Armour closed a $4m private placement of 80m shares at 5 cents, with one 8-cent option (to Sept 2023) per two shares. An entitlement offer on the same terms is planned. Funds go to the Kincora field program. This is below the recent 7c share price and is Armour's first equity raising since the $55m bond.
What it means for a shareholder
80.0m new shares at A$0.050 to raise about A$4.0m. That's 14% dilution: every existing holder's slice gets 14% smaller. If you held A$1,000 of shares (20,000 at the issue price), your slice goes from 0.00393% to 0.00339% of the company. To keep it you'd need 3,141 more shares - about A$157 at the issue price.
Capital raising presentation accompanying the placement. It shows about 509m shares, $55m bond, 7.2c share price and cash of about $8.1m at 1 September 2019, down from $11.4m at 31 March. The text is truncated.
Myall Creek North 1 spudded in 100%-owned PL511, targeting Permian and Triassic gas to 2,270 m TVD. Horseshoe 4 follows, with Myall Creek 5A fracture stimulation run concurrently. The program is about three months, and success matters for the 20 TJ/d push.
Corporate presentation to the SEAAOC conference giving a company overview, including the 10% ATP2046 interest and 17% Uganda interest. It appears to repeat known facts; the text is truncated, so nothing new is confirmed.
The Kincora plant is back online after the C101 compressor repair, and gas is back to 9 TJ/d (about 7 from wells, 2 from Newstead storage). This resolves the 6 August outage. Maintenance planned for later in the year was done during the outage. First well still due to spud in September.
Armour contracted a rig for two development wells at 100%-owned Kincora, at Myall Creek (PL511) and Horseshoe (PL227), each about 2,100 m deep. The first is to spud in September 2019, with production planned for Q4. This follows the quarterly report's rig tender.
The Kincora plant's C101 compressor failed, taking the LPG circuit offline and curtailing several wells. Output fell to about 2.5 TJ/d from roughly 9 TJ/d. Repairs are estimated at about two weeks.
24 July 2019director officer appointment▼ BadMajor
CEO Roger Cressey resigned after eight years and will stay until a successor is found. A recruitment firm search has begun. He led the restart of gas production at Kincora, and the change is a leadership transition during the 20 TJ/d growth push.
Noosa conference presentation largely repeating known facts. It shows cash of $11.4m at 31 March 2019, the $55m bond, about 509m shares and a 7.0c share price (market cap about $29.5m). The text is truncated.
The Queensland block previously announced on 3 June was formally awarded as ATP2046, 18 km2 near Chinchilla, to the Armour (10%) and APLNG (90%, operator) joint venture. Each party can market its own gas. First gas is expected by mid-2021.
3 June 2019asset acquisition disposition▲ GoodMajor
Queensland awarded exploration block PL2018-1B, 18 km2 near Chinchilla, to a joint venture of Armour (10%) and APLNG (90%, operator). The gas is designated for manufacturers, with first gas expected by mid-2021.
Myall Creek 5A flowed 2 MMscf/d from the Basal Rewan but could not sustain it as formation water entered, and the well is shut in. The CEO called it disappointing. Stimulation of other zones is planned. Myall Creek 4A was recompleted and is producing 500,000 scf/d.
Corporate roadshow presentation giving a company overview and capital structure snapshot. It repeats known facts; the text is truncated and no new information can be confirmed.
Presentation to a Hong Kong mining conference. It repeats known points: 105 PJ (85%) of 2P reserves uncontracted and the APLNG agreement of up to 3.6 PJ/a. The text is truncated, so nothing new is confirmed.
Armour settled the $55m secured amortising notes and redeemed all existing convertible notes, including the M.H. Carnegie holding. This resolves the redemption pressure that began in January. The company targets 20 TJ/d during 2019 and calls the refinancing transformational.
Conference presentation repeating known Kincora facts, such as 105 PJ of uncontracted 2P reserves and the five-year APLNG gas agreement. The text is truncated, so nothing new can be confirmed.
FIIG reports offers above the $55m target for Armour's new notes, and the offer will close at $55m. Settlement is targeted for 29 March 2019, when the existing convertible notes are to be redeemed. Documentation is still to be finalised.
19 Mar 2019capital raising announcement▲ GoodMajor
Armour plans to raise up to $55m through five-year secured, amortising notes at 8.75%, arranged by FIIG, to redeem all convertible notes including the M.H. Carnegie holding. DGR Global will roll $10m of its convertible notes into the new notes. This follows the 1 March mandate.
Half-year to 31 December 2018: sales revenue $13.1m (up from $3.1m a year earlier), with gas sales averaging 8.4 TJ/d. Repeats the Tribeca facility, $10.1m entitlement raise and 100% 2P reserve growth. The provided text does not include profit or cash figures.
Presentation to a domestic gas conference. It cites 105 PJ of uncontracted 2P reserves and a five-year APLNG gas agreement (3.6 PJ/a). It largely repeats known Kincora facts; the text is truncated, so nothing further can be confirmed.
Armour agreed to redeem the M.H. Carnegie notes by 7 May 2019 at 20% interest on 110% of face value, with extension fees. Noteholders (75%) approved allowing early redemption of all notes at a 3.25% premium. Armour signed an arranger mandate for new secured notes, with $20m of cornerstone support.
ASX paused trading in Armour securities pending a further announcement. No reason is given in the notice itself; a financing announcement was released the same day.
750,000 unlisted director options (strikes $0.215 to $0.315) expired because Bill Stubbs retired in November 2018. Administrative notice with updated capital structure: 508.7m shares and 373.8m convertible notes.
SRK-verified Kincora 2P gas reserves rose 56% since October 2018 to 123.6 PJ, with 2P condensate at 1.23m bbl. Armour says 2P gas reserves doubled over calendar 2018. Reserves are stated at 100% Armour, excluding the Waldegrave JV.
Armour now sells 11 TJ/d of gas, with 1 TJ/d going into the Queensland spot market at higher prices than its existing contract. Its target is up to 15 TJ/d, up from the roughly 9 TJ/d produced since February 2018.
M.H. Carnegie, holder of 125.8m convertible notes (the cornerstone holder), gave an irrevocable early redemption notice. Armour must pay 110% of face value (about $15.2m) plus interest, or find a buyer, within 60 days. This follows the redemption window extended to end-2018 and puts pressure on cash (about $8.5m at 31 Oct).
21 Dec 2018asset acquisition disposition▲ GoodMajor
Queensland formally awarded Armour ATP2034, ATP2035 and ATP2041 near the Kincora plant, confirming earlier preferred-tenderer status. The adjoining block to ATP2041 went to a Santos-Shell JV. Kincora plant is back online after maintenance at up to 10 TJ/d, with up to 15 TJ/d planned.
Myall Creek 5A, drilled to 2,244.5 m, showed gas in the Triassic Basal Rewan and Permian Tinowon sandstones; logs indicate hydrocarbon saturation. The well is cased and suspended, with perforation testing planned. Armour also flags the Black Alley Shale as a possible new regional play. No flow rate yet.
Armour's gas sales agreement with APLNG moved to Period 2: a firm 5 TJ/d for five years from 1 Dec 2018 to Dec 2023, plus a further 5 TJ/d on an as-available basis (up to 3.65 PJ/a). Output above 10 TJ/d is uncontracted.
AGM CEO presentation. It reports about 507m shares, 374m convertible notes and about $8.5m cash at 31 October 2018. It otherwise repeats the known Kincora and drilling story.
