Chairman Greg Columbus will take $400,000 of shares in the second tranche released, subject to shareholder approval at a meeting planned for early July,
The price is an 18.8% discount to its Wednesday price of 16c per share, when it last traded and a 15.6% discount to the 15-day volume weighted average of 15.4c.
The money goes to the first of the planned two-well campaign at the Perth Basin West Erregulla acreage it shares with operator Strike Energy, West Erregulla-3, which is planned for the second half of this year. Money will also go to long lead items for West Erregulla-4.
The first tranche worth $12.3 million made up of 94.9 million shares will settle May 28 and the second of 20.5 million worth, $2.7 million will settle early July.
Warrego will issue a notice for the meeting this week.
CEO and managing director Dennis Donaldson said this "reflects growing interest in the potential of the West Erregulla gas field following delays in the timing of some large LNG projects offshore Western Australia".
The joint venture has been suggesting that domestic gas options for Perth Basin players are expanding after Woodside delayed sanction for both of its LNG expansions, leading to a tightened local market at some point, likely sooner than later.
"A successful WE-3 well could see the prospective resources in the northern area of the field converted to contingent resources and, possibly, the recognition of additional resources."
The company is in negotiations with possible gas buyers, and it said its recent third-party certification by Perth's RISC "was particularly well received as it serves to underpin deliverable gas columns when available to us".
This is despite RISC's assessment of 513 billion cubic feet of gas on a 2C basis coming in at less than half of Strike's 1.2 trillion cubic feet assessment. Energy News understands this is based on divergent views of seismic amplitudes.
"In addition, Warrego has for some time been progressing a range of gas processing options which present low capital opportunities to deliver gas into the WA gas pipeline network.
"Decisions on gas processing will ultimately be driven by the economics of those opportunities, reflecting the volumes of gas committed under gas sales agreements," Donaldson said.
This essentially confirms that at this point the company is not a part of the pipeline and processing deal Strie announced with pipeline company AGIG last week for the latter for a 50 terajoule a day processing plant and trunkline.
The plant will be run by AGIG under a build, own operate deal.
AGIG operates the Dampier to Bunbury gas pipeline, which the acreage is beside.
The plant will process gas from Strike's phase 1 development of West Erregulla, which is already contracted to Wesfarmer's subsidiary CSBP, a fertilser developer.
All new shares will rank equally with existing shares, Warrego said today.
Canaccord Genuity and Bridge Street Capital were joint lead managers. The placement was not underwritten.