Strike Energy marks mechanical completion at South Erregulla Power Station and reports $13.1 million in gas sales from Walyering, while drilling confirms a fresh gas accumulation at Walyering West-1.
- South Erregulla Power Station achieves mechanical completion; commissioning underway
- Walyering West-1 well confirms new conventional gas accumulation with low CO2
- Gas sales revenue of $13.1 million at average price of $7.09/GJ
- Capital expenditure hits $51 million, focused on development projects
- Leadership changes with new CEO Shelley Robertson and Chair Nev Power
South Erregulla Power Station Nears Commercial Operation
Strike Energy (ASX:STX) has reached a major milestone with the mechanical completion of its South Erregulla 85MW Peaking Gas Power Project. As of 30 June 2026, the project was 94% complete, transitioning from construction to commissioning. Western Power began commissioning the network connection infrastructure on 21 July, advancing the plant towards its targeted commercial operation date. Notably, the upstream gas facilities and power station package have been placed in preservation mode pending Generator Performance Standard testing.
This progress comes amid a sustained period of intense activity, yet Strike reports a strong safety record with no major health, safety or environmental incidents at South Erregulla or Walyering sites.
Walyering West-1 Well Confirms New Gas Accumulation
Meanwhile, at the Walyering field, Strike produced 1 PJe of gas and condensate during the quarter, generating $13.1 million in gas sales revenue at an average realised price of approximately $7.09 per gigajoule. Production was temporarily impacted by 27 days of downtime related to compression installation and commissioning, which has since largely been completed.
The drilling, evaluation, and flow testing of the Walyering West-1 well confirmed a new conventional gas accumulation within the Cattamarra Formation sandstones. Flow testing demonstrated a stabilised flow of 11 million standard cubic feet per day from the C1 sand, with a low CO2 content of 1-2% and a higher condensate yield than existing production. Strike is now completing post-test interpretation and updating reserves and resources to assess commercial viability. This development builds on earlier confirmation of gas flow and reservoir quality at Walyering West-1.
West Erregulla Development and Gas Processing Strategy
Strike continues to advance its West Erregulla project, following a reserves upgrade announced previously. The company is actively engaged in commercial discussions to determine the optimal development pathway and is progressing selection of a preferred gas processing solution. A more detailed update is expected once arrangements are sufficiently progressed.
Market Fundamentals Support South Erregulla Project
The 2026 Wholesale Electricity Market Electricity Statement of Opportunities (ESOO) released during the quarter reaffirmed the long-term need for firm, flexible generation in Western Australia’s South West Interconnected System. As renewable penetration grows, the ESOO forecasts increased electricity demand driven by electrification, mining, and industrial expansion, alongside retirement of thermal generation. This dynamic underpins the strategic value of the South Erregulla Power Project as a fast-start gas generator capable of supporting grid reliability.
Electricity prices in the WEM rose significantly quarter on quarter, with a weighted average price of $118/MWh and peak prices averaging $131/MWh, highlighting a favourable market environment for gas-fired generation.
Financials and Corporate Changes
Strike reported gas sales revenue of $13.08 million for the quarter, including the on-sale of third-party gas. Capital expenditure totalled approximately $51 million, with $49 million directed towards development activities, $25 million at South Erregulla and $16 million at Walyering, including compression and well drilling costs. Exploration expenditure was $2.1 million, mainly general and administrative costs.
Cash and cash equivalents increased 25% quarter on quarter to $46.28 million, supported by net cash inflows from financing activities of $44.3 million, primarily from borrowings. Total liquidity stood at $46.58 million.
On the leadership front, Shelley Robertson was appointed Managing Director and CEO effective 1 June 2026, with Nev Power taking over as Non-Executive Chair from 1 July following the retirement of John Poynton AO and Mary Hackett. Chief Financial Officer Tim Cooper is set to step down on 29 September, with a transition process underway.
Bottom Line?
Strike Energy’s progress at South Erregulla and Walyering positions it well for FY27, but the commercial viability of new gas accumulations and final commissioning outcomes will be critical to watch.
Questions in the middle?
- Will the Walyering West-1 accumulation prove commercially viable after updated reserves and resources?
- How quickly can South Erregulla transition from commissioning to full commercial operations?
- What development pathway and gas processing solution will Strike select for West Erregulla?