Biggs is back in business — leading the Australian Warrego team to (gas) field success
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Special Report: Warrego Energy has appointed David Biggs as CEO of Australian operations to oversee the commercialisation of the company’s 50 per cent interest in the West Erregulla project, where drilling is due to start in the coming weeks.
Warrego (ASX: WGO) recently appointed current non-executive director David Biggs as CEO of its Australian operations to lead Warrego’s Perth-based team. This will mark Biggs’ first executive role since being CEO of AWE.
Group CEO Dennis Donald will remain in the UK and focus on the company’s broader international portfolio. Biggs will remain on the board of Warrego.
More specifically, Biggs has been charged with commercialising Warrego’s 50 per cent interest in the West Erregulla gas field, progressing the EPA-0127 permit in Western Australia, and pursuing further exploration opportunities.
With over 35 years of experience in the oil and gas sector, Biggs has held senior global roles within BHP Petroleum, was formerly the CEO of Cue Energy, and led AWE towards its sale to Mitsui for a takeover price of $602m.
His appointment as an experienced country CEO follows the earlier appointment of gas marketing and sales expert Cathy McKeagney as Warrego’s general manager — commercial earlier this year, as well as, the recent relocation of WGO’s head office from Sydney to Perth.
The West Erregula project, 50 per cent-owned by Warrego, has the potential to be one of the most competitive sources of large-scale available gas to supply the Western Australian market.
In May, the West Erregulla gas project was awarded ‘Lead Agency Status’ by the WA state government to help the project meet permitting and approval timelines. Warrego is well advanced with securing gas market and processing for its gas.
With ~$18m cash at hand, WGO is fully funded for the much anticipated WE-3 well, which is expected to spud in early September.
The joint venture is also preparing to drill WE-4 once permitting is obtained (drilling is currently expected to commence Q1 2021), and is planning a contingent well, WE-5, subject to joint venture and regulatory approvals.
The joint venture has secured the Ensign 970 rig for the upcoming well, which will target the undrilled northern area of the field, independently estimated by RISC Advisory to host mid-case prospective resources of 102 bcf gross.
If successful, this will be a material addition to the independently certified 513 bcf gross 2C contingent resources in the main field area.
“We are entering an exciting phase at West Erregulla as we prepare to drill two, and possibly three, new wells that will give us a clearer view of the northern and eastern extent of the field,” Biggs said.
“If the wells are successful, we could potentially add considerable volumes to the substantial 513 bcf gross 2C contingent resources attributed by RISC to West Erregulla from WE-2, which was a fantastic result from a single well.
“Following delays to some major offshore gas projects, there is a growing gap between forecast demand and supply in the Western Australia market and Warrego and West Erregulla are well placed to meet the needs of a range of potential gas buyers.
“An important part of my role will be to support the gas marketing, where we are in advanced negotiations for gas sales agreements, and progress processing and development plans. Of all the new discoveries in the Perth Basin, West Erregulla has the potential to be the first to bring large volumes to market.”
With WGO’s shares currently trading at 19c per share and a market cap of $158m, the company continues to offer cheaper exposure to the West Erregulla project than its joint venture partner STX, trading at a discount of ~60 per cent to Strike on a market capitalisation, EV and resource metric basis.
Finally, in light of the current COVID-19 travel restrictions, the appointment of Biggs allows group CEO Dennis Donald to spend more time overseeing WGO’s non-Australian assets.
Donald said he would focus on “building-out our European operating strategy, maximising shareholder value from both the very promising Tesorillo project and the El Romeral gas power project acquisition in Spain, and engaging European investors”.
This article was developed in collaboration with Warrego Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.