Sign up Australia
Proactive Investors - Run By Investors For Investors

Armour Energy launches A$75M IPO, targets Northern Territory shale gas

Armour Energy, a 50% owned subsidiary of DGR Global, has launched a A$75 million initial public offering to raise funds for its exploration program in the Northern Territory and Gippsland Basin.
Armour Energy launches A$75M IPO, targets Northern Territory shale gas

DGR Global’s (ASX: DGR) 50% owned gas subsidiary Armour Energy has launched its initial public offering that seeks to raise A$75 million through the offer of 150 million shares at A$0.50 each.

Armour Energy has an extensive 126,000 square kilometre portfolio in the McArthur, South Nicholson and Georgina Basins of the Northern Territory and Queensland.

These basins already host oil and shows including a significant free flow of gas from a historic mineral hole and demonstrate characteristics analogous to U.S. shale gas basins, which have been responsible for the gas glut in the world’s second largest energy consumer.

Armour is optimistic that these characteristics will prevail across the permit areas, giving it strong potential for large scale gas and associated liquids finds.

MBA Petroleum Consultants has assessed the area to contain a combined mean prospective resource of 18.8 trillion cubic feet (Tcf) of gas and 2 billion barrels of associated liquids within the unconventional and conventional plays across both EP 171 and EP 176 in the McArthur Basin, Northern Territory.

These are located near existing infrastructure with a pipeline running along the McArthur River to Darwin and proximity to the Carpentaria Highway.

It has also assessed a mean prospective resource estimate of 22.5Tcf of gas and 242 million barrels of associated liquids within the unconventional plays in ATP 1087, Queensland.
   
The company also has stakes in onshore Gippsland and Otway basin tenements under a A$2.25 million share placement and farm-in agreement it reached with Lakes Oil (ASX: LKO) late last year.

Armour Energy had purchased 900 million Lakes Oil shares at $0.25 per share, providing the company with a 15% interest in Lakes Oil.

The DGR subsidiary will also have the right to earn up to a 51% interest and assume operatorship of the PEP169 tenement in the Otway Basin and PEP166 tenement within the onshore Gippsland Basin.

Armour also has a strong board with four former Arrow Energy directors, Bill Stubbs, Stephen Bizzell, Jeremy Barlow and Armour executive chairman Nicholas Mather as well as former Eastern Star Gas chief commercial officer Roland Sleeman.

Armour’s IPO comes with a free attaching option for every four shares issued. These options are exercisable at A$0.50 each through to 31 August 2014.

DGR shareholders will also be eligible to participate in a special priority offer that closes on 11 April while the general portion with brokers closes on 16 April.

Shares in Armour Energy are expected to list on the ASX on 26 April.

Strong support

Armour had in April 2011 secured A$4 million in seed capital from Och-Ziff Capital Management Group, which also committed to subscribing for A$7.5 million of Armour's shares in the IPO.

The company had said that having a cornerstone investor of the calibre of Och-Ziff was an important milestone in its corporate development and that Och-Ziff's experience in energy investments underscored Armour's potential.

Work program

Proceeds from the IPO will go towards its initial exploration work that includes the drilling of up to 9 vertical wells, 3 lateral wells and completion of 2 multi stage fracture stimulation programs in EP 171 and EP 176 during the first 2 years.

Armour has already secured a drill rig to carry out the drilling with mobilisation scheduled for April 2012 and the first well expected to spud on 1 May 2012.

The company will also fund the drilling of 2 exploration wells up to a total A$4.25 million by the end of 2012 in PEP 166, Gippsland Basin and the option to spend a further A$4.75 million to drill and frac a third well to earn a 51% interest in the permit.

Armour has also agreed to fund the commencement of an exploration well up to A$2.5 million by the end of March 2012 to earn a 51% interest in PEP 169 in the Otway Basin with the right to assume operatorship thereafter and has budgeted further expenditure of A$2.5 million as its 51% contribution to the cost of 2 further wells to be drilled in PEP 169 in 2012.

View full AJQ profile View Profile

Armour Energy Timeline

Related Articles

oil and gas operations
February 26 2018
"This fundraise will represent another major step forward for Chariot, and one which allows the company to participate in two giant-scale wells in this calendar year"
oil and gas operations
June 08 2018
Sound Energy is advancing with multiple work-streams which means a number of value catalysts are coming down the line for investors.
oil and gas operations
February 08 2018
Touchstone shares advanced as a 10-well programme was launched in Trinidad

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use