Armour Energy Flares Gas at Qld Well, Australia

Armour Energy provided a progress report on the Egilabria 2 well in ATP 1087 south west of Burketown and 350 km north of Mt Isa in northern Queensland.

9 5/8 inch diameter casing was successfully set at a depth of 735 metres. The well has since that point been drilling ahead at faster than predicted rates using compressed air and 8 ¾ inch percussion bits and has averaged approximately 15 metres per hour including time for bit changes.

The well was at a depth of 1330 metres at 8.00 am on Monday 1 July, 2013. The Egilabria 2 well is being drilled by Armour Energy as operator and 100% owner of the project area.

The project covers ATP 1087 and the adjacent ATP 1107 for which Armour is the preferred tenderer. The area covers four successive sedimentary basins, namely the Isa Super Basin, South Nicholson Basin, part of the Georgina Basin and overlying Carpentaria Basin.

A prospective recoverable resource of 22 TCF (Trillion Cubic Feet) of gas within the Lawn Shale and within ATP 1087 was certified by Armour’s independent experts and further targets of up to 18 TCF were defined by Armour within the underlying Riversleigh Shale and in conventional targets in the Carpentaria Basin.

At Armour’s Egilabria 2 well, while drilling ahead at a rate of 45 m/hr on air late on Friday afternoon, a gas zone was penetrated in the Doomadgee Supersequence in the Isa Superbasin at 1097 meters. Immediate gas to surface produced an 8 ‐ meter long flare from a peak gas show of 1417 units (238,400 ppm or approximately 23.8%).

The gas was predominately methane with traces of ethane, propane, helium and negligible carbon dioxide. Gas log readings for Egilabria 2 were showing less than 1 unit of background gas before the gas flare.

In the nearby Egilabria 1 well (drilled by Comalco in 1991) an increase in background gas to just 16 units (3000 ppm or approximately 0.3%) accompanied the intersection of the same gas bearing rock unit. At the current depth of 1330 metres in Egilabria 2, gas log readings have begun to increase again from background to 10 units as did the gas log in the nearby historic Egilabria 1 well between this depth and the top of the Lawn Shale.

Significantly improved gas response is evident in air drilling in the area compared to mud drilling. The presence of significant levels of background gas in several intervals of the Isa Superbasin and South Nicholson Basin sequences above the reported flared show at 1097 metres and the potential of overpressure in the South Nicholson and Isa Superbasins are considered by Armour to be favourable factors for future gas production.

The main currently recognised prospective unit in the Isa Superbasin, the Lawn Shale, was intersected by Comalco during the drilling of Egilabria 1 in 1991. Egilabria 1 is located approximately 500 meters southwest from Armour’s Egilabria 2 well.

Egilabria 1 was drilled with mud which suppressed gas shows to varying degrees. Gas shows in Egilabria 1 were still evident in zones from 1300 metres down to the Lawn Shale where an 8% gas show persisted from 1640 metres to the base of the formation at 1760 metres.

The mud weight in that well was increased and further suppressed the gas shows. Armour is planning to drill the Lawn Shale on air with the 8 ¾ percussion bit to a total depth of 1800 metres in order to test the flow and reservoir characteristics of the 125 metre thick Lawn Shale which yielded 8% gas during mud drilling operations in 1991 in Egilabria 1.

Armour intends to collect a full suite of logs, and a number of side wall cores, and perform any testing operations prior to sidetrack drilling the Egilabria 2 DW1 lateral well. Armour recently entered a heads of agreement with APA Group to work towards the pipeline transmission of up to 330 Peta Joules a year of gas from the South Nicholson – Isa Superbasin Project area to potential Sydney and Eastern Queensland gas markets using existing and future pipelines by early 2016.

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LNG World News Staff, July 1, 2013; Image: Armour Energy