Gina Rinehart ups the ante in battle for Perth Basin gas

Gina Rinehart’s Hancock Energy has upped its bid for Perth Basin gas player Warrego Energy by almost 30 per cent to 36 cents a share after about 15 per cent of its target was reportedly sold for 35 cents a share to fellow WA billionaire Chris Ellison’s Mineral Resources.

The escalating battle for Warrego and its principal asset – a 50 per cent stake in the West Erregulla gas field – started in November with an all-scrip offer from Strike Energy, which owns the other half of the gas field. That was quickly followed by a 20 cents a share cash offer from Kerry Stokes’ Beach Energy.

Beach pulled out of a bidding war when Gina Rinehart’s Hancock Energy raised its offer for Warrego to 28 cents a share. Mineral Resources’ reported move to pick up a stake in Warrego has forced Hancock Energy to further increase its offer. Mineral Resources – a diversified miner, mining contractor and gas explorer – is yet to confirm the reported purchase.

In a bidder’s statement released on Thursday, Hancock Energy said its 36 cents a share offer applied to Warrego shareholders that had earlier accepted its lower offer, but was conditional on Hancock achieving 40 per cent acceptance.

Hancock Energy also warned Warrego shareholders that have backed Strike’s scrip offer that they may not get capital gains tax rollover relief, given that Hancock Energy already owned more than 25 per cent of Warrego.

Mineral Resources is already involved in another Perth Basin acquisition: the $400 million all-scrip offer for Norwest Energy and its 20 per cent stake in the promising Lockyer Deep discovery that Mineral Resources owns the rest of.

Ellison said in November that he was interested in developing gas to supply his mines and lithium refineries. In December, the Australian Energy Market Operator forecast a tight domestic gas market in WA this decade and a significant shortfall in supply from 2030 onwards.

Mineral Resources could benefit from a tie-up with Warrego if it led to sharing of infrastructure to develop West Erregulla and Lockyer Deep