Strike Energy Limited

I'm Shelley Robertson, Managing Director and CEO, and it's lovely to have you here with us today. Before I get started, I'd like to introduce that we are lucky enough to have Julia Gruers joining us today as her first day in investor relations and corporate development role, and so she'll be looking forward to engaging with you all as the year progresses. So I thought I'd start today with just a reminder of who we are today as Strike. So you all know Strike as a listed energy company and with a number of key projects that I'll work through today. We have a refreshed board since the end of the financial year with Nev Power as chair, Jill Hoffman, Will Barker and Steve Bizzle joining me on the board. So what we've found is that a smaller hit to purchase pool is working really well for Strike and we're enjoying moving the company forward as a group. This is just a brief overview of our portfolio for those of us perhaps who have joined in more recently onto the register. On the right there's a map and what you see in the blue there is our very extensive portfolio of more than 3,000 square kilometres of acreage in the Perth Basin. and all that acreage is 100% owned by Strike, apart from the West Faragulla joint venture, which is 50-50 with Hancock Energy. So our key projects that I'll talk about today are Wondering, West Faragulla and South Faragulla, as well as our exploration projects, Ocean Hill, Katatini and the remainder of the Perth Basin. So if we talk about the highlights of FY26 and recent milestones, certainly it's been an exciting year for Strike, FY26, with the continuing construction, getting very close to commissioning of the South Arabella Power Project, which we call SEP. So SEP is an 85 megawatt power station based in the Midwest, and we are very close to getting that power station online with Western Power in the final stages of commissioning and dynamic modelling. So that's very exciting for us as it's been a big project on the go for a little while now. We also have West Yarra Gulla, where we increased our net reserve, net GP reserve. And that's another exciting project I'll talk about. If you're on the recent webinar, you'll know, but we've certainly reached agreement with Hancock on the way forward on a pathway to market for us, which is great. And with Wailuring, we'll talk through Wailuring and where we're up to. And so on here, we're also talking about the $30 million Macquarie facility that was made available when we reached agreement with Hancock on the implementation agreement. If we get through to our financial results now, so we can talk to the sales revenue of $62.8 million, the underlying EBITDA, $17.6 million, and cash at 30 June, $46.3 million. The important thing to note here is that we did have a big year with CAPEX of 151.3, which is predominantly for the South Yarra Gullah Power Station. Acknowledging we had lower wiring production just with the natural fuel decline, but we've certainly done things to get that sorted out. But that has increased those tidy gas purchasing and sales during the year, which impacted our EBITDA. What it has done, though, certainly with our investment, has increased materially by around $59.1 million with the advent of South Aricola. If we talk to Wuthering now, Wuthering is a project that's been around for a little while, so it's been producing for a few years. What we have seen is lower field production, so certainly reservoir decline, and as a result of that, we've certainly had to do some interventions, which has included compression, bringing compression on, and purchasing those party gas to meet our contractual commitment. But I think the important thing here to note is that we are moving forward. We have put the compression online successfully and also drilled weathering west, which has been a discovery and has given us a 21% increase in reserves there. So that's really important because it keeps that plant running into the future. We're currently working through the feed process on the way west well and we'll keep you updated on that as we move forward. So what I would say is with compression online and way we're preparing to be tied in, weathering is certainly looking better. South Yarra Gulla, the power station, there's a lovely photo of it there. We're certainly very close now. The facility is amazing. It's 100% strike-owned, and we're running that power station from our own gas reserves. This is a very important project for us because it certainly, for one, it demonstrates that we are able to bring a project online like this. This is the first gas reciprocating engine power station on the Swiss. And so it's new for WA, but it's very excitingly new for Strike as well. And the team have done an outstanding job in getting this project through to this point. What this project means for us is a new high margin earnings stream for Strike with exposure to both capacity credit payments and the electricity markets. So this slide gives you a little bit of a look at the capacity revenue that we look to be able to achieve through the power station once it's online. So for calendar year 27, 19 million in capacity revenue payments. Calendar year 28, 31 million. And calendar year 29, up to 42 million. So with those capacity revenue payments, we actually get a two-year firm look ahead on what the price is going to be. And at the moment, the prices are increasing. and so that's positive for us. In addition to these capacity revenue payments, we have the actual electricity sales. So that revenue is driven by how many hours we are online. So how it will work at South Yarrabella as a peaking plant is that we will look to optimise coming online when the wind is not blowing. So when wind comes online, the price in the market drops and we will stay out of the market, but as the wind falls, South Yarrabella will come online and begin generating. So we've got a very quick ramp-up time with the power station. We can come on as quickly as we like. The power is actually driven by 15-minute intervals, and so we'll be asked to come online based on the price that we've set. So, for example, there's a couple of revenue streams there for if we were producing six hours a day at a certain price or 10 hours a day at a certain price, we'll be certainly generating decent revenue. So although we've built a... some debt against this project to deliver, we certainly will have some two good revenue strengths in SEP coming into play as we move forward. The other thing that's interesting about SEP is its location. So SEP is located on strike 100% owned freehold land. So we have 3,500 hectares of land in the Midwest. And you can see South Yarra Gulla, the gas field there is just to the south of West Yarra Gulla, the joint venture we have with Hancock. We have a connection through to the transmission network on the 132 KV line. And we also have been running studies on that land area for some time now to understand wind generation. So we've got up to 300 megawatts of wind capacity there. So it's quite a neat little project which gives us lots of different opportunities. We're close to Perth, close to Geraldton, close to the Grand Highway where the fibre optic cables run. A few different ideas coming through here, but lots of opportunity after this site. Moving on to West Darugala, it was the big project that we announced on the 31st of August that we actually had reached agreement with Hancock on the pathway forward to putting our gas through their 100% owned Bella Farmer gas processing facility. So the Bella Farmer gas processing facility is located just directly between South Darugala and West Darugala. And so it's just three kilometres from the West Yarra Gullah field. And so ultimately, it was a very good choice to choose that pathway for our gas. And we're now working very closely with Hancock to get our long-form documents completed before the end of this year. So here's some indicative revenue that we have from the West Yarra Gullah facility and from our field. At $8 a gigajoule, it's $127 million. So we're targeting upstream FID by mid-FY28, which is the piece around the West Faroe Valley Joint Bench of the wells and so on. And then those wells will be connected through to the Bellisama facility, targeting first gas by mid-calendar year 29. So certainly we have materially advanced our documents with Hancock over the past short period of time. And this is really one of the strikes. biggest project, biggest, most exciting project. So we're looking forward to getting this moving as quickly as we can. What we currently have with Hancock is we have the implementation agreement in place, which is the framework of all the key principles that help to guide our long-form document creation. So in that implementation agreement, a couple of things we have are a fixed capacity charge, which means we de-risk, we understand the cost of putting our gas through the Bella Farmer plant, and we then own that still own that gas out the other side to sell into the market. We certainly are very aligned with Hancock on this development. We're looking forward to working closely with them to bring this project to market because I think as we go forward, the gas market is tightening in Western Australia. There's going to be a bigger gap between supply and demand between about 2030. So this gap is really materially important for the state of Western Australia. This is just a slide briefly outlining the Macquarie debt structure. So it's been out in the domain previously, but I think it's just useful to understand. We still have Tranch C, which is uncommitted and subject to CPs on West Faragella. So at the moment, our borrowing is $157.7 million, and that's predominantly on the strike, on the South Faragella project. And our cash and net debt position is shown there as well. So this is a slide that some of you will have been familiar with and I've spoken to previously a couple of times, but this really for us is the money slide. It shows our pipeline of growth. It's exciting for us. We have our foundation project wiring with around $52 million revenue per annum and looking to backfill that production. The production decline was that way, which was coming online fairly soon. Then we have South Aragulla, the power station. So soon as we get that commission by the end of this year, that's going to be real near-term cash flow. So that's another, you know, how you look at it, but $50 million to $75 million of revenue on top of weathering. And then West Aragulla coming online mid-2019. It's very exciting, and we've got a little bar chart there which just shows illustrative gas prices and their revenue at that gas price of our 43.5 terajoules a day. So... The Bella Summer facility has a 210TJ a day capacity, so our 43.5TJs a day is a significant portion of that. And based on, say, an $8 gas strike, we're looking at a revenue stream there of $127 million. So when you add those three revenue streams together, we're starting to look at a significantly different strike as we go forward. The fourth box there is around our exploration strategy. portfolio and I know shareholders have been patiently waiting for some developments there around exploration and progress. So as we bring these cash flows online and we start generating some revenue, cutting down our debt, we're going to be very carefully managing capital but we certainly have in our sights the importance of bringing on some of those exploration programs that we've all been waiting for. Ocean Hill and Caterpillar are probably the first in the stack and there are a number of others as well. So it's a very exciting profile for us of Strike and truly at a transformational point with some weathering already producing and giving us revenue. South Darugala really close, West Darugala on the short-term horizon and then our big exploration portfolio out the other side. So I think we have enormous opportunity here at Strike to actually really capitalise on all of this and to deliver something really special. This is just a refresh on the exploration upside that we do have at Stratton. So I spoke to Ocean Hill and Kadasini, but in the middle there is L26, which is the West Faragulla footprint. So the 10-year we hold with Hancock also has new field upside. That will also be looked to be sort of further exploration carried out in the coming years. So the financial priorities for this year are obviously to get South Yarra Gulla online, that's critical, and to actually convert that into cash flow. So we're looking forward to that. So the total for our project cost was around $186 million and we're really looking like seeing that client coming online by the end of this year. Funding for West Yarra Gulla to FID has been really important. So our agreement with Hancock saw a secure $30 million in funding from Hancock to help us get through to FID. subject to Macquarie consent, but certainly that will help us to get through on West Yarra Gullah. Then we have our debt facility with Macquarie. So we've got an additional facility released from Macquarie just recently and that will actually help us to sort of continue on all of our development fronts as well. And then around, I guess the most important thing is us having real capital discipline to pursue exploration and development programs. throughout the coming year. So this is the slide that I will end on. It's why strike, why now? I think everybody knows why strike, why now. We've got West Darugala, Wailuring and South Darugala all coming online. We've got a really solid revenue growth ahead of us and exposure to different markets. We've got the electricity market, we've got the gas market, which is great to have that diversification and we also have the organic growth opportunities And I'll speak again briefly about the opportunities we have at SEP. With that land we have and the location of that land and the opportunities that are around that as well. So that is where I'll end the presentation today, except we do have some questions that have come through. So I'll just run through them now. The first one was just around what will be happening with third-party gas sales as we go forward at Wally Ring. So The idea is that now we have the wagering compression installed that we're expecting to be able to meet that contract for a longer period of time and then in the background we're working on the feed program to actually tie Way West back into the wagering facility. So that will be looking to minimise any third party gas purchases in the future. And I've just got some more questions that came through on email. So the first question is, what are the key work streams to be funded by the 30 million Hancock pre-FID facility? So the upstream work program is expected to remain broadly consistent with the development scope previously communicated, including development drilling of West Faragulla 6 and completion activities, workovers of West Faragulla 2, 3 and 4. So the detailed scope, sequencing and budget for pre-FID work is currently being aligned with Hancock through the JV work program and budget process. We therefore don't intend to provide a more detailed work program or updated capital estimate until that is complete. However, the $30 million of Hancock pre-FID funding is intended to support strike share of expenditure required to progress welfare available towards FIDs. While we currently expect the overall upstream work program to remain broadly consistent with those assumptions made previously, Strike and Hancock are still aligned on the detailed work program and budget for the development, so we're still working through that with Hancock. So it's a little bit early to provide updated CAPEX guidance at this stage. Importantly, Strike remains operator through to FID, which means we'll be allowed to control the definition and optimization of the upstream development plan. By FID, we expect to have a more mature work program and to provide updated guidance. So I hope that answers that question. The next question is, what guidance are you giving on remaining upstream capex at West Yarra Gullar? Actually, I've answered that one now. So then, what's the remaining capex for South Yarra Gullar as at 30 June 2026? As at 30 June 2026, STRIKE forecasts approximately 16 million of remaining capex to complete South Yarra Gullar. Since year end, the project has continued to progress and remains forecast expenditure is now approximately $11 million. As with any project nearing completion and commissioning, the remaining expenditure is forecast and remains subject to final commissioning activities. Project closed out any additional works that may be required. So what's the use of funds for the drawdown of the 30 mil Macquarie facility in December? Is this for South Yarra Gullah workers or will it sit on the balance sheet for now? The $30 million Macquarie facility was drawn to provide additional liquidity as Strike completes South Aragulla and progresses its broader development program. The funds are not specifically quarantined to South Aragulla and will be deployed against the company's funding requirements as they arise. In the interim, any funds not immediately required will remain as cash on the balance sheet. So I think that's all the questions that we have today. So if there are any additional questions, please feel free to send them through to myself or Julia. We'll make sure that Julia's email address is available for any of you that would like to reach out. I'm very pleased to have Julia on the team. I'll be looking forward to getting out and meeting some more of the shareholders in the coming weeks and months. So thank you very much for joining us on the webinar today. Like I said, if you have any questions, please do send them through. Thank you.