Armour Energy Updates on Drilling Operations in ATP 1087, Australia

Armour Energy provided the following update on the company’s operations in ATP 1087 in Queensland.

Egilabria 2 lateral – hydraulic stimulation

Halliburton has commenced the hydraulic stimulation program within the highly prospective intervals of the Lawn Shale formation. To date, 3 out of 8 stages have been stimulated. A further 5 zones will be hydraulically stimulated over this week in already identified highly prospective intervals. Subsequently the well will be cleaned out and production tested, the results of which are expected in early October.

Egilabria 2 is testing the Lawn Shale, as well as the brecciated dolomitic section at the base of the Lawn Shale. The Lawn Shale formation contains a prospective resource of 22.5 TCF of high quality gas, which could potentially feed 2 trains of LNG production.

The aim of the production test at Egilabria 2 is to prove the concept that horizontal well technology, together with hydraulic stimulation, can flow hydrocarbons to surface from the Lawn Shale formation.

Egilabria 4 vertical well

Following a number of operational challenges with the top hole formation, 9-5/8” casing was set successfully to a depth of 477m in the top of the Proterozoic Doomadgee formation. The issues encountered in the top hole were related to swelling clays and an unconformity and are now resolved. Drilling of the 8.5” hole section started on Monday at 477m.

The well encountered gas (up to 95 units or 2%) whilst tripping in and out of the hole at the base of the Mesozoic Carpentaria Basin section, underscoring the prospectivity of that sequence in the areas of structural closure. Future seismic programs are expected to identify structurally closed targets for drill testing in conjunction with the drill testing of the underlying unconventional Lawn and Riversleigh Shales.

The well will be drilled to a planned depth of 1,800m targeting multiple plays ― the Lawn and Riversleigh Shales as well as the basal Jurassic sands of the Carpentaria Basin.

No resource assessment has been completed for the Riversleigh Shale, potentially adding significant upside to the prospectivity of ATP 1087. Drilling results from Egilabria 4 combined with airborne geophysical survey results and the gas shows at the 1990’s Comalco Argyle Creek 1 and Desert Creek 1 wells in the Riversleigh Shale will amass a data set targeting a Prospective Resource Area up to 18 TCF of contained gas, based on the Company’s previously announced in-house review of ATP 1087.

Armour previously announced that it had also identified potential for the entrapment of oil and gas accumulations in the basal Jurassic sands of the Carpentaria Basin where that sand unit is overlaid by the Proterozoic rock units of the Lawn and Riversleigh Shales. The company commissioned reprocessing of existing seismic data gathered by Comalco in the 1990’s, and has now identified numerous leads, in addition to Egilabria 4, that have the potential to host hydrocarbon accumulations.

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LNG World News Staff, September 12, 2013; Image: Armour