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D’Aguilar Gold subsidiary, Armour Energy to IPO and list on ASX

D’Aguilar Gold will spin-out energy company Armour Energy to list on the ASX, targeting gas resource targets onshore in the Northern Territory.
D’Aguilar Gold subsidiary, Armour Energy to IPO and list on ASX

Fast expanding D’Aguilar Gold (ASX: DGR) subsidiary, Armour Energy will spearhead D'Aguilar's energy thrust into the unconventional gas resource sector in Australia, via an Initial Public Offering and a listing on the ASX in February 2011.

Armour has underwritten capital raisings planned for later this year to tap gas resource targets onshore in the Northern Territory, using Coal Seam Gas techniques and US shale gas technology developed in the U.S. and commercially applied by operators in Texas, Wyoming and Saskatchewan and British Columbia in Canada.

An exploration campaign will specifically target a new gas province in the Northern Territory, with the aim to deliver gas to both Queensland’s Northern Economic Triangle and the Northern Territory.

Over 118,814km2 of land area is currently under application, including the McArthur, South Nicholson and Georgina Basins.

The area is host to numerous shows of gas, condensate, oil and bitumen in the proterozoic aged McArthur Group and Roper Group sediments as encountered by previous explorers including Amoco in the 1980s.

The area is also prospective for large shale gas resources which are expected to be comparable to or rival shale gas resources contained within known shale gas basins in the USA.

Armour has identified a core target area located within and adjacent to the fault bounded trough structure known as the Batten Trough.  The target sediments are the thickened sections of the gas rich Barney Creek Shale which has scope to host up to 40 TCF of gas in the area. Armour Energy is targeting 20TCF, equivalent to 21,100 Peta Joules (PJ), of shale gas in the Batten Trough.

Several short term and lower volume market domestic industrial and power generation opportunities have been identified in and near to the exploration area, or adjacent pipeline infrastructure. Early exploration targets and ultimately reserve definition and production plans have been selected to address these opportunities.

Gas resource targets onshore in the NT have not previously attracted major commercial exploration efforts, owing to historic low gas prices, lack of available markets and a focus on conventional reservoir styles which were perceived to be limited in size potential.

Armour Energy’s strategy relies, as with the emergence of the coal seam gas industry in Queensland 10 years ago, on the discovery of very large unconventional gas resources extractable with proven, but as yet untried methods in this area, along with the generation of high volume downstream industrial, power generation and export markets.

In its Northern Territory project areas, Armour Energy has identified potential for shale gas plays in the Barney Creek Shale and potential to discover conventional gas accumulations in the Coxco Dolomite abutting the Barney Creek Shale along the Emu Fault Zone both North and South of the McArthur River Zinc Mine.

A mineral exploration hole drilled at the Glyde River prospect in this area by Amoco in 1979 flowed gas and condensates at 140psi for 6 months before it was sealed at the surface.

In its Northern Territory project areas, Armour Energy has identified potential for shale gas plays in the Barney Creek Shale and potential to discover conventional gas accumulations in the Coxco Dolomite abutting the Barney Creek Shale along the Emu Fault Zone both North and South of the McArthur River Zinc Mine. A mineral exploration hole drilled at the Glyde River prospect in this area by Amoco in 1979 flowed gas and condensates at 140psi for 6 months before it was sealed at the surface.

Mineral exploration drill holes in the area frequently encountered bitumen, residual oil, gas shows and gas flows further substantiating the presence of a mature petroleum system in the area. Armour has identified several targets adjacent to the Emu Fault Zone near both Glyde and Caranbirini along with other anticline related targets adjacent to the Abner Range.

These targets provide immediate potential for approximately 200 Billion cubic feet or approximately 210 PJ of gas with further potential to be identified in similar trap sites

Conventional gas targets present early gas discovery and flow potential, with 40 trillion cubic feet of potential being outlined in gas bearing shales, with display similar characteristics to producing US shale gas reservoirs.

A strong management team has been developed at Armour including CEO Phil McNamara, who recently headed the feasibility study and then successful negotiations with major Chinese constructors, financiers and customers for Waratah Coal.

He also managed large coal development projects for Yanzhou Coal Australia, and prior to that Xstrata Coal.

Chairman Nick Mather was instrumental in the early business development strategy, project acquisition and exploration programs for Arrow Energy and Bow Energy (ASX: BOW). He is currently a Non Executive Director of Bow Energy.

Bill Stubbs was also Chairman of Arrow Energy between 1998 and 2005.

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