Oil and Gas News

Armour announces new venture

Armour Energy has proposed to de-merge its Northern Basin Oil & Gas company into a new entity, McArthur Oil & Gas, which will hold all of the assets and operations of the business.

The company is the leading operator in the McArthur Basin, Northern Territory, and the 100 per cent owner and operator of six granted exploration permits and seven exploration permit applications.

It is also the 100 per cent owner and operator of a material positioned in the South Nicholson Basin in north-west Queensland and and one exploration permit covering 7900km2.

Armour’s Northern Basin business in the McArthur Basin contains extensive acreage holdings covering multiple conventional and unconventional gas and liquids rich prospects and plays.

As part of the demerger, it is proposed that McArthur Oil & Gas will enter into a conditional agreement to acquire from the Northern Basin business for consideration of $40 million, plus a minimum 33.3 per cent retained interest by Armour.  

McArthur Oil & Gas will seek to raise $60-$65 million through the IPO to fund both the consideration for the Northern Basin business and forward works programs.

McArthur Oil & Gas’ focus will include the accelerated development of the exisiting conventional gas discoveries and securing one or more joint venture partners in the exploration of the Coxco-Cooley Dolomitic Breccias, Reward Dolomite, the Barney Creek , the Tawallah Group Woologorang Formation and McDermott Shales.

Following the completion of the demerger, Armour will focus on reinvigorated exploration in its Surat and Cooper Basin assets.

Armour chief executive officer Brad Lingo said the proposed demerger is a great opportunity to unlock significant value for shareholders.

“The company has been well aware that the value of the Northern Basin business has not been reflected in the company’s share price and market capitalisation as it completes with the demands of the company’s Surat basin operations,” Lingo said.

“Through the proposed demerger the company is simultaneously delivering two value creating outcomes and unlocking the value of the Northern Basin business.”

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