The market may be edging lower today, but the same cannot be said for Strike Energy Ltd (ASX: STX).
In afternoon trade, the ASX 200 energy stock is rocketing higher and is up 8% to 22.2 cents.
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Why is this ASX 200 energy stock rocketing?
Investors have been scrambling to buy the company's shares today after it achieved a "significant financial milestone" at the Walyering gas field development.
According to the release, the Walyering gas field in the Perth Basin, which was brought online eight months ago, has now reached payback of its total development capital spend of approximately $30 million (plus operating costs, royalties and taxes incurred to date).
Strike Energy advised that total gross income received to date from the Walyering project is approximately $47 million.
Management notes that this payback profile would be one of the fastest in recent history for a greenfield Australian oil and gas project. It believes this demonstrates the inherent value of the ASX 200 energy stock's conventional gas play in the Jurassic aged Sandstones within the Cattamarra Coal Measures.
What's next?
Given the success of the Walyering project so far, investors will be pleased to learn that drilling activities continue on site.
The company advised that Walyering-7 (W7), which commenced drilling 18 days ago, has reached its total planned depth of 4,035 metres (measured depth). This is five days ahead of target and has set a new time/depth record for its drilling performance within the Walyering gas field.
Pleasingly, the ASX 200 energy stock revealed that the W7 well has passed through multiple sandstone reservoirs within the Cattamarra Coal Measures and has registered positive observations on both mud logs and logging while drilling tools. Management advised that it is now preparing to run a series of wireline logs and specialty tools and will evaluate those results before moving to the next stage of completion.
It adds that the W7 well has been drilled from a surface location co-located with the Walyering gas processing facility directionally to the east into a fault compartment north-east of the producing Walyering-5 structure. The company intends to provide further updates as operations and evaluation conclude at the W7 well site.
Despite today's strong gain, the Strike Energy share price remains one of the worst performers on the ASX 200 index over the last 12 months. During this time, the ASX 200 energy stock is down approximately 53%.
