Strike Energy shares soar as WA govt removes export ban
Make us a preferred source
Make us a preferred source on Google
The news: Shares in Perth-based oil and gas explorer Strike Energy rocketed on the ASX after the Western Australian government removed its export ban for onshore gas production, allowing the export of up to 20% of total production volumes until the end of 2030.
The numbers: Strike shares were up 11% to 2.3 cents by 1:20pm AEST, making it the second best performing stock across the ASX 200.
The policy update means that onshore gas producers in WA will have five years to sell 20% of their output into export markets.
The context: Strike said the export allowance, which covers all pre-final investment decision (FID) projects, is a "strong positive" for the company, where export markets provide premium pricing and a deeper market.
The company said it will now engage with the WA government on the mechanics of the policy updates to determine how it may "immediately augment" its operations and gas marketing activities.
The banning of onshore exports came in 2020 under former WA premier Mark McGowan, with an exemption only for Beach Energy and Mitsui's Waitsia project.
What they said: "Strike stands to benefit through its substantial uncontracted gas reserves and resources position across its suite of pre-FID projects," Strike said in a release to the ASX.
"Strike also has some of the most prospective exploration acreage in the [Perth] Basin, which was recently demonstrated by the Erregulla Deep gas discovery, and this policy may increase the rate of Strike's exploration activities and investment," it said.
The source: ASX announcement
