Petrel Energy Signs Share Purchase Agreement With Warrego Energy

  • Dec 21, 2018 AEDT
  • Team Kalkine
Petrel Energy Signs Share Purchase Agreement With Warrego Energy

Petrel Energy Limited (ASX: PRL) is an Australian based oil and gas company. Its key projects include Piedra Sola and Salto concessions Project, Tesorillo Project, and Coolcalalaya / North Perth Basin Project.

The Piedra Sola and Salto concessions Project in Uruguay is spread over an area of 3.5 million acres with a 49% interest in Schuepbach Energy International LLC. The Tesorillo Project in Cadiz Spain is working on the exploration of gas over 94,000 acres of land. The Western Australia Coolcalalaya / North Perth Basin Project is spread over 2.2m acres (8,700 square km) land with a 12-month call option.

Today, PRL has signed the Share Purchase Agreement with Warrego Energy Limited (Warrego) stating the acquisition of Warrego by PRL through a reverse takeover (RTO). Warrego shareholders, in consideration, will receive fully paid ordinary shares in PRL representing 76.9231% of the issued share in PRL. PRL shareholders will own the remaining shares.

PRL will change its name to Warrego Energy Limited, subject to shareholder’s approval. EGM is scheduled for 18 February 2019 to approve the reverse takeover.

Warrego Energy (UK) Limited is a private company in the UK with a permit ‘469’ in Western Australia. In June 2018, Warrego entered into a joint venture arrangement with Strike Energy Limited (STX) for a 50% interest in EP469 and operatorship, previously 100% owned.

PRL is working towards entering into the trading on the AIM market in London with a capital raising of A$10 million. With the uncertainty in the London markets due to Brexit, it is likely to occur just prior to, or shortly after, the drilling of West Erregulla-2, a well having conventional gas prospect expected to drill in the first half of 2019. However, the AIM listing is not a condition of the SPA. Entering into the AIM market at the correct time with right market conditions will be an essential factor for PRL in order to maximize the value to the shareholders.

It is expected that there will be some significant changes in the Board of directors after the RTO.

In addition, PRL and Prospex Oil and Gas Plc (AIM: PXOG) are focussing towards drilling on Tesorillo-1 Project in 2H FY19. STX at West Erregulla-2 has funded up to A$11 million and PXOG at Tesorillo-1 up to A$6 million in the two wells with both, PRL and Warrego, having 50% interests in each asset.

It is expected that Warrego may raise interim funds, before its listing to the AIM, by issuing convertible notes at a discount of 20% raising A$6,000,000 to meet transaction-related expenses and existing project costs.

PRL further intends to consolidate its securities in the ratio of 20:1, subject to the approval of its shareholders.

As per the management of both, PRL and Warrego, the combined entity will have a greater scope and scale and return for existing and new shareholders.

The price of the scrip has fallen by 75% with the price of 1 cent at the beginning of the year to 0.2 cent today. There is no movement in the scrip price today.


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