The Directors of Armour Energy Limited (Armour) has now executed the South Nicholson Basin Farmin Agreement with Santos QNT Pty Ltd (Santos). Under the Farmin Agreement, Santos has the right to earn a 70% interest in Armour’s North Queensland tenements, being ATP1087 (granted), and ATP1107, ATP1192 and ATP1193 (applications), and the Northern Territory tenements EP172 and EP177, both of which are also in the application phase. The remainder of Armour’s Northern Territory exploration portfolio is not subject to, or affected by, this Farmin Agreement.
Armour’s South Nicholson Basin exploration project area covers approximately 10.07 million acres and includes the Egilabria 2DW1 well, which was drilled in 2014 and the first hydraulically stimulated horizontal shale well in Australia to flow hydrocarbons to surface.
ATP1087: Armour will make an application to the Queensland Government to transfer a 70% interest and the operatorship of ATP1087 to Santos, and Santos will pay Armour AUD 15M as reimbursement for the total costs already incurred on the South Nicholson Project.
ATP1107: Santos has the right to earn a 70% interest in and operatorship of ATP1107 subject to carrying out the farmin obligations that include paying to Armour the transfer payment of AUD 3M, and free carrying Armour on the farmin program to an agreed capped amount.
ATP1192, ATP1193, EP172 and EP177: Santos has the right to earn a 70% interest in and operatorship of each of these tenures, subject to carrying out the farmin obligations that include carrying out the relevant farmin program up to an agreed capped amount.