Southern Cooper Basin (PEL 96)

ASX announcement re: Southern Cooper Basin (66% Strike Energy (STX) and 33% EWC) posted earlier this morning (16 July 2014) by STX.

The main features are as follows:

PROGRAM OBSERVATIONS Our evaluation program has now confirmed that the Patchawarra coals encountered at Le Chiffre and Klebb have the following key attributes: • Thick and consistent coal development over a very large area. • The coals are thermally mature and have generated hydrocarbons. • Gas volumes measured from desorption of coal samples together with evidence of gas flows to surface during the current flow test program confirm the presence of gas in the coals. These observations confirm the range of gas contents used in the Company’s prospective resource estimate (total of 6.7TCF of which 2.2TCF net to EWC) • The coals have high permeability and exceptional productivity.

IMPLICATIONS Key implications of the work completed to date are: • Preliminary reservoir modelling assuming only the volume of gas measured from desorption of coal samples and the permeability observed at Le Chiffre and Klebb indicates that recoveries in excess of 2 Bcf per well are achievable. • The coals may not require stimulation to flow at high rates presenting an opportunity to reduce development drilling and completion costs. Laboratory analysis of water and gas samples is still underway, so the implications of the volume of fluids recovered in the initial testing phase are yet to be resolved. Well completion design and production methodology will be refined as gas and water saturation levels are confirmed through the next phase of testing.