Highlights

• Combined 2020 work programme delivering an estimated uplift of 3 TJ/d + associated liquids over the month of January 2021.
• The 2020 work programme continues to establish proof of concept in the Basal Rewan formation, unlocking new play potential throughout the greater Kincora Surat Project.
• Warroon #1, Horseshoe #2 and Horseshoe #4 are connected to the sales gas gathering network & continuing to clean up; further treatment intervention is planned to accelerate fluid recovery and improve performance.
• A number of production enhancement projects have been successfully executed and commissioned; collectively these wells are meeting expectations.
• Preparations are underway for larger 2021 work programme.

Armour Energy provides an update on the Surat 2020 Work Programme which is being conducted on Armour’s 100% owned and operated Kincora Gas Project.

Stimulation Programme Update 

Horseshoe #4 was connected to the gathering network on 23 December 2020. Gas rates have steadily increased to 260 mscfd over the course of January as the well continues to slowly recover frac fluids from the Basal Rewan.

Horseshoe #2 was connected and commenced flowing back to the gathering network from 28 December 2020. The well has been consistently unloading frac fluid unassisted over the course of January at a gas rate of 160 mscfd + condensate.  It is suspected that the lower pressured Intra Wallabella zone is yet to contribute while the higher pressured Rewan formation continues to slowly unload frac fluid.
 
Warroon #1 continues to consistently produce from the Rewan formation at around 400 mscfd. The well continues to additionally free flow condensate at approximately 15 bbls/d. The Showgrounds formation remains isolated while the company continues to evaluate the reservoir performance of the Rewan.

While Armour remains encouraged with the stimulation execution and reservoir response, the well clean up period is taking longer than anticipated. A remedial frac treatment for all three wells is currently planned for the first week of February. The aim of this treatment is to accelerate the recovery of frac fluids by dissolving any residual hydrated polymers from the frac fluid allowing the reservoir greater connectivity to the well bore. The effectiveness of this treatment should be known within 7 to 14 days following the application. 

Overall, the Company remains encouraged with both the Horseshoe and Warroon stimulation results. Specifically, the Basal Rewan results establish the potential for a significant new pay zone across Armour’s existing well stock. 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 Company is particularly encouraged by the sustained high bottom-hole pressures in the Basal Rewan and higher levels of permeability (1.6 mD) identified in the Warroon #1 well. These encouraging initial results pave the way for a potential material reserves maturation plan to unfold across Armour’s Surat acreage from the Rewan formation. 

Armour Energy is using both new and existing data to finalize candidates for a 2021 Work Programme. The Company is planning to execute this new work programme, which will include fracture stimulations activities within its existing well stock, during the first half of 2021.  Bypassed pay & tight gas stimulation candidates (ref. 18 December 2020 AGM CEO Presentation) are the primary targets.

KeyFacts Energy: Armour Energy Australia country profile