TIDMEME
RNS Number : 4549Q
Empyrean Energy PLC
06 June 2018
This announcement contains inside information
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil &
Gas
6 June 2018
Empyrean Energy PLC ("Empyrean" or the "Company")
31% Uplift in Best Case Gross Prospective (Un-risked) Resources
in Block 29/11 Offshore China
-- Total best case Prospective Resources increased 31% to 774 MMbbl from 591 MMbbl
-- Jade Prospect best case Prospective Resources increased 84% to 190 MMbbl from 103 MMbbl
-- Topaz Prospect best case Prospective Resources increased 19% to 435 MMbbl from 365 MMbbl
-- Pearl Prospect best case Prospective Resources increased 21% to 149 MMbbl from 123 MMbbl
Empyrean Energy (EME: AIM), the oil and gas development company
with interests in China, Indonesia and the United States, is
pleased to announce that comprehensive processing and
interpretation of the 608km2 of new 3D seismic data that it
successfully acquired on its offshore China Block 29/11, for which
it holds 100% exploration rights, during 2017 and announced on 23
August 2017 has now been completed. The analysis has firmed up key
prospects which were initially identified by the vintage regional
2D seismic survey and were mapped on the partially available
(seismic Survey Boat Raw) 3D in September 2017.
Based on the results of the comprehensive processing and
interpretation of the final 3D data, the prospective (un-risked)
resources of the three major high graded prospects have been
revised (Table 1). The revised estimates are higher than previously
reported estimates because of detailed mapping and improved
assessment of reservoir parameters. Gross (100%) 'Best' case
Prospective Resources combined are estimated at 774 million barrels
of oil ("MMbbl") on an un-risked basis.
Empyrean CEO Tom Kelly commented, "It is pleasing to report
continued strong progress with our China asset and we are delighted
with the significant increase to the prospective resources. Our
in-depth work has confirmed the Jade and Topaz prospects as both
being highly material opportunities with best estimate Prospective
(un-risked) Resources of 625 MMbbl, along with a third exciting
opportunity at the Pearl prospect. Driven by quality 3D data and
known analogues these prospects will be targeting reservoir
intervals proven by AMACO and CNOOC discoveries immediately north
and west of Block 29/11. Put simply, the potential size of the
prize in China just got materially bigger.
"Together with high impact activity taking place elsewhere
across our portfolio, specifically first cash flow from the
commencement of commercial gas production at the Dempsey 1-15 well
in the Sacramento Basin, onshore California in which we have a 30%
interest, this is an exciting time for Empyrean. With this in mind,
we look forward to updating our shareholders in due course on
further progress."
Table 1:
Block 29/11 China: Gross Prospective (un-risked)
Resources MMbbl*
----------------------------------------------------------------
Timeline September 2017 June 2018
---------- ------------------------- -------------------------
(Seismic Boat Raw 3D (Final Processed 3D
data) data)
---------- ------------------------- -------------------------
Prospect Low Case Best High Low Case Best High
Case Case Case Case
---------- --------- ------ ------ --------- ------ ------
Jade 89 103 143 94 190 303
---------- --------- ------ ------ --------- ------ ------
Topaz 280 365 498 292 435 728
---------- --------- ------ ------ --------- ------ ------
Pearl 84 123 206 94 149 256
---------- --------- ------ ------ --------- ------ ------
Following the successful acquisition of a large 3D survey with
no Health, Safety and Environmental (HSE) issues in August 2017,
Empyrean has focused on processing the seismic data optimally.
Empyrean has had regular interaction with the China Offshore Oil
Services Limited (COSL) processing team at all stages of the
project. Time (PSTM) and Depth (PSDM) processing of the 3D seismic
data was completed in January 2018. The final processed data is of
high-quality that has clearly imaged the potential reservoirs,
faults and deeper basin.
Interpretation of the processed data commenced immediately
following the completion of processing using both internal
technical capability provided by experienced Geoscientist Gaz Bisht
and an additional expert consultant Geophysicist that Empyrean
contracted specifically for the task. These works have recently
been completed.
Arising from the 3D seismic interpretation, the Jade and Topaz
prospects have developed into better defined and very substantial
opportunities. The Pearl Prospect, which was a substantial lead
based on the vintage regional 2D seismic has evolved into a
substantial prospect following the 3D. The results indicate that
all three prospects are large and are in favourable geological
settings.
Given, one of the major challenges with resource estimation
rests heavily with an estimation of Gross Rock Volume (GRV), a
critical step to reducing the uncertainty of estimating GRV is to
better understand and quantify velocity field and depth conversion.
As a result, two approaches were taken for depth 'conversion of
time' interpretation of the seismic marker for the potential
reservoir top. The resulting two GRVs from two structure maps were
then combined to generate an industry standard probabilistic result
using Monte Carlo simulation with 1,000 trials (using Crystal Ball
software). This probabilistic method has produced Gross Prospective
(un-risked) Resources as shown below (Table II).
Table 2:
Block 29/11 China: Gross Prospective (un-ricked)
Resources MMbbl
----------------------------------------------------------
Probabilistic Estimates
----------------------------------------------------------
Prospect P90 P50 P10 Mean
------------------ -------- -------- ------- ---------
Jade 110 183 230 202
------------------ -------- -------- ------- ---------
Topaz 298 431 631 453
------------------ -------- -------- ------- ---------
Pearl 105 152 220 159
------------------ -------- -------- ------- ---------
In addition, Empyrean has made significant progress on an "Oil
Migration study" to identify and map effective migration of
hydrocarbons to the prospects from the proven "Baiyun Sag"
hydrocarbon kitchen. China National Offshore Oil Corporation
("CNOOC") (Shenzhen branch) has been highly supportive and
cooperative during this study. CNOOC technical team shared data and
analysis with Empyrean freely and contributed enormously in
developing a basin-wide understanding of hydrocarbon source rock,
maturity and migration pathways.
Empyrean will make a further update with regards to the Oil
Migration study as soon as it is completed in the near future.
Cautionary Statement: The estimated quantities of oil that may
potentially be recovered by the application of a future development
project relates to undiscovered accumulations. These estimates have
both an associated risk of discovery and a risk of development.
Further exploration, appraisal and evaluation is required to
determine the existence of a significant quantity of potentially
movable hydrocarbons.
**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 (Technical) , 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
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