Strike to Recommence Production Testing Operations at SA's SCB Gas Project

Strike Energy Limited (STX) reported Monday that planning for the continued testing operations at the Le Chiffre 1 and Klebb 1 wells in PEL 96 (STX 66.7 percent, Operator and Energy World Corporation Limited 33.3 percent) at the Southern Cooper Gas Basin Project in South Australia has been completed with field operations scheduled to recommence during September.

Based on the production testing completed to date at Le Chiffre 1, Klebb 1 and Davenport 1, a program has been designed to continue the evaluation of the productivity of the Patchawarra coals. The program will comprise extended testing of the three wells completed to date plus the drilling of two close spaced offset wells around Klebb 1. This will enable the impact of fracture stimulation size on hydrocarbon and formation water production to be understood and facilitate optimization of development economics.

Flow Back and Testing Program

The continued evaluation of the project will be undertaken in a series of phases.

• Phase 1
  • Activities - Installation of pumps at Le Chiffre 1 and Klebb 1
  • Objectives - Test pumps, measure formation fluid production rates, measure critical desorption pressure
  • Timing - October to December
• Phase 2
  • Activities - Drill and complete two close spaced wells offsetting Klebb 1
  • Objectives - Achieve sustained gas flows to surface, gas flow rates, gas composition
  • Timing - November to December: Drilling; January 2015: Production testing

Initial Phase 1 testing was completed with limited post frac flow back operations in June and July and will continue with the installation of pumps in the Le Chiffre 1 and Klebb 1 wells.

Phase 2 will extend the existing program through the drilling of two close spaced offset wells around Klebb 1 followed by completion and extended flow testing of all three Klebb wells.

The objectives of the Phase 1 and 2 programs is to determine the reservoir pressure at which gas production commences (the critical desorption pressure), achieve sustained gas flows to surface and obtain data on formation water production volumes.

Subsequent multi‐well testing centred on the Le Chiffre well will focus on well spacing and production optimization.