The Strike Energy Ltd (ASX: STX) share price has jumped more than 7% in early trade after a strong production test update from the Aussie energy company.
Why is the Strike Energy share price climbing?
Strike reported that it has conducted a selective perforation at its West Erregulla 5 well. The Aussie energy group said it has subsequently observed gas flows to the surface in the production test in good news for shareholders.
Perforation#1 was made over a 6-metre interval at the bottom of the Kingia Sandstone pay zone at a depth of 4,641 to 4,647 metres.
The Strike Energy share price has shot higher on the back of this morning's news. That's on the back of the testing confirming the existence of a gas prone reservoir throughout the site.
Strike said these initial West Erregulla 5 flow test observations "provide further support and corroborate other data points that the gas water contact of the West Erregulla gas field has not been observed in the drilling to date and likely lies at a depth of around 4,720m ss".
The good news has sent the Strike Energy share price soaring more than 7% in early trade. Shares in the Aussie energy company are now up 56% in the last year following this morning's news.
What's next for the West Erregulla site?
Strike will now execute Perforation #2 and conduct a full flow testing program at WE5 following the discovery. The company will then suspend the well as a future producer for the proposed Phase 1 87 TJ/d development of the West Erregulla gas field.
