Strike Energy (ASX:STX) reports it will receive $136 million in proceeds following its closing of the off-market takeover bid for Warrego Energy (ASX:WGO).
The company says as of today (15 February 2023) it owns or is in control of about 30.4% (377,040,765) of Warrego’s shares, and will now proceed to vend all of these shares into the unconditioned Hancock Energy cash offer of $0.36 per Warrego share in order to receive $136 million in proceeds.
Adding on, Strike notes the $136 million in proceeds is equivalent to it conducting an equity capital raise at $0.40 per Strike share or 16% premium to Strike’s last closing price of $0.345.
“Strike has never been in a better position than it is today, with imminent gas production and cash flow generation at the Walyering gas field”
The company also notes the decision to accept Hancock’s offer and receive the ‘substantial’ and certain funding injection provides clarity on the development pathway for the Greater Erregulla gas resources.
Speaking on the takeover bid, Strike Chief Executive Officer (CEO) and Managing Director Stuart Nicholls said: “Strike has never been in a better position than it is today, with imminent gas production and cash flow generation at the Walyering gas field, having a robust balance sheet and operating the largest reserve and resource position in the Perth Basin, all whilst local and global gas markets continue to tighten, and pricing dynamics increase in attractiveness.
With two planned and funded drilling campaigns in the next 12 months, a proposed investment decision at the Erregulla domestic gas project and the opportunity to accelerate assets where known and unrecognised dormant value exists, there is a lot to look forward to for our current and newly welcomed Strike shareholders.”
It is reported that in conjunction with the $67 million of available cash and undrawn facilities at Q4 2022, the company will have a total of $203 million of available funding with a further $80 million in an uncommitted domestic gas development facility to support its next investment decision.
With the off-market takeover bid for Warrego now closed, Strike announces it will proceed to accelerate its Perth Basin focussed strategy across its portfolio of highly attractive domestic gas, fertiliser, and renewable energy assets.
Strike Energy is an ASX-listed Australian independent exploration and gas development company focused on its ‘large’ and ‘high quality’ conventional gas resources in the Perth Basin.
In order to leverage this prolific resource base, the company has developed an integrated downstream strategy with the aspirations of becoming Australia’s lowest cost domestic gas and fertiliser producer, supporting its future customers’ carbon abatement and in doing so attracting premium pricing for its energy products.