Armour Energy Ltd. has signed a conditional binding heads of agreement (HOA) with Oilex Ltd., Perth, to acquire Oilex’s interests in the Cooper-Eromanga basin.
Subject to terms of the agreement, Armour will acquire 100% of the issued capital of CoEra Ltd., an Oilex subsidiary. Upon completion, CoEra will own all of Oilex’s direct and indirect interests in the Cooper-Eromanga basin including a 79.33% direct interest in two exploration licenses (PEL 112 and PEL 444) with an option to acquire the remaining 20.66%, and the right to acquire 27 petroleum retention licenses from Senex Ltd. (Northern Fairway).
Armour will issue up to 34.5 million shares to Oilex upon completion of deal, subject to any necessary shareholder and/or regulatory approvals. Tranche 1 is worth $710,000 (Aus.) and Tranche 2 is worth up to $290,000 (Aus.).
Within 60 days from deal completion, Armour will reimburse Oilex, in cash, for past costs of $125,000 (Aus.).
Assuming completion, Oilex will no longer hold any oil and gas asset interests in Australia, and instead will focus on developing its asset base in India and the UK Continental Shelf.
The deal is subject to conditions, including completion of due diligence by Armour and execution of definitive transaction documentation between Armour and Oilex. The HOA notes that these conditions must be satisfied by May 31 unless extended by agreement.