Strike Energy Limited

US Production

Strike completed a record production year to 30 June 2009, with its share of gas production from the Rayburn and Mesquite Projects up 185% to 3,335 MMcf and oil-condensate production up 222% to just under 82,000 barrels.

	2009	2008	YoY change
Gas (MMcf)	3,335	1,168	185%
Oil-condensate (bbl)	81,836	25,387	222%

Three new wells commenced production at the Rayburn project during the year; Gilbert Freeman 2 (August 2008), Gilbert Freeman 3 (September 2008) and Duncan Ansley Gas Unit 1-1 (January 2009, shut-in in May 2009). At the end of the year six wells were in production.

At the Mesquite Project, all four Wilcox production wells continued to operate continuously during the year although production rates decreased due to natural decline.

A workover performed on the Webernick 2 well in May 2009 resulted in a substantial increase in production. The Webernick 5 well which produces at low rates from a shallow reservoir was shut-in in July 2009.

Total revenue from gas and oil-condensate sales for the year was $36.4 million, up from $16 million in the previous year and representing a 128% increase.

	2009 $’000	2008 $’000	YoY change
Gas	29,003	12,761	127%
Oil-condensate	7,431	3,238	129%
Total	36,434	15,999	128%

Reserve assessments, as at 31 December 2008 and 31 July 2009, were conducted for both fields. Overall, a 17% increase in Estimated Ultimate Recovery (“EUR”) was calculated which more than replaced production for the six months to 30 June 2009. The company’s reserves at 30 June 2009 were 7.47 Bcf of gas and 170,000 barrels of oil-condensate.

Mesquite and Rayburn Projects	Joint Venture		Strike Working Interest
Mesquite and Rayburn Projects	Proved 30 June 09	Proved 31 December 08	Proved 30 June 09	Proved 31 December 08
Gas (Bcf)	33.96	34.97	7.47	7.71
Oil-condensate (MM bbl)	0.75	0.63	0.17	0.14
Total boe(i) (MM bbl)	4.15	4.13	0.92	0.91
Total bcfe(ii) (Bcf)	41.46	41.30	9.17	9.11

(i) Barrels oil equivalent (boe) is based upon 10:1 value ratio
(ii) Gas equivalent is based upon 1:10 value ratio

A total of five wells, comprising four appraisal/development wells and one exploration well, were drilled during the year. None of the wells were completed for production.

Area	Well	Strike Working Interest	Depth (metres)	Results
Appraisal/ Development Rayburn Project	Hlavinka GU 1-1	22.8%	3,719	Wilcox Fm suspended for later testing
	Duncan 4	22.8%	3,734	Wilcox Fm plugged and abandoned, shallower zone suspended for later testing
	Duncan GU 1-1	22.8%	3,719	Wilcox Fm plugged and abandoned, shallower zone suspended for later testing
	Gilbert Freeman 4	22.8%	1,481	Plugged and abandoned
Exploration Texas Gulf Coast	Hart Estate GU 1-1	30.0%	3,680	Wilcox Fm temporarily abandoned

Consideration will be given to testing the suspended wells dependent on future gas and oil-condensate pricing.

Duncan 1 - Production Facility