“We have an expanded exploration portfolio in recognised petroleum provinces and an accelerated drilling program,” managing director Simon Ashton told the Good Oil Conference in Fremantle recently.
Strike’s five wells since listing include four in the offshore Carnarvon Basin and one in onshore Texas. All were dusters but Ashton put a brave face on this dry run.
“We acted as operator in two of these wells – Cooper-1 and Altostratus-1 – and we met all our commitments in that respect,” he said.
“It’s unfortunate that the wells were dry, but it was a big achievement for a small and new company to operate two offshore wells. It bodes well for the future.”
While Strike also started its Texas program with a duster, Jabber-1, it remains committed to building a hub in the onshore Gulf Coast region.
Elsewhere in the US, Strike has teamed up with Comet Ridge to redevelop old fields in Colorado.
This follows an agreement with Comet Ridge and AJ Lucas Group Limited to pursue oil and gas opportunities in the states of Colorado, Wyoming, New Mexico and Utah.
Comet Ridge will operate 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 first acreage taken up under the agreement covers four neglected oil fields in Colorado that were once highly productive. Comet Ridge acquired a 75% working interest and 60% revenue in 35 square kilometres of non-producing leases on the Tow Creek anticline in Routt County, northern Colorado, which overlap the four oil fields.
Within days, Strike had bought into the project, taking a 25% working interest and 20% revenue. If, as expected, AJ Lucas joins the project, the three Australian companies will each have a 25% working interests and 20% revenue share. But it is not yet clear whether the drilling contractor will pay upfront or offer its drilling services and expertise to gradually acquire its stake.
Comet Ridge and Strike will pay US$697,000 in two instalments to Houston-based Ponder Exploration Ltd, which will be granted a free carry of US$150,000 in additional leasing costs and the drilling of two wells.
Strike sees its Rocky Mountains hub as being the least risky of its four core regions.
The Tow Creek, Colorado play is reminiscent of recent moves by Elk Petroleum in Wyoming and Louisiana Petroleum in northern Louisiana, in which these recently listed Australian juniors took on neglected historic oil fields, using modern techniques to boost production.
If the Tow Creek plan works, the Australian partners could soon become producers, gaining a revenue base from which they can move to riskier but potentially more rewarding prospects.
Strike said the Cooper Basin was higher risk than its US plays and its offshore Carnarvon prospects were the company’s most risky and potentially most rewarding blocks.
Strike has made significant progress in advancing its Carnarvon Basin and Cooper Basin projects, according to Ashton.
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 for coal, coalbed methane and natural gas in the Kingston area.
“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.”
The Kingston interests will be handled by Kingston Energy Pty Ltd, a 100%-owned subsidiary of Strike.
