ASX ANNOUNCEMENT
TUESDAY 22 DECEMBER 2020
ASX Code: AJQ
Executives
Bradley Lingo - Chief Executive Officer Karl Schlobohm - Company Secretary Michael Laurent - Chief Operating Officer Toni Hawkins - Chief Financial Officer
Directors
Nicholas Mather - Executive Chairman
Stephen Bizzell - Non-Executive Director
Roland Sleeman - Non-Executive Director
Eytan Uliel - Non-Executive Director
Contact Details
Level 27, 111 Eagle Street
Brisbane Qld 4000
Tel: +61 7 3303 0620
Website: ArmourEnergy.com.au
Twitter: @armour_energy
Linkedin: linkedin.com/company/armour- energy
EXECUTION OF BINDING TERM SHEET FOR THE SALE OF ADDITIONAL SOUTH NICHOLSON BASIN PERMIT INTERESTS TO SANTOS
HIGHLIGHTS:
- Armour has entered into a binding term sheet to sell its additional interest in South Nicholson Basin Permits to Santos.
- As consideration, Armour to receive approximately $12.25 million in cash payments plus retain 100% ownership of ATP(A) 1107.
- Armour retains a material exposure to the South Nicholson Basin play by securing operatorship and full control of ATP(A) 1107 covering 7,906 km2.
The Directors of Armour Energy Limited (ASX: AJQ; "Armour", or "the Company") are pleased to announce the execution of a binding term sheet for a further sale of the Company's remaining 30% interest in a portion of the South Nicholson Basin Exploration Project to Santos QNT Pty Ltd (Santos), a wholly-owned subsidiary of Santos Ltd (ASX: STO). The South Nicholson Basin Exploration Project area covers approximately 40,751 km2 (see attached map in Appendix 1).
Under the binding term sheet, Santos will acquire 100% ownership of ATP 1087 (of which Santos currently holds a 70% interest and is operator) and the application permit areas in Queensland ATP(A) 1192 and 1193 and the Northern Territory tenements EP(A) 172 and 177. As consideration, Armour will receive an intital payment of $3 million upon execution of the term sheet, a further $9.25 million in cash upon completion of customary conditions precedent, and will retain full ownership and operatorship of ATP(A) 1107.
ATP(A) 1107 covers 7,906 km2 of the South Nicholson Basin Exploration Project. Armour's net acreage position in the South Nicholson Basin Exploration Project will reduce by only approximately 35% from 12,225 km2 (30% of 40,751 km2) to 7,906 km2 as a result of this transaction, whilst also receiving $12.25m in cash proceeds.
Completion of the sale of the South Nicholson Basin Exploration Interests to Santos is expected by 31 January 2021. With the completion of this additional transaction, over the last 12-months, the Company has received $33.25 million in cash proceeds in relation to the South Nicholson Basin Project, whilst retaining 100% ownership and operatorship of ATP(A) 1107.
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Armour Energy's CEO, Brad Lingo said:
"This is a significant step for Armour and is a clear demonstration of the Company's commitment to deliver on the strategic priorities outlined in August 2020. We are very pleased with the result bringing this additional capital, of which a substantial portion will go to reducing the Company's outstanding long-term debt."
Mr. Lingo added:
"Retaining the ATP(A) 1107 Application Area enables the Company to maintain substantial exposure to the unconventional shale gas play it proved-up with the Egilabria 2DW1 directional well, which was the first hydraulically stimulated shale gas well in Australia to flow hydrocarbons to surface. Operatorship and 100% ownership of this material application area provides Armour with the control and flexibility in progressing activity and maintaining exposure to the play potential of this area."
This Announcement is Authorised by the Board of Directors
Karl Schlobohm
Company Secretary
For further information contact:
Nicholas Mather - Executive Chairman 07-33030680
Brad Lingo - CEO
07-3303 0680
Karl Schlobohm - Company Secretary 07-33030661
Sarah Schuiringa - Marketing & Communications 07 - 3303 0619
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APPENDIX 1
South Nicholson Basin Exploration Project Area
Map showing the Santos Farmin Permits within the green border
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Armour Energy Limited published this content on 21 December 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 December 2020 00:12:05 UTC