Armour opts for McClendon deal rather than Westside takeover

Shareholders of Armour Energy Ltd., Brisbane, have voted for a farmout deal to US company American Energy Partners (AEP) owned by controversial entrepreneur Aubrey McClendon rather than a cash takeover offer from Chinese-backed Westside Corp., also of Brisbane.

Shareholders overwhelmingly backed a 75% farm-in offer from AEP that includes the issue of shares and options to AEP.

The deal will see AEP taking the majority position in Armours McArthur basin permits in the Northern Territory. Armour retains 25%.

Following the vote, Westside said it had no interest in increasing its offer for Armour a second time. It had previously raised its bid from 12¢ (Aus.)/share to 20¢/share, but secured less than 3% of Armour’s shares. It was looking for at least 50.1% majority ownership.

Armour and AEP will now finalise the paperwork. It will be AEP’s first transaction outside the US and pledges the spending of more than $200 million (Aus.) during the next 5 years to earn up to the maximum of 75% in Armour’s permits and those of Empire Energy Group which lie adjacent to them.

Armour expects to receive around $40 million from the deal and, apart from the Northern Territory program, it will use a significant proportion of the money to develop its new assets in the Roma Shelf and Nicholson basin in Queensland.

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