- A joint venture, drilling delays and a $32 million capital raising made the last quarter of 2020 an eventful one for Warrego Energy (WGO)
- Well appraisal at the West Australian West Erregulla project came to a temporary halt after overpressured gas was encountered while drilling
- As a result, it was decided under the joint venture with Strike Energy that the drill rig should be relocated to a different well
- Warrego is working towards a final investment decision for the first half of CY21
- WGO also managed to raise approximately $32 million via capital raise, which is set to go towards further drilling and general working capital
- Warrego Energy shares closed today's session flat at 22.5 cents each
A joint venture, drilling delays and a $32 million capital raising made the last quarter of 2020 an eventful one for Warrego Energy (WGO).
Drilling at West Erregulla's WE-3 appraisal well in Western Australia was brought to a temporary halt after significantly overpressured gas was encountered at the project.
Under the 50:50 joint venture between Warrego and Strike Energy, it was concluded that further equipment and well engineering would be required to ensure drilling could be continued safely.
As a result, WE-3 was temporarily suspended and the rig relocated to an already prepared site at WE-4.
According to WGO, the joint venture is yet to decide on the future of the WE-3 drill and continues to consider the implications of the geological data acquired there.
Warrego and Strike also expanded on the details of their joint venture in October 2020, executing a binding heads of agreement in October 2020 to ensure alignment from both parties on the development of the West Erregulla gas field.
The joint venture says it plans to seek financing for the construction of the phase one development and gearing up for a final investment decision (FID) within the first half of 2021.
Warrego says the FID will be subject to the drilling, testing and evaluation of the WE-4 and possibly the WE-3 or WE-5 appraisal wells.
In terms of financial matters, WGO managed to raise approximately $32 million via a two tranche capital raise to fund further drilling and general working capital.
The company's cash and equivalents balance sits at roughly $33.6 million, which based on WGO's current spending levels, should see it through the next 3.88 quarters.
Warrego Energy shares closed today's session flat at 22.5 cents each.