Armour Update on Horseshoe-4
Armour Update

Armour Update on Horseshoe-4

Armour has successfully completed the stimulation activities on the Horseshoe #4 well, a single-stage stimulation of the basal Rewan sandstone over a 4-

metre interval between 1936 metres to 1940 metres. The programme was successfully completed utilizing approximately 82,000 lbs of proppant into the target zone.

Prior to conducting the stimulation, the Company conducted a DFIT test (diagnostic fracture injection test) and to improve formation contact for the stimulation, reperforated the target interval. A postreperforation DFIT was conducted and the targeted basal Rewan interval demonstrated a significant improvement in stimulation conditions. On Sunday, 1 November, the target interval was then stimulated exactly as planned with all proppant placed. Within a couple of hours after the completion of the stimulation, wellhead pressure was recorded at 2000 PSI, which is an encouraging sign that the target basal Rewan interval is likely to produce at the forecasted production estimate.

A production string will now be installed, and the Horseshoe #4 well will commence the clean-up and flowback phase prior to returning to sales gas production. The Company will provide further information on the well flow rate and the outcome of the Horseshoe #4 stimulation programme.

The Horseshoe #2 well was originally drilled by Oil Company of Australia in 2002 targeting the intra Wallabella and upper Tinowon sandstone, with the basal Rewan as a secondary target. The upper Tinowon was absent but the intra Wallabella sandstone was gas saturated, connected, and put on production in 2009. The basal Rewan was considered prospective at the time, but not completed in the Horseshoe #2 well.

The Horseshoe #2 well is connected to the Horseshoe gathering system which is connected by an 8km flow line to the Myall Creek Compressor Station (see map below).

The Horseshoe-2 programme is planned to be a two-stage stimulation of the intra Wallabella sandstone and the basal Rewan sandstones. The intra Wallabella stimulation is planned to be over a 5-metre interval between 1937 metres to 1942 metres. The programme planned is a large stimulation utilizing approximately 95,000 lbs of proppant.

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