Carnarvon Energy Limited has announced a strategic investment in Strike Energy Limited, agreeing to subscribe for up to US$89 million worth of fully paid ordinary shares at an issue price of $0.12 per share. This investment will secure Carnarvon a 19.9% stake in Strike and was chosen after extensive due diligence as the best alternative to other opportunities considered during the Company’s Strategic Review. Key to the decision was the attractiveness of Strike’s extensive gas portfolio, the favorable entry discount compared with recent trading levels, and the opportunity to capitalize on increasing gas and energy demand in Western Australia. The funds provided by Carnarvon, together with Strike’s additional financing arrangements, will enable Strike to progress several significant projects. These include the completion of an 85 MW gas-fired peaking power station by October 2026, a life extension for an existing domestic gas project, advancement toward a final investment decision on another gas project, and the further development of exploration opportunities in the Perth Basin. The investment is structured in two tranches—an initial $52 million for a 13% stake, followed by a potential additional $37 million contingent on shareholder approval in September 2025—giving Carnarvon considerable influence including rights to nominate a board representative and participate in future equity offers. From a financial standpoint, Carnarvon remains well-capitalized with a strong cash reserve and additional backing from a notable carry on a separate project. As a result, plans for a potential capital return have been cancelled, reaffirming the Company’s commitment to pursuing value-accretive opportunities. The move not only enhances Carnarvon’s exposure to high-quality energy assets in Western Australia but also preserves its development pipeline in the Bedout Sub-basin. Market sentiment around the news can be seen through both bullish and bearish lenses. On the bullish side, the attractive entry price, exposure to a robust energy market, and participation rights in a promising portfolio of assets are likely to support positive investor sentiment in the medium to long term. On the bearish side, risks remain associated with the conditional nature of part of the investment, potential delays in shareholder approvals, and the inherent volatility in the energy sector. Overall, the strategic investment reflects a calculated move by Carnarvon Energy Limited towards enhancing shareholder value through diversified asset exposure and potential growth in a dynamic market environment.