Strike Oil Launches IPO


  • Established independent explorer with proven track record of returns to shareholders
  • Successfully operating in Australian oil and gas sector since 1997
  • High equity position in drilling targets in Australia's most productive areas: Carnarvon and Cooper/Eromanga basins
  • Three significant offshore wells scheduled for drilling September to November 2004 with further six wells and major seismic acquisition program over next two years
  • Potential for rapid commercialization of oil discoveries through application of advanced exploration and production skills and technology
  • Focus areas with low offshore and onshore drilling and development costs
  • Strong balance sheet, access to proven technology, highly experienced in-house commercial and technical team
  • Offer of 60 million Shares at $0.20 per share representing 42% of issued capital

  • Strike Oil announced an initial public offering to raise $12 million, capitalizing the company at $28.9 million assuming the offer is fully subscribed.

    Since its incorporation in 1997, Strike has assembled an expansive exploration portfolio focusing on the near shore Carnarvon Basin, Australia's most prolific offshore oil producing area and onshore in the Cooper/Eromanga Basin, the country's most prospective onshore area.

    Proceeds of the IPO will be used, together with existing cash reserves of around $5.5 million, to fund an intensive nine well drilling program on the company's permits in the Carnarvon and Cooper/Eromanga Basins.

    The Chairman of Strike, Mr. Jeff Schneider, said the IPO marked the emergence of Strike as an important player in the oil and gas exploration market, with the track record and technical expertise to capitalize on emerging opportunities in the sector.

    "Strike is exceptionally well placed to benefit from the changing dynamics of the oil market, where current oil prices are expected to remain strong. Many of the majors are now focusing on growing their offshore deepwater portfolios and expanding reserves. This leaves a substantial amount of attractive acreage for us, and for our technology," he said.

    " Strike's position is unique. Few small independent explorers have a sustained track record of successful exploration and such a strong position in two of Australia's most prolific oil and gas basins. We are therefore well placed to take advantage of our acreage positions and technical expertise to identify prospective targets and deliver results as we have done in the past," Mr Schneider added.

    Mr. Simon Ashton, Managing Director of Strike, said Strike had streamlined its portfolio to focus on high quality assets in the two basins and to strengthen its balance sheet ahead of the IPO. This included the sale of the company's Otway Basin assets, and the placement of Strike's coal seam gas assets on the east coast of Australia into the recently listed Comet Ridge Limited, in which Strike has retained a 10% interest.

    "Strike has a proven track record of success in the discovery and evaluation of petroleum properties in high quality, undervalued areas, allowing us to generate good returns for our shareholders. Our strategy is to remain geographically focused in Australia and to concentrate exploration activity in proven/prolific hydrocarbon basins as well as exploring in acreage where costs of exploration are low.

    Strike has been successful securing acreage where modern seismic acquisition and reprocessing techniques can identify opportunities previously missed and developing these in a way that maximizes exposure to high quality assets and minimizes risk," Mr. Ashton said.

    In 1999 Strike acquired prospective acreage in the Otway Basin. The subsequent application of new seismic technology to the area, which had previously been appraised and discarded by larger companies, led to the discovery of the significant Casino Gas Field. The sale of the field to AWE and Mitsui for $23.5 million generated a capital return to shareholders of approximately $20 million.

    The Offer will open on June 24, 2004 and is scheduled to close on July 29, 2004, with trading expected to commence on the ASX on 20 August 2004. The Broker to the issue is Macquarie Equities Limited and includes a Priority Offer of 18 million shares to shareholders in Perilya Limited which currently holds 35% of the equity in Strike. The first of the offshore Carnarvon Basin wells is expected to commence drilling shortly afterwards in September 2004.

    Applications for shares can only be made on the Application Form accompanying the Prospectus dated June 11, 2004. Printed copies of the Prospectus are available from the Company's Registered Office Level 10 International House, 26 St George's Terrace, Perth, 6000 (telephone 08 9225 4446).

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