Armour Energy Ltd. shareholders have voted overwhelmingly in favor of teaming up with Oklahoma City's American Energy Partners LP (AEP).

On the afternoon of Oct. 30, Armour shareholders signaled strong support for Aubrey McClendon-backed AEP, voting in favor of all resolutions put to the Enterprise Growth Market (EGM).

More than 184 million proxy votes were given supporting the Armour transaction vs. 10.4 million against it. The voting outcome means WestSide’s bid is no longer capable of becoming unconditional.

Having received shareholder approval for AEP’s US$130 million Northern Territory farm‐out, the company’s proportional bid for 13.62% of each Armour share priced at 25 cents will now proceed.

AEP will now hold up to 14.99% of Armour’s shares, making the company a strategic investor in Armour in addition to becoming a partner in the McArthur Basin project.

Following the vote, Armour said the proportional bid, when combined with the farm-out, remained superior to WestSide’s revised 20 cents per share offer.

“The approval of Armour shareholders for the partnership with AEP brings us one step closer to realizing the potential for our significant McArthur Basin tenements to define a large-scale oil and gas province,” said Nicholas Mather, Armour chairman.

“We look forward to partnering with American Energy and to maximize the benefits of their outstanding technical and operational capability for all of our shareholders.”

Chinese-owned WestSide will now seek permission from the Australian Securities and Investments Commission (ASIC) to withdraw its sweetened 20 cents a share offer, which valued Armour at about $60.9 million.

Brisbane-based Armour holds one of the largest acreage positions in the McArthur Basin at 34 million acres, an area the size of England. Since its IPO in 2012, the company has spent more than $65 million proving up its shale oil and gas resources.

The company recently announced a 66% increase in its northern Australia prospective gas resource base, boosting its best estimate prospective gas resources by 34 tcf to 57 tcf.

Source: AEP

Under the farm-out with AEP, Armour will transfer 75% of its acreage in the Northern Territory to the company to further the exploration and development of its oil- and gas-prone McArthur Basin project.

In addition, the Queensland Department of Natural Resources and Mines has given Origin Energy indicative approval to transfer its Roma Shelf assets to Armour.

The acquisition sets Armour up to become a significant producer of oil, gas, LPG and condensate on the east coast of Australia.

Armour expects to restart oil production from the Roma Shelf assets within three months from registration of title to the relevant tenements.

Lauren Barrett can be reached at lbarrett@hartenergy.com.

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