TIDMEME
RNS Number : 0881H
Empyrean Energy PLC
08 March 2018
This announcement contains inside information
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil &
Gas
8 March 2018
Empyrean Energy PLC ("Empyrean" or the "Company")
Dempsey Production Testing to Resume
-- Testing to recommence this month
-- Moving progressively up hole and beginning with two gas
reservoir intervals (Zone 3) covering over 400 gross feet (120+
metres)
-- Plan has been carefully designed to test more zones before
reaching overlying field production zones
-- Focus on testing zones with the potential to flow without
stimulation first, whilst maintaining the optionality to revisit
any zone and stimulate, if required, later
Empyrean Energy (EME: AIM), the oil and gas development company
with interests in China, Indonesia and the United States, is
pleased to announce that it has been informed by Sacgasco Limited
(ASX: SGC) ("Sacgasco"), the operator of the Dempsey 1-15 well in
the Sacramento Basin, onshore California, that production testing
of the Dempsey 1-15 well will re-commence this month following
review of all existing results and data collected to date. The
review has involved in-house technical capability, independent
consultants, technical collaboration with partners and leading US
well completion and stimulation experts.
The new program has been designed to allow earlier than
previously planned testing of shallower zones that exhibit
extensive gas shows and higher porosity and therefore are perceived
to have a greater chance of flowing without stimulation, while
preserving the opportunity for more testing and possibly reservoir
stimulation of all zones in the well, including the previously
tested deeper interval (Zone 2). Empyrean had previously announced
on 17 January 2018 that production had commenced from Zone 2 and
that stimulation was expected during Q1. The production and
pressure data collected since 17 January in conjunction with the
technical review has enabled the joint venture to formulate a more
flexible forward operation plan.
Sacgasco will shortly commence operations to access two
shallower potentially gas-filled reservoir sands (Zone 3) covering
a gross interval of gas shows over 400 feet (120+ metres) at the
same time as allowing access to the currently producing interval
(Zone 2).
Technical analysis completed by Sacgasco indicates that Zone 3
potentially contains reservoir sands with significantly better
porosity than exhibited by the tested Zone 2. Zone 3 sands also
have a strong seismic signature, with positive seismic attributes
interpreted to reflect better reservoir continuity and extent.
Other, as yet, untested zones of potentially gas saturated
reservoirs, separate from the overlying field-level reservoirs,
exist above Zone 3 and may also be tested. Sales of natural gas
being produced from Dempsey 1-15 will continue until Zone 3 testing
work begins this month.
Sacgasco confirms that a draft application to stimulate zones in
the Dempsey well, should that be necessary in future, is near
completion. The application is structured to accommodate future
flexibility. Consultation with Government authorities and
consultants on aspects of the stimulation process has occurred, and
includes production and pressure data collected from the well since
17 January. Lodging of the application is part of the final process
to achieve approval to stimulate.
Empyrean CEO Tom Kelly commented, "We look forward to testing
operations re-commencing at Dempsey following an extensive
technical review process. We have worked closely with Sacgasco, the
operator of the well, to review the existing data, results and
views of independent consultants. We are delighted to have reached
consensus on forward operations that allow imminent testing of
further prospective zones whilst maintaining the flexibility to
revisit any zone at a later date to produce, re-evaluate or
stimulate if required. Shareholders should note that Empyrean
believes that testing these zones higher up in the well before any
plan to fracture stimulate a deeper zone (or any zone for that
matter) may provide a better chance of commercial gas flows and is
a more logical next step now that we are able to stimulate at a
later date if needed.
"Shareholders should also note that the draft application to
stimulate has benefitted from extensive consultation with experts
and authorities since our last update and also from the production
and pressure data collected over that time. This work and
consultation process is expected to result in a much smoother
approval process given that the data and consultation were required
in any case. Put simply, Empyrean supports the efforts being made
by Sacgasco on the forward testing program and the stimulation
application and reiterates that stimulation approval would not have
been hastened by lodging the application earlier without the
collected data and consultation process. We are excited and wish
Sacgasco and the JV partners well for a safe and rewarding testing
program."
**S**
For further information:
Empyrean Energy plc
Tom Kelly Tel: +61 8 9380 9920
Cenkos Securities plc
Neil McDonald Tel: +44 (0) 131 220 9771
Beth McKiernan Tel: +44 (0) 131 220 9778
St Brides Partners Ltd
Lottie Wadham Tel: +44 (0) 20 7236 1177
Frank Buhagiar Tel: +44 (0) 20 7236 1177
The information contained in this announcement was completed and
reviewed by the Company's Executive Director, Mr Gajendra (Gaz)
Bisht, who has over 28 years' experience as a petroleum
geoscientist.
Notes to Editors
About Empyrean Energy Plc (LON: EME)
Empyrean is a London AIM listed oil and gas explorer with three
potentially high impact new projects. Empyrean has a 1800km2
offshore oil permit located in the Pearl River Mouth Basin, China
where it has completed 3D seismic in Q3, 2017 to further mature two
large oil prospects, Jade and Topaz. Processing and interpretation
is underway and preliminary internal interpretation of the raw
seismic data has confirmed the structural validity of the Jade and
Topaz prospects and also identified a third significant target
named Pearl, which is located north of Topaz. The permit is
directly South East of the billion barrel+ Liuhua Oil Field
operated by CNOOC and two recent discoveries to the permits West
and South further enhance the merit of Jade and Topaz. Empyrean is
operator and holds 100% of the exploration rights through to
commercial discovery where CNOOC have a back-in right to 51%.
Empyrean also has a 10% interest in West Natuna Exploration
Limited that holds 100% of the Duyung PSC in offshore Indonesia and
is targeting the Mako Shallow Gas Discovery that has an
independently verified 2C and 3C gas resource of between 430-650
Bcf recoverable gas. Successful testing operations were recently
completed at the Mako South-1 Well with 10.9 million cubic feet of
gas flow and better than expected reservoir quality and multi Darcy
permeability. The operator is currently analysing data with a view
to providing a development plan.
Empyrean also has a joint venture with ASX listed Sacgasco
Limited on a suite of projects in the Sacramento Basin, onshore
California, USA. The package includes two mature, multi-Tcf gas
prospects, 'Dempsey' and 'Alvares', and an Area of Mutual Interest
(the "Dempsey Trend AMI") that includes at least three already
identified, large Dempsey-style follow up prospects. Dempsey is a
large structure mapped with 3D seismic and interpreted by Sacgasco
to have the potential to hold a prospective resource of over 1 Tcf
of gas in up to seven stacked target reservoirs. The joint venture
has completed drilling of a 2,970 metre (9,747 fee) combined
appraisal and exploration well; Dempsey 1-15, to evaluate this
prospect. Wireline logs confirmed numerous zones for production
testing.
Aside from compelling technical merit, the Dempsey-1 well
location sits next to existing gas metering and surface
infrastructure that is owned by the joint venture. This will allow
for any gas discovery to be tested and connected into the local
pipeline at relatively low cost and in an accelerated timeframe.
This early potential for short-term cash flow in the event of a
commercial discovery would be significant for the joint venture and
for the state of California where gas demand is high and
approximately 90% of consumption is imported from other states. Gas
produced in the Sacramento Basin currently prices at a 10-15%
premium to Henry
Hub Gas Prices. The joint venture is currently testing the Dempsey Prospect.
Alvares is a large structure mapped with 2D seismic and
interpreted by Sacgasco to hold prospective resources of over 2 Tcf
estimated potential recoverable gas. A well drilled by American
Hunter Exploration Limited in 1982 for deeper oil intersected
5,000ft of gas shows. No valid flow test was conducted due to
equipment limitations and the deeper oil target failing. However
minor gas flows to surface were recorded even with these
limitations. The possibility of using the existing well bore to
sidetrack and get a valid flow test, thus reducing costs will be
examined.
The Dempsey Trend AMI is an Area of Mutual Interest extending to
approximately 250,000 acres and containing the Dempsey prospect
(described above) as well as at least three other, Dempsey-style
prospects which have been identified on existing seismic.
www.empyreanenergy.com
About Sacgasco Limited (ASX. SGC)
Sacgasco Limited (ASX: SGC) is an Australian-based energy
company focused on conventional gas exploration in the Sacramento
Basin, onshore California. SGC has an extensive portfolio of gas
prospects at both exploration and appraisal stages, including
multi-Tcf opportunities. The Company is targeting gas supply to the
local Californian gas market and burgeoning LNG market in North
America. SGC is of the view that the size of the prospects in
California have the potential to supply both the domestic
Californian gas market and export LNG markets.
www.sacgasco.com
This information is provided by RNS
The company news service from the London Stock Exchange
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