Oil and Gas News

Armour’s confidence boosted by Kincora

Armour_Kincora_Myall_Creek-1 (2)

Armour Energy has confirmed that its 2020 work program continues to establish proof of concept in the Basal Rewan formation, unlocking new potential throughout the Kincora gas project in the Surat Basin, Queensland.

The company reported that the Basal Rewan results have established the potential for a significant new pay zone across its existing well stock.

Armour is encouraged by the sustained high bottoms-hole pressures in the Basal Rewan and higher levels of permeability identified in the Warroon #1 well, paving the way for a potential material reserves maturation plan to unload across the company’s Surat acreage.

The Warroon #1 well continues to consistently produce from the Rewan formation at around 400 million standard cubic feet per day (mscfd), and maintained free flow condensate at 15 barrels a day (bbls/d).

However, the company stated that the well clean up period at the Kincora project was taking longer than excepted, with a remedial frac treatment for three wells also planned for the first week of February.

The aim of the 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.

Armour chief executive officer Brad Lingo said the company was highly encouraged with the early indication in unlocking the Basal Rewan bypassed pay play across the company’s Surat acreage.

“The higher observed and expected reservoir pressures demonstrate that this formation has the potential represent a virgin, un-depleted reservoir with higher permeability – albeit still a tight reservoir requiring fracture stimulation,” Lingo said.

In addition, Armour is using new and exisiting data to finalise candidates for a 2021 work program, which will include fracture stimulations activities within existing well stock during the first half of the year.

“These results are laying out the map for a further expanded program which the Armour team is currently working on, and to be executed through 2021,” Lingo added.

“The fundament objective of this new program is to deliver by the end of 2021 an additional 8 terajoules a day (TJ/d) of sales gas production from the company’s current base production level.”

Lingo said the company has the gas gathering and processing capacity through the Kincora gas processing plant and the delivery capability to deliver up to 20 TJ/d of sales gas into the Wallumbilla gas hub.

“More importantly, the company is receiving very strong interest from gas buyers to secure long-term gas supply arrangements from the Kincora gas project at the same time gas prices are demonstrating a very strong recovery,” he said.

“This will require a significantly increased level of activity and investment and the company’s technical team is confident that we have a deep catalogue of in-well bore opportunities to develop and a sufficiently strong understanding of these plays to deliver this result.”