Gas2Grid Ltd., Sydney, agreed terms with Armour Energy Ltd., Brisbane, to farm into a parcel of acreage in Armour’s permits in the Surat basin of southeast Queensland.
Subject to binding documentation, Gas2 Grid’s total investment will be over $12 million (Aus.) which will include the drilling of three wells, a fracture stimulation program, and the funding of acquisition of 100 sq km of new 3D seismic data.
Once the work is completed, Gas2Grid will have earned a 50% interest in the Riverside and Myall-Bainbilla blocks. Armour and Gas2Grid in partnership will then acquire a further 300 sq km of 3D seismic.
Armour said the deal would increase its production for 2022, while the seismic program is expected to define new drilling opportunities.
The Riverside farmin block is a 30 sq km subset of permit PL511 which comprises Riverside field which is estimated to contain 2.6 bcf of gas in place.
The discovery well, Riverside-1, was drilled in 1997 targeting the Tinowon formation, which is a low permeability, but overpressured reservoir. So far there has been negligible production.
The Gas2Grid farmin will include the drilling of Riverside North-1 by mid-2022 followed by a fracture stimulation of the well by end September 2022.
The Myall-Bainbilla farmin block covers 489 sq km comprising permits PL22, PL53, PL227, and ATP 647, but excludes existing production wells.
Gas2Grid will earn its 50% interest by funding seismic re-processing, plus acquisition of 100 sq km of new 3D work and drilling two wells. The first will be drilled in 2022 and the second by mid-2023.
Binding documentation for the farm-in is expected to be prepared by early 2022.