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The facility is broken up into two tranches, with the first A$13-million committed, subject to definitive documentation and limited other conditions.

The second tranche of A$15-million will be subject to certain drilling milestones, and further lender conditions and approvals.

As part of the establishment cost of the facility, Strike will issue Macquarie with 35-million options exercisable at 29c each, with an expiry date of 30 months after issue.

“This facility, in conjunction with the expected research and development returns and existing cash on hand provides strength and flexibility to Strike’s balance sheet. The timing of the funding is important as it allows Strike to secure its finance requirements over a period of heightened operational expenditure during a seasonal slowdown in capital markets,” said Strike MD and CEO Stuart Nicholls.

“The facility enables acceleration of long lead procurement for the West Erregulla gas plant and frees up Strike to fund preparatory work for activity across a suite of Strike’s other Perth basin assets, notably at South Erregulla and Walyering.”

Strike and JV partner Warrego Energy earlier this week inked a heads of agreement for the joint development of West Erregulla, paving the way for the Phase 1 development of the project, including gas processing and plant capacity, gas balancing and sales, and optimisation of timing and alignment of critical activities including a final investment decision and the current appraisal of drilling campaign.

The Phase 1 development of West Erregulla is subject to the final investment decision being taken by the end of the first quarter of next year, as well as the completion of definitive documentation for the gas process arrangements, and completion of limited due diligence.