TIDMEME
RNS Number : 9854O
Empyrean Energy PLC
23 May 2018
This announcement contains inside information
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil &
Gas
23 May 2018
Empyrean Energy PLC ("Empyrean" or the "Company")
Dempsey to produce commercial gas flows at 1,200 mcf per day
-- Represents combined gas flow rate from Field Level Intervals and from Zones 2, 3 and 4
-- Dempsey will generate cash flow from this production very shortly
-- Multiple options being pursued to further develop Dempsey
well and field reservoirs now commercial production has been
established
-- Work on the "Alvares" structure is being scheduled for Q3 2018
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
("Dempsey") in the Sacramento Basin, onshore California, that
Dempsey will very shortly produce into the sales gas pipeline at an
anticipated rate of 1,200 mcf per day from Field Level Kione
Sandstone and the combined Zones 2, 3 and 4. Consequently, Dempsey
will very shortly be generating cash flow for the Dempsey JV
partners. Empyrean has a 30% working interest in the Dempsey Gas
Project.
Zone 4 was perforated and tested with gas flow co-mingled with
production from Zones 2 and 3 at a combined rate of 175 mcf / day
on a 12/64" choke with associated minor water. The gas contribution
from Zone 4 is interpreted to be minimal. The field and older zones
in the well will now be produced and monitored in separate streams
(via a dual completion) at the surface to enable reservoir
assessment as the basis for further development activities in these
levels.
Based on test data the Dempsey well has produced clean dry
natural gas from a vertical interval of over 2,000 feet, and this
information will be integrated with geology and seismic to evaluate
production options, including reservoir production enhancement
through fracture stimulation, and alternative deviated well
configurations.
Production data and economic assessments will determine the
development plans for Dempsey reservoirs and associated JV drilling
activities in the Sacramento Basin.
Sacgasco also advised of advanced plans to connect four idle
wells into the sales gas system in the Dempsey area that are hoped
to add to production and cash flow.
Applications have been submitted to the regulator to permit
re-entry of the Alvares 1 wellbore. The plan is to assess the
integrity of the well bore as the basis for a decision to either
log through casing and perforate zones of interest for natural gas
production, or alternatively drill a sidetrack well to enable
gas-filled reservoir assessment in a newly drilled interval of
reservoirs. Commencement of these activities is planned for Q3
2018.
Empyrean CEO Tom Kelly commented, "Thanks to the close proximity
of existing infrastructure owned by the JV, the Dempsey Well can be
connected to the sales pipeline in an expedited timeframe. With
production of commercial gas flows at 1,200 mcf per day imminent,
we look forward to reaping the benefit from this early cash flow as
one of the JV partners with a 30% working interest. Additionally,
there is significant upside potential from nearby wells where plans
are in place to connect four idle wells into the grid to further
increase production and cash flow. We also look forward to
providing further updates on the Alvares 1 wellbore, where Sacgasco
is planning to commence activities in Q3 2018."
**ENDS**
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
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END
MSCPGURWAUPRUAW
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