Warrego Energy has secured $32 million in funding that will be used for the West Erregulla drilling campaign in the Perth Basin, Western Australia.
The company has received commitments for a two-tranche placement to investors at $0.21 per share.
Warrego plans to use the funds for the drilling of the West Erregulla 4 and West Erregulla 5 appraisal wells, 3D seismic over the remainder EP469 and general working capital.
The placement will be completed in two tranches, with the second tranche subject to shareholder approval at the company’s general meeting.
Warrego has reported that tranche one will be $26 million, with the second tranche $6 million.
Managing director and chief executive officer Dennis Donald said strong supply from institutional investors was indicative of the confidence in Warrego’s business strategy.
“As well as confidence in our future growth potential following the recent announcement of a landmark gas sale agreement and joint venture alignment,” Donald said.
“We look forward to the results from the current drilling campaign which has the potential to further enhance our view of West Erregulla’s reserves and resources.”
Warrego chairman Greg Columbus has subscribed for 1.5 million shares in tranche two of the placement.
West Erregulla joint venture partner Strike Energy yesterday reported that it had hit drilling complications following an inspection of the bottom hole assembly at its 17.5-inch intermediate hole section at West Erregulla 3 well.
The company commenced drilling of the 17.5-inch first intermediate hole section, which resulted in the rate of penetration being reduced and an inspection of the bottom hole assembly.
Following retrieval to surface, Strike found that the bottom hole assembly has parted just above the mud motor and the drill bit and the motor remained in hole.
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