The Strike Energy Ltd (ASX: STX) share price traced higher in early trade on Tuesday, nudging past a 5% gain before cooling off to 31 cents. That's still up 3.33% on yesterday's closing price.
Investors are bidding up the oil and gas explorer's shares amid a company announcement regarding its Project Haber development strategy.
What did Strike Energy announce?
Strike has launched the Mid West Low Carbon Manufacturing Precinct via the acquisition of freehold farming land in the Three Springs Shire in Western Australia.
It has signed an unconditional binding contract to purchase the 3,500 hectares of freehold farming land on a $13.5 million valuation. Settlement is set to finalise in H2 FY22.
It also agreed to lease the farm back to the current owners on a periodic lease.
Strike hopes to open a mortgage facility "that takes into account the various income streams that will be produced from the land over the next three to five years" to finance the transaction.
The land sits above Strike's 100%-owned South Erregulla gas fields. The company will use the land to create a low carbon integrated energy and industrial manufacturing centre.
Management commentary
CEO Stuart Nicholls said the precinct will produce "some of the lowest cost and lowest carbon fertiliser in the global market". He added:
Strike continues to display sectoral leadership through its strategic development approach at Project Haber, in utilising its natural resource endowment in partnership with world class renewable energy in the Mid West to manufacture globally low carbon critical agricultural commodities.
Strike says the land contains natural resources and assets. These include the South Erregulla Kingia and Wagina low impurity gas fields, 103 metres of "excellent Jurassic aged carbon sequestration sandstone reservoir", and wind resources.
"The land will now be referred to as the Mid West Low Carbon Manufacturing Precinct and it is planned that other proponents may join Strike in the development/expansion of the Precinct," it remarked.
With regards to the fertiliser component, Strike says the emissions would result in "an estimated 50% carbon reduction against the current imported supplies".
Strike Energy share price snapshot
In the last 12 months, the Strike Energy share price has slipped around 14% into the red. However, it has gained more than 40% this year to date (see below) amid surging energy markets.
