Santos and Armour will jointly explore and develop Armour oil and gas tenements in the South Nicholson Basin in a $95 million farm-in deal.
Armour’s South Nicholson Basin exploration project area covers tenements in Noprth Queensland and the Northern Territory.
It includes the Egilabria 2DW1 directional well, which was the first hydraulically stimulated horizontal shale well in Australia to flow hydrocarbons to surface.
“Armour is excited to be entering into a mutually beneficial partnership with one of Australia’s most recognised and capable oil and gas companies,” Armour Energy chief executive officer Roger Cressey said.
“The binding term sheet with Santos paves the way for accelerated exploration of the highly‐prospective South Nicholson Basin in the best interests of both companies. This transaction represents another major milestone in Armour’s development.”
The binding term sheet agreed with Santos only covers some of Armour’s tenements – a granted tenement and applications in North Queensland (ATP1087: granted, and ATP1107, ATP1192 and ATP1193: applications) and the Northern Territory permit applications (EP172 and EP177).
Santos will pay Armour $15million in cash within 10 days of execution of the formal farm‐in agreement, and further cash payments of up to $15million will be payable by Santos subject to certain conditions being satisfied.
Santos will also cover work programs costing up to $65million as part of the deal to earn a 70 per cent interest.
Map showing the farm-in tenements within the blue border.