Walyering West-1 Drilling Could Make or Break Strike’s Gas Supply Plans

Regulatory Green Light and Operational Progress

Strike Energy Limited (ASX, STX) has announced a significant milestone in its Perth Basin operations with all necessary regulatory approvals now in place to drill the Walyering West-1 exploration well. Located within Production Licence L 23, the well pad construction is already underway, with the company targeting a spud date by mid-April 2026. This progress signals Strike’s commitment to advancing its exploration agenda amid a dynamic gas market environment.

Exploration Potential and Resource Estimates

The Walyering West-1 well is strategically positioned approximately two kilometres west of the producing Walyering-5 gas well. It aims to test a gross prospective resource estimated at 46 petajoules (PJ) within the A to D Sands of the Cattamarra Formation. While this estimate is un-risked and probabilistic, it carries a 26% chance of discovery and a 90% chance of development if hydrocarbons are found. The well targets Jurassic-aged conventional sandstone reservoirs within a fault-bound, four-way dip closure, a geological setting that offers promising potential for commercial gas extraction.

Current Production and Market Context

Strike currently has approximately 19.6 PJ of gas remaining under firm supply agreements as of January 31, 2026. However, following the expiry of its contract with Alinta Energy at the end of 2025, the company has reduced production at Walyering to around 10 terajoules per day. To meet its supply obligations, Strike has been supplementing production with third-party gas purchases, a strategy it intends to maintain while awaiting drilling results and as market conditions remain favourable for gas procurement.

Implications of a Successful Well

A successful outcome at Walyering West-1 could be transformative for Strike’s operations. It would enable a return to higher sustained production rates from the Walyering field and potentially unlock additional gas marketing opportunities. The proximity of the well to the existing Walyering Gas Processing Facility, just three kilometres away, facilitates efficient integration of any new production into Strike’s supply chain, enhancing operational economics and market responsiveness.

Looking Ahead

As drilling progresses, Strike has committed to providing further updates, keeping investors and stakeholders informed of developments. The company’s cautious optimism is grounded in the geological promise of the Perth Basin and the strategic importance of augmenting gas supply amid evolving market demands. However, the probabilistic nature of the resource estimate underscores the inherent uncertainties in exploration drilling.