- Warrego Energy (WGO) has received firm commitments for a $15 million two-phase placement
- Approximately 115.4 million shares will be issued to institutional and sophisticated investors at a price of 13 cents per share
- Furthermore, Chairman Greg Columbus intends to invest $390,000, however, this is subject to shareholder approval
- The money raised will be used to fund activity at the company's West Erregulla-3 and 4 wells
- Warrego is up a steady 9.38 per cent on the market this morning and shares are trading for 17.5 cents each
Warrego Energy (WGO) has received firm commitments for a $15 million two-phase placement.
Approximately 115.4 million shares will be issued to institutional and sophisticated investors at a price of 13 cents per share.
This price is an 18.8 per cent discount to Warrego's closing price on May 20 at 16 cents per share, and a 15.6 per cent discount to the 15-day volume-weighted average price of 15.4 cents per share.
The placement will be undertaken in two phases, with phase one issuing 94.9 million shares to raise $12.3 million.
This phase is expected to settle on May 28.
Phase two will issue 20.5 million shares to raise the remaining $2.7 million.
Shares from this phase are expected to settle in early July, following shareholder approval at the general meeting.
Chairman Greg Columbus is planning on subscribing for $390,000 worth of shares in phase two, however, this is subject to shareholder approval.
The money raised from the placement will be used to fund the full drilling of the West Erregulla-3 exploration well, provide funding for long-lead items for the West Erregulla-4 exploration well, and general working capital.
"Strong demand from a range of new and existing institutional shareholders and sophisticated investors reflects growing interest in the potential of the West Erregulla gas field following delays in the timing of some large LNG projects offshore Western Australia," CEO and Managing Director Dennis Donald commented.
"A successful West Erregulla-3 well could see the prospective resources in the northern area of the field converted to contingent resources and, possibly, the recognition of additional resources," he said.
"It would also provide a new and more complete data set that could potentially enhance our independent contingent resource estimate for the central area of the field," he added.
Warrego is up a steady 9.38 per cent on the market this morning and shares are trading for 17.5 cents each at 10:58 am AEST.