stx Strike Oil

[JBmurc]

Unlike a lot of the junior petroleum plays, Perth's Strike Oil has already hit it big. A few years back, it banked $23.5 million from selling out of the Casino gas discovery in the Otway Basin off Victoria to a Santos/AWE/Mitsui consortium.
But like a host of other Australian juniors, Strike has since turned its attention to the US.

The US is hardly an underexplored petroleum province. While Australian oil production peaked in 2000, American production reached its peak 30 years earlier and has been declining ever since.

Short of protected areas of Alaska and the ultra-deep waters of the Gulf of Mexico, there probably aren't a lot of big fields waiting to be found in the US.

But that hasn't stopped Australian juniors from looking for profitable small finds in well-known petroleum provinces like Texas, Louisiana, Oklahoma and California.

Strike already has interests in two commercial discoveries in Texas. Now an American joint venture partner is about to start flow testing at the Rayburn gas discovery, which has the potential to hold up to 500 billion cubic feet of gas. Strike will receive about 17 per cent of the revenues after taxes and royalties, which could be worth up to $425 million, or $1.52 a share, depending on the ultimate size of the discovery. The company is seeking to raise up to $10 million from an entitlement issue at 21.5c a share to help expand its production base.

Lots in the US

But given there are about 40 Australian junior petroleum companies - including bigger plays like Petsec Energy and tiddlers like GulfX - scouring the US for oil and gas finds, it can be hard for investors to separate the wheat from the chaff.
The Intersuisse analyst Paul Gooday notes a lot of the companies have only a small working interest in the projects, leaving the hard work up to American operators.

"They might get a bit of a run with gas shows but some of them haven't been able to complete the wells successfully," he says. "I haven't seen the market really fall in love with these."

Even Strike's managing director, Simon Ashton, admits these juniors are bound to fall by the wayside.

"We will see consolidation, no question" he says, adding it doesn't seem sustainable to have 40 or so Australian companies competing for the same investor attention.

Earlier this year, Patersons said the US energy sector was arguably the most competitive in the world.

"We believe it remains difficult for Australian companies to acquire assets inexpensively," the broker said. "[It] makes it difficult to generate substantial cash if prospect sizes are modest."

The Fat Prophets analyst Gavin Wendt rates Salinas Energy as a standout among the US-focused juniors since it has obtained direct entry into projects, rather than farm-ins or earn-ins.

"This has allowed it access to high-quality oil acreage under better terms, where it is the operator and can effectively control its own destiny," he says.

Gone to Italy

Given the fiercely competitive nature of the US petroleum sector, some Australian juniors have decided overseas bonanzas lie elsewhere.
Deltana Energy, a company with projects in Italy's gas-filled Po Valley, is seeking $12 million to $18 million to list on the Australian Securities Exchange.

Although it's game plan sounds very similar to another successful Australian junior, Po Valley Energy - and Deltana's managing director, Geoff Bone, admits to "emulating them" - there's no relation between the two companies.

It's not as if Deltana couldn't have grabbed some US prospects. Bone has plenty of American contacts from his days working in the Middle East.

But given gas prices are actually higher in Italy than in the US, Deltana is holding off on any potential American ambitions.

[JBmurc]

Looks like us STX holders may be getting a nice Xmas present in some good flow rates


like 10-20 mmcfgas- perday+ please




http://www.strikeoil.com.au/document...te_Rayburn.pdf

[I.T.Ancient]

Sounds as if we'll hear about the flow rates and the new well will reach target depth just after Xmas.

[JBmurc]

Duncan 1 is currently flowing at commercial rates comparable to other nearby wells which from there recent ann report was 10 MMcf /pd
IMHO STX's should be looking at 4.5-5MMcf/pd from D1-D2 on there 22% interest



Florence Project in Colorado which will start early in 2008.(off HC)

Andy Lydyard (COI) said today in an Open Briefing Interview that the exploration target (from the Pierre Fmt. only) is around 200,000 bbls per well which are worth over $17 million based on current oil prices. The wells have further upside because they have five additional objectives.

They will start with an initial 3 well program but currently permitting 10 wells, and have an inventory of over 50 more locations that could be drilled.

[shasta]

Duncan 1 is currently flowing at commercial rates comparable to other nearby wells which from there recent ann report was 10 MMcf /pd
IMHO STX's should be looking at 4.5-5MMcf/pd from D1-D2 on there 22% interest



Florence Project in Colorado which will start early in 2008.(off HC)

Andy Lydyard (COI) said today in an Open Briefing Interview that the exploration target (from the Pierre Fmt. only) is around 200,000 bbls per well which are worth over $17 million based on current oil prices. The wells have further upside because they have five additional objectives.

They will start with an initial 3 well program but currently permitting 10 wells, and have an inventory of over 50 more locations that could be drilled.

Very nice ann out with 3/3 Gas shows in the Duncan-1 drills, looking good & the next drill (some 3km away from Duncan-1) will determine if this is a large accummulation & bigger than first thought.

Am looking to re-enter STX, like yourself JBMurc i rate STX with plenty of upside at these prices.

[JBmurc]

Yeah to right tricha have just brought another 45,000 total 195,000 looking forward to the market wake up early 2008 STX will have alot of new cashflow very soon Top Managerment.(also see some big buyers starting to look again one 700k order pulled trying to get in cheap)


STX-40c-50c short term min

[JBmurc]

big orders chasing the weak sellers atm 31c 400k bid hope you guys got a truckload recently will be rerated very soon

[bermuda]

big orders chasing the weak sellers atm 31c 400k bid hope you guys got a truckload recently will be rerated very soon

Picked STX to perform in 2007.As the cash gets 'proven' this company will fly.Good luck to holders..you will have a good year.

[Awamoa]

This company may be one to watch.
It has announced today that its Rayburn field has gas and oil reserves with expected revenues of $2 million
per month by mid 2008.
The share price has lifted to 28.5 cents and should have more mileage yet.

[Huang Chung]

Revenue of $2 a month is a touch disappointing IMHO.....$2 million a month would have been much more impressive.