- Oil explorer Warrego Energy (WGO) has rejected Strike Energy’s (STX) purchase proposal.
- Strike offered to purchase all Warrego shares for an all-scrip consideration of 1.2 Strike shares
- However, the Warrego Board reviewed the proposal and said it undervalues the company and its assets
- On the market this morning, both companies are down, with Warrego dropping 11.6 per cent to sell shares for 8.4¢ apiece
- Meanwhile, Strike is down 7.07 per cent and is trading at 9.2 cents per share
Oil explorer Warrego Energy (WGO) has rejected Strike Energy’s (STX) purchase proposal.
Strike offered to purchase all of Warrego shares for an all-scrip consideration of 1.2 Strike shares for each Warrego share.
The proposal was subject to a number of conditions, including the completion of due diligence to Strike’s satisfaction.
It wasn’t to be, however, as the Warrego Board reviewed the proposal and said it undervalued the company and its assets.
“The Proposal, if it were implemented, would result in Warrego shareholders owning approximately 31 per cent of the merged entity, whereas Strike and Warrego each hold a 50 per cent interest in the EP469 Joint Venture which includes the West Erregulla tenements,” the company said.
The EP469 gas project is located onshore in Perth Basin, Western Australia. In 2019, Warrego farmed out 50 per cent of the project to Strike.
Warrego said the proposal also undervalues its Tesorillo project in Spain.
The company currently holds a 15 per cent interest in Tesorillo but has an option to earn 49.9 per cent.
The Board continues to be prepared to engage on any other proposals, whether it be from Strike or any third party, provided it is fair for Warrego shareholders.
Strike is an Australian based, independent oil and gas exploration company. It aspires to be Australia’s lowest-cost onshore gas producer, providing natural gas to support Australia’s transition to a lower-carbon future.
On the market this morning, both companies are down. Warrego has dropped 11.6 per cent and is selling shares for 8.4¢ apiece. Meanwhile, Strike is down 7.07 per cent and is trading at 9.2¢ per share at 11:00 am AEDT.