Armour Energy Engages Drilling Contractor for 2013 Exploration in Qld, Australia

Armour Energy Engages Drilling Contractor for 2013 Exploration in Qld

The Directors of Armour Energy Limited announced that the Company has now formally mobilized the drilling contractor in preparation for commencement of the planned 2013 exploration program in North Queensland and the Northern Territory.

The Contractor will supply the services of their highly experienced drilling crews and management team along with a Schramm TX130XD drill rig and the associated spread of equipment. The drill rig is capable of drilling to a vertical depth of 2900m and will be equipped to drill vertical and lateral wells on both mud and compressed air.

The program will commence in ATP 1087 located in North Queensland where three vertical wells and one lateral well are planned with work scheduled to commence in the week commencing on 6th May.

These wells will target the highly prospective shale gas potential of the Lawn Hill Formation where exploration by Comalco in 1991 encountered continuous gas shows of up to 390 gas units (approximately 8%) from a continuous 125m thick gas rich Lawn Hill Shale in the Beamesbrook, Egilabria, Desert Creek and Argyle Creek wells.

The first well of the program will be the Egilabria 2 vertical well to a planned depth of 1750m. The Egilabria 2 DW1 Lateral well will then be drilled from the Egilabria 2 vertical well to a measured depth of 2360m to establish a 600m sub horizontal lateral well section within the Lawn Hill Formation. Thislateral section will then be completed with casing and swelling packers to establish six isolated stimulation zones.

Halliburton Energy Services have been contracted to carry out a six stage hydraulic stimulation of the Egilabria 2 DW1 well in July 2013 to test the shale gas production potential of the Lawn Hill Formation. Halliburton are a proven service provider in other Australian shale plays.

The planned hydraulic stimulation of the Egilabria 2 DW1 lateral well is designed to prove commercial gas flows and will be a key milestone in the Company’s plans to define proven and probable reserves inATP 1087.

Armour Energy and its independent expert consultants believe the Lawn Hill Formation contains a prospective recoverable resource of 22 TCF (Trillion Cubic Feet) of gas. Armour believes this provides potential to define up to 9 TCF of resources and reserves over the next three years. 9 TCF is sufficient gas resource to support 6 million tonne per annum of LNG production for more than 20 years.

Armour has internally estimated potential for an additional 18 TCF of gas resource within the underlying Riversleigh Shale.

The Egilabria 3 and Egilabria 4 vertical wells are then scheduled to follow in the program. Both of these wells are of similar depth and will test the lateral extension of the Lawn Hill Formation away from the Egilabria 2 DW1 well.

The Egilabria 4 well is also located to simultaneously test the potential of a pinch out oil and gas play at the base of the Mesozoic Carpentaria Basin which Armour believes is being sourced by the underlying Lawn 4 and Riversleigh Formations.

[mappress]
LNG World News Staff, April 26, 2013; Image: Armour Energy