Armour Energy Ltd., Brisbane, has acquired oil, gas, and condensate assets on the Roma shelf region in southeast Queensland from Sydney company Origin Energy Ltd. for $10 million (Aus.) cash and $3 million in deferred consideration.
The deal includes oil fields and associated facilities in more than 3,000 sq km of acreage in the Taroom Trough western flank play. There are 19 production licences, four exploration permits, and four petroleum licences.
Specifically the acquisition includes the Kincora gas, LPG, and condensate processing facilities that provide a regional production hub, a dedicated pipeline to the Roma-Brisbane trunkline at Wallumbilla and the Newstead and other potential gas storage facilities.
The acquisition transforms Armour into a production company for the first time and the company views the Roma shelf as having the potential to host more oil and gas resources than have been found to date.
Executive Chairman Nick Maher said over and above immediate production assets, Armour is attracted to what it sees as a large untapped unconventional wet gas and oil upside in the Permian-age rocks on the eastern flank of the Roma shelf.
Armour plans to recommission the Kincora gas plant and associated infrastructure and bring back on line 38 of 76 wells in the area. It believes the Kincora plant will be able to produce gas at 7-9 MMscfd of gas.
The Newstead underground gas storage facility has gross capacity of 7.5 petajoules and currently contains 2.3 petajoules of sales gas. Additional underground storage facilities under investigation will add another 19 petajoules of storage potential.
Armour will fund the acquisition with current cash and available debt resources.
The aggressive move has come despite the recent $36.6 million (Aus.) hostile takeover bid for Armour by Chinese-owned WestSide Energy Corp.