Strike (ASX:STX) share price lifts after 2030 net-zero pledge

The Strike Energy Ltd (ASX: STX) share price is up 2.7% after the company pledged to become a net-zero carbon emitter by 2030.

| More on:
A businessman holds a bolt of energy in both hands, indicating a share price rise in ASX energy companies

Image source: Getty Images

The Strike Energy Ltd (ASX: STX) share price is lifting in mid-morning trade today after the company pledged to reduce scope 1 and 2 carbon emissions to net-zero by 3030.

At the time of writing, shares in the oil and gas company are trading for 38 cents each – up 2.7%. In comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is currently 0.84% higher.

Let’s take a closer look at today’s update and what it means for the Strike share price.

Strike share price climbs on lower emission pledge

In a statement to the ASX, Strike Energy said it was committing to becoming a net-zero carbon emitter for scope 1 and 2 emissions by 2030. The company added it “aspired” to fully offset its scope 3 emissions sometime after 2030. 

According to the government’s Clean Energy Regulator, Scope 1 emissions occur directly as a result of company operations, such as emissions produced from manufacturing processes.

Scope 2 emissions are those indirectly caused by operations (for example, the electricity used that has been generated by coal power stations). Scope 3 emissions are those generated throughout a company’s supply and value chain, such as in the metals used to manufacture tools.

It should be noted that net-zero emissions are not the same as zero emissions. A zero-emissions strategy would not produce any air pollutants, period. A net-zero strategy means any carbon pollution is offset (or counterbalanced) by green initiatives.

Strike says it hopes to be “Australia’s first integrated energy company” to deliver net-zero scope 3 emissions.

However, according to Strike’s release, the emissions promise is predicated on its proposed Project Haber becoming fully operational, a current unknown:

[Current studies into the feasibility of Project Haber] are indicative in nature only. The studies are based on low-level technical and economic assessments and are insufficient to provide full assurance of an economic development case at this stage or provide certainty that the conclusions of the studies will be realised, and that the development of Project Haber will be commercially viable.

The announcement has failed to excite investors, judging by the Strike share price movement so far today.

Management commentary

Strike CEO and managing director Stuart Nicholls said:

Project Haber is the enabler for Strike to make the ambitious target of achieving net-zero scope 1 & 2 emissions by 2030. This commitment epitomises the broader value proposition of Strike’s downstream integrated strategy.

Should the company achieve success through its Mid-West Geothermal Project, it would possess sufficient offsets to meet its aspirations of being Australia’s first net-zero energy company across all of its Scope 1, 2 and 3 emissions.

Nicholls said this would create additional value as net-zero emissions energy attracted premium pricing from industrial energy consumers making their own transition to a lower carbon future.

With a near term target and the contemporary nature of Strike’s business, its current board and management team will be the company’s custodians to be held to account against these ambitious targets.

Strike share price snapshot

Over the past 12 months, the Strike share price has increased 138.7%. It is only slightly off its all-time high of 39.5 cents achieved in mid-April this year.

Strike Energy has a market capitalisation of $743.7 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares