Strike, Santos link up Perth Basin deal

Santos has signed up to buy gas from Strike Energy and Talon Energy’s Wayerling gas field development under a new supply agreement.

The deal will see Santos buy a total of 36.5 petajoules of gas from the Perth Basin-situated Walyering joint venture over five years, starting in the first half of next year.

Strike owns 55 per cent and is the operator of the Wayerling development along with joint venture partner Talon Energy, which owns the remaining 45 per cent.

In its update today Strike estimated the procurement programme for the project was 95 per cent complete with construction on track for first gas sales in the first quarter of 2023.

In a bid to keep operational costs down, Strike said it would be reducing the scope of work being undertaken by APA Group to build the main pipeline by taking on the work itself.

But the move is likely to add another $2.4 million to the project’s capital expenditure.

“The agreement with Santos provides a commercially attractive route for the Walyering JV to sell its gas stream in a strong pricing environment,” Strike chief executive Stuart Nicholls said.

“Walyering’s incredibly short 15-month journey from discovery to planned start-up shows the opportunity and immediacy in returns and value from Strike’s substantial undeveloped acreage position in the Jurassic wet gas play in the Perth Basin.”

Chief executive Kevin Gallagher said Santos was delighted to sign the agreement with the Walyering joint venture and that the deal reinforced its position as WA’s biggest supplier of domestic gas.

On the market, Santos shares were up 0.99 per cent to trade at $7.17.

 Strike shares were up 5.23 per cent at 34 cents.