Armour Energy Limited, (Armour), is pleased to announce that it has signed a Heads of
Agreement (HOA) with Australian Natural Diamonds Ltd, a wholly owned subsidiary of
Lucapa Diamond Company Limited (ASX: LOM), for gas supply to the Merlin Diamond
Project from its Glyde discovery in EP 171 in the McArthur Basin, Northern Territory.
HIGHLIGHTS
? HOA in place for 14 years supply of gas produced from the Glyde gas discovery to Merlin
Diamond Project.
? The agreement reinforces the hydrocarbon potential of the McArthur Basin in the
Northern Territory and Armour’s ability to provide this valuable resource to the domestic
market.
? Successful execution of the development plan will represent the first production from the
Basin which lies within 20 km of the Merlin site.
The HOA contemplates the sale of gas produced from the Glyde Field from production startup (mid-CY2025) for 14 years through to the end of CY2039 providing fuel to support the
development of the Merlin Diamond Project which is currently undergoing a feasibility study.
This is anticipated to be a minimum of 7 PJ of gross sales gas over the contract term. The
terms set out in the HOA will form the basis of a fully termed Gas Sales Agreement (“GSA”)
once all the conditions precedent have been met.
Armour CEO, Mr Christian Lange, commented:
“This HOA with Lucapa represents a significant opportunity to further appraise, develop
and commercialise the Glyde gas discovery in the Northern Territory. Recent technical
work performed by Armour and SLB (Schlumberger) have validated the producibility of
the existing well and plans are underway to reassess the resource potential and
development feasibility. The agreement underpins the accelerated pathway to
commercialisation of this shallow, conventional gas asset and reinforces the exciting
conventional and unconventional hydrocarbon potential of the McArthur Basin in the
Northern Territory and our ability to provide this valuable resource to the domestic
market and represent first production from the Basin.
We are looking forward to working closely with the team at Lucapa and providing them
with a reliable and sustainable supply of high-quality gas for the life of the mine.”
Mr Stephen Wetherall, Managing Director of Lucapa Diamond Company Limited
commented:
“The prospect of the availability of gas from a source less than 20 km from the Merlin
Diamond Project rather than diesel trucked from Darwin, potentially as part of a solargas hybrid power solution, is of significant interest to Lucapa from both an environmental
and project economics point of view. We look forward to working with Armour Energy
on this exciting initiative.”