At the end of the quarter, the company spudded its first well outside Australia where it is earning a 10% interest by participating in the Jabber et al 1, exploration well in the onshore Gulf of Mexico.

The well, still being drilled, is the first in an ongoing program of drilling in the Texas Gulf Coast.

“This creates a new focus area for Strike Oil with an experienced operator, Cypress E&P Corporation,” the company said.

Strike said it would fund its access to the opportunities through a combination of cash and the issue of options, preserving cash for ongoing exploration.

Strike Oil paid US$385,000, in cash and issued 15 million unlisted options in Strike Oil exercisable at 16c each and expiring on 23 June 2009. Ongoing drilling and associated exploration costs for 2005-06 were likely to be about A$2.5-3 million.

Elsewhere in the US, Strike has signed a Heads of Agreement with Comet Ridge Limited and AJ Lucas Group Limited to pursue oil and gas opportunities in the states of Colorado, Wyoming, New Mexico and Utah.

Comet Ridge will be the operator of the Rocky Mountains Project joint venture, using its local expertise and experience to locate opportunities while AJ Lucas will provide specialised drilling expertise to help develop the opportunities acquired.

Comet Ridge is 10% owned by Strike Oil.

The company said it had also made significant progress in advancing its Carnarvon Basin and Cooper Basin projects.

In the Carnarvon Basin, two wells operated by Apache Energy, Gats-1 and Hestia-1, are due to be spudded in August. Prospect generation activities in permits operated by Strike Oil have continued and several new oil prospects continue to be high-graded for further evaluation with seismic acquisition in the fourth quarter 2005 and drilling in 2006.

Seismic program planning continues with seismic acquisition expected to commence in the second half of this year in permits TP/6, EP 342, EP 424, TP/19, EP 421 and WA-340-P. This seismic is planned to mature existing prospects and to develop new prospects for drilling.

The current high-graded prospects include: Hastings in EP 424 (40% Strike), which potentially has 60 million barrels of recoverable oil; Whalebone in EP 325 (40% Strike), with up to 40 million barrels of recoverable oil; and Sharp peak in TP/19 (100% Strike), which has up to 80 million barrels of recoverable oil.

In the Cooper Basin, Strike is undertaking native title agreements, and seismic could begin next quarter.

Elsewhere in South Australia, Strike Oil has taken up Petroleum Exploration Licence PELA 127 and Mineral Exploration Licence ELA61/05, giving the company exploration rights to the coal, the coalbed methane and natural gas.

“Having the combination of the rights over the deposit is a first in South Australia and allows exploration to proceed without conflicting rights,” Strike said. “Evaluation of the potential of this significant energy resource is underway.”