Strike Energy secures A$153mn refinancing for Perth basin development

Australia's Strike Energy has reached an agreement with Macquarie Bank for a A$153mn ($102mn) refinancing package to fund production upgrades, pre-development, and development costs across its Perth basin portfolio, the company announced on June 21.

The financing package consists of three facilities. The first is a A$60mn facility to refinance the existing drawn debt of A$16.3mn and to provide development capital of A$43.7mn for the Walyering project, West Erregulla, and general working capital purposes.

Strike recently announced that the Walyering gas field in Western Australia, which came online eight months ago, had reached the 'payback' of its total development capital spend of about A$30mn.

The second facility is for A$53mn to support the development of South Erregulla. The third facility, amounting to A$40mn, will support the development of the West Erregulla gas project.

“This financing package provides the funding clarity for Strike’s gas acceleration strategy, which comprises a series of highly attractive Perth basin energy assets,” CEO Stuart Nicholls said. “The lowering of the company’s cost of capital is commensurate with the advanced stage and derisking of its production and development portfolio.”

The South Erregulla gas field development is part of Strike Energy's government-endorsed gas acceleration and development strategy which aims to provide incremental gas supply into a tightening Western Australian market. 

Last year, the company launched its gas acceleration strategy post-receipt of A$136mn in proceeds from the sale of its Warrego Energy shares. The company is targeting up to four sources of gas production - Walyering, Ocean Hill, and the South and West Erregulla gas fields - to come online by the end of 2025, commencing with Walyering.