The deal with Armour Energy marks the company’s first ever oil and gas investment in Australia
Stonehorse Energy, in partnership with an undisclosed investor group (InvestorCo), has announced to invest in the Myall Creek 2 well owned by Armour Energy in the Surat Basin in Australia.
As part of the deal, Stonehorse Energy and its partner will jointly fund the entire capital cost for bringing the well on stream. The partners will get a combined 50% share of the gas and condensate revenue generated from the well for a period of nearly seven years.
The Myall Creek-2 well, which is located in southeast Queensland, will initially undergo clean-up operations. Following these, well intervention activities will be taken up by Armour Energy at the lower Tinowon formation, which will begin in December 2021.
Armour Energy has contracted Griffin Energy Solutions to design and complete the well intervention operations.
According to Stonehorse Energy, the Myall Creek-2 Lower Tinowon reservoir is an over pressured, stratigraphically controlled, laterally continuous reservoir spread across the Myall Creek and Riverside gas fields.
The company said that subsequent well intervention operations will be taken up for two more formations up-hole as part of the investment.
The capital estimated for the perforation and fracture stimulation of the Lower Tinowon reservoir is $1.5m followed by an additional A$1.4m ($1m) for a second fracture stimulation within 12 months.
Armour Energy CEO Brad Lingo said: “We are excited to see further investment in the Myall Creek field which offers strong potential from untapped formations. Armour will continue to pursue partnering to fund value-adding work programs and to enhance production.”
Stonehorse Energy, which is listed on the Australian Securities Exchange (ASX), has stakes in oil and gas wells in Oklahoma and Texas in the US. The deal with Armour Energy marks the company’s maiden oil and gas investment in Australia.
Stonehorse Energy executive director said: “We are excited to make our maiden Australian investment in the Myall Creek field, which offers strong potential from untapped formations and to partner with both Armour Energy and InvestorCo, a private investment entity with significant experience in well intervention activities.”