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Warrego tug of war intensifies

12th January 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The tussle for control of takeover target Warrego Energy continues, with both Strike Energy and Hancock Energy lobbying for shareholder votes.

Strike’s all-scrip offer for Warrego opened this week, under which it is offering one new share for each Warrego share held. Strike’s offer is in counterpoint to the 28c a share being offered by Hancock, which would increase to 36c a share if the Gina Rinehart-led company achieves a minimum 40% acceptance of its offer.

Hancock has told Warrego shareholders that it has received acceptance from three of Warrego’s largest shareholders, who collectively own 32.6% of the company, while three of the company’s four directors have backed the cash offer over the scrip offer.

Strike on Thursday naysayed these claims, saying Hancock had only secured a 25.91% shareholding in Warrego, and argued that its own offering presented the opportunity for Warrego shareholders to take part in the development of Warrego’s Perth basin assets.

For its part, Hancock on Thursday said Strike’s share price continued to be "unrealistically inflated" and that Strike’s scrip offer was inferior to its own cash offer.

Hancock also stated that Strike’s gas reserves were insufficient to support Project Harber, which would require a minimum 2P reserve of 584 PJ to support its planned urea production over an operating 20-year mine life. Strike has earmarked its South Erregulla field as the primary source of gas for the project, however, Hancock pointed out that the project only had a 2P reserve of 128 PJ.

Hancock claimed that this was indicative of the "considerable uncertainty" over Strike’s ability to establish a sufficient reserve to support Project Harber, and the need for significant additional exploration and funding.

Edited by Creamer Media Reporter

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