Warrego Raise A$32mn for Oz West Erregulla Drilling

Sydney-listed Warrego Energy has raised A$32mn (US$23mn) via two-tranche share placement to institutional and sophisticated investors at an offer price of A$0.21/fully paid ordinary new share, it said on October 14.

The proceeds from the placement will be used to fund the drilling of the WE-4 and WE-5 appraisal wells, a 3D seismic survey over the remainder of permit EP469, which contains the West Erregulla gas project, and for general working capital. The WE-4 and WE-5 wells will appraise Wagina gas discovery.

“Strong support from institutional investors is indicative of the confidence in Warrego’s business strategy and future growth potential following the recent announcement of a landmark gas sale agreement and joint venture alignment,” CEO Dennis Donald said. “We are looking forward to the results from the current drilling campaign which have the potential to further enhance our view of West Erregulla’s reserves and resources.”

Warrego is partnered at West Erregulla gas project with fellow Australian explorer Strike Energy in a 50:50 equity split. The companies entered into a binding heads of agreement last week for the joint development of the West Erregulla gas field. In the same week, Strike finalised terms with Macquarie Bank for an A$28mn (US$20mn) two-year debt facility to finance pre-development expenditure at West Erregulla.