During the ceremony, Muloni, Uganda’s minister for Energy & Mineral Development said the delay in issuing the exploration agreement was partially caused by the protracted due diligence that government needed to do to ensure that only serious and credible investors (and presumably not speculators) are given prospecting rights on Uganda’s nascent oil fields. Cressey, the CEO Armour Energy on his part said Armour Energy was such a credible investor that Government was looking for to work with on the new exploration area. He said his company had the skill and resources, up to the task.
During the signing ceremony Armour Energy was the sole and last investor on their side of the deal.
But The Infrastructure Magazine can now reveal that the same day government inked the agreement with Armour Energy, the Australian prospector, entered into yet another agreement with its parent Australian investor, DGR Global Limited under which the block prospecting will be shared out with Armour Energy retaining only 16.82 per cent of interest, while DGR Global Limited will take 83.18 per cent of the Kanywataba stake. In other words Armour Energy is affront for DGR Global Limited.
It is important to note here that there is nothing illegal in the Armour Group and DGR Global Limited transaction, except that both the Government of Uganda and Armour Energy were silent on the relationship between the two, giving the impression that Armour Group was the final investor on the deal. This reality only came out as a conditional requirement by the Australian Securities Exchange (ASX), where both Australian companies trade in. In the Australian Securities Exchange Armour Energy trades as ASX: AJQ, while DGR Global Limited trades as ASX:DGR.
A statement issued by Karl Schlobohm, corporation secretary, DGR Global Limited, in Brisbane, Australian on 14 September ( the same day that the agreement was signed in Kampala) said: “The Board of Directors of international resource company creator, DGR Global Limited is pleased to announce that Armour Energy Limited and DGR Global have entered in to an agreement over Armour’s application for the Ugandan Oil Project, ‘Kanywataba Block’.”
It went further: “The Kanywataba Block is to be initially granted to Armour, and subsequently placed into a Specific Project Company (“SPC”) for the purposes of the (investor’s-ed) agreement, subject to Ugandan Government consent. Under these arrangements, Armour will retain 16.82% while DGR will meet the tenement expenditure, work program commitments for the first two-year period, and indemnify Armour for these costs. Until the transfer is completed, Armour shall hold DGR Global’s 83.18% interest in trust beneficially for DGR Global.”
Practically this means that if the government of Uganda consents to this deal, the eventual investors into Kanywataba will be GDR Global limited, not Armour Energy.
The briefing also says that DGR Global has agreed to spend up to US$837,000 for a performance guarantee; US$442,000 to complete the grant of the licence; and US$1,980,000 exploration commitments over the first two years.
GDR Global is bullish about their newly acquired stake: “The Albertine Graben is a Rift Basin, a geological formation known to host a third of the world’s oil reserves and similar geology to the Gippsland Basin in Victoria, Australia. The Albertine Graben is considered to provide world-class reservoir qualities, multiple reservoirs and less than 40% of the Albertine Graben has been evaluated. Production licences have been awarded to Total, Tullow and CNOOC on blocks to the north of the Kanyawataba block, on the east coast of Lake Albert. Armour considers the Kanywataba block to be a highly prospective oil play.”
On their website, DGR Global Limited describe themselves as “focused on generating resource companies and developing them from grassroots exploration stage through to production.”
Their modus operandus is “Projects are conceived directly through the skills and experience of DGR Global’s accomplished team of exploration geoscientists (with an enviable track record), not by the costly purchase of properties. Each project or exploration strategy is held in a separate subsidiary.”