Why an NT gas prospect could hold the key to Armour Energy bailout

A NT gas field could be key to bailing out Armour Energy after it was placed in receivership. WHAT IT MEANS

An emerging NT gas prospect is a key asset in the administration of gas exploration company Armour Energy, which was placed in receivership in November.

A Brisbane-based exploration and production company, Armour Energy, was placed on sale immediately after the receivership was announced.

It will remain operating under the administration of KordaMentha’s Richard Tucker and Robert Hutson.

“The appointment by secured creditors follows unsuccessful attempts by the company to repay the outstanding senior secured notes,” a KordaMentha media statement said.
“Armour Energy has been achieving consistent quarterly production results and sales revenue of $15m in financial year 2023. However, there is considerable upside for both production volumes and sales revenue.

Armour Energy was placed in administration last week.

In July 2021 the NT government approved McArthur NT’s application under the Petroleum Act 1984 to develop the McArthur Basin gas project.

In February 2022, the government approved exploration permits 171, 174, 176, 190, 191 and 192 to McArthur Oil and Gas Limited with Armour Energy Ltd identified as an associated entity.

Both businesses were headquartered at 111 Eagle Street, Brisbane.

Armour Energy chief executive Christian Lange said the company’s management would remain in place pending a sale of assets by KordaMentha.

As well as the NT, Armour Energy is focused on the discovery, development and production of gas, LPG, gas condensate and oil projects in Queensland, Victoria and South Australia.

Mr Lange, who joined the company last year, said the NT’s Glyde field in the McArthur Basin would be a key asset in the eventual sale.

Flaring at Armour Energy’s Glyde 1 prospect in the Northern Territory.

In March, Armour Energy and Australian Natural Diamonds Ltd, a wholly owned subsidiary of the Lucapa Diamond Company, signed a 14-year heads-of-agreement with Armour Energy Limited to supply gas to power the proposed Merlin diamond mine site.

“It’s business as usual until the company or assets are sold,” Mr Lange told the NT News. “Myself and the management team remain intact to run the business on an ongoing basis until the administration process is complete. Obviously, depending on who the acquiring parties are will determine what happens after that.”

Under previous management, Armour Energy drilled three exploratory wells in the McArthur Basin in 2013.

The company was formed to focus primarily on developing its NT assets but shifted gaze nationally in recent years.

“It’s safe to say we as a team are enthusiastic about the Glyde prospect,” Mr Lange said. “It’s a shallow, conventional asset and subject to what happens, the plan we had was to accelerate extended well-testing of the Glyde 1 well (EP 171) in the McArthur Basin to confirm that as a development, and then tie it in with the Merlin diamond mine and other local prospects.”

As well as the Merlin site about 20km from Glyde, gas could also be forwarded to the McArthur River Mine about 40km east.

Mr Lange said he hoped the administrators would finalise the company’s new ownership by Christmas.

The NT government confirmed Armour Energy holds six prospective exploration permits which will be transfered to the new owners under the same regulations.

No taxpayer-funded grants or benefits have gone to Armour Energy.