Announcement PDF ASX Announcement 26 June 2015 The Company Announcement Officer ASX Ltd via electronic lodgement UPDATED INVESTOR PRESENTATION Please find attached an updated version of the investor presentation released to the market on 15 June 2015. The revised presentation now incorporates additional information relating to the PEL 96 resource estimates from the Company’s ASX announcements made on 19 February 2014 and 27 April 2015. Yours faithfully Sean McGuinness CFO & COMPANY SECRETARY Strike Energy Limited ABN 59 078 012 745 www.strikeenergy.com.au P: +61 2 9397 1420 E: strike@strikeenergy.com.au 120B Underwood Street, Paddington NSW 2021 STRIKE ENERGY LIMITED INVESTOR PRESENTATION June 2015 Company Overview: Corporate Strike Energy Limited (ASX : STX) is an Australian based, independent oil and gas exploration and production company. The company is focused on the development and rapid commercialisation of a substantial gas resource in the Southern Cooper Basin to meet the future Eastern Australian gas market demand. Listing ASX (ticker STX) Issued Shares 833,330,946 Unlisted Options and Performance Rights 40,500,000 Market Capitalisation $112 million (11 June 2015) Production (2013/14) 81,357 boe Revenue (2013/14) $4.3 million Strike Energy Limited - Investor presentation, June 2015 2 Investment Summary World scale onshore gas resource –> substantial supply opportunity Fully funded commercialisation program to unlock project potential Gas offtake contracts in place with Orica, Orora, Brickworks - $17mln prepayments already made Opportunity for investors to gain exposure to near-term value upside Strike Energy Limited - Investor presentation, June 2015 3 Southern Cooper Basin Gas Project: Asset summary Strike has discovered a world-scale onshore multi-Tcf gas resource favourably located under a gas pipeline connected directly to Eastern Australian gas markets. Subject to commerciality being determined in coming months the resource can be rapidly developed to supply into a 40 Tcf market over the next twenty years. Successful commercialisation has the potential to deliver substantial value. Prospective Resource** PEL 96 4,492 Bcf* PEL 96 Phase One Area 1,123Bcf* Moomba 2C Contingent Resource Marsden 1 104 Bcf Davenport 1 PEL 94 STX 35% PEL 95 STX 50% Mount Isa Le Chiffre 1 Klebb production testing area Net STX Acres PEL 94 77,925 PEL 95 160,248 PEL 96 443,880 PELA 640 850,786 Total 1,532,839 Gladstone Moomba PELA 640 STX 100% PEL Brisbane PEL 96 STX 66.67% 0 20 Sydney Adelaide Kilometers Melbourne PEL 96 Phase One Area Strike Phase One Area wells drilled Gas Pipeline Strike Wells Drilled Oil Pipeline PEL 96 Offset Wells PEL 96 and PELA 640 – STX operated Strzelecki Track Hobart * Mean estimate (net to Strike determined on a probalistic basis) per ASX announcement dated 19 Feb 2014 and adjusted for announced contingent resource estimate per ASX announcement dated 27 April 2015. ** The estimated quantities of petroleum that may potentially be recovered by the application of a future develpment project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Futher exploration appraisal and evaluation is required to determine the existence of a significant quanity of potentially moveable hydrocarbons. Strike has an ideally positioned long-life multi-Tcf resource to supply into ~40 Tcf Eastern Australian gas demand over the next twenty years Strike Energy Limited - Investor presentation, June 2015 4 Southern Cooper Basin Gas Project: Strike’s strategic objectives Strategic objectives Timing Supply targets 2020/21 Production FID Cost competitive third party gas supply for LNG exporters Development ~5 Tcf over 20 years Equivalent to gas supply for one LNG train Expanded resource delineation across STX acreage 2017/18 Production ~1 Tcf over 20 years FID New source of affordable gas supply for east coast domestic customers Initial development Equivalent to 35% of NSW gas supply Current PEL 96 Appraisal/ Commercialisation Strike is positioning the Southern Cooper Gas Project as a long-life resource for domestic and export gas supply Strike Energy Limited - Investor presentation, June 2015 5 Southern Cooper Basin Gas Project: Comparison to recent large gas discoveries Strike’s 2013 appraisal drilling program confirmed the presence of a world scale gas resource. In 2014, this prospective gas resource in Strike’s PEL 96 permit was estimated as 4.5 Tcf net to Strike. AGULHA Mozambique CORAL Mozambique PEL 96 TANGAWIZI Tanzania SALAMAT Egypt ~700 million BOE ~700 million BOE ~650 million BOE ~575 million BOE ~500 million BOE The potential scale of Strike’s PEL 96 gas resource is comparable to recent large global gas discoveries Strike Energy Limited - Investor presentation, June 2015 6 Southern Cooper Basin Gas Project: Potential value $/share 1.66 Broker 1 1.32 1.20 Broker 2 Broker 3 $1.50 $1.00 $0.50 $0.14 / Share $0.14 Current share price Notes: Broker “unrisked“ valuations Broker 1 - EUROZ Broker 2 - Bell Potter Broker 3 - Ord Minnett “Unrisked” valuations point to significant value upside from successful commercialisation of the resource Strike Energy Limited - Investor presentation, June 2015 7 Southern Cooper Basin Gas Project: Unlocking the potential Resource Initial Production Commercial Production [PEL 96] Infrastructure Market PEL 96 ~ 4.5 Tcf prospective resource ASX announcement 19/02/14 Sustained gas flows (Le Chiffre 1 & Klebb 1) ASX announcement 18/12/14 Enhanced Klebb flow test July 2015 STX resource connected to all east coast gas markets [slide 4] ~ 40 Tcf demand over next 20 years - domestic offtake - LNG exports PEL 96 ~ 104 Bcf 2C contigent resource ASX announcement 27/04/15 Independent contingent resource certification – De Goyler & McNaughton ASX announcement 27/04/15 Le Chiffre flow test commencing Q4 2015 STX has signed offtake agreements to value of $1B - $1.5B 4.5 Tcf ~ $27 billion revenue @ $6/GJ (ex-Moomba) Targeting initial reserves H2 2015 Achievement of initial reserves is the catalyst to unlock the project’s potential Strike Energy Limited - Investor presentation, June 2015 8 Southern Cooper Basin Gas Project: PEL 96 – next phase of testing Klebb 3 Klebb 1 ~200m SW PEL 96 Weena trough Klebb 2 ~200m NE Depth 1,930m Enhanced Klebb flow test Vm3 Vm3 Vu Upper Vm3 Vu Upper • fracture stimulation of the Klebb 2 and Klebb 3 wells Vu Upper 460 bbl frac net 35m planned frac net 35m • 3 wells planned frac net 35m • flow testing from July 2015 • extended flow testing Q3/ Q4 2015 Vu Lower Vu Lower Vu Lower Enhanced Klebb flow test July 2015 Strike Energy Limited - Investor presentation, June 2015 9 Southern Cooper Basin Gas Project: PEL 96 – commercialisation strategy The next phases of the PEL 96 appraisal program are specifically designed to convert contingent resources to reserves and increase the project’s resource base Objective Infill wells Funded Commence Q4 2015 Phase 4 Le Chiffre wells + flow testing Continue Klebb flow test Pre-development activities Commence June 2015 Funded Klebb flow test Phase 3 Frac Klebb 2 & 3 Install new pumps at Klebb 2 & 3 Commence Q1 2015 Funded Continue testing Le Chiffre 1 and Klebb 1-3 Install new pump at Klebb 1 Understand multi-well pressure drawdown effects Phase 2 Funded Phase 1 Dec 2014 Single well tests Le Chiffre 1 and Klebb 1 Drill & complete Klebb 2&3 Increased reserves and resources Objective Demonstration project Objective Commercial gas flows Initial reserves Objective Build gas flows (in progress) Objective Sustained gas flows Technical feasibility Commercial feasibility A disciplined, capital efficient and funded appraisal program is being followed to establish commerciality H2 2015 Strike Energy Limited - Investor presentation, June 2015 10 Southern Cooper Basin Gas Project: Value summary Significant opportunity for value accretion as Strike targets 5 – 10 Tcf Australian east coast addressable gas market opportunity • infill wells (Phase One Area) • PEL 96 (outside Phase One Area) • additional gas offtake • FID initial project Commercial feasibility [first project reserves] Technical Feasibility [sustained gas-flows ] high gas content high gas saturation good permeability • Klebb flow test Q3/Q4 2015 - commercial gas flows • Reserves • Le Chiffre wells + flow testing Q4 2015 - ↑ reserves • Demonstration project 2016 • early cash flows ($$$’s) • additional gas offtake Value accretion Resource delineation - 2016 [+++ reserves & resources] PEL 96 2012 - 2015 18 months Strike’s rapid commercialisation of its Southern Cooper Basin Gas Project over the next 18 months has the potential to deliver substantial value Strike Energy Limited - Investor presentation, June 2015 11 Investment Summary World scale onshore gas resource –> substantial supply opportunity Fully funded commercialisation program to unlock project potential Gas offtake contracts in place with Orica, Orora, Brickworks - $17mln prepayments already made Opportunity for investors to gain exposure to near-term value upside Strike Energy Limited - Investor presentation, June 2015 12 Important Notice This presentation does not constitute an offer, invitation or recommendation to subscribe for, or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. Reliance should not be placed on the information or opinions contained in this presentation. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Any decision to purchase or subscribe for any shares in Strike Energy Limited should only be made after making independent enquiries and seeking appropriate financial advice. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, Strike Energy Limited and its affiliates and related bodies corporate, and their respective officers, directors, employees and agents disclaim liability (including without limitation, any liability arising from fault or negligence) for any loss arising from any use of or reliance on this presentation or its contents or otherwise arising in connection with it. Contingent Resource Estimate DeGolyer and MacNaughton was engaged by Strike to undertake an Independent Review of the gas resource in PEL 96 based on the data and information acquired to date by Strike from the drilling and flow testing programs carried out at the Le Chiffre 1 and Klebb 1, Klebb 2 and Klebb 3 wells. DeGolyer and MacNaughton has estimated a contingent gas resource on a probalistic basis for the initial zones that have been flow tested within the Le Chiffre 1 and Klebb 1 wells. As these zones only represent a portion of the net coal encountered at these locations, successful flow testing of additional zones will enable an increased contingent resource to be booked. The table below summarises the Contingent Resource Estimates. Contingent Gas Resource Estimates - PEL 961 as of 31 March 2015 Statements contained in this presentation, including but not limited to those regarding the possible or assumed future costs, performance, dividends, returns, production levels or rates, oil and gas prices, reserves, potential growth of Strike Energy Limited, industry growth or other projections and any estimated company earnings are or may be forward looking statements. Well 1C2 (BCF) 2C2 (BCF) 3C2 (BCF) Productive area (acres) 2,171 2,938 3,931 Le Chiffre 1 – Patchawarra Vu Upper and Vu Lower zones 62.9 93.2 132.4 Such statements relate to future events and expectations and as such involve known and unknown risk and uncertainties, many of which are outside the control of Strike Energy Limited. Actual results, actions and developments may differ materially from those expressed or implied by the statements in this presentation. Klebb 1 – Patchawarra Vu Upper zone 42.1 62.2 93.3 Total Gross Contingent Resource 105.0 155.4 225.7 Total Net Contingent Resource3 70.0 103.6 150.5 Subject to any continuing obligations under applicable law and the Listing Rules of ASX Limited, Strike Energy Limited does not undertake any obligation to publicly update or revise any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such statement is based. Strike Energy Limited - Investor presentation, June 2015 1. Contingent Resource Estimates have been prepared in accordance with the Petroleum Resources Management System “PRMS”. Contingent Resource Estimates are those quantities of gas (produced gas less carbon dioxide and fuel gas) that are recoverable from known accumulations but which are not yet considered commercially recoverable. 2. 1C, 2C and 3C estimates in this table are P90, P50 and P10 respectively for each well and have been summed arithmetically. 3. Net to Strike’s 66.7% interest in PEL 96. 13 Important Notice: continued Competent Persons Statement The information in this presentation that relates to the PEL 96 contingent resources estimate has been taken from the independent reports as prepared by DeGolyer and MacNaughton, a leading independent international petroleum industry consultancy firm, and has been reviewed by Mr Chris Thompson (Chief Operating Officer of the Company). All other reported resource and or reserves information in this presentation is based on, and fairly represents, information prepared by, or under the supervision of Mr Thompson. Mr Thompson holds a Graduate Diploma in Reservoir Evaluation and Management and Bachelor of Science Degree in Geology. He is a member of the Society of Petroleum Engineers and has worked in the petroleum industry as a practicing reservoir engineer for over 20 years. Mr Thompson is a qualified petroleum reserves and resources evaluator within the meaning of the ASX Listing Rules and consents to the inclusion in this release of the resource and or reserves information in the form and context in which that information is presented. About DeGolyer and MacNaughton The information contained in this release pertaining to the PEL 96 contingent resources estimate is based on, and fairly represents, information prepared under the supervision of Mr Paul Szatkowski, Senior Vice President of DeGolyer and MacNaughton. Mr Szatkowski holds a Bachelor of Science degree in Petroleum Engineering from Texas A&M, has in excess of 40 years of relevant experience in the estimation of reserves and contingent resources, and is a member of the International Society of Petroleum Engineers and the American Association of Petroleum Geologists. Mr Szatkowski is a qualified petroleum reserves and resources evaluator within the meaning of the ASX Listing Rules and consents to the inclusion of the contingent resource estimate related information in the form and context in which that information is presented. Strike Energy Limited - Investor presentation, June 2015 14