Investor Presentaiton
Armour Energy and controlled entities
armourenergy.com.au
Review of operations and activities continued
for the year ended 30 June 2020
OPERATIONS REVIEW CONTINUED
UGANDA OIL PROJECT
The Ugandan Oil Project is located at the southern end of Lake Albert within the Albertine Graben which has recorded discoveries
of 6.5 billion barrels of oil. The Company was awarded the Kanywataba exploration licence in September 2017 with DGR Global,
a major shareholder in Armour, holding a beneficial interest of 83.18% and the Company 16.82%. The exploration licence was
renewed until 13 September 2021, subject to various conditions. This included the completion of the 2D seismic data survey.
The Company has identified multiple developed (untested) on-trend structural traps (3-way and 4-way dip closures) and multiple
untested stratigraphic traps. The Kingfisher oil discovery (40km north east of Kanywataba) has produced from commingled
Ⓒ oil reservoirs 12,000 barrels per day from a single well with the field expected to come online at 40,000 barrels per day once in
Sproduction.
Local oil seeps confirmed local working petroleum systems. The Company's internal assessment of the Kanywataba block is a
Resource Best Estimate Risked 57-193 mmbls recoverable which compares to the Unrisked Prospective Oil Resource Estimate
(mmbls) of 145-217mmbls (Internal Armour Estimate; refer ASX release of 19 September 2017 for full details).
The Company stated that the travel restrictions put in place by both the Ugandan and Australian Governments prevented key
personnel from travelling to the site and the disruption to numerous businesses and supply chains meant that the Company is
unable and is being prevented from undertaking work on the 2D seismic program. The effect of this notice to the Minister means
that the period during which the event of Force Majeure is operative, will be added to the end of the second exploration period.
CORPORATE ACTIVITIES
Capital Raising
On 23 September 2019, the Company announced that it had successfully closed a private placement raising gross proceeds of $4
million via an allocation of 80 million shares at a price of 5 cents each. Investors received one (1) unlisted option exercisable at 8
cents (through to 30 September 2023) for every two (2) shares subscribed for in the placement.
On 15 June 2020, the Company announced a $10 million capital raising program, which consisted of:
"
an initial placement which raised ~$3.36 million.
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an underwritten accelerated non-renounceable, pro rata entitlement offer expected to raise ~$4.53 million.
an additional conditional placement to raise up to $2.1 million.
For ne
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DR
CONGO
RWANDA
BURUNDI
Bukoba
UGANDA
Home
Armour Uganda
Kampala
Eldoret
TANZANIA
Nairobi
KENYA
AFRICA
Due to significant demand from third-party investors in relation to the Company's fund raising, on the 18 September 2020 the
Armour Board announced that it had upsized the conditional placement component to approximately $7 million, subject to the
receipt of any necessary further shareholder approvals. Under the offer, for every two (2) new shares issued under the entitlement
offer and/or placement, the holder will also receive one (1) attaching listed option exercisable at $0.05 and expiring 29 February
2024.
Corporate Bond Finance Facility
In 2019 Armour raised $55 million via the issue of secured and amortising notes (the New Notes). The offering for the New Notes
was managed by FIIG Securities Limited (FIIG).
On 26 March 2020, Armour announced that noteholders of the Company's $55 million Secured Amortising Notes (Notes) had
approved, by the requisite majority, the special resolution of Noteholders (the Special Resolution) to amend the Conditions of the
Notes as per Armour's proposal.
Tabora
Singida
Pipeline
200km
Mombassa
Tanga
Zanzibar
Dar es Salaam
Figure 8 Map Source - DGR Global Website - https://www.dgrglobal.com.au/dgr-uganda
On 9 April 2020, the Company wrote to the Minister of Energy and Mineral Development (Minister) of the Ugandan Government,
advising that as a result of the COVID-19 pandemic, it was unable and is being prevented from undertaking work on the 2D seismic
program, based on a Force Majeure event occurring.
The approved amendments included the following:
"
"
New Note principal amortisation schedule including 4 quarterly payments in the calendar year 2020 totalling approximately
$6.0 million.
Further unscheduled amortisation payment arrangements to cover certain future asset disposals or further farm-in proceeds
received from the Santos Farm-In Agreement.
Amendments to Financial Undertakings, including the Debt Service Cover Ratio, the Leverage Ratio, and the Gearing Ratio.
Amendments to extend the Debt Lock Up Date to 31 December 2020.
The establishment of an EBITDA (non-IFRS measure) performance benchmark for the 2020 calendar year.
Amendments to certain Conditions (Financial Accommodation and Disposals) in connection with the Ugandan Oil Project.
Allow for the grant of certain Security interests and the provision of Financial Accommodation in relation to Joint Ventures;
and
Amendments to permit voluntary early redemption of the Notes.
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