Bidding war: Gina Rinehart ups the ante in WA gas battle

Australia’s richest person Gina Rinehart has wasted little time in putting a firmer offer on the table for Warrego Energy, escalating her stoush with Kerry Stokes’ backed Beach Energy for control of the resources minnow.

While Warrego is yet to produce a molecule of gas and few had heard of it a few months ago, Beach and Rinehart’s Hancock Energy are both amping up their pursuit of the company and its prized 50 per cent interest in the West Erregulla onshore gas field.

Beach’s revised 25 cents a share offer, put forward on Friday, was promptly countered by Hancock’s new offer at 28 cents a share, which values Warrego at $342 million.

Warrego’s shareholders, whose investment has risen 40 per cent or $100 million in three days, were first courted less than a month ago when Warrego’s equal partner in the West Erregulla field Strike Energy revealed an all-scrip offer with an implied price of about 19 cents a share.

At stake is a promising gas field that can quickly be brought into production without controversial hydraulic fracturing to supply a market that is expected to tighten after decades of relatively low prices due to enforced supply from WA’s huge gas export projects.

An added bonus would be the opportunity to export gas through Woodside’s underutilised North West Shelf LNG plant. However, that would require an exemption from the McGowan Government’s ban on the export of onshore gas.

The only exemption to date was given to Mitsui and Beach Energy’s Waitsia field in 2020. The decision was controversial as Kerry Stokes, the owner of WA’s only newspapers and dominant TV channel, was an indirect beneficiary through his interest in Beach Energy.

Credit Suisse energy analyst Saul Kavonic said acquisitions in the Perth Basin were just starting.