Armour Acquires Origin Energy's Upstream Assets in Queensland's Surat Basin

Furthermore, Armour has identified significant potential for increased production from hydrocarbon zones currently cased‐off in existing wells that have not been accessed by production perforations.

• Tight Conventional and Coal Seam Gas Resource Upside

Armour estimates that the tenements offer further targets for the discovery of additional unrisked prospective resources in excess of 500 Bcf (best estimate) in eastward oriented sand channels and unconventional accumulations in the Permian section (Tinowon Sand Member) and a further unrisked prospective resources of 3 trillion cubic feet or Tcf (best estimate) in coal seams in the Permian Back Creek Coal Measures and shallower Jurassic Walloon Coal Measures. Elsewhere, these coal units host extensive resources of gas in Queensland’s Surat and Bowen Basins in projects owned by the QCLNG and Arrow Energy.

The estimated quantities of petroleum that may potentially be recovered by the application of future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

Newstead Storage Facility

The assets include the Newstead Field which is now used as an underground gas storage facility, including a contained 2.3 PJ of gas resources, available for immediate sale on recommissioning of the Kincora gas plant. The facility is capable of holding 7.5 PJ of gas and Armour intends to investigate management of this facility in order to maximize returns during periods of high gas demand.

Potentially there is scope to increase the underground gas storage capacity by a further 19 PJ from other reservoirs. Armour believes the existing gas storage facility and the potential for further storage capacity opportunities provides an excellent business opportunity to participate in the gas trading business and make use of gas price fluctuations in the market.

Queensland Gas Markets

Armour believes that Queensland gas markets will be very strong over forthcoming years as Queensland gas demand triples as a result of Queensland LNG facilities coming on stream. Spot gas prices in peak periods are expected to reach significantly higher levels.

Birthplace of Previous Oil and Gas Producers

The Roma shelf was the location of the first gas discovery in Queensland, in 1900. Since then the area has spawned the emergence of numerous Australian oil and gas producers, including Crusader, Hartogen, AOG, Bridge and numerous other oil and gas producers.