WGO - Warrego Energy

[System]

Petrel Energy Limited (PRL) was formerly known as Orion Petroleum Limited (OIP).

Previous discussion of this company can be found in the OIP thread: https://www.aussiestockforums.com/forums/showthread.php?t=8859

 

[piggybank]

Double Top or will it carry on going up?

 

[Valued]

Hard to tell. I looked at it on the candlestick chart and sellers were able to push the buyers back. It looks like those some traders decided to take their profits. I would not put any money into this yet since I think it's a pure gamble. That being said, if I was made to take a choice at gun point, I would short the stock. The latest capital raising sold the shares at 0.135. That announcement came out on the 17th. The company outlook at a brief glance looks poor (as are all companies that don't do anything but lose money and raise capital). I would expect it more likely that the price will fall at least to the value of the shares sold on the capital raising. It makes no sense for a share price to rise after equity has been diluted.

It may be that some traders bought in since of the upwards momentum then the ones who opened the action decide to sell to the ones who do not want to miss out. The price then falls as those traders who purchased at resistance lose money. Next they will get scared and sell driving the price down further.

 

[piggybank]

 

[piggybank]

Quarterly Activities and Cashflow Report released on the 31st January 2014 - http://stocknessmonster.com/news-item?S=PRL&E=ASX&N=780074

 

[rnr]

Perhaps another indication of life in PRL?

 

[4kids]

Anyone still around and following PRL at the moment? Drilling in Uruguay...first drill @Cerro Padilla 815m very, very close to announcing td...massive potential! Management ex ESG guys

 

[greggles]

Anyone still around and following PRL at the moment? Drilling in Uruguay...first drill @Cerro Padilla 815m very, very close to announcing td...massive potential! Management ex ESG guys

Petrel Energy up 116% so far today after announcing first hydrocarbons discovered at the Cerro Padilla-1 well in Uruguay. A good day for those holding.

 

[System]

On March 28th, 2019, Petrel Energy Limited (PRL) changed its name and ASX code to Warrego Energy Limited (WGO).

 

[Padowan]

I have picked WGO for the ASF September 2019 stock picking competition. Following announcement of a major gas discovery on 27 August, the stock has traded up strongly and was
up a further 9% today

 

[Padowan]

I have picked WGO for the ASF September 2019 stock picking competition. Following announcement of a major gas discovery on 27 August, the stock has traded up strongly and was
up a further 9% todayView attachment 97242

Well, we live and learn (hopefully) post discovery sell down and a capital raising in September has seen price pullback considerably and evaporated any chance for the September 2019 competition . I am learning about charts through reading the interpretation by members reviewing other charts in the ASX stock chat. Would I be wrong if I say based on the daily price chart below there is support at 0.30 and resistance at 0.34 ish, this is a potential consolidation zone and a price rise through 0.34 should be viewed as a bullish move if accompanied by rising volume and any move above the recent high of 0.40ish would be a breakout and potential buy?

Any constructive advice appreciated.

 

[greggles]

It's been a bad six months for Warrego Energy. The share price has declined from around 37c in October last year, to a low of 8.6c yesterday. It has climbed back to 9.5c today after the company announced a cost cutting corporate reorganistion, which included the resignation of Executive Director Duncan MacNiven.

The Board of WGO has decided that the company will reduce salaries paid to Executive Directors and Senior Executives and the fees paid to Non-Executive Directors by 50% from 1 April, with a review of the position to be held post end June. The impact of COVID-19 was specifically cited as a reason for the cost cutting.

Last quarter the company reported a $4.262 million operating loss and had cash of $9.111 million at the end of the quarter. That may sound like a fair bit, but the reality is that it's only another two quarters worth of cash burn at the same rate.

It is going to get harder and harder for small cap miners to raise cash in the current economic environment. When the market starts to recover, I think people are going to pile into the safest blue caps and companies like WGO will get left to one side.

Wouldn't go near this one at the moment. Too many risks and too much uncertainty. I think I'll revisit it in about six months and see how they are doing then.

 

[Dona Ferentes]

in the second half of 2019, the 'exciting' play was drilled. The market was kept informed (probably too much) as

West Erregulla-2 [was] being drilled in EP 469 which is adjacent to and targeting analogous Permian gas sands of a similar size and nature as the Waitsia gas discovery

First up , by mid August

• Significant conventional gas discovery in the Wagina Sandstone
• Wagina reservoir characteristics appear good quality with a gross section of 74m
• WE-2 still to drill through to Basal Wagina and yet to encounter wet gas sands
• Wagina porosity development is additional evidence of Strike subsurface model accurately predicting hydrocarbons and porosity

and come the start of Sept

• Excellent quality conventional gas discovery in the High Cliff sandstone
• High Cliff log data compares favourably to the Waitsia gas field log data
• Gas saturated High Cliff sandstone with 10m of net pay and porosities up to 16%
• Gross High Cliff gas column of at least 22m
• WE2 well drilling now complete at 5,100m

Then came the capital raise at 29c mid Sept, and by Oct, three payzones

The testing program is designed to determine well deliverability from the Kingia Sandstone reservoir at the West Erregulla field, and to collect additional well data and gas samples for compositional analysis to feed into reserve certification calculations and gas marketing conversations.

Three intervals totaling 48 metres, from 4,799 metres to 4,851 metres Measured Depth Below Rotary Table, were perforated and flowed. Well clean-up operations commenced on 21 October 2019. On 24 October, following completion of the clean-up flow, the well flowed at a maximum rate of 69 million standard cubic feet of gas per day (MMscf/d) on a 2-inch choke at ~ 700 psig well head pressure over a 1-hour period.

So there we have it, three zones, the Wagina sort of fell away (resource 270 BCF), the Kingia flowed (thought to be up to 1.2TCF contingent resource), but it was deep deep and the sands were ho-hum and not that special.

And since then, a T/O from Strike has been turned down, and recently a slump in hydrocarbon pricing - oil and then gas - and now a virus. The company has opened a Perth office, is trying to shop the resource, or at least get funding to turn a resource into reserves. Will that happen? not for a while, and lots of stale holders probably wanting to get out. Hard to raise capital without diluting. Meantime, cash running low as greggles points out.

And they're up against Waitsia for domestic gas, that may flow to WA market, but maybe not for 3-4 years when supply gap opens up.

 

[greggles]

Nice summary. Thanks for filling in the blanks.

 

[barney]

Nice summary. Thanks for filling in the blanks.

Yeah agree … good summation @Dona Ferentes

Tough times for small Oilers ….. The fact that Strike made a low ball offer means that WGO are obviously good value … but will also become more vulnerable as cash dries up.

Bounced off that old low around 8 cents but doubtful that will hold over the next few months. Worth keeping on the watchlist though.

 

[Dona Ferentes]

Trading Halt.... roll drum ..... Capital Raising on its way

Two days prior, WGO came out with a 2C for West Erregulla of 513 Bscf gross.

Strike begs to differ:

announcement made by Warrego Energy Limited regarding the contingent resource estimate certified by RISC on the 18th of May 2020.... Strike acknowledges there are differences in volumetric estimates between the resource statement released by Strike on the 11th of November 2019 and this recent estimate by Warrego, based on the information disclosed in their announcement.

and

Strike is the operator of EP469 and is the leading explorer of the Permian Gas Fairway of the North Perth Basin. Strike’s rigorous geological and geophysical work in the Basin broke open this deep gas play, proving the existence of major conventional gas fields deeper and further eastward than any previous subsurface interpretation has led to. This was a result of seismic analysis which fed into Strike’s modelling. Strike’s resource estimate in November 2019 was compiled and certified by Igesi Consulting Pty Ltd in accordance with the SPE-PRMS-2018.

furthermore

Strike is confident of its modelling, which has proven accurate to date, and has been used to inform the initial target identification and drilling program, which in the case of West Erregulla 2 led to the discovery of the West Erregulla gas field.

 

[Dona Ferentes]

moved away from this during Covid,...... back with some good news

WA's biggest gas buyer, Alcoa of Australia, has signed a huge gas purchase deal that looks set to kickstart a fresh phase of development of onshore gas in the state.
The binding deal with junior Warrego Energy for 155 petajoules of gas is enough to commit to develop the West Erregulla field in the Perth Basin, a decision targeted for the June half of 2021, Warrego said today.

Warrego managing director Dennis Donald said the deal with WA's largest gas buyer "is testament to the quality of the West Erregulla gas field and the commercialisation strategy adopted by Warrego, and will send a positive signal to other potential gas buyers".
He said Warrego is well advanced in progressing options for gas processing, including sharing infrastructure and third-party processing, with a view to selecting the preferred option later this year.
"No further GSAs [gas sales agreements] are required in order for Warrego to commit to bringing the field into production," Mr Donald said.

 

[Sean K]

WGO been beaten down recently. I wonder if jumping on this H bandwagon will fix that?

 

[divs4ever]

Receipt of Non-Binding and Indicative Proposal
Warrego Energy Limited (“Warrego”, ASX:WGO) wishes to advise that it has received a non-binding
indicative offer from Beach Energy Limited (“Beach”, ASX:BPT) under which Beach would acquire all of
the shares in Warrego via a scheme of arrangement (the “Proposal”).
Under the Proposal, Warrego shareholders would receive:
• Cash consideration of $0.20 per share; and
• If Warrego's Spanish assets are sold, and such sale completes, within 12 months of
implementation of the scheme, additional scheme consideration described below.
The Proposal is subject to several conditions including:
• Confirmatory due diligence;
• Agreement of, and entry into, a binding scheme implementation deed; and
• Recommendation of the Board of Directors of Warrego.
Contingent scheme consideration if a sale of the Spanish Assets is completed within 12 months
As part of the Proposal, Beach would be required to use reasonable endeavours to market and sell the
Spanish assets. If those assets are sold, and such sale is completed, within 12 months following
implementation of the scheme, Beach will be required to pay, as additional consideration for the
Warrego shares transferred under the scheme, the net proceeds of sale of the Spanish assets (net of all
taxes and costs). Any such consideration would be in addition to the cash consideration to be provided
by Beach for Warrego shares under the scheme.
Due Diligence
The Warrego Board considers the Proposal is at a sufficient level to merit further review and has
determined to grant due diligence access to Beach.
Any scheme implementation agreement entered into between the parties would itself be subject to a
number of conditions including Warrego shareholder approval.
Next Steps
The Warrego Board will update shareholders and the market in due course. Shareholders do not need to
take any action in relation to the Proposal at this stage. There is no certainty that the Proposal will result
in a transaction.
Warrego is being advised by RBC Capital Markets and Allens.
Authorised by the Board of Warrego Energy Limited

DYOR

i hold BPT ( 'free-carried' ) my average buying price is 52.5 cents

 

[Dona Ferentes]

i hold BPT ( 'free-carried' ) my average buying price is 52.5 cents

Fascinating

But what does Warrego hold?

In WA's prolific Perth Basin, the Company holds a 50% interest in EP469, including the West Erregulla gas project, and 100% of EPA-0127.

which Beach would covet

In Spain, the Company holds an 85% working interest in the Tesorillo gas project in the Cadiz region and a 50.1% working interest in the El Romeral gas to power facility in the Seville region.

which could be anything.

And, because a day before,

Strike Energy Limited (ASX: STX) refers to Warrego Energy Limited’s (ASX: WGO) ASX release this morning dated 10 November 2022. In order to keep the market fully informed, Strike confirms that on 16 September 2022 it submitted a confidential, non-binding indicative all-scrip merger proposal to the Warrego Board ...