Warrego Energy Limited (ASX: WGO) is an energy company based out of UK/Australia engaged in oil exploration, development and production. Today on May 31, 2019, WGO announced that it has completed share placement of 64,210,526 fully paid ordinary shares of worth $6.1 million at an issue price of 9.5 cps. This issue price represents a 24% discount to the last trade on May 28, 2019, at $0.125 and a 24.6% discount to the five-day VWAP (Volume Weightage Average Price) at $0.126. The Lead Manager for the placement process was Bridge Street Capital Partners.
The placement was offered to sophisticated, professional, and institutional investors. The issued shares follow the compliance as listed in the company’s Listing Rule 7.1 capacity. Additionally, the share purchase plan to raise up to $1 million will offer an opportunity for the existing eligible shareholders to increase their shareholding. WGO’s Chairman, Mr Greg Columbus participated in the Placement for 3,157,895 fully paid ordinary shares valued at $0.3 million. The placement shares will be subject to the shareholders’ approval in the General Meeting.
The capital raised will be utilised primarily as working capital to progress the EP469 exploration programme, which includes drilling contingency and testing of West Erregulla 2, planning and initial expenditure on next steps depending upon the results, including seismic and reserve wells.
Group’s Managing Director and CEO, Mr Dennis Donald stated that the Board is delighted with the level of support it has received from the new and existing investors. The company welcomes a significant number of new investors, including several institutional investors, which reflects the confidence that the Board and the broader market has in the West Erregulla 2 Well. The additional funding will allow them to commence further steps to scope out any discovered resource in EP469.
Additionally, the share purchase plan, which is targeted to raise up to $1 million will allow each eligible shareholder (which holds share prior record date of May 30, 2019) to apply for up to $15,000 of fully paid ordinary shares. The issue price will be the same as the Placement price of 9.5 cps, and the shares issued under the SPP will rank equally among the existing shares.
Warrego holds 50% joint venture interest with Strike Energy Limited (ASX: STX) (operator), in the EP469. West Erregulla-2 is being drilled at the depth of 5.2K and penetrate 3 independent reservoir targets in EP469, which targets analogous Permian gas sands of a similar size and nature as at the Waitsia gas discovery. As per the current operations, the Easternwell 106 has now raised its mast and substructure and installed the top drive. Third-party inspection has been completed, and crews have commenced 24hr operations with the rig powered up. Final safety and functional checks will be carried out in accordance with the pre-spud checklist requirements and rig acceptance for spud is currently expected Saturday afternoon. Drilling will commence from the preinstalled conductor at 65 meters to a planned depth of 1,000 meters in the 17-1/2” surface hole section.
On the stock information front, at the time of writing (on May 31, 2019, AEST 02:30 PM), the stock of Warrego Energy was trading at $0.125, with a market capitalisation of ~$63.43 million. Today, it reached day’s high at $0.125 and day’s low at $0.120, with a daily volume of 1,349,748. Its 52 weeks high and low price stands at $0.175 and $0.020, with an average volume of 1,355,820 (yearly). Its absolute returns for the past one year, six months and three months are 108.33%, 525.00%, and 56.25%, respectively.
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