Strike Energy (ASX:STX) executives used the company’s first-half FY2026 webinar to outline lower period gas production at Walyering, an update on construction progress at the South Erregulla Peaking Power Plant, and ongoing commercial and pre-final investment decision (pre-FID) work across the West Erregulla development.
Managing Director and CEO Peter Stokes told investors the company’s communications in recent months have been largely limited to regulatory updates because some ongoing project discussions are “commercially sensitive.” He said Strike expects to provide more frequent updates as the Walyering West drilling program begins and as the South Erregulla power project moves into commissioning.
Financial and production snapshot
Cooper said Strike achieved an average realized price of AUD 7.37 per gigajoule, generating revenue of AUD 36 million and operating cash flow of AUD 3 million for the half.
At December end, Cooper reported a cash balance of AUD 69.5 million and debt drawn of AUD 108.8 million on the Macquarie facility, implying net debt of AUD 39 million. He said the debt has been used primarily to execute the South Erregulla Peaking Power Plant project, which he described as 77% complete at the time of his remarks, with AUD 87 million of capital expenditure in the half tied to that development.
Total capital expenditure for the period was AUD 99.5 million, which Cooper said also included spending on Walyering compression, West Erregulla, and the Walyering West-1 program.
Audit note and Macquarie facility tranche
Cooper also addressed a “material uncertainty” noted in the half-year audit report. He said it “refers primarily” to an uncommitted AUD 15 million tranche within the Macquarie financing facility and forecast completion of the South Erregulla Peaking Power Plant.
The CFO said the tranche remains uncommitted as previously reported and is subject to Macquarie credit committee approval at the time Strike seeks to draw it. He added Strike engages with Macquarie regularly and does not foresee concerns in obtaining approvals “in due course.”
Cooper emphasized that delivering the South Erregulla project on schedule and on budget is “an important outcome for the business,” as it is envisaged to generate significant cash flows. He added that management is seeking to manage capital expenditure prudently.
South Erregulla power plant: commissioning path and October target
Stokes said construction at the South Erregulla Peaking Power Plant is “nearing 80% complete overall,” adding that key components such as the engine shed and facilities within it are nearly finished. Later in the presentation, he described the power station as “99% complete”, noting the shed is sealed, engines are installed, and filtration systems are in place.
Stokes said commissioning activity is beginning with the provider of the Jenbacher units (Clark), with full commissioning expected to get underway from next month. He said Strike expects “first gas” to run through the plant towards the end of April, allowing load bank commissioning. Stokes also said the company is working with Western Power on commissioning steps and continues to engage actively with the utility.
Strike reiterated it remains on target for 1 October operations, with Stokes noting processes still ahead including Western Power commissioning and an AEMO credit application/accreditation process. He added that as commissioning progresses, any power exported to the grid could generate revenue ahead of Reserve Capacity Credits commencing on 1 October.
Stokes also discussed Reserve Capacity Credit pricing trends, saying benchmark prices have increased and provide a growing underpin for the facility. He said draft numbers suggest benchmark Reserve Capacity Credits for the 2028/2029 year could rise to nearly AUD 492,000 per megawatt, up from AUD 360,000 the prior year and AUD 220,000 used in Strike’s FID analysis.
Walyering and Walyering West drilling plans
On Walyering, Stokes said the company continued to produce successfully through the period and completed a planned maintenance shutdown before Christmas to install a heat exchanger. He said Strike is now evaluating how much to ramp up the facility ahead of drilling at Walyering West.
Strike confirmed the Walyering West well is locked in to spud in early April, with Stokes citing a target date of around April 9. He said earthworks are underway, the pad is being developed, and the rig will mobilize in the next couple of weeks. Stokes said materials were ordered last year and the expected drilling timeframe is about six weeks including testing, with the company expecting the Walyering West test to be completed by the end of the quarter.
Stokes said Strike has completed early work for a potential tie-in pipeline and is targeting an early 2027 connection if the well is successful. He stressed that Strike’s financials are not dependent on Walyering West success, describing the company’s planning as prudent, while also saying the team is working to be ready to connect gas if results support development.
Stokes also said compression units are installed at Walyering and are expected to be commissioned over the coming months, coming online toward the back end of Q2 as required for production. He said the company is still assessing ramp-up timing as it runs the heat exchanger longer.
West Erregulla and basin infrastructure options
Stokes said Strike is progressing West Erregulla while assessing “a number of commercial opportunities” across upstream and midstream options, including processing alternatives. He said the company is finalizing pre-FID activities with its joint venture partner, with groundwork such as drill availability, long lead items, and approvals already advancing to enable work to commence once pre-FID plans are agreed.
He also said West Erregulla has been included in AEMO’s Gas Statement of Opportunities (GSOO)/planning context as part of required future supply for Western Australia’s domestic gas market, calling it a key focus for the state government to see the asset developed.
Strike is working toward an independent reserve and resource estimate for West Erregulla and Erregulla Deep, with Stokes still targeting completion before the end of the quarter. He said the estimate is expected to reinforce the scale of the broader assets across the West Erregulla area (L25) and Erregulla Deep (L26).
Asked about Hancock’s proposed Beleleema gas plant, Stokes said additional infrastructure is “really exciting for the basin” and could provide an option for downstream processing of West Erregulla gas. He said the proposed plant is about 4–5 kilometers north of West Erregulla and that Strike continues to talk with Hancock about options involving the facility. Stokes added there is no current discussion about selling West Erregulla to Hancock.
In Q&A, Stokes said Strike has no asset sales planned in the near term, though he noted farm-ins and similar arrangements are “always on the cards.”
The company also addressed shareholder questions on Carnarvon-related shares coming out of escrow in July, with Stokes saying the priority is delivering key projects—including South Erregulla, establishing a path forward on West Erregulla, ongoing Walyering performance, and maintaining a clear exploration plan.
Separately, Stokes said Strike purchased “pilot land” immediately north of South Erregulla because the power line route to Western Power runs through the property, and the acquisition provides certainty around easements and offers strategic flexibility between assets.
About Strike Energy (ASX:STX)
Strike Energy Limited explores for and develops oil and gas resources in Australia. It primarily focuses on the Project Haber, Ocean Hill, Perth Basin Geothermal, Walyering, West, and South Erregulla projects located in the Perth Basin. The company was incorporated in 1997 and is based in West Perth, Australia.
