Armour Energy Limited 5 July 2013 WellUpdate Egilabria Build-upGas Shows and Flare HIGHLIGHTS ? 4 hours build-up testflare substantiates classic shale gastarget. ? Lawn Shale sequence 150 metresthick (1660 to 1810 metres) and thickerthan the 125 metres expected. ? Vertical wellto be deepened by 100 metres. ? Logging activities planned overthe weekend. ? Lateral well expected to commence in the first half of next week. The Directors of Armour Energy are pleased to advise that the Egilabria 2 gas exploration well is currently at a depth of 1830 metres. The well penetrated the bottom of the target Lawn Shale at 1810 metres, 65 metres lower than forecast, establishing a prospective target interval of 150 metres, approximately 25 metresthicker than the 125 metres expected. Overnight, the well wasshut in and gasinflux from the gas bearing rock formations allowed to build up in the well bore for 4 hours. A flare up to 5 metreslong and with a methane peak of 32% (C1 – 322,731ppm) was observed for 20 minutes after the well was re- opened (refer Figure 1). Armour considers the results to be very encouraging, and support the case for the lateral and fracture stimulation planned for the next stage of the well. Details of the design including length, declination, direction and number ofstages offracture stimulation are yetto be finalised. Over the next 24 hours Armour intendsto deepen the Egilabria 2 well by 100 metresto allow logging and characterisation of mechanical aspects of the underlying sediment layers to assist with final lateral bore and stimulation designs. Egilabria 2 is being drilled in Armour’s 100% owned exploration licence ATP1087, 350kms north of Mt Isa (see Figure 2). Armour has identified an independently certified prospective recoverable resource of 22 TCF of gas in the Lawn Shale within ATP 1087. An additional 18 TCF of conventional and unconventional targets have been identified by Armourin the overlying Carpentaria Basin and underlying Riversleigh Shale. The Company hasrecently entered a Heads of Agreement with APA to work towardstransportation of up to 330 Petajoules a year of gasin the existing upgraded and future APA pipeline network to undersupplied coastalQueensland LNGand Sydneymarkets.2 Armour holds 133,000 km2 of granted licences and applications over North Queensland and the Northern Territory. The provincial holding covers four successive sedimentary basins, the Isa Superbasin, South Nicholson and parts of the Georgina and Carpentaria Basinsin Queensland and the MacArthur Basin in the Northern Territory (refer Figure 3 below). In the Batten Trough, Macarthur Basin, Armour made the Glyde 1 discovery last year atflowing gasrates up to 3.3million cubic feet per day.
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