Shareholders of Aberdeen-based Warrego Energy have unanimously approved the firm’s acquisition by Australia’s Petrel Energy in a reverse takeover.
The deal, initially announced in November, is expected to go through later this week, following an extraordinary general meeting of Petrel shareholders.
Sydney-based Petrel will buy all Warrego shares before listing the entire share capital of the enlarged business on the alternative investment market in London.
Warrego investors will receive shares equating to about 77% of the capital of the combined business, but prior to the issue of the new shares.
Warrego was co-founded in 2007 by managing director Dennis Donald, a former Shell engineer, and director Duncan MacNiven, a retired corporate lawyer.
The company owns 50% of exploration permit 469, located 140 miles north-east of Perth, Australia, having sold the other 50% to Strike Energy for about £300,000 last year.
Strike took over as operator and agreed to cover 100% of the cost of drilling the West Erregulla-2 exploration well in the first half of next year.
Strike’s spending on the well will be capped at £6 million within the first two years.
West Erregulla-2 is estimated to contain prospective volumes of 1.24 trillion cubic feet of gas.
The prospect is thought to have similar attributes to the nearby Waitsia discovery, which has been a profitable producer.
Warrego managing director Dennis Donald said: “The combined Warrego entity benefits from a material portfolio of international, excellent, scale projects with funding in place from the recently completed Warrego Convertible Note issue which raised £3.8m.
“With Strike funding the first £6m of expenditure on West Erregulla-2, which will commence in about 10 weeks’ time, we highly commend the reverse takeover to Petrel shareholders on 15 March 2019.”
Petrel managing director David Casey said: “We are very pleased with the support provided by Warrego shareholders in what can only be seen as a vote of confidence in the new combined Warrego board and management team and the drilling of West Erregulla-2.
“Drill site preparations at West Erregulla-2 are currently under way for what is potentially the most significant well drilled onshore Australia this year and a near identical analogue to AWE’s Waitsia Field.”
Following completion and subject to shareholder approval, Petrel will change its name to Warrego Energy.