Armour Announces Completion of Sale for Additional South Nicholson Basin

Source: www.gulfoilandgas.com 2/5/2021, Location: Not categorized

HIGHLIGHTS:
- Completion of the sale and purchase agreement between Armour and Santos QNT Pty Ltd (Santos) to sell Armour’s remaining interest in several South Nicholson Basin Permits to Santos.

- Armour has received approximately $12.16 million in cash payments plus re-acquired 100% ownership of ATP(A) 1107.

- Armour retains a material exposure to the South Nicholson Basin play of approximately 7,906 km2.

The Directors of Armour Energy Limited (ASX: AJQ; “Armour”, or “the Company”) refer to the Company’s previous announcement of 6 January 2021 and wish to advise that completion of the sale and purchase agreement (SPA) with Santos has now occurred.

As previously disclosed, Santos has acquired 100% ownership of: ATP 1087 (of which Santos previously held a 70% interest and was operator); the application permit areas in Queensland ATP(A) 1192 and 1193; and the Northern Territory tenements EP(A) 172 and 177. As consideration, Armour has received total cash payments of approximately $12.16 million and will re-acquire full ownership and operatorship of ATP(A) 1107. ATP(A) 1107 covers 7,906 km2 of the South Nicholson Basin Exploration Project.

With the completion of this additional transaction, over the last 12-months, the Company has received approximately $33.16 million in cash proceeds in relation to the South Nicholson Basin Project, whilst retaining 100% ownership and operatorship of ATP(A) 1107.

As a result of these sale proceeds, the Company will further reduce its outstanding long-term debt by approximately $6.08 million by way of an unscheduled amortisation payment on the Secured Amortising Notes. Since 30 June 2020, the Company has reduced its outstanding long-term debt by 28% in total from $62 million to $44 million as a result of the sale of its South Nicholson Basin assets.

Armour Energy’s CEO, Brad Lingo said:
“The completion of the South Nicholson Basin sales to Santos and the further long-term debt reduction is a good way to start 2021 and a clear indication of the Company’s commitment to strengthen the balance sheet. The Company is fully focussed on delivering on the strategic priorities we outlined in August 2020 – both and the delivering increased production in our core Kincora Gas Project and debt reduction.”


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