Armour Energy has provided an update on the Surat 2020 Work Program which is being conducted on its 100% owned and operated Kincora Gas Project.

HIGHLIGHTS:

• Warroon #1 well on flowback & cleaning up with encouraging initial results
• Warroon #1 result establishes proof of concept in the Rewan formation and unlocks new play potential with multiple additional targets
• Positive step towards realising the potential for the Rewan formation to yield material production and contribute to the reserves maturation story  across Armour’s Surat acreage
• Horseshoe #2 and Horseshoe #4 stimulated flowback testing to commence shortly
• Sandy Creek #2 and Carbean #1 artificial lift projects completed on budget and delivering to expectations

Stimulation Programme Update

Following delays due to the recently enacted COVID-19 quarantine measures restricting personnel movements from South Australia, Armour has reestablished momentum on its 2020 Work Program and intends to complete all activities in December.

On 8 Dec 2020 sand and fluids were cleaned out on Warroon #1 with a coiled tubing unit and the well is currently on test recovering frac fluid. The stimulated Rewan interval flared  rates of up to 700 mcf/d on 9 Dec 2020. Flow rates are expected to increase through clean-up operations and once the evalution phase is completed the well will be connected to sales. As a final step, the temporarily suspended Showgrounds interval, previously producing at approximately 400 mcf/d, will be commingled with the new Rewan production.

The Company is very encouraged with the Warroon #1 Rewan results as it establishes the potential of a significant new pay zone with multiple additional candidates that has been previously overlooked by other operators. Identification of bypassed pay zones is possible due to advancements in logging technology allowing for the identification of mineralogically complex sandstones with hydrocarbon saturation suitable for hydraulic stimulation. The encouraging initial results pave the way for a potential material reserves maturation plan to unfold across Armour’s Surat acreage from the Rewan formation. 

Once the flowback and clean-up operations are concluded on Warroon #1, the testing equipment will be mobilized to Horseshoe #4 and Horseshoe #2. Initial flowback data from these wells is expected during the week of 14 Dec 2020. The Company will provide initial well flow rates for each well once sales gas production has commenced. All three wells will produce and flow gas into Armour’s Surat Basin Gas Gathering System to the Kincora Gas Processing Plant for additional gas sales.

The programme is targeting achieving an aggregate initial increase in daily sales gas production of approximately 4 TJ/day (best estimate) with a potential aggregate high-side outcome of up to approximately 7 TJ/day sales gas (high estimate).

KeyFacts Energy: Armour Energy Australia country profile