Under the farmin agreement, Armour Energy will have the opportunity to secure interest as part of a two stage farmin program.
In the first stage, the company will have an immediate initial 15% working interest in PRL2, subject to using its efforts to undertake a $10m work program within 12 months
Later, Armour Energy can earn an additional 35% working interest, subject to making an election to do so within two years.
Located in the onshore Gippsland basin in Victoria, PRL2 is considered prospective for both tight and conventional gas accumulations and is in close proximity to existing infrastructure and markets, the company said.
Most of the wells have been drilled by Lakes Oil at the PRL2 project and have encountered gas and/or oil.
Currently, the first stage program and Armour Energy’s right to carry it out are suspended due to a moratorium on hydraulic fracturing in Victoria.
However, Armour Energy has sought to engage in discussions with Lakes Oil to revise the conditions of the farmin agreement.
