Warrego Energy to raise $15m

Warrego Energy has received commitments to raise $15 million from a two-tranche share placement, with the proceeds to go towards drilling at its West Erregulla development in the Perth Basin.

The NSW-based company is looking to develop West Erregulla alongside 50 per cent owner Strike Energy, which last week announced it had partnered with the Australian Gas Infrastructure Group (AGIG) to develop and operate a gas facility for the project.

Warrego said the placement closed oversubscribed, with the proceeds to fund drilling at the West Erregulla-3 appraisal well this year and provide long lead items for the West Eregulla-4 appraisal well.

Managing director Dennis Donald said strong demand for the capital raising reflected growing interest in the potential of the West Erregulla gas field.

The company will issue around 115 million shares at 13 cents each in two tranches, with the first tranche expected to settle on May 28.

Chairman Greg Columbus intends to subscribe for $390,000 worth of shares, Warrego says.

Canaccord Genuity and Bridge Street Capital Partners are acting as joint lead managers to the placement.

Shares in Warrego closed up 12.5 per cent to trade at 18 cents.