Armour Energy to buy Origin conventional gas in Roma shelf
MARANOA Mayor Robert Loughnan has welcomed Armour Energy to the local resource industry sector.
The company told the ASX this month it had agreed to buy conventional gas resources from Origin Energy in the Roma Shelf.
The deal worth $10m in cash and $3m deferred includes Kincora gas plant, LPG and condensate processing facilities and a dedicated pipeline to the Roma to Brisbane Pipeline at Wallumbilla.
Kincora is located south-west of Wallumbilla and conventional gas was first discovered there in 1970. Gas processing began in 1977 and it was decommissioned in 2012.
After recommissioning Kincora, the acquisition will allow Armour become a petroleum producer for up to 10 PJs a year of gas, 110,000 barrels of condensate, 21,000 tonnes of LPG and 100,000 barrels of oil a year.
Mayor Loughnan said this reinvigoration of the local natural gas fields was needed in the Roma - Surat area.
"This infrastructure has been dormant for some time - taking a back seat while the LNG industry has been bubbling along to the north," Mayor Loughnan said.
"I am looking forward to meeting Armour Energy personnel and seeing how they, Council and landholders can work together to benefit the local region."
Armour told the ASX it proposed to use its existing cash resources together with debt financing to pay for the assets.
"Prior to the execution of the agreements for the Roma Shelf Acquisition, the Company had received a funding proposal from major shareholder, DGR Global Limited, which proposed a debt financing package of $15 million on commercial terms (DGR Proposal)," the company said.
"Separately, the Company is also in advanced discussions with other third party financiers both as an adjunct to, and alternative to, the DGR Proposal."
The company said they had not signed the DGR Proposal term sheet.
"Armour continues to engage with a variety of parties with respect to funding alternatives to the DGR Proposal," the company said.
Armour Energy is currently focused on the exploration of the McArthur, South Nicholson and Georgina Basins in the Northern Territory and Queensland, and in the onshore Gippsland Basin in Victoria in joint venture with Lakes Oil, for gas and associated petroleum liquids.
Armour said its acquisition of Origin's assets and resources on the Roma Shelf will establish the company's future as a petroleum producer.
Subsequent to the announcement Armour rejected a takeover bid from Westside Corporation, citing the Roma Shelf deal as proof of their "further basis for growth and future cash flow".
An Origin Energy spokesperson had no comment on the deal other than it was about conventional gas resources and had no impact on the APLNG project.