ASX All Ords share Strike Energy Ltd (ASX: STX) is on the rise during Monday's session after posting a company-specific update.
Shares in the oil and gas explorer are currently fetching 22.5 cents apiece, up nearly 8% from the open.
Investors are buying the stock after the company announced production test results at its Erregulla Deep-1 well, which were favourable.
This brings the ASX All Ords share's gains to more than 3% in the past month. Let's take a closer look at today's update.
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ASX All Ords share rallies on update
Strike Energy's latest announcement revealed impressive production testing results at the Kingia Sandstone gas discovery within the Erregulla Deep-1 well.
The well recorded stabilised flow rates of 53 million standard cubic feet per day with a high flowing wellhead pressure of 5,515 psi.
Results were limited by the capacity of Strike's surface equipment, suggesting the well could achieve even higher flow rates.
The company estimates an absolute open flow potential of up to 450 million standard cubic feet per day.
The gas quality comes with "lower CO2 and other impurities compared to the West Erregulla gas field". STX's excitement was palpable in its update to the market:
Due to ED-1 being able to be retained as a future producer for the upcoming West Erregulla gas field development, testing rates were kept within a pre-agreed conservative range in order to guarantee integrity of the well infrastructure and to manage the test safely.
However, an absolute open flow (AOF) calculation indicates that the well could produce at a maximum rate of 400- 450 mmscfd demonstrating the scale and quality of the reservoir and pressure regime.
Time will tell the longer-term impact on the ASX All Ords share.
Production trends continue
The ASX All Ords share has been building momentum in the past few months, and its success isn't just in the ground.
The company has already generated $64 million in gross sales from its Walyering gas field, achieving payback on the project earlier this year.
JPMorgan acquired a 5.11% stake in the company shortly after the update.
But the rally in the ASX All Ords share comes amidst broader strength in the ASX energy sector.
Rising crude oil prices have buoyed the market, with geopolitical tensions in the Middle East pushing prices higher.
Although Strike focuses on gas versus oil, the two are often commingled under the energy banner.
Foolish takeaway
Strike Energy's promising production results at Erregulla Deep-1 have put the company in the spotlight. Investors are buying the ASX All Ords share hand over fist today.
