Strike Energy Limited

The large 4050 km2 exploration licence PEL 96 was granted in May 2009, creating a significant new asset for The Company, comprising the Southern Cooper Project, covering a large area of the southern Cooper Basin in South Australia considered highly prospective for coal seam gas.

Strike holds a 66.7% interest in and is operator of the project which features extensive thick coal seams and close proximity to Epic Energy’s “open access” Moomba to Adelaide gas pipeline, providing direct access to the South Australian gas market as well as (through trading opportunities) the rest of the eastern Australian market.

The exploration licence area was previously the subject of petroleum drilling and seismic studies, which have confirmed the presence of thick, continuous coals over a very large area.

A Prospective Resource has been modelled at 7,000 to 19,000 Petajoules (PJ) gas-in-place based on the existing data, of which Strike’s share would comprise 5,000 to 12,000 PJ, as shown in the following table:

		Unit	Best Estimate	High Estimate
Total Joint Venture	Gas in Place	PJ	7,425	18,562
Total Joint Venture	Prospective Resources	PJ	3,712	9,281
Strike’s Share	Gas in Place	PJ	4,950	12,375
Strike’s Share	Prospective Resources	PJ	2,475	6,188

This Prospective Resource estimate has been confirmed in an independent review conducted by MBA Petroleum Consultants of Brisbane, one of Australia’s most experienced coal seam gas advisory groups.

Prospective coal seam gas Resources are estimates of the un-risked potential in PEL 96. Prospective Resources under the SPE PRMS classification are as yet undiscovered and as such carry exploration risk.

Whilst previous petroleum drilling and interpretation of seismic surveys have confirmed the presence of thick and extensive coal seams, key attributes remain to be confirmed including gas content, gas composition and permeability, each of which are to be tested in the forthcoming drilling program.

A successfull drilling campaign may increase confidence that a substantial portion of the Prospective Resources can be realised which with sufficient volume may support significant power generation and LNG export development options, two examples of which are outlined below:

Development Option	Output	Required Gas p.a.	Required Gas Resource – 25 Year Life
Power Generation	200 – 250 MW	17 Pj	425 PJ
LNG Export(i)	1.6 Mt pa	96 Pj	2400 PJ

(i) Equivalent to scale of Gladstone LNG project, proposed by Arrow Energy/LNG Limited

Strike is in the process of securing a drilling rig and plans to commence drilling at the Southern Cooper Project from late November/early December2009.

In addition to PEL 96, elsewhere in the Cooper Basin region, Strike commenced finalisation of Native Title agreement for the even larger PELA 71, located approximately 27 kilometres to the west of recent oil discoveries by other companies (including the Bulters-1 discovery by Beach Petroleum Ltd and Cooper Energy Ltd) beyond the western flank of the Cooper Basin.

Compressor station on Epic Energy’s Moomba to Adelaide gas pipeline.
The pipeline traverses Strike Energy’s Southern Cooper CSG Project exploration licence (PEL 96)