Strike Energy’s HY report fails to kickstart recovery momentum for share price

• Strike Energy has released its HY report
• The shares are up, but, not enough to reverse a punishing YTD run
• The company’s much-discussed South Erregulla-3 well came up more or less dry
• Stocks plummeted through February wiping off half of value
• Shares currently sit at 22c as at 11.45am AEDT on Wednesday

Strike Energy (ASX:STX) – the Australian gas explorer and producer that’s meant to turn the Perth Basin into the next big thing – hasn’t been able to shake off a punishing YTD run with its HY report on Wednesday.

As at 11.45am AEDT, Strike Energy shares were worth 22c; up 4.76% in intraday trades.

But on February 7 2024, shares were worth over 40c.

In little under three weeks, Strike Energy has absolutely plummeted on a series of mishaps – most notably, finding no gas downhole what was meant to be a promising well – and today’s report has done little to kick-start a journey of recovered losses.

Strike’s market cap has sunk to $629.6M (not like this is terrible, mind you,) and one year returns are down -37.14 per cent.

As of Wednesday 28 February, 7 brokers still rate the stock a ‘Buy’ with two saying ‘Hold’ and zero saying ‘Sell.’ That’s probably some relief to shareholders.

There’s also some relief when shareholders look at cash.

Strike had $66.7M in cash at the end of December in 2023, while the year before that, it only had $9.7M in cash. So that’s a good start to the year, if you forget about the stocks.

Strike also notched an income tax benefit of $18.3M due to last year’s losses.

The company continues to plug away at the Perth Basin, a project closely watched due to the interest in it shared by WA billionaires Gina Rinehart and Chris Ellison – stalwarts of a long-gone 80’s mining culture whose echoes of rambunctiousness never fail to titillate.

Strike finds itself developing WA gas at the same time differing voices frame WA domestic gas export policy; as Tamboran looks set to develop the NT’s Beetaloo Basin into Australia’s next big energy story, and as the North West Shelf continues to see US supermajors take an interest in the western flank of the top end.

There’s big potential for the company, even if Chris Ellison only wants to gas up his own mines – but clearly, shareholders don’t see that in today’s report.

Maybe Strike should beware the ides of March.