Armour Energy continues aggressive McArthur Basin drilling

Thursday, June 28, 2012 by Angela Kean

Armour Energy (ASX: AJQ) is continuing its aggressive Northern Territory drilling program following the success of its Cow Lagoon-1 well in the McArthur Basin, with drilling underway on the Kilgour North-1 well.

The Kilgour North 1 well is located on the Kilgour Anticline which has been confirmed through seismic interpretation to be a conventional and shale target.

Preparations are underway to drill out from the bottom of the surface casing that has been successfully set at 319 metres depth.

Armour is planning to drill to a proposed depth of 2100 metres targeting the Yalco, Lynott, Reward, Barney Creek and Coxco Formations.

The company will use improved drilling techniques and streamlined formation evaluation methods developed at the previously drilled Cow Lagoon-1 well.

Armour plans to drill up to nine vertical wells and three lateral wells in EP 171 and EP 176 in the McArthur Basin during the next two years.


Cow Lagoon-1

Formal notices of a petroleum discovery at Cow Lagoon-1 have now been filed with the Northern Territory Department of Mines and Energy.

Armour previously proved the presence of a valid hydrocarbon trap at its Cow Lagoon-1 well, increasing the prospectivity of the McArthur Basin.

The well was drilled to a total depth of 1804 metres and discovered gas in the Lynott and Reward Formations.

Gas shows were also seen in the Barney Creek shale oil and gas target, where a prospective 65 metre section was intersected, as well as in deeper formations on the Cow Lagoon West Anticline during underbalanced, air-mist drilling operations.

Armour added that gas influxes and flares were also observed and continued from these formations up to 15 days after they were drilled.

The company has completed and cased the well to allow for future cased hole testing, lateral drilling and stimulation as required.

Armour is currently conducting a detailed log interpretation with a view to establishing the gas resource potential in the Cow Lagoon structures.


McArthur Basin

The McArthur Basin is known to host oil and gas shows and has been assessed by MBA Petroleum Consultants to hold combined mean prospective resource of 18.8 trillion cubic feet of gas and 2 billion barrels of associated liquids within Armour’s EP 171 and EP 176.

Commercialisation of any discoveries will be aided by the proximity of the Basin to the Carpentaria Highway as well as the pipeline running along the McArthur River to Darwin.

The prospectivity of the Basin has drawn other companies as well.