Armour Energy and APLNG agree on stake sale of Queensland block

Australia Pacific LNG (APLNG) has signed a sale and purchase agreement (SPA) with Armour Energy for its interest in Petroleum Lease (PL) 1084, also known as the Murrungama block, for A$4m ($2.75m).

PL 1084 is a coal seam gas CSG tenure located 22km southwest of Chinchilla in south-western Queensland. The 18km² petroleum lease adjoins APLNG’s Talinga project.

The project is a joint venture between (JV) between APLNG (90%) and Armour Energy (10%).

Under the SPA, APLNG will pay an initial deposit of A$0.5m ($0.34m) within five business days of the agreement execution. It will pay the remaining A$3.5m ($2.41m) to Armour upon satisfaction of certain customary closing conditions.

Armour Energy chairman Nick Mather said “While working with APLNG and the development of the Murrungama project was of interest to Armour, the board has taken the decision to sell its interest in the project in order to focus its resources, both technical and financial on Armour’s highly prospective 100% owned and operated assets and to allow for further debt reduction.

“We are thankful to APLNG for the opportunity to work together on the project, and look forward to continuing our relationship in the future including through the ongoing Gas Sales Agreement with APLNG from Armour’s Kincora Gas Project.”

APLNG is a joint venture (JV) between ConocoPhillips (37.5%), Australia’s Origin Energy (37.5%), and China’s Sinopec (25%).

Recently, APLNG shipped its 500th cargo of fuel from its LNG facility on Curtis Island.

In October last year, Armour Energy spudded the Horseshoe 4 (HS4) development well, the second among the planned two-well programme of the company.

In February 2019, Origin Energy signed an agreement to sell its Ironbark coal seam gas project in Queensland’s Surat Basin to APLNG in an A$231m ($164.7m) transaction.