Armour Energy disclosed Thursday that it plans to launch an exploration and appraisal project to define up to 9 trillion cubic feet (Tcf) of potential gas resource, following its win of a new shale exploration permit in Northern Queensland.
As part of its exploration plans, the company also aims to investigate the potential for extensive oil plays.
Armour's exploration tenement, ATP1087, spans an area of 2,756 square miles (7,138 square kilometers), and it covers the thick prospective sections of the petroleum rich South Nicholson and underlying Isa Super Basins. These basins extend to the south into ATP1107, where Armour is the Preferred Tenderer and to the West into its Northern Territory application areas.
Armour revealed in its statement that its target in the permit is the Lawn Hill Shale, a thick, organic-rich source rock section showing up to eight percent gas recorded in mud logs during drilling of four exploration wells by Comalco in the early 1990s. Independent assessments previously assessed the rock section to contain 22.5 Tcf of prospective gas resource.
Armour is proposing to finalize initial drill sites across ATP1087 in early 2013. During its drilling campaign, Armour proposes to drill three vertical wells and one lateral well. In addition, the company looks to undertake further seismic surveys next year.
While not explicitly stating so, the company’s aggressive drilling program appears geared towards supplying gas for a liquefied natural gas (LNG) project in Australia.
Commenting on the potential for the Lawn Hill Shale, the company noted in a statement that the gas play could contain gas volumes that could supply a six million tonne per annum LNG project for a period of 25 years.
Australia is at present home to seven world-scale LNG projects, each in a different stage of construction. Four of the new projects draw from gas fields in Western Australia: Gorgon, Prelude, Wheatstone and Ichthys. The other three are in Queensland: Queensland Curtis LNG, Gladstone LNG and Australia Pacific LNG.