Carnarvon Energy will invest up to $89 million in Strike Energy, acquiring a stake of up to 19.9 per cent at $0.12 per share through a two-tranche placement. This strategic move provides Carnarvon with exposure to Western Australia’s gas and power markets and follows a strategic review initiated after delays to the Dorado project. Carnarvon Energy is an ASX-listed oil and gas exploration and development company focused on the Bedout Sub-basin. Strike Energy is an independent energy company focused on developing gas resources.
The placement is structured in two tranches. The first tranche involves a $52 million investment for a 13 per cent stake, which is unconditional and expected to settle within five business days. The second tranche allows for an additional investment of up to $37 million. However, this tranche is subject to approval from Strike Energy shareholders, which is anticipated to be sought in September.
Strike Energy intends to use the newly acquired funds to advance key projects. These include delivering its South Erregulla gas power project, extending the Walyering project, progressing the West Erregulla project towards a final investment decision, and developing its broader Perth Basin portfolio. Following the investment, Carnarvon Energy will retain over $96 million in cash, in addition to a US$90 million Dorado carry. A previously considered capital return has been put on hold.
“Carnarvon is excited to become the largest shareholder of Strike Energy,” said Carnarvon chair Rob Black. “This investment positions us alongside a high-quality WA gas portfolio, on attractive terms, while preserving full exposure to our Bedout Sub-basin assets.”
