Asset A&D

Armour Energy to Acquire Remaining W.I. in the Cooper-Eromanga Licenses

By Mahati K L
October 24, 2020
2 minutes read
Kings Canyon Northern Territory Australia

ASX-listed Armour Energy Ltd. has notified Toronto-based Terra Nova Resources Inc. that it intends to exercise its option to acquire the remaining 20.67% participating interest in Petroleum Exploration Licenses (PELs) 112 and 444 in the Cooper-Eromanga basin in South Australia.

The option was originally granted to Oilex Ltd. in August 2019, under an agreement between Terra Nova, Oilex Ltd., and Perseville Investing Inc., a private investment management company. Terra Nova initially sold a 30.833% interest in the licenses to Oilex, along with an option to acquire a further 20.67% interest within 15 months. The option was subsequently acquired by Armour from Oilex in May 2020, pursuant to an agreement to acquire the entire share capital of Oilex’s Australian subsidiary CoEra Ltd., which held all of Oilex’s direct and indirect interests in the Cooper-Eromanga basin. The acquisition was completed on October 15th.

To exercise the option, Oilex was required to issue to Terra Nova an additional 20.67 million ordinary shares of Oilex at a deemed price of A$0.003 per share, amounting to a total transaction value of A$62,000. In lieu of Oilex ordinary shares, the final exercise price will be A$62,000, payable in cash. Upon completion, Armour will hold a 100% interest in the licenses.

“The divestiture of our remaining interests in Australia will allow the company to now strategically focus on the digital health and wellness sector, and our transaction with WellteQ, a leading provider of corporate wellness solutions within Asia-Pacific,” said Mark Lawson, CEO and Director of Terra Nova.

PEL 112 and PEL 144 cover an area of 1,086 sq. km and 1,166 sq. km respectively, and are located on the extension of the Western Flank oil fairway, the most important recent contributor to oil production in the Cooper basin. The Cooper basin is considered to be one of Australia’s most prolific oil-producing basins, having produced approximately 1.5 billion barrels of oil equivalent (Bboe) till date. The licenses target several drill-ready areas within the Namur and Birkhead formations, including the Milo, Libby, and Drole prospects in PEL 112 and the Maverick, Moraine, and Crater prospects in PEL 114. The work program includes the re-evaluation of 3D seismic data using specific re‐processing techniques, and drilling of a well on PEL 114 before January 2022.

Brisbane-based Armour Energy is a publicly quoted E&P company currently focused on the discovery, development and production of natural gas and associated liquids resources in Northern Territory and north-west Queensland in Australia. In addition, it also owns exploration interests in the Albertine Graben in Uganda.

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