Warrego Energy Limited notes today’s ASX announcement by Strike Energy Limited (“Strike”) that it has acquired 8.16% of the listed securities of Warrego.
Warrego and Strike both have a 50% interest in the EP469 Joint Venture, which includes the West Erregulla Gas Project, and Strike is the Operator.
Strike’s $22.3 million investment in Warrego demonstrates the significant value potential of Warrego shares as well as the importance of West Erregulla as the principal asset, and only discovery to date, for both parties.
Strike’s investment is also an acknowledgement of Warrego’s ability to generate superior cashflow and returns from Phase 1 of the West Erregulla Gas Project.
Warrego notes that Strike joins founders Dennis Donald and Duncan MacNiven (the largest shareholders in Warrego with a combined holding in excess of 25%) as a substantial shareholder on the Warrego register, which also includes a number of large institutional shareholders and a broad range of retail shareholders. Warrego does not consider Strike to be independent, as it is a party in Warrego’s primary asset, West Erregulla, through its Joint Venture relationship.
With Phase 1 of the West Erregulla Gas Project moving from development planning into construction, and with spot gas price forecasts trending above $5/GJ1 reflecting the growing demand for Phase 2 gas, Warrego is excited about the future of West Erregulla.
