Investor Presentaiton
Armour Energy and controlled entities
armourenergy.com.au
Review of operations and activities continued
for the year ended 30 June 2020
STRATEGY CONTINUED
The Eastern Australia Gas Market (AEGM) is starting to recover of recent lows brought on by Covid-19 and the correction in the oil
price. The Australian Energy Market Operator (AEMO) - 2020 Gas Statement of Opportunities projects that the AEGM is, based on
current industry supplied data, tightening and is expected to meet demand until 2023 so long as LNG exports are redirected to the
domestic market (see Figure 3).
The uncertainty and variability have increased since the 2019 report, especially between 2022 and 2024. This shortage is reported
to be due to a reduction in Victoria's gas reserves, reducing the State's ability to export gas into New South Wales and South
Australia.
(CAUs
S
2,000
1,500
1,000
500
Eastern Australia gas demand vs supply (PJ)1
Surat
Northern
Basins
Cooper
Basin
Development and Production
'
Stage 1 - 3 well fracture stimulation
program (Dec 20 quarter).
Stage 2 3 well fracture stimulation
program (June 21 quarter).
Production enhancement projects -
multiple well workovers (Sept 2020).
Applying for Production Licenses and
field development plan approvals for
Glyde, Cow Lagoon and Lamont Pass
conventional gas discoveries.
Commence gas marketing for up to
9TJ/day.
Sales gas production potential as
early as 2022.
Assessment of appraisal program for
the Panning Tight Gas discovery and
assessment of development potential.
"
Exploration
"
Commence 3D seismic location planning based on AEM-PTP
Airborne Geophysical Survey (completed late 2019) across key
Surat Basin exploration assets.
Develop 3-5 drill-ready prospects for potential CYE 2021 drilling
program.
"
"
McArthur Basin - Conduct AEM-PTP Airborne Geophysical
Survey to identify REDOX activity indicating possible
hydrocarbon zones.
McArthur Basin - Commence 2D/3D seismic location planning
based on AEM-PTP Airborne Geophysical Survey results.
South Nicholson Basin - Santos to prepare for and acquire new
2D seismic and execute targeted drilling activity.
Detailed 3D seismic reinterpretation of Northern Fairway PRLS
utilizing Total Depth Seisnetics 3D seismic next generation Al
evaluation tool.
Conduct AEM-PTP Airborne Geophysical Survey to identify
REDOX activity indicating possible hydrocarbon zones.
High-grade leads and prospect inventory to generate drill-ready
exploration targets for 2021 drilling program.
Develop 3-5 drill-ready prospects for potential CYE 2021 drilling
program.
ப
12P developed
2025
2026
2027
2028
2029
2030
Anticipated developments
Figure 3 Gas demand vs supply forecast - AEMO 2020 Gas Statement of Opportunity
2035
12P undeveloped (committed)
Forecast demand
Beyond the predicted shortage generated from the ongoing increase in demand, and potential shortfall in supply, AEMO has
also noted that there is a significant need to continue exploration activities requited to convert contingent resources (2C) and
Prospective resources (3C) to reserves. This will require an increase in exploration expenditure and funding. Again, Armours
exploration acreage associated with the Roma Shelf, Cooper Basin, North Queensland and Northern Territory will potentially have
greater significance to the domestic market.
Armour is in the right location, with the right infrastructure to take advantage of the projected supply shortfall. In seeking to
maximise this opportunity, Armour is proposing the following (set out over the page) work program in 2021.
Funds raised in the September 2020 capital raise will enable the Company to accelerate Stage 2 of the Surat stimulation
growth program, Cooper Basin exploration and Newstead Gas storage surface works. Additionally, Armour has a number of
asset transactions being actively progressed which will enable the Company to both fund upcoming near-term production and
development work programs, expanded exploration programs and further accelerate amortisation of Armour debt position.
OPERATIONS REVIEW
SURAT BASIN ASSETS
Kincora Production Drilling
During the financial year Armour Energy drilled two new production well, Myall Creek North #1 and Horseshoe #4. Myall Creek
North #1 was completed in both the Tinowon A and the Tinowon C. The Tinowon C interval was found to be wet and it is believed
that water cross flow into the Tinowon A has impeded gas flow from this sand. A further intervention and workover are currently
being considered.
Horseshoe #4 was conventionally completed in both Triassic and Permian sands, tied in and sustained an initial production
wellhead rate (IP30) of 0.31 TJ/d. An Environmental Authority amendment has been recently obtained, which allows for fracture
stimulation activities to now be conducted. Stimulation of Horseshoe #4 is planned as the next step for production enhancement.
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