The Strike Energy Ltd (ASX: STX) share price has surged more than 6% today after the company's latest quarterly update.
Why is the Strike Energy share price surging?
Strike reported several highlights for the quarter ended 31 March 2021 (Q1 2021). At its West Erregulla site, Strike executed drilling operations at the WE4 well with results "above expectations". Gas was observed throughout the entire reservoir sections with no gas water contact seen. WE4 drilling operations are now complete and final production casing string has been cased and cemented.
In its South Erregulla & Permian Gas Fairway, WE4 results suggested communication between the West and South Erregulla structure. That reportedly increases the likelihood that the two are "co-charged in a mega-closure". The update was also punctuated by the Project Haber update from the Aussie energy group.
Strike has entered into pre-FEED and is advancing its Mid-West fertiliser development to produce low-cost urea from its Perth Basin Gas resources. Strike has been awarded an option to lease 60 hectares of "strategically positioned land" during the quarter.
The company said Project Haber will secure more than 628 petajoules of additional gas demand with an opportunity to be on both the supply and demand side of a potential hydrogen boom.
That's been enough to help push the Strike Energy share price on Wednesday. Strike has agreed to acquire 100% of existing rights of the Perth Basin via its acquisition of Mid-West Geothermal Power Pty Ltd during the quarter.
Greater Erregulla update
Another factor that could be contributing to the Strike Energy share price rise is the company's Greater Erregulla update, released yesterday. Strike announced it has been awarded the maximum $200,000 Exploration Incentive Scheme (EIS) grant to contribute towards the drilling of South Erregulla-1.
The company was also awarded exploration permit EP505 from the WA Department of Mines, Industry Regulation and Safety during the quarter. This allows for progression of data acquisition over Strike's current "flagship opportunity" in South Erregulla.
There was also an update on the corporate side of things for the Aussie energy company. Strike successfully completed a $75 million single tranche equity placement after the quarter end. The company hopes to raise a further $5 million from the currently open Share Purchase Plan.
Foolish takeaway
The Strike Energy share price has jumped higher on the back of this morning's quarterly update. Shares in the energy group remain up more than 6% at 37.2 cents, with a $729.1 million market capitalisation.
