Armour Submits Application for Retention Licenses in Northern Territory

Source: www.gulfoilandgas.com 2/25/2021, Location: Not categorized

Highlights:
• Retention License applications (RLA) lodged in the Northern Territory (covering 491.01km2) over conventional gas discoveries in the McArthur Basin.
• RLAs cover portions of 100% owned McArthur Basin Exploration Licences 171 and 190.
• First company in the McArthur Basin to lodge an application for Retention Licences.
• Important first step towards securing production licenses for existing gas discoveries.
• Gas sale discussions underway targeting gas sales from late 2022 onwards.
• Existing discoveries close to existing pipeline infrastructure and customers.
• Opportunity to accelerate commercialisation via Compressed Natural Gas “virtual pipeline”.
• Potential to help regional communities’ transition from diesel to natural gas and renewables.
• Continue working with NT Government to obtaining a Production Licence.

The Directors of Armour Energy Limited are pleased to announce that the Company has lodged applications for Retention Licences (RL) in the Northern Territory over portions of its 100% owned Exploration Permits (EP) 171 and 190 (the “Tenements”).

The Company is the first operator in the McArthur Basin to lodge applications for Retention Licences and only the second operator since 1990 to submit RLs in the Northern Territory.

The Company has been targeting both the conventional and unconventional gas potential in these Tenements since 2012 and through successful exploration programmes through 2012 and 2015 has made multiple conventional gas field discoveries in the Coxco Dolomite conventional reservoir with the Glyde 1 ST1 and Cow Lagoon 1.

The Glyde 1 ST1 flowed sales quality natural gas on DST at a rate of 3.33 MMscf/day. Lamont Pass 3 encountered 520m of oil bearing Barney Creek Shale. As a result of successfully flowing hydrocarbons from Glyde 1 ST1 and Cow Lagoon 1, the grant of RLs will allow the Company to progress the discoveries within the RL area towards commercial development and the award of petroleum licences. The Company has booked Contingent Resources based on the Glyde 1 ST1 discovery, as previously announced to the ASX on 24 April 2013 and 21 September 2015.

RLAs are an intermediate step towards commerciality, allowing for further appraisal works, marketing arrangements, pipeline feasibility studies, environmental studies, and entering into land access and Native Title agreements.

If granted, the RLs will put the Company in a good position to take advantage of the current gas shortage and the Northern Territory’s and Federal Government’s “Gas Led Recovery” objectives, by providing local gas to local businesses and communities.

The Company’s Tenements are well positioned and are close to existing local major operating mine gas consumers and local and regional gas pipeline infrastructure. Proximity to this pipeline infrastructure provides prospective access for future gas development within the RLAs either North to supply Darwin, or to the East Coast Market. Alternately, the Company has also identified the potential to accelerate commercialization via a Compressed Natural Gas “virtual pipeline” solution providing accelerated access to local and regional existing and prospective gas demand.

The Company is in preliminary discussions with third parties for the supply of gas with the intention of producing and selling gas from 2022 onwards. The Company is also investigating initiatives to help supply energy to remote communities and assist with transitioning those communities from diesel powered generators to combined natural gas and renewable energy solutions similar to deployed in remote areas of central and north Queensland.

Armour Energy’s CEO, Brad Lingo said:
“This is a great step towards supplying local Northern Territory businesses and helping the Northern Territory Government and the Federal Government with their Gas Led Recovery objectives. The Company is also excited about the opportunity to help remote communities’ transition from diesel to gas to renewable energy.

The Company has made a strong commitment to deliver on the strategic priorities outlined in August 2020 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.”


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