Warrego co-founders pick Hancock offer but the verdict is still out

The prospect of a greater reward has led Warrego Energy (ASX:WGO) co-founder Duncan MacNiven to accept Hancock Energy’s revised offer for the shares he owns in the company.

While MacNiven has accepted the initial 28c per share cash offer for the 138,365,136 shares in Warrego he owns, the Gina Rinehart-owned company has said it will increase this to 36c per share if it receives acceptances totalling 40% or more of Warrego.

He joins fellow co-founder Dennis Donald, who accepted Hancock’s offer on 30th December 2022.

Prior to his acceptance of its offer, Hancock had already received acceptances from shareholders holding 25.92% of Warrego’s issued shares.

The addition of MacNiven’s 11.27% interest takes this up 37.19%, which takes the total acceptances up close to the 40% mark.

His acceptance serves to rather wonderfully muck up the question of just which company is leading the race for Warrego’s hand.

While Hancock has now secured the largest chunk of the company, Strike Energy (ASX:STX) isn’t too far behind with shareholders holding 10.68% of Warrego accepting its one-for-one scrip offer, taking its total interest up to 30.58%.

And just because it can, Mineral Resources (ASX:MIN), which has made its own takeover offer for Lockyer Deep joint venture partner Norwest Energy (ASX:NWE), has acquired a 16.35% stake in Warrego.

Meanwhile, the identity of the buyer of Regal Funds Management’s 9.82% interest remains undisclosed.

Big gas prize

The interest in Warrego stems from a very simple reason – the big prize which is the company’s 50% stake the in the West Erregulla gas field (the other 50% held by Strike).

With Strike having drilled several successful wells since the West Erregulla-2 well flowed gas from the reservoir, the field currently has Proved and Probable (2P) Reserves of 422 petajoules of gas.

Given that Western Australia could face manageable gas shortages from this year out to 2026 – according to the Australian Energy Market Operator, this gas resource is clearly valued by companies such as Hancock who are looking to secure affordable energy for their mining operations.