Strike Energy : 3Q21 Quarterly Activities Report 5B

Q3/21

Quarterly Report

Comments from Managing Director & CEO Stuart Nicholls:

"Strike has had another busy quarter as it concluded its CY20/21 West Erregulla drilling and testing campaign and completed the pre-FEED on Project Haber.

"At the end of the reporting period Strike announced its maiden Perth Basin gas reserve at West Erregulla. This report from certifier NSAI reflects a point in time of the resource maturation and is based on only 3 well penetrations for the field. Importantly, the reserves booking is sufficient to progress towards the FID of the West Erregulla Phase 1 development, which is a positive outcome and provides a pathway to Strike's first cashflows.

"In the coming months the Company will drill the Walyering and South Erregulla exploration wells, where positive outcomes have the potential to create significant value."

Highlights

West Erregulla

• Netherland, Sewell & Associates, Inc. (NSAI) has certified 300 PJ 2P and 372 PJ 3P gross gas Reserves at the West Erregulla gas field in the Kingia Sandstone alone.1
• Considerable upside has been identified by NSAI in the West Erregulla gas field with a further 128 PJ of gross 2C Resources and 198 PJ of gross 2U Resources2.
• The NSAI Reserve certification supports progression of the West Erregulla Project into its Phase 1 of development.

South Erregulla & Permian Gas Fairway

• As part of the West Erregulla Reserve certification, NSAI has delineated a continuous gas resource to the southern boundary of the permit supporting Strike's high degree of confidence in the potential of the 100% owned South Erregulla prospect.
• South Erregulla 140km Maior 2D seismic program completed.
• Non-bindingand indicative MOU for gas supply from South Erregulla entered into with a Goldfields downstream developer for 15-20 TJ/d for 5 years starting in 2024.

Walyering

• Civils completed with rig mobilisation expected in late October for spud in November.

1. Refer STX ASX Announcement dated 11 October 2021 entitled 'Strike delivers maiden Perth Basin gas reserve'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the announcement dated 11 October 2021 and that all the material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed.
2. Refer above. Cautionary Statement: Prospective (2U) resources are unrisked and the estimated quantities of petroleum that may potentially be recovered by the application of a future development project and may relate to undiscovered accumulations. These estimates have both an associated risk of discovery and risk of development. Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

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ABN 59 078 012 745 www.strikeenergy.com.au

2, 66 Kings Park Rd, West Perth WA 6005

Project Haber: Mid-West Fertiliser Development

• Strike completed 7-monthpre-FEED with Technip Energies.
• Technip Energies capital estimates decreased 6% on a like for like basis from feasibility study estimates. Adoption of Haldor Topsoe's SynCOR Autothermal Reformer technology resulting in a 24% reduction in carbon intensity from previous estimates.
• Round 2 of Project Haber's 1.4mtpa urea offtake process closed heavily oversubscribed with 4.75mtpa of firm proposals. Offers received were up to 15 years in length which can support future bankability of the proposed development. Shortlisted offtakers are now in negotiations to enter binding term sheets.

Mid-West Geothermal Power

• 5-monthheat needle survey has been completed and data retrieved.
• Submission to convert geothermal acreage to full exploration permit underway.
• Strike was awarded Exploration Incentive Scheme grant to execute seismic inversion modelling with leading geophysics consultancy, Delft Inversion.
• Independent inferred resource assessment has commenced.

Corporate

• Entry into the ASX300 following the September rebalance.

Domestic Gas Business

West Erregulla

During the quarter Strike's field operations centred on the production testing at WE5 and suspending the other WE wells readying them for production operations in 2023.

The results of the appraisal campaign to date support the engineering and development work done for the Phase 1 development and underpins sufficient reserves to service the existing gas offtake agreements. Consequently, Strike is preparing to move the asset into construction and proceed to first company cashflows post a Final Investment Decision.

Additional near term planned and funded drilling and seismic activities at West Erregulla have the potential, on success, to grow the reserve and resource base to support a second phase of development at the asset.

West Erregulla - Certified Reserves &

Resources

At the end of the reporting period Strike released NSAI's estimates and report for the West Erregulla reserves and resources. This report was based on the exploration and appraisal data from the field as at August 2021. The full dataset for West Erregulla is yet to be compiled with additional appraisal activities at West Erregulla currently planned to take place in 1H/22. However, based on this limited dataset NSAI has certified a gross 2P gas reserve of 300 PJ (150

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PJ net to Strike) which is sufficient to satisfy the existing offtake arrangements and proceed into development of the field.3

NSAI has recognised substantial growth potential in the West Erregulla gas field with a further 128 PJ of gross 2C Contingent Resources (64 PJ net to Strike) and 198 PJ of gross 2U Prospective Resources (99 PJ net to Strike) in the Kingia, High Cliff and Wagina/Dongara Sandstones.4

The NSAI Reserves and Resources report was based on the drilling, coring, log, seismic and production testing data from the various strata and exploration and appraisal wells drilled throughout the field.

Strike still retains a strong upside view of the potential in West Erregulla and there are several other areas where Strike assesses and observes upside in the fields recoverable resource potential versus that of NSAI. These include:

• Improved time depth conversion of the seismic and inclusion of the existing 2D seismic could add back up to 130 PJ of P50 recoverable volume. This will also be supported by the planned and funded Natta 3D seismic program which may start in Q1/22 subject obtaining the required regulatory approvals.
• Defining and reducing the size of the perched water zone. This area is limited by only a single data point on the eastern flank of the field where additional well penetrations or even longer-term production data from WE4 could inform the areal extent of the lens. This could add back some of the 180 PJ of P50 recoverable gas that has been risked out due to the conservative position taken on the size of the perched water zone.
• Deeper gas in the Kingia Sandstones where core analysis, seismic amplitude anomalies and gas gradients indicate further potential for gas prone reservoir. These possible volumes could add up to 155 PJ of P50 recoverable resource but would require a well penetration into this deeper rock or a production test of the High Cliff in WE2 in order to provide confidence that is externally certifiable.
• Recovery factors used by NSAI were inherently conservative, where a P50 recovery factor of 70% was applied due to the depth of the field and the lack of extended production data from any equivalent deep penetration in the Basin. P50 recovery factors of 75% or more have commonly been used for the Permian gas discoveries of the Perth Basin, which may be possible at West Erregulla once additional production data is available. An increase in recovery to 75% would see a P50 incremental recovery of 30 PJ.

1. Refer to West Erregulla Reserve and Resource Tables included in STX ASX Announcement dated 11 October 2021 entitled 'Strike delivers maiden Perth Basin gas reserve'.
2. Refer to resource tables at end of this release and to Prospective Resource cautionary note on page 1 of this release.

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West Erregulla Appraisal Operations

WE5 was perforated and flow tested during the quarter. The program was conducted in two steps to test the similar depths at WE5 as the water bearing units at WE4 separately. Gas production was initiated from the lower interval which confirmed these sands were not water bearing and have formed part of the subsequent resource calculation.

After perforation of the larger primary interval the well achieved an instantaneous rate of 13.1 mmscf/d from the two perforated zones over a combined 31m interval in the Kingia Sandstone, between 4,840m and 4,874m measured depth (4,613m to 4,647m subsea). The test program indicated a production barrier that the reservoir was unable to overcome through prolonged flow testing. This is interpreted to be skin from the filtrate from cement and mud invasion resultant from the drilling which has been amplified via the depth of penetration and ineffectiveness of the existing completion. The primary flow period was conducted over 77 hours at a rate of 5.1 mmscfd through a 64/64" choke, with 260 psig flowing well head pressure.

The flow rates and pressures were stable throughout the extended flow period and in conjunction with pressure build ups show no evidence of depletion from the test which is positive to dismiss compartmentalisation of the field. Gas sample analysis indicated WE5 has a similar gas composition to the other well

results from the field, and WE5 produced minimal associated water which was measured at less than 5.9 bbls per mmscf on average.

Strike is preparing to re-enter WE5 to recomplete and retest the well which will be completed via a rigless intervention. These activities are planned to be campaigned along with the other wells in the region that require testing such as WE3 and possibly Walyering 5, South Erregulla 1 and Lockyer Deep 1.

The proposed West Erregulla Natta 3D seismic campaign is subject to feedback from the EPA, which is expected in the coming quarter. Subject to the level of assessment required, Strike could look to acquire the seismic data in Q1-Q2/22.

West Erregulla - Development

The EPA is continuing to review Strike and AGIG's respective environmental permit submissions with the level of assessment determined as 'assessment on referral of information'. Strike is now preparing to provide the additionally requested information and will

recommence the approvals process towards the end of October. Strike currently expects the EPA to approve and issue the environmental permits in mid-22, subject to satisfying the information requests.

During the quarter Strike continued funding its share of the security required for the AGIG procurement of the gas plant long lead items required for the proposed 87 TJ/d Phase 1 gas processing plant. Security now totals ~$3m Strike share with a total expected commitment of up

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to $16m prior to AGIG making their construction undertaking and then taking the procurement processes onto their balance sheet.

West Erregulla - Finance

At the end of the quarter Strike had fully drawn its $12.5 million pre-development debt facility with Macquarie Bank. The finalisation of the West Erregulla reserves allows Strike to proceed to enter mandates with the selected banking institutions and engage in formal due diligence for the proposed project financing for the West Erregulla Phase 1 development project.

South Erregulla

South Erregulla-1 is scheduled to spud using the Ensign 970 rig after completion of the Walyering-5 appraisal well.

NSAI's West Erregulla resource report identified 1C (P90) Contingent Resources to the far south down to the permit boundary of EP469. EP469 borders EP503, Strike's 100% owned and operated permit that contains the South Erregulla prospect.5

Strike's interpretation that West Erregulla is connected to South Erregulla6 is further supported by NSAI's work. NSAI's booking of P90 high confidence resource to this arbitrary point bodes well for the probability of success in the South Erregulla-1 well and, as a result, Strike has sought approval from the regulator to add a second South Erregulla well into its Environmental Permit to facilitate timely appraisal and faster reserves conversion on success.

Base line flora and fauna studies for the proposed Minjiny 3D seismic campaign are also underway where Strike will look to execute the survey off the back of a successful South Erregulla-1 well.

Eneabba Deep

During the quarter Strike submitted for approval its permits to progress the Eneabba Deep 2D seismic campaign in EP506. These submissions were not referred to the EPA as the campaign has been designed using Strike's methodology of 'new data sooner' utilising only roads, firebreaks, gaps in paddocks and previously cleared land to constrain the 2D source lines. Strike expects feedback on the approvals process in the coming quarter.

Eneabba Deep is a Permian aged structure sitting adjacent to the Eneabba mineral sands mine and location of the proposed Iluka rare earths refinery. Strike will look to progress the exploration program of Eneabba Deep with a view to identifying a rig slot in FY23.

1. Refer STX ASX Announcement dated 11 October 2021 entitled 'Strike delivers maiden Perth Basin gas reserve'.
2. Refer to ASX announcement titled "Exploration Portfolio Update" released on 17th February 2020. Strike confirms it is not aware of any new information or data that materially affects the information included in that announcement and that all the material assumptions and technical parameters underpinning the estimates in that announcement continue to apply.

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