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- Strike Energy (ASX:STX) shares have lost nearly 25 per cent so far today
- The drop comes as the company reports its South Erregulla-3 well was a duster
- The company recently hit an all-time high of 48 cents only in December
- It has plummeted back towards 30 cents today
- Shares last traded at 32 cents
Strike Energy (ASX:STX) shares sunk 23.8 per cent this morning as the company released disappointing news on a gas well at its South Erregulla project.
In short: the company has most probably found nothing, though did mention samples being submitted for further analysis.
It’s clear, however, shareholders weren’t buying it.
Are Strike shares as good as perceived?
A whopping 43.7 million shares in STX have been turned over today versus a four-week average of 12.9 million – as of 1:00 pm AEDT, reflecting $13.636 million worth of trades.
Strike has 2.8 billion shares on issue and hit its all-time high only very recently in December 2023 (though, it had earlier hit 48 cents in May of last year).
For this reason, it’s in the ASX200 with a market cap of $923.06 million – and to be fair, the company is proof that the Australian domestic energy sector still has fuel to burn.
However, the stock has never broken past the psychologically attractive 50-cent barrier, as far as market watchers are concerned.
Today, it’s back down to 32 cents, posting a loss of nearly 25 per cent in intraday trades.
With that said – the stock remains popular with brokers; seven rate STX a ‘Buy’ with two rating it a ‘Hold’ and zero rating it a ‘Sell’.
Rich listers make Perth Basin interesting
How much of this has to do with any sole value proposition coming from Strike itself and how much to do with it being a possible takeover target remains unclear.
The company was on the radar of traders late last year when a surge of buying that pushed it back to its ATH of 48 cents attracted the attention of curious observers.
Strike was involved in a three-way takeover bid for Warrego Energy in its recent history which also involved Gina Rinehart’s private Hancock Prospecting and Kerry Stokes-backed Beach Energy (ASX:BPT).
Mineral Resources, run by billionaire Chris Ellison, was also keen to saddle up alongside Gina for the deal, given that it wants domestic gas for its own onshore mining operations.
These WA billionaires all getting together – who are forever closely watched by Perth denizens (including this journalist) – is what put Perth Basin on the map, even after smaller companies like Talon Energy (ASX:TPD) couldn’t quite make it work.
Strike acquired Talon, which was a microcap at the time, then run by an American called Colby Hauser.
Red Tuesday
The news puts Strike in the same boat as a raft of stocks travelling downward today on the backs of respective HY releases.
Despite the geotechnical team’s best efforts to accurately interpret where gas could be on-site, the well – South Erregulla-3 (SE-3) – has come up dry.
Strike reported that the well failed to flow even after nitrogen was pumped downhole in an attempt to move fracking fluid around the asset.
The company has collected samples of what it believes could be evidence of a gas-water contact in SE-3 for further analysis, but, shareholders are punishing the stock today.
Shares last traded at 32 cents.
