Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

DGR Global's Subsidiary Armour Energy To Tap Shale Gas Potential Of Tenements

DGR Global (ASX: DGR) is edging closer to tapping the vast potential for shale gas in the Northern Territory via its subsidiary Armour Energy.

Armour Energy, which has lodged a prospectus for the float of the company, has a massive 11,500 square kilometres of granted tenements and another 113,000 square kilometres under tenement applications.

CEO Armour Energy, Phil McNamara said recently it was important to note their was an historic gas flow within one of their granted tenements.

"That gas flow analysis from that shows that we have some real prospectivity for production of liquids."

The company is preparing to float the 50% owned subsidiary in April, once it has successfully completed an IPO to raise A$75 million through the offer of 150 million shares at $0.50 each.

The completion of the IPO and ASX listing of Armour Energy is expected to deliver a substantial increase in the asset base of DGR Global.

Armour Energy is focused on exploring for petroleum gas and liquids in a new province in the Northern Territory and northern Queensland, with the company's permit areas covering 126,000 square kilometres of the McArthur, South Nicholson and Georgina Basins.

Importantly, these basins demonstrate analogous characteristics to U.S. shale gas basins, with the company optimistic that these characteristics will prevail across the permit areas and in turn imply potential for large scale gas and associated liquids fields.

DGR shareholders, registered as a holder of DGR Global shares on 9 March 2012 will be eligible to participate in a special Priority Offer.

About Armour Energy

Late last year Armour Energy reached a share placement and farm-in agreement with Lakes Oil (ASX: LKO) to subscribe to A$2.25 million in Lakes Oil shares and farm-in to highly prospective onshore Gippsland and Otway basin tenements.

Armour Energy purchased 900 million shares at $0.25 per share, providing the company with a 15% interest in Lakes Oil.

The DGR subsidiary will also have the right to earn up to a 51% interest and assume operatorship of the PEP169 tenement in the Otway Basin and PEP166 tenement within the onshore Gippsland Basin.

Armour Energy's IPO is underwritten to $50 million.

DGR Global's Portfolio

DGR Global currently holds:

- 50 million shares (30.6%) in Mt Isa Metals (ASX: MET) currently exploring for gold in Burkina Faso;

- 33.2 million shares (11.7%) in Solomon Gold (LSE: SOLG) currently exploring for gold and copper in the Solomon Islands and Queensland;

- 59.8 million shares (41%) in AusNiCo (ASX: ANW) exploring for nickel sulphides, cobalt, gold and silver in southeast Queensland; and

- 27 million shares (29%) in Navaho Gold (ASX: NVG) exploring for Carlin style gold in Nevada and Queensland.

DGR is also currently progressing the corporate development of Archer Resources, focusing on copper-gold‐silver porphyry systems, and IronRidge Resources.

IronRidge is undertaking project research and identification for iron ore in west Africa.

Capital raisings and stock exchange listings for these companies are in planning for 2012.