JUNIOR resources player Armour Energy announced it has updated its prospective gas resources in the Northern Territory and Queensland by 66 per cent as of September 2015.
SRK Consulting performed the assessment which increased the prospective gas resources from 34 trillion to 57 trillion cubic feet (Tcf).
The update includes the first prospective gas resources from the Tawallah Group unconventional reservoirs in the McArthur basin in the Northern Territory and the Riversleigh shale located in ATP 1087, Queensland.
In addition, Armour announced combined inventory totalling 193 conventional leads and prospects in the Northern Territory can target 4.9 Tcf of best estimate prospective gas resources.
Speaking to Oil & Gas Australia, Armour chief executive Robbert de Weijer said the next step with regards to development in northern Australia is for shareholders to vote on the farm out agreement with American Energy Partners.
“In terms of activities on the ground we are aiming to start work in the field at the start of the next dry season in April or May 2016.”
“Preparation work has started already,” he said.
In a recent press statement Mr de Weijer said although it was early days, he was confident Armour would deliver commercial outcomes from the project.
“To put it into context, one trillion cubic feet of gas can provide enough energy for one million people for 20 years, and our best estimate of prospective gas resources has been upgraded to 57 trillion cubic feet.”
“Potentially there will be multiple major developments in this vast, sparsely populated area.”
Mr de Weijer said the updated prospective and contingent resources were a starting point, while the proposed North East Gas Interconnector pipeline between the Northern Territory and Queensland would enable major supplies of gas to flow to east coast markets.
“The fact that we have been able to partner with American Energy Partners testifies that these basins in northern Australia could well become the next great hydrocarbon province on a global scale,” he said.
“American Energy Partners will bring world’s best practice in exploration and development and US$130 million to this exciting project.”
Armour is focused on the exploration of the McArthur, Isa superbasin and Georgina basins in the Northern Territory and Queensland, and in the onshore Gippsland basin in Victoria in a joint venture with Lakes Oil, for gas and associated petroleum liquids.
Armour agreed in September to acquire the Roma Self project in the Surat basin, Queensland for $13 million from Origin Energy.
On completion of the acquisition, the assets will offer the company near term production and cash flow opportunities through production of gas, oil and liquids.
Armour said this represents a potentially key source of funding for Armour’s overall growth strategy.
A letter of intent was signed by Armour in late-August with American Energy Partners for a US$100 million farm out of the Northern Territory assets.
This has since been finalised with binding agreements for an upsized US$130 million farm out to earn 75% interest, with US$23 million accompanying cash payments.
The farm in is binding, subject to due diligence and shareholder approval.
Since 2012 Armour has spent about $60 million on a small proportion of its acreage in northern Australia.