Strike Energy Ltd., Sydney, has submitted a confidential non-binding all-scrip merger proposal for its Perth basin joint venture partner Warrego Energy Ltd., Sydney.
The proposal provides for Warrego shareholders to receive 0.7521 new Strike shares for each Warrego share held in addition to the net proceeds resulting from the sale of Warrego’s Spanish assets that include the EL Romeral integrated gas production and power station operation in Guadalquivir basin in southern Spain.
Subject to completion of due diligence, the Warrego board intends to recommend the merger.
Upon implementation, Strike shareholders would own 72% of the combined entity (including Strike’s existing 7.6% ownership of Warrego).
The merger would create an integrated energy, fertilizer, and renewables company and consolidate 100% ownership across the Erregulla region of the onshore North Perth basin in Western Australia, Strike said.
The combine pro-forma ownership would have 1,200 petajoules of conventional 2P gas reserves plus 2C resources of which 550 petajoules of 2P reserves and 301 2C resources exist within the Greater Erregulla permits.