Investors rally behind Armour Energy

AUSTRALIAN oil and gas producer and explorer Armour Energy is in the middle of a capital raise, and thus far things seem to be going well for the ASX-listed junior.
Investors rally behind Armour Energy Investors rally behind Armour Energy Investors rally behind Armour Energy Investors rally behind Armour Energy Investors rally behind Armour Energy

Paul Hunt

Senior Journalist: Oil & Gas, Policy.

Paul Hunt

Armour has secured more than A$8 million of firm commitments just four days into its three-stage capital raising. 

The raising consists of an initial placement, an underwritten accelerated entitlement offer, and an additional conditional placement. 

The company hopes to raise a total of $10 million, offering shares at 2.3 cents together with one free option for every two shares issued. 

This is on top of the $4 million it will receive from Australia Pacific LNG for its 10% stake in a 18sq.km permit they share in Queensland. 

Funds raised will be used for exploring, appraisal and development work at the Kincora oil and gas project in the Surat Basin, Queensland. 

The company recently completed a review of its exploration project which included studying historically productive fields. 

Armour identified four existing wellbores suspended by the last operator for testing and restart at the Emu Apple, Washpool and New Royal fields. Workovers and installation of surface equipment began in February. 

The company hopes to increase sales of gas from its Surat acreage to 20 terajoules per day, with a further 30 TJ/d further down the track. 

It also hopes to expand its focus beyond gas and into oil. Earlier this year the company booked a maiden oil resource at Kincora of 1.22 million barrels on a 2P basis. 

The past few weeks have been busy for the company which made a series of management changes and acreage buys.

Separately, on Monday, Armour and fellow ASX small cap Oilex signed another agreement which would see Oilex take a 5% stake in Armour. 

In return, Armour will transfer ownership of its subsidiary CoEra to Oilex. CoEra owns a swathe of retention and production licenses in the Cooper Basin southern and western flanks. 

Brad Lingo, ex-Drillsearch and current Oilex managing director, also joined Armour as CEO this week. 

Lingo has signalled big plans for the company's Cooper Basin acreage, and plans to re-evaluate and acquire data to identify stratigraphic trends and opportunities in an area where it says oil migration is "proven and pervasive".

Armour Energy shares were worth 2.6 cents at noon.