The Strike Energy Ltd (ASX: STX) share price has bounced back after dropping almost 3% in early trade today. This comes after the company released an update on its West Erregulla project in Western Australia.
In early trade, Strike Energy shares were exchanging hands for 29.3 cents apiece, trading off their 52-week high of 41 cents. However, at the time of writing, they have rebounded to 30 cents — the same as yesterday's closing price.
Let's take a look a what is behind the price action for Strike Energy shares today.
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Quick recall on Strike Energy
Strike is an oil and gas exploration company, that has interests in Western Australia and South Australia.
Its projects are situated at the Southern Cooper Basin Gas Project, the Perth Basin and at West Erregulla.
At the time of writing, Strike Energy has a market capitalisation of $604 million.
Strike increases exposure to West Erregulla
The company announced today it has increased its "economic interest in the West Erregulla gas project" to 54%.
Strike achieved this via the "acquisition of an 8.16% strategic stake in the listed equities of Warrego Energy Ltd (ASX: WGO)". It is now Warrego's largest independent shareholder.
Strike said its board decided that increasing its stake by a further 4% at a cost of around $22 million "represented an attractive transaction".
Today's news comes after Strike previously announced the "transformational phase of its Perth Basin gas resource growth strategy".
Investors seem to have had a mixed reaction to today's announcement, initially pushing Strike shares 2.5% into the red from the market open.
Since the "transformational phase" announcement on 6 July, Strike Energy shares have posted a loss of about 11%.
Strike Energy share price snapshot
Strike shares have had a choppy year to date, posting a return of 3.4% since January 1.
However, the Strike Energy share price more than doubled the S&P/ASX 200 Index (ASX: XJO)'s 12-month return of 21%, scoring a single-year return of 50%.
Over the previous month, the company saw its share price fall by 15% into the red.
