Strike Energy has bought $22 million worth of shares in joint venture partner Warrego Energy, effectively raising its exposure to the West Erregulla development in the Perth Basin.
Strike acquired roughly 93 million shares in Warrego for an additional 8.16 per cent stake in the business, which prior to transaction owned 50 per cent of West Erregulla.
The deal lifts Strike’s share in the gas project to 54 per cent.
“For avoidance of doubt, Strike’s board has not formed an intention with regards to any future transaction that may involve Warrego,” Strike said.
“Strike is comfortable with the level of investment in Warrego at this time and Strike will continue to consider value accretive transactions from time to time should market conditions allow.”
Stuart Nicholls-led Strike said it remained the single largest shareholder in Warrego.
The duo first entered a JV arrangement in April 2018 and signed a binding heads of agreement in October last year to develop West Erregulla.
Stage one of the project includes an 87 terajoules of gas per day processing plant, to be built, owned and operated by Australian Gas Infrastructure Group.
Strike recently raised $80 million from investors to begin construction works associated with phase one.
The company was due to make a final investment decision by mid-year but recently said it was experiencing a “relatively short delay”, due to postponed drilling activities.
In June, Warrego raised $50 million to fund phase one of the project, including the purchase of long lead items for the processing plant and drilling the WE-3 appraisal well.
Stage two of the project involves a potential expansion 300TJ/day through both West Erregulla and Strike’s wholly owned South Erregulla field.
Strike's shares have closed up 1.7 per cent to trade at 30 cents while Warrego's shares remain unchanged at 25 cents.