MinRes not buying Warrego

Chris Ellison’s Mineral Resources has said its 19.2 per cent stake in Warrego Energy is “strategic”, and claimed gas assets in the Perth Basin are now overpriced.

MinRes told the ASX today it had bought 234 million shares in Warrego, following a campaign which included acquiring a 15 per cent stake in the company through an off-market trade with Regal Funds Management earlier this month.

But the miner will stop there.

“MinRes does not intend to make a takeover bid or other offer for (Warrego), and is of the opinion that gas asset prices in the Perth Basin are over-inflated,” the company said in a statement to markets late on Wednesday.

MinRes has been pursuing another Perth Basin play, Norwest Energy, its partner at the Lockyer Deep project.

Norwest's board knocked back a $400 million bid.

But Warrego has been the subject of an escalating takeover battle featuring four of Western Australia’s richest people.

The junior’s main asset is the West Erregulla project with Strike Energy.

John Poynton-chaired Strike opened the bidding, valuing Warrego at about $227 million through an all scrip deal.

Beach Energy, backed by Kerry Stokes’ Seven Group, then made a play; followed by Gina Rinehart’s Hancock Prospecting.

All that has driven up the Warrego share price from 17 cents per share before Stike’s move was revealed in November, to 39c today.

Beach, Strike and Hancock proved to be ahead of the curve in their moves to secure a slice of the basin, because December brought news from the Australian Energy Market Operator that revealed a huge shortage of gas looming in WA in the 2030s.