Perth Basin brief overview (Attempt 2)

Hi guys,
This is a long post, so I decided to create a new thread.
I did some research on the recent drilling (and reserves) outcomes in the Perth Basin, asking myself, what is means for the strategic position of Strike.
Hope some might find it useful.

Map of the Perth Basin from Beach’s quarterly

HANCOCK ENERGY RESERVES/RESOURCES AND RECENT DRILLING RESULTS (excluding Strike JV)

So, we all know Mineral Resources (MinRes) signed a deal in October 2024 to sell its Perth Basin gas exploration permits to Hancock Energy. The agreement included an initial $780 million payment for the sale of Exploration Permits 368 and 426, and a further $24 million for a 50% stake in MinRes' drill rig. A potential price adjustment of up to $327 million is tied to resource discoveries (some initial results pertaining to this were released in MIN’s q4FY25).

Just before this, on September 16th 2024, Min Resources released it’s initial resource estimates (not reserves). This incorporated the result of the Lockyer Deep-1, North Erregulla Deep 1, Lockyer-3, and Lockyer 5 (ST) wells.

Looking only at the gas resources, 2C estimates were 435PJ for the Lockyer and North Erregulla pools, combined. Note, this is surprisingly similar to the West Erregulla 2P reserves (very important distinction) of 422PJ (plus 30PJ of 2C).

From Oct 2024 Reserves report:

Post-acquisition, Hancock Energy and MIN undertook further drilling to bolster these resource estimates. The results of these well will determine the final amount Hancock Energy will pay MIN resources.

Three recent wells are important: Lockyer 6, North Erregulla 3, Moriary-2.

Min Resources has been cagey about releasing too much information about these wells since the reserve report (in October 2024) or in today’s quarterly (q425).

	Well name	Date of total depth	Results
1	North Erregulla 3	16/09/2024	Reached Total Depth in September last year but no further results announced
2	Lockyer 6	26/02/2025	The drilling and testing of Lockyer-6 was completed in May 2025. The Lockyer-6 reserve and resource certification process is expected to be completed in Q1 FY26, which will determine any additional purchase price adjustments.
3	Moriary-2	13/12/2024	Definition drilling and testing for the Moriary Deep Prospect gas well was completed in January 2025. The independent expert has certified a 2C contingent resource of 27 Bcf for Moriary-2. Although this outcome does not meet the minimum 30 Bcf threshold for an upside purchase price adjustment13, it confirms a substantial gas resource and further demonstrates the prospective potential of the region.

Definition drilling and testing for the Moriary Deep Prospect gas well was completed in January 2025. The independent expert has certified a 2C contingent resource of 27 Bcf for Moriary-2. Although this outcome
does not meet the minimum 30 Bcf threshold for an upside purchase price adjustment13, it confirms a substantial gas resource and further demonstrates the prospective potential of the region.

Rough map

Moriary 2 has the most definitive information. It is a gas discovery but has disappointed to the downside. It is also important as it is furthest south. Note the relatively short distance between WE-3, ED and the last well drilled by Hancock Energy. (i.e. within artillery range). It almost as though Moriary is designed to “take a peak inside” what may lay in the rest of the WE tenement.

North Erregulla 3 and Lockyer 6 are important for increasing the resource estimates for the Lockyer and North Erregulla pools, respectively (see table above). But I don’t know what to make of the lack of details that have been released regarding the success or failure of these recent wells. The simplest explanation is that the results of these two wells have disappointed to the downside, because Min Resources have a financial incentive to release information about any upside successes because they are linked to the payments they will receive from Hancock Energy.

This is from transaction announcement from Oct 31, 2024:

Additional purchase price adjustments of $327 million, subject to meeting certain resource thresholds and classifications for the Moriary Deep Prospect and Lockyer Gas and Erregulla Oil discoveries. Definition drilling related to the purchase price adjustment for the Moriary Deep Prospect and the Lockyer Gas discovery are expected to be completed during FY25, with drilling of the Moriary-2 well to begin in November 2024.

This is relevant to Strike because, if all these wells have disappointed to the downside, then Hancock Energy may not be able to increase their 2C resource estimates much above MIN’s initial estimates above (i.e. 435PJ of 2C). This has implications for the size of the gas plant Hancock Energy can plan for based on, lets say, ~500PJ of 2P reserves.

Remember, the 87TJ gas plant initially proposed for West Erregulla has a lifespan of 13 years, based on 422PJ of 2P reserves.

For context, the expanded Waitsia plant is 250TJ/day.

In short, we don’t know exactly how successful the last three wells have proven for Hancock Energy, but judging by the lack of details, I would be assuming, not so well.

BEACH/MITSUI RESERVES/RESOURCES AND RECENT DRILLING RESULTS

According to Beach Energy’s 2024 Annual Report, Beach has 465PJ of net 2P reserves in the Perth Basin. That means, the Waitsia JV (including Mitsui) has around 930 PJ of 2P reserves to feed their 250TJ/day plant at Waitsia and 25TJ/day plant at Beharra Spring. That equates to around 9 years worth or reserves to feed both plants. (Note: I have aggregated Waitsia and Beharra Springs plants because Beach does not disaggregate it’s Perth Basin reserves).

This, of course, assumes no further reserves downgrades. Beach downgraded its Perth Basin reserves by 11% in 2023. Beach is expected to update its reserves position in August 2025 (so soon).

Looking forward, Beach and Mitsui’s recent drilling campaign does not inspire confidence of them achieving large upgrades to their existing reserves, however.

Beach have been operator on the following wells, mainly focussed around the Beharra Springs area (south of Waitsia). They seem to have had some success here, but any additional gas will be fed into the Beharra Springs plant.

	Well	Total depth date	Net Pay	Flow Rate	Status	Notes
1	Redback Deep‑1	20/03/2024	28 m	Test pending (Q4 FY24)	Future producer	64 m gross Kingia
2	Beharra Springs Deep‑2	20/01/2024	18 m	26 MMscf/d (peak)	Commercial	No water produced
3	Beharra Springs Deep 3	Mar-25			Drilled, no public data yet
4	Tarantula Deep‑1	14/10/2023	10 m	Not tested	Discovery	Above gas–water contact

More pertinent to Strike are Beach’s Trigg 1 and Trigg Northwest Wells, as they butt up against Strike’s South Erregulla tenement (see map above).

Trigg 1 reached ~4,914 m measured depth in the Kingia formation. Gas shows were observed, but no gas flowed in wireline testing, due to poor porosity/permeability. As a result, Trigg 1 was abandoned, and the planned sidetrack Trigg 2 was canceled.

Trigg Northwest 1 (NW1) Trigg Northwest 1 was completed in August 2023 and gas was discovered.
Intersected ~6 m of net gas pay in Kingia across ~49 m gross thickness.
Flow testing was scheduled for Q4 FY‑24 but never seemed to have happened (or the results haven’t been released).

Of equal relevance to Strike is the Mitsui-operated drills in the Waitsia tenement. These are designed to prove up more reserves to feed their 250TJ/day plant.

Of most relevance are those drilled after the last reserves downgrade in 2023, so the results of Waitsia 11 onwards. But given some of the wells were drilled late last year, and no public information has been provided in Beach’s quarterlies, you’d have to expect they haven’t surprised to the upside.

	Well	Drilled / Tested	Result / Status Summary
1	Waitsia‑6	2022–23 (Stage 2 programme)	No public results disclosed; part of multi‑well development. (Beach Energy, Wood Mackenzie)
2	Waitsia‑7	2022–23	Minor gas flow (~8 MMscf/d); underwhelming due to compartmentalisation. (CSIRO Publishing, Beach Energy)
3	Waitsia‑8	2022–23	Drilled as part of Stage 2; no flow data or outcomes released. (Beach Energy, ace.dmp.wa.gov.au)
4	Waitsia‑9	2022–23	Completed, but no public performance results shared. (Beach Energy, ace.dmp.wa.gov.au)
5	Waitsia‑10	2022–23	Drilled; no gas flow observed — considered non‑commercial. (Beach Energy, ace.dmp.wa.gov.au)
6	Waitsia‑11	Nov 2023	Drilled; no results published to date.
7	Waitsia‑12	Q1 FY25 (~late 2023)	~37 m net Kingia gas pay; completed and suspended as future producer. (Beach Energy)
8	Waitsia‑16	Nov–Dec 2024	Drilling completed; undergoing well testing and flaring operations in December 2024 — public results pending. (Amazon Web Services, Inc.)
9	Waitsia‑17	Mid Dec 2024	Testing operations (flaring) commenced mid‑Dec 2024; 48‑hour flaring program underway—results not released yet. (Amazon Web Services, Inc., MEPAU)

Of particular interest is the Arenaria 1 well drilled in March 2025, because it is the closest well drilled to the West Erregulla tenement. It is approximately 15km west of West Erregulla-3-. Arenaria was plugged and abandoned.

So, overall, Beach has drilled the Trigg wells (bordering right on the South Erregulla tenement) with poor results (they haven’t bothered testing Trigg Northwest yet), the Waitsia wells operated by Mitsui have been a mixed bag, and Arenaria 1 (closest to West Erregulla) was plugged and abandoned. Little wonder then, the market has question marks about whether Beach and Mitsui have the reserves to run Waitsia in the long-run.

And again, right next door, Strike has >200PJ of 2P reserves in West Erregulla with significant upside from ED still to come.

TO CONCLUDE…

I did this just to give myself a snapshot of the state of play in the Perth Basin. It’s been a while since I reviewed the recent drilling results in the area. I hope, despite its rough nature, the above information is usesful to other.

My overall conclusion is that both Beach/Mitsui and Hancock Energy are being very secretive about the results of their recent drills - I wonder why?

Also, I can’t see Beach/Mitsui announcing large upgrades to reserves in August 2025 (despite all the expensive drilling they have undertaken), or Hancock Energy releasing results from the ex-Min tenements that surprise to the upside either. If Hancock want to build a gas plant bigger than already planned in West Erregulla (i.e. >87TJ/day), or Beach/Mitsui want to run with their 250tj/day Waitsia plant for more than 10 years (assuming no further reserve downgrades), then Strike’s assets seem to provide a very convenient solution to their problems.