Strike Oil Limited : Quarterly Activities - 31 Dec 2011

Strike Energy Limited ABN 59 078 012 745 27 January 2012

FOCUSED ON UNCONVENTIONAL OIL and GAS

• 6 Tcf and 50 Mmbbl Cooper Basin prospective unconventional resource

• Eagle Ford Shale gas / condensate leasing - now over 8,100 net acres

• Acquisition of Permian Basin shale play

OUR STRENGTHS

• Quality Assets

• Experienced Team

• Major Growth Potential

OVERVIEW

Strike Energy Limited ("Strike") is pleased to update shareholders on its activities for the December 2011 quarter.
During the quarter, Strike focused its management and financial resources upon developing unconventional oil and gas opportunities in Australia and the USA.

Cooper Basin

Strike completed a technical evaluation of the potential unconventional resource in our permits covering the Southern Flank of the basin. The company announced a prospective unconventional resource of approximately 6 Tcf of gas and 50 Mmbbl of liquids (net to Strike). Strike recently confirmed that its Cooper Basin unconventional drilling program is scheduled to commence in February 2012.

US Unconventional

Strike continued its Eagle Ford Shale leasing program with a focus upon the preferred gas/condensate fairway. As at 31 December, the company and its partners had leased approximately 29,500 acres (~8,100 acres net to Strike). The joint venture is now planning for a drilling program, which is expected to commence during the first half of 2012.
Strike announced its first investment in the Permian Basin in November. The MB Clearfork Project gives Strike conventional oil production and reserves, and considerable unconventional resource upside potential from the underlying thick Lower Clearfork Shale formation.
During the quarter, Strike participated in two conventional exploration wells - AD Kennison 1 and Wintermann 1 - neither of which encountered commercial hydrocarbons. The company has no plans to participate in further conventional exploration during 2012.

Strike Energy Limited Ground Floor, 10 Ord Street West Perth WA 6005

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Strike Energy Limited ABN 59 078 012 745 27 January 2012

Production from the Louise field continued at stable rates during the quarter and an initial contribution from the MB Clearfork project was received.

Strike has a very exciting six months ahead with drilling expected at its key unconventional assets, the Cooper Basin and the Eagle Ford Shale. PRODUCTION

Strike has conventional production from its 40% interest in the Louise gas/condensate field in southern
Texas. The Louise field's Gardner Duncan 1 well has produced without decline at approximately 4,000
Mcf of gas and 100 Bbl of condensate per day (1,600 Mcf and 40 Bbl per day net to Strike) since
commencing in April 2010.
Strike also has oil production from the MB Clearfork Project in the Permian Basin that was acquired in
November.
Strike's quarterly production is summarized in the following table:

	Oct - Dec 2011	July - Sept 2011	Quarterly Change
EAGLEWOOD JV - LOUISE GAS/CONDENSATE FIELD
Gas (Mcf)	153,618	153,862	-
Oil (Bbl)	3,464	3,987	-15%
Barrels of oil equivalent (Boe) 1	29,067	29,631	-2%
Mcf of gas equivalent (Mcfe)1	174,404	177,784	-2%
PERMIAN BASIN - MB CLEARFORK PROJECT2
Gas (Mcf)	782	-	n/a
Oil (Bbl)	1,452	-	n/a
Barrels of oil equivalent (Boe) 1	1,583	-	n/a
Mcf of gas equivalent (Mcfe)1	9,496	-	n/a
TOTAL
Gas (Mcf)	154,400	153,862	-
Oil (Bbl)	4,917	3,987	+19%
Barrels of oil equivalent (Boe) 1	30,650	29,631	+3%
Mcf of gas equivalent (Mcfe)1	183,899	177,784	+3%

1 Energy equivalence is calculated on a 1:6 ratio

2 MB Clearfork Project acquired in November 2011. Production for two months only

Total quarterly oil production increased by 19% because of the November - December contribution of the MB Clearfork Project. Gas production was unchanged. The Eaglewood Joint Venture's Sadie 1 well produced at minimal flow rates. Strike also received 244 barrels of oil as its share of production from the Aldinga Oil Field in the Cooper Basin.

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Strike Energy Limited ABN 59 078 012 745 27 January 2012

REVENUES

Strike's quarterly revenues from production are summarised in the following table:

Revenues (A$'000)	Oct - Dec 2011	July - Sept 2011	Quarterly Change
EAGLEWOOD JV - LOUISE GAS/CONDENSATE FIELD
Gas	722	823	-14%
Oil	297	355	-20%
Total	1,019	1,178	-16%
Gross margin	68%	68%	-
PERMIAN BASIN - MB CLEARFORK PROJECT2
Gas	4	-	n/a
Oil	131	-	n/a
Total	135	-	n/a
Gross margin	68%	-	n/a
TOTAL
Gas	726	823	-13%
Oil	428	355	+17%
Total	1,154	1,178	-2%
Gross margin	68%	68%	-

Average realised oil prices during the quarter were $87.00/Bbl and gas prices were $4.70/Mcf, down 2% and 12% respectively on the previous quarter. Total quarterly revenues were flat, with the lower prices being offset by the November - December revenue contribution from the MB Clearfork Project.

EXPLORATION

Cooper Basin, South Australia

Strike has a very large 16,000 net km2 exploration portfolio in the Cooper and Eromanga Basins. During the quarter, Strike's technical team conducted a detailed analysis of the unconventional potential of the company's permits on the Southern Flank of the Cooper Basin - PELs 94, 95 and 96. Four troughs within the permits were estimated to have a prospective gas resource of 12.3 Tcf and prospective liquids resource of 112 MMbbl (approximately 6 Tcf and 50 MMbbl net to Strike).
Strike has recently announced that its Cooper Basin drilling program is scheduled to commence in February 2012 with the drilling of the Marsden 1 evaluation well in PEL 95 (Strike 50%), to be followed by the Davenport 1 evaluation well in PEL 94 (Strike 35%). The wells will be extensively logged and cored.
Strike anticipates that the Marsden 1 and Davenport 1 wells will provide extensive data upon which to refine the assumptions underlying the company's resource model and develop a forward exploration and production program.

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Strike Energy Limited ABN 59 078 012 745 27 January 2012

Eagle Ford Shale, Texas

Strike has a 27.5% interest the in the Eagle Landing Joint Venture that is focused upon the Eagle Ford Shale gas/condensate play, onshore Texas. During the quarter, the joint venture increased its leasehold acreage position by 16% to 29,560 acres (8,129 acres net to Strike) as at 31 December 2011.
Over the quarter, the Joint Venture undertook a comprehensive evaluation of its Eagle Ford Shale acreage in preparation for a drilling program, which is expected to commence during H1/2012.

Permian Basin, Texas

In November 2011, Strike announced its first investment in the Permian Basin, the USA's largest onshore oil producing basin. The MB Clearfork Project produces approximately 120 Bbl/day (30 Bbl/day net to Strike) and has proved and probable reserves of about 1,600 Mbbl (400 Mbbl net to Strike). The project has been independently assessed to have over 2 billion barrels of original-oil-in-place, mainly within the thick Lower Clearfork Shale formation underlying the conventional formations.
The operator of the MB Clearfork Project has proposed an active program of low-cost infill wells, re-fracs and workovers to increase conventional production over 2012. Strike also expects to test the Lower Clearfork Shale during H2/2012.

Carnarvon Basin, Western Australia

In November, Strike was awarded a 33.3% interest in offshore permit WA 260 P in the Carnarvon Basin. The permit covers part of the Palta prospect, which Strike estimates to have a gross prospective resource of 13.5 Tcf. Shell is expected to drill the Palta prospect from within the adjoining permit WA
384 P in late 2012.

Wilcox Slope, Louisiana

The conventional AD Kennison 1 well reached total depth in December without encountering commercial hydrocarbons. The well was suspended pending a completion attempt by one of the participating parties. Strike and the other participants in the well declined to join in the completion attempt.

Wilcox Formation (Eaglewood JV), Texas

The conventional Wintermann 1 well targeting the Upper Wilcox Formation reached total depth in late December without encountering commercial hydrocarbons and the well has been plugged and abandoned.

CORPORATE

Strike's new management team completed a review of the company's assets and strategy. In 2012, Strike's management and financial resources will be focused upon developing unconventional oil and gas opportunities in Australia and the USA - particularly in the Cooper Basin and Eagle Ford Shale.
Strike successfully completed a $2.5 million placement in December and welcomes new institutional investors as shareholders. The company also announced an entitlement offer to all shareholders and a

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Strike Energy Limited ABN 59 078 012 745 27 January 2012

top-up facility allowing all non-Director shareholders to purchase shares in excess of their entitlement. The offer closes on Wednesday 25 January.
Strike's management is investigating various options to fund planned 2012 activities and has also initiated a corporate and administrative cost reduction program.
Strike's corporate information as at 31 December 2011:

Board of Directors

Chairman: T M Clifton Managing Director: D C Wrench Executive Director: B A Thomas Non-executive Director: S M Ashton Non-executive Director: T R B Goyder Non-executive Director: E Uliel

Issued Capital

Issued Shares: 465,817,026

Unlisted Options: 34,885,000

Registered Office

Ground Floor, 10 Ord Street

West Perth, Western Australia 6005

Telephone: [phone]

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Email: [e-mail]

Website: www.strikeenergy.com.au

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