Carnarvon Energy to invest $89m in Strike Energy for discounted 20% stake
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The news: Carnarvon Energy is set to make investments worth up to $89 million investments in fellow oil and gas small-cap Strike Energy through a two-tranche placement to acquire a 19.9% share.
The numbers: Under the first tranche Strike Energy will raise about $52 million by issuing new shares to Carnarvon at a price of $0.12 each, a 19.7% discount on the 10-day volume-weighted average price of about $0.15.
Settlement of tranche one is expected on 29 July.
Between $34 million and $36 million will be raised through the issuance of Strike shares to Carnarvon, subject to Strike shareholder approval at an extraordinary general meeting expected to be held on 11 September 2025.
The value of tranche two will also depend on Strike shareholder participation in a non-underwritten share purchase plan, also announced today and pending approval at the September meeting.
Eligible shareholders can apply for an additional $30,000 worth of shares each.
Up to $10 million will be raised with an oversubscription allowance of $5 million at the board's discretion.
The context: Strike will use the funding to develop its core projects in Western Australia.
This includes progressing to final investment decision on the West Erregulla gas project, delivering the South Erregulla gas-fired peaking power station by October 2026 and extending the life of the Walyering domestic gas project.
Funds will also enable Strike to access remaining Macquarie facilities.
The announcement of Carnarvon’s investment means the company will no longer progress a potential capital return announced in March.
