Warrego Energy (ASX:WGO) signs gas sales agreement with Alcoa

• Warrego Energy (WGO) has signed a gas sales agreement with Alcoa for the supply of 155 petajoules of natural gas from the West Erregulla gas field
• West Erregulla is located within the Perth Basin of WA and is part of a 50:50 joint venture with Strike Energy (STX)
• The gas sales agreement will begin on January 1, 2024, and is dependant on Warrego making a positive final investment decision in the first half of 2021
• Significantly, the agreement with Alcoa means that Warrego won’t need to secure any further gas sales agreements to bring the gas field into production
• Shares in Warrego opened 6.25 per cent higher, trading for 25.5 cents

Warrego Energy (WGO) has signed a long term gas sales agreement with Alcoa for the supply of 155 petajoules (pj) of natural gas from the West Erregulla gas field.

The West Erregulla gas field is located onshore within the Perth Basin in Western Australia. It is part of a 50:50 joint venture with Strike Energy (STX).

The gas sales agreement will begin on January 1, 2024, and is subject to Warrego making a positive final investment decision in the first half of 2021.

Pleasingly, this agreement will support a gas processing development and provide the foundation for Warrego to plan additional developmental phases.

Significantly, the agreement with Alcoa means that Warrego won’t need to secure any further gas sales agreements to bring the gas field into production.

“Securing such a large scale and long term GSA with a top-tier customer like Alcoa is testament to the quality of the West Erregulla gas field and the commercialisation strategy adopted by Warrego, and will send a positive signal to other potential gas buyers,” Warrego Managing Director and Group CEO Dennis Donald said.

Warrego will focus on progressing gas processing options, which include using third-party facilities and shared infrastructure.

The company is also drilling the WE-3 well on the northern area of the West Erregulla field. Another two wells are expected to be drilled in the field over the next 12 months.

Shares in Warrego opened 6.25 per cent higher, trading for 25.5 cents at 10:46 am AEST.