The S&P/ASX 200 Index (ASX: XJO) is down 0.1% in early afternoon trade, but don't blame this rocketing ASX 200 energy stock.
Shares in the embattled oil and gas company closed yesterday trading for 16.5 cents. At the time of writing, shares are swapping hands for 19.7 cents apiece, up a whopping 19.4%.
This will come as welcome news to shareholders. It will be less pleasing to the cadre of short sellers betting the ASX 200 energy stock had further to fall. According to ASIC data, shares in the company kicked off this week with a 10.8% short interest.
Any guesses?
If you said Strike Energy Ltd (ASX: STX), give yourself a virtual gold star.
Here's what's caught those short sellers wrongfooted today.
ASX 200 energy stock soars on drill test
If you've been following along with Strike Energy, you're likely aware of the series of major setbacks the company has had this year at its West Erregulla gas field, located in Western Australia.
Strike is the operator and owns 50% of the joint venture (JV) project; Warrego Energy owns the other 50%.
As you can see on the above share price chart, the ASX 200 energy stock was pummelled in February after reporting on major failures with well testing at South Erregulla-3 and then South Erregulla-2 within weeks of each other. Among the issues, water was being pumped to the surface along with gas.
At the time, Strike Energy CEO Stuart Nicholls said that while those results were disappointing, "Strike will be drilling the Walyering-7 and Erregulla Deep-1 wells in this half, which have the potential to add material 2P developed and undeveloped volumes on success."
Indeed, today, things are looking far brighter for the ASX 200 energy stock, with Strike reporting it has reached 5,208 metres in measured depth at its Erregulla Deep-1 (ED-1) exploration well.
According to the release:
Positive observations of sustained drilling breaks, with associated mud gas responses above background level, were made whilst drilling through a sand body within the Irwin River Coal Measures and then again within the primary target of the Kingia Sandstone.
Logging while drilling tools have measured gamma-ray, resistivity, density and neutron which indicate gas charged porous sands in both formations.
Management noted that the latest set of observations are preliminary in nature. Strike plans to continue drilling to final depth before running a series of wireline logs.
Investors will be updated on those results at the conclusion of Strike's wireline logging campaign.
With today's intraday share price gains factored in, the ASX 200 energy stock remains down 48% over 12 months.
