PERTH (miningweekly.com) – ASX-listed Strike Energy on Wednesday revealed that it would realise A$136-million in proceeds from the sale of its interest in takeover target Warrego Energy to suitor Hancock Energy.
Strike earlier this month bowed out of the tussle for ownership of Warrego, accepting Hancock’s increased offer of 36c a share, after Hancock had gained a 52.17% foothold in the takeover target.
Strike on Wednesday said that it had closed its off-market takeover bid for Warrego with a near 30.4% interest in the company.
The company noted that proceeds of A$136-million realised from the sale of its interest in Warrego were equivalent to an equity raise priced at 40c a share, or a 16% premium to Strike’s last closing price.
The sales proceeds, along with the company’s A$67-million of available cash and undrawn facilities meant that Strike had sufficient capital to support its next investment decision.
“Strike has never been in a better position than it is today, with imminent gas production and cash flow generation at the Walyering gasfield, having a robust balance sheet and operating the largest reserve and resource position in the Perth basin, all while local and global gas markets continue to tighten, and pricing dynamics increase in attractiveness,” said MD and CEO Stuart Nicholls.
“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.”
He added that the company was now conducting a capital allocation review and would provide further information on the additional activities that would be funded under this acceleration strategy in due course.