Perth Basin gas player unveils strategic review

Strike Energy and managing director Stuart Nicholls are parting ways as the company considers the future of its gas assets in the Perth Basin.

Strike chair John Poynton. Picture: Colin Murty

Strike Energy and its managing director Stuart Nicholls are parting ways as the company embarks on a strategic review that could result in the sale of some of its onshore gas assets in the Perth Basin.

The Strike board, led by John Poynton, believes the stock is undervalued and said the strategic review would look at a range of ownership and funding options.

Strike shares were trading around 46c this time last year but plunged after disappointing well testing at one of its key projects. The stock was down about 2 per cent to 21c in trading on ­Thursday.

Mr Nicholls led Strike for nearly eight years, including during a bidding war for Warrego Energy won by Gina Rinehart’s Hancock Energy that also involved billionaires Chris Ellison, through Mineral Resources, and Kerry Stokes, through Beach Energy.

The Warrego takeover tussle ended in 2023 with Hancock and Strike becoming partners is the West Erregulla gas project, which Mr Poynton said Strike remained keen to develop.

Mrs Rinehart has since increased her footprint in the Perth Basin through the $1.13bn acquisition of assets from ­Ellison-led MinRes.

Stuart Nicholls has parted company with Strike Energy. Picture: Colin Murty

Mr Nicholls resigned from the board with immediate effect on Thursday, with his time as chief executive due to end on February 14.

He said it was the right time to stand aside and hand the baton to a new chief executive with “refreshed energy to guide the company through its next stage of development and growth, which should see further significant shareholder value creation”.

Mr Nicholls’ time in charge was marked by the acquisition of assets in the Perth Basin, gas discoveries and diversification into integrated peaking gas power.

More than $300m was wiped from the company’s valuation last February on the back of failed appraisal testing at its South Erregulla gas field and the stock has not recovered.

Mr Poynton said the company was in good shape to develop its strategic gas and power projects in the Perth Basin.

Strike opted in November to build a fully integrated peaking gas power station at South Erregulla and allocated $137m to the project. The move came after it ditched earlier plans for a $3bn fertiliser plant as part of a strategy to add value to gas rather than simply selling most of it into the domestic market.

The West Australian government eased its gas reservation policy last year, saying it would allow onshore producers like Strike a six-year window to sell 20 per cent of their gas to more lucrative LNG export markets.

Strike has appointed Jill Hoffmann, who was a non-executive director, as acting chief executive. Strike deputy chairman Nev Power will help with the strategic review.

Originally published as Perth Basin gas player unveils strategic review