Early signs promising for Strike and Rinehart-led Warrego as Erregulla Deep-1 clocks raised mud gas levels

Strike Energy (ASX:STX) has updated the market on its Erregulla Deep-1 well, with geotechs clocking mud gas responses on the way to total depth higher than background levels.

Above background mud gas levels were detected in two intervals downhole the 5,000m deep well; one through a sand body within the Irwin River Coal Measures and another in the primary target – the Kingia Sandstone.

While further logging and sampling will need to be conducted to confirm commercial viability of the well (pressure notwithstanding,) HotCopper users were receiving the news well.

Strike Energy was the most popular company at 9am on Tuesday.

However, that popularity isn’t reflected at every level of investing. Fairly or unfairly – you can guess where HotCopper STX bulls stand – Strike Energy is attracting the attention of shorters.

In fact, Strike Energy has in recent weeks quietly become the fifth most shorted stock on the entire market.

It’s preceded only by Pilbara Minerals (lithium prices,) Idp Education (Canadian student intake caps), and scrutinised critical mineral miners Syrah and Lynas.

“These observations are preliminary in nature and Strike will continue drilling to final depth before running a series of wireline logs,” Strike wrote on Tuesday of its early-stage indications.

Strike’s Erregulla well is owned 50% by Strike – operator – and Warrego Energy, now private, owns the other half.

Gina Rinehart took control of Warrego Energy in early 2023.

STX last traded at 16.5cps.