Strike Names Proposed Belisama Preferred for West Erregulla

Strike Energy (ASX:STX) said that, following a detailed selection process, it has selected Hancock Energy's proposed Belisama gas processing facility as the preferred processing solution for its share of gas from the West Erregulla joint venture, and has entered an Implementation Agreement with Hancock Energy (EP469) Pty Ltd and Hancock Energy (PBN) Pty Ltd. The agreement provides a framework for progressing West Erregulla towards a final investment decision and establishes an agreed and binding fixed capacity charge, with the remaining project documentation, including a Gas Processing Services Agreement, still to be finalised in long form agreements; other operating, export and decommissioning charges remain subject to further negotiation, approval and execution. Strike has agreed not to pursue alternative gas processing arrangements for its share of West Erregulla gas while the Implementation Agreement remains on foot. The parties are targeting an upstream FID in FY28 and first gas in mid-CY29, and have agreed that operatorship of the L25/L26 upstream joint venture will transfer to Hancock Energy (EP469) once three conditions are satisfied: West Erregulla FID, execution of the key project agreements, and joint venture approval of the field development plan and associated work programs and budgets. The Implementation Agreement may be terminated if the key project agreements are not executed by 31 December 2027, if FID has not occurred by 31 December 2028, or on such other dates as the parties may agree, and also if a party breaches its material obligations and fails to cure the breach.

Strike and Hancock Energy have also agreed a term sheet under which Hancock Energy would lend Strike West Pty Ltd up to $30 million to fund West Erregulla joint venture cash calls for pre-FID activities, subject to finalisation of binding documentation including consent from Strike's existing financier, Macquarie Bank Limited. Under the term sheet interest would be BBSY plus 600 basis points, capitalised or paid in cash at Strike's option, and Hancock Energy would take second-ranking security behind Macquarie, with an “upside payment” representing 50 per cent of the realised value of 10TJ/day of gas sold in excess of an agreed target price payable from first gas until the facility is repaid in full. Macquarie has waived drawdown conditions precedent, increased the amount available through the relevant tranche from $23 million to $30 million and made it repayable on maturity of its facilities in 2029 with no amortisation beforehand. On operations, Strike said practical completion of the South Erregulla Power Plant is currently forecast for 31 October 2026, that the timing of Western Power and AEMO approvals remains outside its direct control and that there is a risk those activities continue into Q4 CY26; the announcement's highlights separately state the commissioning program is now targeting approval to generate in late Q4 CY26. At Walyering, production is running at approximately 13 TJ/d with compression commissioning progressing and both compressors brought online over the weekend of 29 August 2026, and Strike said that once both compressors are successfully commissioned it will look to ramp up progressively towards 20 TJ/d into September.