Transcription of The Stock Network Interview with Strike Energy (ASX:STX), Managing Director & CEO Shelley Robertson
Lel Smits: Strike Energy is moving closer to becoming a diversified Western Australian energy producer with a major breakthrough at West Arigala, providing a defined processing pathway and funding support. Strike has selected Hancock Energy’s Bellisarmid gas processing facility as its preferred processing solution and secured a framework for up to $30 million in funding support. With West Arigala targeting a final investment decision in 2028 and First Gas, in mid-2029, alongside Wael Yerling and South Arigala, the company is entering a potentially transformational phase.
I’m joined today by Strike Energy’s Managing Director and CEO, Shelley Robinson, to discuss the breakthrough and Strike’s pathway to growth. Shelley, welcome to The Stock Network.
Shelley Robertson: Hello, Lel, thanks for having me.
Lel Smits: Pleasure to have you on. And congratulations on recent development. Strike has secured a processing pathway with Hancock Energy and also funding support of up to $30 million.
Can you outline for us just how significant this milestone is in moving West Arigala towards a final investment decision and also that First Gas?
Shelley Robertson: Sure. Thank you for the opportunity to talk about the project. So West Arigala is a project that’s of major importance to the state of Western Australia, but also to the West Arigala joint venture in which Strike and Hancock are 50-50 joint partners.
So the agreement with Hancock on directing 100% of West Arigala gas to the Hancock Bellisarmid gas processing facility demonstrates really strong alignment within the JV, providing a pathway to market for our gas by mid-29. So the binding heads of agreement includes key terms that provide cost certainty for Strike by way of a fixed gas process in charge for the life of the project. So this is a win-win for both parties.
For Strike, we have funding through the $30 million that Hancock are backing us with and a pathway to monetise our most valuable asset. And also for Hancock, the guaranteed processing of West Arigala gas through their 100% owned facility is also important. So I guess in answer to your question, this agreement represents a significant milestone in moving West Arigala towards FID.
Hancock with that commitment of 30 mil shows the strong JV alignment that we have. And also by helping us to pay for our pre-FID activities, which include a bit more drilling and so on, and with our repayments back to them not due until first gas, that gives Strike the opportunity to have a pathway to share that funding, to sort of share our costs across that timeline and to move the project sort of closest to development.
Lel SMits: And Shelley, in terms of your three pillars of growth with Walyuring generating revenue and South Arigala targeting generation late this fourth quarter in 2026, also West Arigala targeting first gas in mid-calendar year of 2029.
Can you outline for us how could this change Strike’s earnings and growth profile?
Shelley Robertson: So the important change for Strike is the diversification of our revenue base. Walyuring is already producing and generating revenue and South Arigala is targeting generation in, as you said, in late this year, and that will introduce a new electricity and capacity revenue stream for us. Then from mid-29, West Arigala has the potential to add a much larger and longer duration gas revenue stream.
For example, the agreement with Hancock has a minimum of 12 years of processing through that facility. That timing is particularly important. AEMO is forecasting tightening conditions in the Western Australian gas market towards the end of the decade, while the electricity market’s also undergoing a major transition as the government looks to retire coal-fired generation and demand from electrification and new industrial loads grow.
So by the end of the decade, we’re targeting those three operating assets across gas and supported by those increasingly diversified earnings. That would represent a very different scale and earnings profile for Strike, while also giving us greater capacity to invest in growth and exploration.
Lel Smits: Shelley, thank you so much for the update from Strike Energy.
Shelley Robertson: Thanks, Lel. Thanks so much for having me.
Ends