressure drilling equipment to successfully complete the WE3 well to the final depth.
The rig has been mobilised to the well site and has completed rig-up activities to re-enter the well which was scheduled to occur today.
Drilling, casing and evaluation operations are expected to take around 45 days.
Strike last traded at 30 cents and Warrego shares last traded at 13 cents on May 31.
