Australia: Armour Energy Provides Egilabria Well Update

July 8, 2013

Armour Energy announced that the Egilabria 2 gas exploration well is currently at a depth of 1830 metres. The well penetrated the bottom of the target Lawn Shale at 1810 metres, 65 metres lower than forecast, establishing a prospective target interval of 150 metres, approximately 25 metres thicker than the 125 metres expected.

On Friday, the well was shut in and gas influx from the gas bearing rock formations allowed to build up in the well bore for 4 hours. A flare up to 5 metres long and with a methane peak of 32% (C1 – 322,731ppm) was observed for 20 minutes after the well was reopened.Armour considers the results to be very encouraging, and support the case for the lateral and fracture stimulation planned for the next stage of the well.

Details of the design including length, declination, direction and number of stages of fracture stimulation are yet to be finalised.Egilabria 2 is being drilled in Armour’s 100% owned exploration licence ATP1087, 350kms north of Mt Isa. Armour has identified an independently certified prospective recoverable resource of 22 TCF of gas in the Lawn Shale within ATP 1087.

An additional 18 TCF of conventional and unconventional targets have been identified by Armour in the overlying Carpentaria Basin and underlying Riversleigh Shale. The Company has recently entered a Heads of Agreement with APA to work towards transportation of up to 330 Petajoules a year of gas in the existing upgraded and future APA pipeline network to undersupplied coastal Queensland LNG and Sydney markets.

Armour holds 133,000 km2 of granted licences and applications over North Queensland and the Northern Territory. The provincial holding covers four successive sedimentary basins, the Isa Superbasin, South Nicholson and parts of the Georgina and Carpentaria Basins in Queensland and the MacArthur Basin in the Northern Territory (refer Figure 3 below). In the Batten Trough, Macarthur Basin, Armour made the Glyde 1 discovery last year at flowing gas rates up to 3.3 million cubic feet per day.

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LNG World News Staff, July 8, 2013; Image: Armour Energy