Armour Energy Finds Gas in Cow Lagoon-1 Well, Australia

Armour Energy Ltd reported that the drilling of the Cow Lagoon 1 well (Batten Trough, McArthur Basin NT EP176) has been completed at a total depth of 1804 metres.

Approval has also been obtained from the Northern Territory Government to suspend the well. The well has now been cased and cemented. The current well head configuration will allow Armour Energy to perform future cased hole testing, lateral drilling and stimulation as required.

Cow Lagoon 1 was drilled to 1804m and discovered gas in the Lynott and Reward Formations with further gas shows in the Barney Creek and deeper formations on the Cow Lagoon West Anticline during underbalanced, air-mist drilling operations. This proved the presence of a valid hydrocarbon trap at the Cow Lagoon 1 location where surface geological mapping had indicated four-way dip closure. Gas influxes and flares were observed and continued from these formations up to 15 days after they were drilled.

Gas charged sediments were confirmed by flares, mudlog shows, chromatograph readings, and preliminary desorption readings from core and cutting samples from the Lynott, Reward and Barney Creek Formations. A full suite of logs was acquired and detailed cuttings collection was obtained for further mineralogy, maturity, and brittleness studies. Image logs indicated porosity responses in conjunction with natural fracturing within these formations. The presence of this thick gas charged, naturally fractured sequence indicates the potential for the application of lateral wells and stimulation techniques in these sequences across EP176.

The Barney Creek Formation, an unconventional shale gas and shale oil target, was encountered in Cow Lagoon 1 at a depth of 1245m which was deeper than the original depth prognosis. A prospective 65m shale section was penetrated within the Barney Creek Formation.

Further appraisal of the Lynott, Reward and Barney Creek Formations at greater depth can now be considered at down dip locations in synclinal areas of the Batten Trough where the formations may thicken and display further increases in gas charge and pressure. Additional targets have been identified 10-15km south west of Cow Lagoon.

Armour Energy is currently using the Vertical Seismic Profile data acquired at Cow Lagoon 1 to reprocess and reinterpret the regional seismic line 02GA-BT1 that was originally surveyed in 2002 and extends across EP 176. This will assist in identifying further Barney Creek Formation targets.

During the course of drilling the Cow Lagoon 1 well, significant improvements in drilling rates were achieved. These improvements will be refined and applied to the Kilgour North 1 well which will be drilled next in the current campaign. The Kilgour North 1 well is expected to be spudded on Friday 22nd June.

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LNG World News Staff, June 20, 2012