Western Australian oil and gas companies Strike Energy (ASX:STX) and Carnarvon Energy have announced a strategic partnership. Carnarvon Energy will invest up to $89 million to acquire a 19.9% interest in Strike Energy through a two-tranche placement. In addition, Strike Energy will undertake a share purchase plan to raise up to $10 million, with the capacity to accept oversubscriptions of an additional $5 million.
Strike Energy, an onshore Perth Basin specialist, has become a key contributor to Western Australia’s domestic power sector through drilling successes. The company focuses on the discovery, development, and production of gas reserves in the Perth Basin. Carnarvon Energy is an offshore oil and gas explorer.
Carnarvon’s decision to invest was driven by Strike’s extensive portfolio of gas assets. According to Carnarvon chair Rob Black, the investment allows Carnarvon to help Strike unlock the value in its Perth Basin assets, while retaining full exposure to its own assets in the Bedout sub-basin. Strike Energy chair John Poynton welcomed Carnarvon as a strategic partner and Strike’s largest shareholder, highlighting that Carnarvon’s investment provides the financial capacity to realise its potential.
The new shares will be issued to Strike in two tranches at $0.12 per share. This represents a 19.7% discount to the 10-day volume weighted average price as at 18 July of $0.149.
