Slide 1: New Focussed Strategy to Deliver Material Production from Cooper Basin Gas Assets
ASX ANNOUNCEMENT 1 June 2017 NEW FOCUSSED STRATEGY TO DELIVER MATERIAL PRODUCTION FROM COOPER BASIN GAS ASSETS Key Highlights New strategy designed to focus Strike on upstream value chain Recent geological validation confirms Southern Cooper Basin Project as a prolific and producible gas asset
Slide 2: New strategy and technical review findings
This new strategy has been designed to release major value through refocussing Strike on its core upstream competencies. It is in response to the key findings of the recent technical validation, which while confirming the outstanding producibility of Strike’s portfolio, highlighted that a new approa
Slide 3: Klebb, Project Jaws, organisation and funding
Work conducted to date at Klebb has proven the producibility of the resource which we expect will lead to a declaration of Technical Success once the range of the gas content is narrowed. Subsequent to this, Strike will plan, procure and execute Project Jaws, a 2 well program that will showcase both
Slide 4: Orica Gas Supply Agreement update
entered into. To facilitate those discussions, the parties entered into an agreement under which they agreed to continue the discussions until 31 May 2017 (subject to any agreed extension) or until a mutually acceptable outcome was agreed, if earlier. Orica and Strike also agreed to suspend certain
Slide 5: Strike Energy Limited Company & Project Update
Strike Energy Limited Company & Project Update 1st of June 2017 Page 1
Slide 6: A Prolific & Producible East Coast Gas Resource
A Prolific & Producible East Coast Gas Resource 1. Geological validation from CSG expert confirms materiality and quality of Strike’s Cooper Basin gas assets 2. New strategy designed to drive excellence within upstream value chain 3. Value levers understood revealing core competencies required for s
Slide 7: Strategic Partnerships
Strategic Partnerships Page 3
Slide 8: East Coast Gas Market – Certainty of Demand
East Coast Gas Market – Certainty of Demand Total market demand is ~2100 Jemena PJ p.a of which 70% driven by the LNG producers. Domestic market currently 465 PJ p.a. short. This is expected to rise to 600 PJ p.a. by 2021 Federal Government domestic market security mechanisms wont alter demand
Slide 9: East Coast Domestic Gas Prices
East Coast Domestic Gas Prices Quarterly Gas Price $ per Gigajoule +250% Gas Prices have moved from less than $4/GJ to above $10/GJ between 2010 and today. Commissioning of LNG export plants + onshore moratoria have exacerbated recent pricing. New domestic supplies coming from Sole, Bass Strai
Slide 10: Markets, Pricing & Belief Systems: Technical Validation
MARKETS, PRICING & BELIEF SYSTEMS technical validation Page 6
Slide 11: Validation of Reservoir Parameters – High Quality
Validation of Reservoir Parameters – High Quality Reservoir Properties Sensitivities to Ultimate Recovery High Low Comment Gas Content (m3/ton) 6.5 5 Validated Gas Content -52% 31% Matrix Permeability (md) 2.5 1 Validated Thickness -17% 22% Fracture Permeability (md) 7 5 Validated Porosity (%) 1.8 2
Slide 12: Gas Content Analysis Confirms Range
Gas Content Analysis Confirms Range Le Chiffre Desorption events Klebb Wells Desorption events 7.50 m3/ton 6.66 m3/ton 5.81 m3/ton 3.98 m3/ton Predicted range between 5 and 6.5 m3/t is consistent with other deep Australian coals Page 8
Slide 13: CSG Producibility Confirmed
CSG Producibility Confirmed Reservoir Saturation and Gas Content Hydrodynamics Permeability and Skin Coal Rank and Coalbed Cleat Gas Generation Reservoir Development Producibility Tectonic and Coal Thickness Structural And Continuity Coal Lithology Setting and Depositional Setting No Red Flags Data
Slide 14: Interpretation of Materiality of PEL 96 Resource
Interpretation of Materiality of PEL 96 Resource Net Pay: Klebb Pilot to Le Chiffre 1 ~ 38 km2 Patchawarra Coal (≥ 1600m) 1,500PJ = 1.4Tscf Vm3 ~ 10 to 20m Weena Trough ~ 373 km2 Vu Upper ~ 30 to 40m PEL 96 ~ 2,694 km2 Vu Lower ~ 10 to 20m Page 10
Slide 15: Strategy
strategy Page 11
Slide 16: Strike's Value Stair Case
Strike’s Value Stair Case Technical Success Phase 2 - Full Field Shareholder Value Commercial Success Development 200 TJ/d Phase 1 - 5 -10 Year Gas Sales 50 TJ/d sales gas Jaws Project – Commercial Rates & Increased EUR/well + Reserve Booking Klebb – Proof of Production & Resource Expansion 2017 201
Slide 17: Resource Capture
Resource Capture Moomba Prospective The Southern Cooper Basin Gas Resource1 PEL 96 Project is in a premium location (PJ) with major transportation and Low Est (P90) 2,905 883 processing infrastructure within its PEL 95 immediate area of operations STX 50% Best Est (Pmean) 4,716 1,501 PEL 94 STX 35%
Slide 18: Key Value Levers
Key Value Levers Out of Strike’s Control 1. Gas Content of the Coal (between 5 & 6.5m3/t) Resource Density In Strike’s Control 1. EUR: affects ultimate well count Capital Materiality Well Design 2. Initial Well flow rates Production Intensity 3. Mid/Downstream Costs (tolling, transport, processing P
Slide 19: Subsurface + Operational Excellence + Resource Capture = Upstream Focus
Subsurface + Operational Excellence + Resource Capture = Upstream Focus Given the: 1. Size of the Resource in Strike’s Portfolio 2. Strike’s deep understanding of the unique subsurface environment; and 3. The sensitivity of the project to Upstream Capex Strike’s value addition to the resource (out
Slide 20: Upstream Focus Building Excellence in Core Competencies
Upstream Focus Building Excellence in Core Competencies Wells & Driving Focus to: Connections Dehydration 1. Reduce scope of organic capabilities and + drive excellence in operational Gas Gathering Processing performance. 2. Streamline customer + base and reduce Moomba commercial complexity. Field G
Slide 21: Klebb Update
Klebb Update Commissioning Complete All workovers and Beam Pump installations complete. De- pressurisation of the reservoir has recommenced Technical Success Realigning Klebb’s objectives with that of a exploration project (not production) is key to releasing the valuable data around Strikes maj
Slide 22: Jaws Project – Rapid Technology Deployment
Jaws Project – Rapid Technology Deployment Design, procure and execute a small well program that Jaws Project will prove the commerciality of the PEL96 resource. Jaws 2 8.2 mmscf/d Jaws 1 Detailed Design Demonstrate a commercial gas rate ASAP Jaws 1 6.5 mmscf/d Leverage dewatering efforts of Kle
Slide 23: The Jaws Project – Well Locations
The Jaws Project – Well Locations Jaws 2 Demonstrate commercial gas rates by leveraging existing dewatering efforts from Klebb pilot Jaws 1 Demonstrate EUR potential with replicable well concept for development Klebb Well Existing Jaws Modelled Drainage Drainage Area Area Page 19
Slide 24: Operational Excellence - Strike Well Design Evolution
Operational Excellence - Strike Well Design Evolution Klebb Klebb 4 Jaws Spectre EUR (CH4) 1.4 BCF / 1.47 PJ 1.4 BCF / 1.47 PJ 5.68 BCF / 6.0 PJ 8.3+ Bcf Max Rate (CH4) 0.53 TJ/d 0.53 TJ/d 5.6 TJ/d 6+ TJ/d Art Lift Beam Pump Mini ESP Large ESP Double ESP Water rate 600 bbl/d 600 bbl/d 1600 bbl/d 250
Slide 25: Strike Energy Limited – Forward Plan
Strike Energy Limited – Forward Plan 2017 2018 2019 Klebb Gas Content Klebb 2 & 3 Tie in of Jaws 1 Tie in Jaws 2 Jaws 1 Procure Execute Dewater Gas Jaws 2 Procure Execute Dewater Gas Resource Definition Book Reserves Pilot Well Campaign Phase 1 50TJ/d Concept Studies Select Definition FEED Execute P
Slide 26: How do we fare? Cost of Supply Analysis
How do we fair? Cost of Supply Analysis for East Coast Upstream Supply $/GJ Gunnedah Bowen -Fairview Gloucester Gippsland Bowen - Moranbah Cooper - Napamerri Strike 6m3/t Existing Otway Strike 5m3/t Sydney Camden Gas Surat - Iron bark Existing Cooper Bowen Spring Gully Surat - Undulla Nose Surat - E
Slide 27: Consolidation of Strike HQ to Adelaide
Consolidation of Strike HQ to Adelaide Commercial Improve quality of relationships through closer proximity to JVP’s, partners and Cooper basin contractors Located with major existing customers Economic / Financial Political / Regulatory Movement to lower cost base with South Australian ener
Slide 28: An Organisation designed to deliver top class upstream projects
An Organisation designed to deliver top class upstream projects Chief Executive Officer Office Administration Chief Financial GM Commercial & GM Technical GM Operations Legal Officer Company Drilling & Commercial Geoscience Secretary Completions Advice Reservoir Operations & Legal Finance Engineerin
Slide 29: Conclusion
conclusion Conclusion Page 25
Slide 30: Strike Energy – Southern Cooper Gas Project
Strike Energy – Southern Cooper Gas Project Strike’s new strategy will drive the business toward a plan that is: 1. Technically credible 2. Robust in all price scenarios 3. Competitive in a diverse and complex market; and 4. Investible in the long term With the safe and successful execution of the s
Slide 31: Important Notice
Important Notice Strike Energy | This presentation does not constitute an offer, invitation or recommendation to subscribe for, or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. Reliance should not be placed on the
Slide 32: Important Notice: continued
Important Notice: continued Competent Persons Statement Oil and Gas Reserves Estimation Process The information in this report that relates to oil and gas resource estimates at 01 June 2017 is based on information compiled or reviewed by Mr A.Farley who holds a B.Sc in Geology and is a member of the