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Strike Energy (ASX:STX) and Warrego Energy (ASX:WGO) return to WE3 well

ASX News, Energy
ASX:STX      MCAP $572.4M
01 June 2022 03:00 (AEST)

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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.

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