Armour Energy: Egilabria 4 Reaches Total Depth, Shows Gas (Australia)

Armour Energy announced that the Egilabria 4 gas exploration well has reached total depth at 1,839 metres. The well was drilled on time and within budget, achieving all well objectives, and very good rates of penetration of up to 50m/hr with the use of air hammers.

The well first encountered gas at 344 metres through to 417 metres at the base of the Mesozoic Carpentaria Basin section, underscoring the prospectivity of that sequence in the areas of structural closure.

The next significant gas shows were encountered in the Lawn Shale Formation which was penetrated as expected between 1,060 and 1,200 metres. A stronger than expected buildup of pressure to 70 psi was noted in a number of desorption canisters filled with cuttings from this interval. The purpose of using desorption canisters is to show that gas is being liberated from shale source rock cuttings taken from a tight reservoir that is yet to be stimulated. This technique is also used by the CSG industry to show that coal seams contain gas bound by water. Shale gas is tightly held in the shale and needs to have pathways created through hydraulic stimulation techniques, whereas CSG wells need to be dewatered to create pathways for the bound gas.

The presence of gas off structure at Egliabria 4 substantiates the presence of a continuous gas‐charged shale sequence in the Lawn Shale Formation between Egliabria 4 and the on structure Egilabria 2 well. This is a key milestone towards proving a developable gas play within ATP1087.

The well continued on to penetrate the Riversleigh Shale Formation at a depth of 1,450 metres through to 1,700 metres. Significant gas shows were encountered in three separate zones of the Riversleigh Shale. Desorption canisters filled with cuttings from this interval at 1,495 metres developed pressure of 45 psi after 3 days.

These results prove an additional unconventional shale gas target has been discovered off structure in the Riversleigh Shale Formation which may be projected down‐dip to the Egliabria 2 well, which reached total depth at the base of the Lawn Formation.

Egilabria 2 update

Egilabria 2 continues to flow back post‐stimulation fluids, and approximately one third of the total volume pumped during hydraulic stimulation has been recovered. Due to the large volume of fluids pumped into the stimulated formations, gas production will not commence until additional fluids are recovered. Clean up time on stimulated laterals can vary greatly and is dependent on a number of factors. Once gas production commences, it will be run through a test separator to accurately ascertain flow rates.

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LNG World News Staff, September 24, 2013; Image: Armour Energy