The Strike Energy Ltd (ASX: STX) share price has exploded by 58.6% after the company released an announcement to the ASX about a 'staggering' discovery this morning before market open.
Strike shares had been in a trading halt since Friday pending this announcement, but when trading resumed today, they surged to 23 cents a share (at the time of writing) – up from the last traded price of 14 cents.
What did Strike announce?
The company has revealed a new and substantial conventional gas discovery in its West Erregulla (in Western Australia) joint-venture that Strike operates with Warrego Energy Limited (ASX: WGO) with a 50% stake each. The Warrego share price has also rocketed today, up 51.35% to 28 cents at the time of writing.
Here's some of what Strike management had to say on the discovery this morning:
"Strike Energy Limited confirms that the Strike-Warrego Joint Venture has made a significant gas discovery in the Kingia sandstone as part of the West Erregulla-2 drilling campaign…
The Kingia formation was encountered at 4,753 metres with gas on rock showing a gross gas column of at least 97 meters. The lower section from 4,790 metres onwards is made up of several high-quality large units of clean sand with thick blocky porosity development. This 67-metre section, which has high gas saturation throughout, is interpreted to have net pay of 41 metres and an average porosity of 14.3% with peaks of up to 19%".
Strike Managing director Stuart Nicholls stated that "this is a truly exceptional outcome" and "have exceeded Strike's highest expectations and indicate a significant discovery that appears to have a higher reservoir quality than the (existing) Waitsia gas field".
Strike also predicted that the discovery in what is "one of the deepest wells ever drilled onshore Australia" will shift the 'subsurface paradigms' of the Perth basin and has validated the company's geological model, adding that "a further material discovery looks promising".
It has been a good year for Strike so far – with this announcement coming off the back of its discovery of additional gas at West Erregulla in July and again in early August.
At its current price, Strike shares are trading at a near 7-year high and have climbed 80% in the last 12 months.
