Shareholders of oil and gas explorers Warrego Energy (ASX: WGO) and Strike Energy (ASX: STX) have been handsomely rewarded after drilling and log interpretation indicated a major reservoir with high gas saturation at the West Erregulla joint venture project.
The strike came 4,753m below surface at which point analysis identified a 97m trick gas column which contained a intersect of high gas saturation with porosities measuring up to 19%.
“This exciting discovery has exceeded our pre-drill expectations for the Kingia and substantially upgraded our view of the West Erregulla gas fields as a whole.” said Warrego CEO and MD, Dennis Donald.
“The net pay of 41m is significantly thicker than analogues in the Waitsia field and underlines the potential of West Erregulla and EP469 to become an important future source of gas production in Western Australia.”.
The Company intends to undertake further analysis and evaluation of the Kingia sandstone data which will contribute to the announcement of an initial resource estimate in the near future.
West Erregulla is a 50-50 joint venture between Warrego and Strike Resources with Strike farming into the project in December 2018 in exchange for $600,000 and meeting the first $11m of operating costs.
“This is truly an exceptional outcome. The Kingia results at West Erregulla have exceeded Strike’s highest expectations and indicate a significant discovery that appears to have higher reservoir quality than the Waitsia gas field,” said Strike Energy Managing Director, Stuart Nicholls.
“With West Erregulla-2 now being one of the deepest wells ever drilled onshore Australia and finding such excellent quality sandstone reservoirs, the subsurface paradigms of the Perth Basin are shifting.”
Following their pre-market announcement of the major discovery, shares in Warrego rose as much as 70% with Strike also rising as high as 62.5% in morning trading.