Strike Energy : Independent certification of Walyering reserves

21st July 2022
	ASX: STX The Company Announcement Officer ASX Ltd via electronic lodgement

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Independent certification of

Walyering reserves

• The Walyering exploration and appraisal program has exceeded the gross pre- drill gas in place estimates by 35%.
• RISC Advisory has independently certified gross 2P gas Reserves of 54 PJ and 0.55 mmbbls condensate at the Walyering gas field.
• Substantial upside has been identified by RISC in the Walyering gas field with a further 32 PJ and 0.31 mmbbls of gross 2C Resources and 16 PJ and 0.16 mmbbls of gross 2U Resources.
• RISC's Reserves certification supports progression of the Walyering gas field into construction and development.

Strike Energy Limited (Strike - ASX: STX) is pleased to release the maiden independently certified Reserves & Resources report for the Walyering gas field procured for the EP447 JV (Strike operator and owner of 55% equity interest, Talon Energy (ASX: TPD) 45%).

Strike Energy Limited Managing Director & CEO Stuart Nicholls said:

"The booking of a gross aggregate 102 PJ gas and 1.02 mmbbls of condensate at Walyering is hugely exciting for Strike and its shareholders. The Walyering gas field's fast to market and low-cost development profile will likely translate these resources into delivering the Company's maiden cash flows given the project has successfully navigated its primary environmental review process.

"The full field results have exceeded Strike's mid case pre-drill estimates by 35%, which is a great outcome for the project, particularly at a time of heightened commodity pricing.

"As previously highlighted, the Walyering gas field was not captured in the forward supply modelling by the AEMO in their 2021 Gas Statement of Opportunities and, therefore Walyering's gas supplies will be influential in minimising or even avoiding any forecasted mid-decade WA industrial gas shortage"

Walyering Gas Field Reserves & Resources

RISC Advisory (RISC) have estimated gross 2P gas reserves of 54 PJ (30 PJ net to Strike)1 and

0.55 mmbbls of associated condensate (0.30 mmbbls net to Strike), which supports the progression of the Walyering gas field into development and construction and recognises the success of the drilling, appraisal, and development programme to date.

RISC has recognised growth potential in the Walyering gas field with a further gross 2C Contingent Resource of 32 PJ and 0.31 mmbbls of associate condensate (18 PJ and 0.17

1 Refer to resource tables at the end of this release.

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

2, 66 Kings Park Rd, West Perth WA 6005

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mmbbls net to Strike) and 16 PJ of gas and 0.16 mmbbls of condensate of gross 2U Prospective Resources (9 PJ and 0.09 mmbbls net to Strike) in undrilled or untested compartments / reservoirs of the Walyering gas field's Cattamarra Sands.

The RISC Reserves and Resources report is based on the drilling, coring, log, seismic and production testing data from both the Cattamarra Sands and the Cadda Formations exploration and appraisal wells drilled throughout the field.

Walyering Gas Field Development

Strike intends to shortly engage with the EP447 JV to contemplate a final investment decision given the proposed development has successfully passed through its primary environmental review process. The investment decision would consider taking the Walyering gas field into construction and commissioning immediately.

A full field development cost of $14.2m (including contingency) is estimated to complete the existing wells and construct the associated 33 mmscf/d (up to 37 TJ/d) and 1,400 bbls of condensate storage and offloading upstream infrastructure, which would be tied into the Parmelia Gas Pipeline and or the Dampier to Bunbury Natural Gas Pipeline. Momentum Engineering is currently finalising the detailed design for the upstream plant and pipeline tie in. Gas contracting processes for the ramp up/ commissioning gas and firm supply contracts are expected to complete in Q3/4 CY22 with positive responses from Strike's tender process received to date.

This announcement is authorised for release by the Managing Director and Chief Executive Officer in accordance with the Company's Continuous Disclosure Policy.

Company Contact

Stuart Nicholls

CEO & MD [e-mail]

Media Contact

Paul Ryan (Citadel-MAGNUS)

Phone: [phone]

Email: [e-mail]

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	Walyering Reserve and Resource Tables
only	As at 20th July 2022
	Walyering Gas & Condensate Reserves Gross
		Original Gas/Oil in Place	Proved, Probable & Possible
			(bcf / mmbbls)			(PJ / mmbbls)
		P90	P50		P10	1P	2P	3P
	Gas	35.4	58.5		92.9	32.4	54.2	82.4
	Condensate	-	-		-	0.33	0.55	0.85

use				Walyering Unrisked Contingent Resources Gross
			Original Gas/Oil in Place		Low, Best and High
					(bcf / mmbbls)				(PJ / mmbbls)
				P90		P50		P10	1C		2C		3C
		Gas		24.7		37.8		57.9	17.9		31.9		50.9
		Condensate		-		-		-	0.18		0.31		0.50
personal				Walyering Unrisked Prospective Resources Gross
				Original Gas/Oil in Place		Low, Best and High
					(bcf / mmbbls)				(PJ / mmbbls)
				P90		P50		P10	1U		2U		3U
		Gas		8.8		20.1		32.7	5.8		15.9		30.8
		Condensate		-		-		-	0.06		0.16		0.30
		Cautionary Statement: Prospective 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 (40-80%)
		and risk of development (60%). Further exploration and appraisal is required to determine the
		existence of a significant quantity of potentially moveable hydrocarbons.
				Walyering Gas Reserves Gas Net to Strike (55%)
				Original Gas/Oil in Place	Proved, Probable & Possible
For					(bcf / mmbbls)				(PJ / mmbbls)
			P90		P50		P10	1P		2P		3P
	Gas		19.5		32.2		51.1	17.8		29.8		45.3
		Condensate		-		-		-	0.18		0.30		0.47
			Walyering Unrisked Contingent Resources Net to Strike (55%)
				Original Gas/Oil in Place		Low, Best and High
					(bcf / mmbbls)				(PJ / mmbbls)
				P90		P50		P10	1C		2C		3C
		Gas		13.6		20.8		31.8	9.8		17.5		28.0
		Condensate		-		-		-	0.10		0.17		0.27

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Walyering Unrisked Prospective Resources Net to Strike (55%)

	Original Gas/Oil in Place		Low, Best and High
		(bcf / mmbbls)				(PJ / mmbbls)
	P90		P50		P10	1U		2U		3U
Gas	4.8		11.1		18.0	3.2		8.7		15.1
Condensate	-		-		-	0.03		0.09		0.17

Cautionary Statement: Prospective 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 (40-80%) and risk of development (60%). Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

Important Notices

Additional Information in respect to Reserves and Resources as required by the ASX Listing Rules:

The reported Reserves, Contingent Resource and Prospective Resources in the Cadda and Cattamarra are within Exploration Permit EP447 and have been estimated by RISC Advisory based on data as at 20th July 2022.

All Reserves and Resources figures in this document are net to Strike unless otherwise stated. Strike holds a 55% operated interest in Exploration Permit EP447 to which the Reserve and Resource estimates relate.

Reserves and resources are reported in accordance with the definitions of reserves, contingent resources and prospective resources and guidelines set out in the Petroleum Resources Management System (PRMS) prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the American Association of Petroleum Geologists (AAPG), World Petroleum Council (WPC), Society of Petroleum Evaluation Engineers (SPEE), Society of Exploration Geophysicists (SEG), Society of Petrophysicists and Well Log Analysts (SPWLA) and European Association of Geoscientists and Engineers (EAGE), revised June 2018.

This Report has been prepared in accordance with the Australian Securities and Investment Commission (ASIC) Regulatory Guides 111 and 112. The Reserves and Resources have been categorised and reported in the most specific category that reflects the degree of uncertainty in the estimated quantities, that is 1P, 2P and 3P in the case of Reserves, 1C, 2C and 3C in the case of Contingent Resources, and low (1U), best (2U) and high (3U) in the case of Prospective Resources. The Contingent and Prospective Resource estimates are un-risked and have a risk of development.

Oil and gas reserves and resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that were valid when originally calculated may alter significantly when new information or techniques become available. Additionally, by their very nature, reserve and resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional drilling and analysis, the estimates are likely to change. This may result in alterations to development and production plans which may, in turn, adversely impact the Company's operations. Reserves estimates and estimates of future net revenues are, by nature, forward looking statements and subject to the same risks as other forward looking statements.

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In respect to the Reserve estimates:

• LR 5.25.6 - the Reserve estimates have been determined using a combination of deterministic and probabilistic methods.
• LR 5.26.1 - Strike has a high degree of confidence in the commerciality of the project and evidence of the economic producibility of the reservoir.
• LR 5.26.4 (Lease Fuel) - The Reserves estimates do not include fuel and flare gas consumption. Strike estimates that negligible fuel consumption will be required by the upstream facilities. Deployment of solar panels and a battery system will be the primary form of electricity generation for the development. Shrinkage of condensate is estimated at 2.1% by RISC with a high energy content of the gas at 1.12 PJ per BCF measured at a standard temperature and pressure after condensate drop out;
• LR 5.26.5 (Reference Point) - The reference point at which these reserves have been estimated is the inlet to the Parmelia Gas Pipeline;
• LR 5.26.7 and 5.26.8 (Aggregation)- The Reserves have been aggregated by arithmetic summation by category, that is 1P, 2P and 3P. As recommended by the PRMS, the 1P, 2P and 3P Reserves have been aggregated beyond the project level by arithmetic summation, hence the aggregate 1P may be a very conservative estimate and the aggregate 3P may be a very optimistic estimate due to the portfolio effects of arithmetic summation;
• LR 5.31.1 (Material economic assumptions) - All economic assumptions that form the basis of the commerciality test were provided by Strike to RISC as actual or planned expenditures and forecast revenues based on Strike's WA gas marketing processes for the field. Any assumptions on capital or operating costs were based on authorisations for expenditure or actual costs, or near final agreed pricing. These assumptions are commercially sensitive. Economic consideration has been applied for all State based royalties and federal taxes when assessing the resulting net project cashflows.
• LR 5.31.2 (Operated interest) - Strike has a 55% operated interest in the EP447 Walyering gas field.
• LR 5.31.3 (Permits) - Strike holds Exploration Permit EP447 in respect of the reported Reserves in joint venture with Talon (AUST) Pty Ltd.
• LR 5.31.4 (Description of analysis of Reserves) - The reserves were deemed commercial as screened against the economic assumptions for the Walyering conventional gas project to generate net project cashflows with conservative assumptions around capital, abandonment, ongoing operating costs and sales revenue. These assumptions are commercially sensitive. The cashflows were generated from sales quantities of gas tendered by offtake proponents of the project at estimated screening level pricing based on Strike's WA gas marketing processes for the field.
• LR 5.31.5 (Estimated Quantities (in aggregate) to be recovered) - All reserves listed under the RISC report are deemed as undeveloped and the resulting recoverable quantities of gas reflect the ultimate recoveries of the existing well inventory inclusive of compression at the point in time of pressure depletion of the field.
• LR 5.31.6:
  o Status of the project -The Walyering gas field is in the pre-development phase and remains contingent on the taking of a final investment decision by the EP447 Joint Venture.

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