Australian oil and gas explorer, Strike Energy, saw its shares fall on the Australian Securities Exchange (ASX) today. This decline came after the company adjusted the estimated size of its gas reserves at the Walyering field in Western Australia downwards.
Share Prices and Performance
By 12:35pm Australian Eastern Standard Time (AEST), Strike Energy’s shares had plummeted by 9.1%, trading at 20 cents. Despite this setback, the company reported that it has produced approximately 7 petajoules of energy equivalent from the Walyering field over the past year. This production generated $64 million in gross sales revenue, allowing the company to recoup its investment by May of this year.
Company’s Perspective on Field Performance
Strike Energy stated that the Walyering field has operated “within the original range of expectations” throughout the past year. However, the company has made a downward revision to its 2P reserves. This adjustment is mainly due to changes in the assumptions regarding the amount of gas present at the site.
Understanding Reserves Classification
It’s important to understand the terminology used in the industry to classify reserves. 2P reserves refer to “proved and probable” gas resources, indicating a higher degree of certainty compared to 3P reserves, which include “proved, probable, and possible” resources. On the other hand, 1P reserves represent “proved” resources, which are the most certain.
Strike Energy’s decision to revise its 2P reserves reflects a careful reassessment of the field’s potential, which is a common practice in the industry as new data becomes available. The company continues to monitor its assets and will provide updates as necessary.
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