Alright, we'll just give it a couple more seconds as people are funneling in. Good morning, everyone, and thank you for joining us this morning for Strike 's Q1 FY 2026 quarterly report and webinar. My name is Emma Alexander. I'm the Investor Relations Manager at Strike , and I'm joined this morning by Peter Stokes, our Managing Director and Chief Executive Officer. Our Chief Financial Officer, Tim, is unfortunately a late apology this morning. For those who haven't joined us before, I'll kick over to Peter shortly to run through the presentation and give us an update on the quarterly report. Post that, we'll be running a short Q&A session. You should have a Q&A button in the window, and feel free to type in your questions there, and I'll host a short Q&A. I will try and put some of those questions together. If you feel you haven't had your question answered, you can always reach out to us on email or on the Investor Hub, and we'll do our best to get back to you where we can. With that, I'll pass over to you. Thanks, Peter.
Thank you, Emma, and my welcome as well. Thank you for joining us for the quarterly update. Really pleased to show you the cover slide we've got here showing the progress at South Erregulla power plant. You'll see in the foreground, the shed containing the 20 engines is now well and truly built, and I'll run through a bit more detail in a minute. The majority of the engines are now in the shed and being installed, and you'll see in the background the flow testing that we recently did at South Erregulla as well, which has demonstrated and reaffirmed the flow rates that we'd expected and the composition of gas, etc. Really pleasing to have that done as well.
In the foreground of the picture here, you'll see also the civils work that's now being completed for the transformers, which will then run into the power line to connect us to Western Power. If you go to the next slide, please, Emma. Highlights for Q1 2026. As I said on the previous photo, you can see in the background here the Jenbacher generation units that have now been installed in our facility at South Erregulla. 17 of the units are on site, 15 have been installed, and the final three will arrive over the next couple of weeks and head up to site as well. A lot of the core infrastructure is in place. You may have noticed on the previous photo that the kiosks that manage the power coming out of the units were installed on the outside of that facility as well.
Really pleasing to have the majority of this core infrastructure now in place, and we're now building out the electrical connection and those core components of substations, etc., that will connect us into the local Western Power line there. The project is now just over 50%, so actually 56% completed and still on track to deliver first power by October 1, 2026, and we're doing everything we can to bring that date forward. That's the, you know, we're sticking with the date that we previously announced. Importantly, during the last couple of weeks, we had our capacity credits confirmed for the 2027/2028 capacity year at $31 million, which is a significant increase from our first year, where we're at $20 million. That continues to point to tightening demand around both gas and power in the market in Western Australia.
We will then see electricity sales on top of that base amount. Importantly, during the quarter too, the $86 million strategic placement was completed with Carnarvon Energy. Really excited to be partnering with Carnarvon and working with them. We also raised a further $1.7 million via the share purchase plan, which was also really positive. We're continuing to engage with Carnarvon, and you would have noticed also that Will Barker has joined our board from Carnarvon to represent that interest as well. During the quarter, we also announced Ocean Hill resources have been certified from the 3D seismic that was completed. It took quite a while to get the seismic lines approved or area to cover the seismic, and we were able to process that data. Out of that data, which has been independently verified, we have 180 PJ 2C contingent resource.
In addition, at Ocean Hill, there's another 190 PJ of 2P prospective resource. Sorry, prospective resource. At Ocean Hill, the additional area we announced, while we knew that there was a resource in the southern area of those leases, the 3D seismic has identified a 670 PJ prospective resource in the Ocean Hill South area. I mentioned at the start of the presentation also that the South Erregulla 1 workover is complete, and we will start work on the upstream works that need to be done shortly in that area, including the pipeline to connect us to the power plant, which is pretty much adjacent, as you would have seen from the photo on the front cover. Financials for the quarter. We continue to have strong sales, so $18.8 million of sales revenue. We had an average realized gas price of $7.38, about level where we were previously.
A total of 2.1 PJ of sales during the month and at 23 TJ a day. Really solid production from the Walyering facility. We also realized a strong price for our condensate. Expenditure during the quarter, we had $31 million on development, the bulk of that being the power plant with a small amount of spend at Walyering in preparation for the compression. A smaller number again on some of the exploration activities relating to West Erregulla. With the injection of the funds from Carnarvon, our liquidity position is very strong at $140 million of available liquidity, as you can imagine, up significantly from the previous quarter. We also have, of that $140 million, $35 million of available undrawn debt with our bank. No debt was drawn during the quarter, as you can imagine. Strike Energy has some really great prospects ahead of us.
One of the reasons I joined is we have some outstanding assets and are incredibly well positioned to benefit from the significant changes that we're undergoing globally, both with the transition to renewable power, gas being a key part of that transition to provide firming. Underpinning that is significant growth, both globally and in Western Australia and Australia more broadly around AI and the data centers that underpin a lot of that into our future. AI is a critical part and requires significant power to generate that. A large part of that globally is coming from gas power generation, and we're well-positioned to provide that for Western Australia as well as it continues to develop. Western Australia's exit from coal-fired generation, committed to by the government here, will remove in excess of 1 GW of dispatchable power by 2030. That requires significant backfill from renewables, but importantly also, firming gas power generation is a critical part of that as well. There is the AMO report that was released just after mid-year, which really confirmed the forecast that we'd expected, that there is an emerging capacity deficit during the latter part of this decade and certainly into the early part of the next that requires gas and power storage to enable that to be filled.
Strike Energy has a significant acreage in the Perth Basin of some 3,000 sq km, ideally placed within the SWIS, the Southwest Structure, and is uniquely placed to supply power into that grid as well as gas because we are also within the power lines that sit in Western Australia, within the pipelines to feed into gas-fired use for industrial, both into the Southwest of Western Australia and continue to build and support the WA government's built-in WA program that they are really supporting and driving to enable Western Australia to continue to grow and prosper into the future. The Perth Basin gas really provides reliable firming capacity for a lot of AI-driven data centers, opportunities both regionally and in the metropolitan area to support that through power, but also for gas that would be used for power generation as well.
The growth of the data centers and AI really requires significant electric power, and that's not really been factored into a lot of the forecasts. You can see from a couple of the quotes at the bottom, there is a significant requirement of that going into the future, really yet to be quantified. Western Australia is well placed to provide that capability into Southeast Asia, but also significantly for the state and more broadly into Australia with significant land available, but also supported by renewables and firmed by gas-fired power generation. Focusing on our four strategic pillars and the key projects that we defined out of the strategic review that we released early in the quarter, West Erregulla continues to progress. We are working to now finalize the pre-FID activities with our joint venture partner. We're coming very close to having agreement on those.
The recent field gas discovery at Erregulla Deep and the 3D seismic acquired from the Natta 3D seismic survey are now being independently certified after the work that we've done internally and our joint venture partner has done, and we can continue to commit to having that released by the end of December 2025. We're exploring multiple attractive midstream development opportunities from gas processing to power generation. Once we've got clarity on those and a confirmed path forward, we'll be able to announce that to the market as well. I talked about South Erregulla. We are the 100% operator. The 85 MW peaking plant is progressing well. The first of the power lines will commence being built in early November w ith the connection to Western Power, civil works has already started, and that'll start to be built out over the next several months so that we're ready to connect into the Western Power grid and complete testing to enable us to then have first power generation connected into the grid as planned, fully running at full capacity from October 1, next year.
Walyering remains online and continues to produce well. We are producing at a rate of 20 TJs a day and filling that with 5 TJs a day of third-party gas until the end of the Atlanta contract at the end of the year. We've been purchasing that 5 TJs a day of gas on the market while prices are soft to mitigate any shortfall that we have. We have that option going forward. We're working through what that looks like into next year while we finish the installation of compression, which we expect to have very early into the new year. As we've also announced, we plan to do the West Walyering well in February, so to drill that, which is some 3km away from the facility that you can see here in the picture. We would be looking to do that and potentially on success would have that online sometime into the third quarter of next year, subject to various approvals and things. On exploration, I've talked about Ocean Hill. We will still continue to look at opportunities to put a well into Ocean Hill, as we talked about in one of our previous announcements, ideally into the first half of next year.
As we committed, we want to have that drilled in the calendar year 2026 and also looking to try and bring that forward, subject to final agreements, approvals, etc., and also lining up the appropriate funding to do that. The 3D seismic survey, as I said, has identified some really significant improvements and significant prospectivity there that we now need to test with a well and confirm around Ocean Hill and then test into Ocean Hill South. On the next slide, talking about the South Erregulla, you can see from the photos here significant progress on the power plant. This is a view from the other side. These are the radiators for the 20 generation units, the mufflers and things are in, the generators are in the plant. The facility is now getting connected.
You can see on the left-hand side one of the kiosks with some of our team, and the connections of those are now underway and being connected into the generators on the right-hand side of that picture. The underground power is already there, ready for the transformers when they arrive at site over the next couple of months. We will be connected. By then, the power line will be running down to our substation, which is right near the Western Power line. The engine hall's complete, as I said earlier. The ends of the shed, you'll notice on the front cover, are open. That was to give us access. They'll get closed up once all of the generators are installed and also once the fans on the left-hand side of the shed go in. As I said earlier, the earthworks for the transmission and connection have now started and will continue to be developed over the next several months and remain on track from the work that we've done. Thank you, Emma. I'll now hand back to you to work through some of the questions.
Thanks, Peter. Sorry, having slight technical difficulties. Apologies for a few of those slides being a bit slow. We've got a few questions that have come through from the pre-webinar questions, but I'd also like to point out that people can place questions in the chat box if they would like to ask anything. We have one from Daryl Watts in regards to the Arugala Deep Reserve. The previous CEO had made a statement on record at last year's AGM that the Arugala Deep Reserve would be released by June 2025, and we are now at the end of October. Can we have an update on the current status of this and why it's being held back from shareholders?
Yeah, sure. Emma, thank you for the question. As I said in the presentation, we'll have those released in December. The 3D seismic from the provider was not, we didn't start receiving that information until almost mid-year. Both ourselves and our joint venture partner need to do our reviews of those before they then go to the independent verification, which is now underway. I think as we'd said in the half, we were intending to do everything we can to bring it forward, but our backstop was to have it by the end of 2025, and that's still the case.
Great. A follow up, if you can shed some light on the current situation with the West Erregulla power optionality that you were talking about earlier this year.
We are looking at several midstream development opportunities for West Erregulla. Power generation is still an opportunity for us. Processing gas is also an opportunity for us. Once we have a clear path forward, we can announce it. At the moment, we're still in various commercial discussions and not in a position to announce anything. We want to make sure that when we do make an announcement, we're very clear on the path forward and are able to demonstrate that clearly to our shareholders so that there's no question about which way we're going as opposed to painting potential options. I think we want to be very clear so that everyone understands and can, I guess, model that for themselves.
Great. There's a question coming through on whether you can provide an update on the West Erregulla joint venture. Another question has come through specifically asking whether there's any comment on involvement with Hancock's recently announced Belisama project.
It's very similar to the last one. Excuse me, Emma. We're certainly having discussions and that path with our joint venture partner would be one option to develop. At the moment, we're not in a position to announce any more. We'd like to be able to. We want to be really clear that we've got a path forward with the joint venture partner or others so that we can make an announcement and ensure that we're not changing direction after we've made a commitment.
Great. Is there any, how much are you able to provide any color on how much was spent on the third-party gas purchases to appease contractual obligations in the quarter?
Thanks, Emma. I think you can probably, from our numbers, you can probably make an estimate. The amount that we've spent is commercial in confidence with our providers and with our gas offtake agreement. Unfortunately, I can't give you any more information, but I think you can probably estimate that based on the production that we've got there and the revenue that we've got in the facility. You can give you a good indication of what it would be.
Is it possible at all to provide some guidance on growth of power and gas sales at all into the future?
Yeah, I think so. I mentioned, if we look at Walyering and assume it will continue to produce at around 20 TJ a day next year, we expect, while during this last quarter, we've produced at 23 TJ to deliver $18 million or $19 million of revenue into next year, if we assume 20 TJ a day of revenue from Walyering. The power plant coming online from October 1 next year, as I said earlier, there's a $20 million capacity credit that underpins that power plant and then $30 million the following year from October 1, 2026. On top of that, we will receive a payment for the power that we generate. Roughly, we have used estimate, I think, similar to FID, around $60 million of revenue from the power plant on an annualized basis from October next year.
Great. I think we don't have any other questions coming through as such. If that's the case, we might wrap things up. Just a note on our AGM, it will be on the November 13th, held in the Parmelia Hilton and online as well. Otherwise, we will see you again for the next quarterly webinar in January.
Thank you for joining us and thank you for your questions. I look forward to seeing as many of you who can attend the AGM in person in a few weeks. Thank you.
Great. Thanks.