PERTH (miningweekly.com) – ASX-listed Armour Energy has struck a formal sales and purchase agreement with oil and gas producer Santos over its remaining interests in several South Nicholson basin permits.
Armour in December flagged a binding term sheet for the sale of its remaining 30% interest in the South Nicholson basin exploration project to Santos at a sales price of A$12.25-million.
“This is a great start to 2021, with the company both clearly focused on strengthening the balance sheet but also materially delivering,” said Armour CEO Brad Lingo on Wednesday.
Completion of the sale of the South Nicholson basin exploration interest is expected by the end of January, with Lingo noting that the transaction with Santos has brought cumulative transactions over the last 12 months to A$33.25-million.
The sale proceeds have allowed the company to reduce its outstanding long-term debt by some 28%, from A$62-million to A$44-million.
“The company has made a strong commitment to deliver on the strategic priorities outlined in August last year, and we are very pleased to show investors that we can deliver on those commitments. More work clearly needs to be done but to deliver a material reduction in debt against the backdrop of the challenges that 2020 brought with the Covid-19 pandemic, shows the resilience and commitment of the company to deliver for shareholders,” said Lingo.
The transaction with Santos gave the major full ownership of tenement ATP 1087, which covers some 40 751 km2, while Armour retained full ownership and operatorship of ATP 1107, which covers some 7 906 km2 of the South Nicholson basin exploration project.