TIDMEME
RNS Number : 6742R
Empyrean Energy PLC
18 June 2018
This announcement contains inside information
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil &
Gas
18 June 2018
Empyrean Energy PLC ("Empyrean" or the "Company")
Oil Migration Study Completed - Block 29/11 Offshore China
-- Large Jade and Topaz prospects interpreted to be potentially
filled from at least two different pathways
-- Large Pearl prospect interpreted to be filled via a pathway
from the large oil field to the North
-- Proven Baiyun Sag East ("BSE") basin interpreted to have oil migration pathway to Block 29/11
-- 3D seismic data identified a new small sag that has been
named Baiyun Sag North ("BSN") and is located entirely within Block
29/11 between the Jade and Topaz prospects
-- A convincing "seismic tie" with additional migration pathways
has been established between the 2013 CNOOC Limited ("CNOOC") oil
discovery LH 23-1d-1, immediately west of Block 29/11, and the Jade
prospect
-- The Study has established valid drilling targets that are of
significant size with relatively low geological risk
Empyrean Energy (EME: AIM), the oil and gas development company
with interests in China, Indonesia and the United States, is
pleased to announce that a comprehensive oil migration study ("the
Study") encompassing China Block 29/11, for which it holds 100%
exploration rights, has now been completed and has established
potential oil migration pathways into the Jade, Topaz and Pearl
prospects.
The Study was supported by geoscientists from CNOOC (Shenzhen
branch) who shared the comprehensive viewpoints of their previous
study in this area.
The Study established the maturity profile of source rock, and
confirmed that the source rock in the BSE area was at peak maturity
when oil expulsion commenced. The main implications for Block 29/11
prospectivity are interpreted to be very positive with the entire
source rock within BSE interpreted to have produced hydrocarbons.
In addition, any potential oil accumulation in Block 29/11
prospects are expected to be light and therefore similar to the oil
discoveries around Block 29/11 that range from 33-38 API.
The Study also validated the interpreted oil migration pathways
from the known oil sources of the Enping Formation (Paleocene aged)
within the BSE into the several oil discoveries made by CNOOC to
the immediate West and South of Block 29/11 since 2010, and thus
provided strong evidence of a prolific petroleum system in the
area. At the same time, the Study interprets effective migration
pathways from BSE towards the northern flank of the Baiyun uplift
where the Jade and Topaz prospects are located.
In addition, 28km(2) of 3D seismic data that was acquired
outside Block 29/11 over the 2013 CNOOC oil discovery LH 23-1d-1
which is located 8km west of the Jade prospect, has helped confirm
potential "fill-and-spill" pathways to the Jade structure from the
oil discovery. Whilst early exploration techniques such as this are
no guarantee of exploration success, the Company believes that this
form of "seismic tie" to a nearby known discovery helps to reduce
the risks associated with exploration and provides an improved
understanding of the geology in the basin and within Block
29/11.
Comprehensive interpretation of the 2017 3D seismic data has
helped map a new sub-basin called Baiyun Sag North. BSN is located
between the Jade and Topaz prospects and is located entirely within
Block 29/11. The Study confirms a potential effective migration
pathway from BSN into the Jade and Topaz prospects.
The Study also indicates that the Pearl prospect is potentially
located in a migration shadow for oil migrating from BSE or BSN. As
a result, further work has been done focussing on the possibility
of migration from the Huizhou Sag located NW of Block 29/11. The
Liuhua 11-1 field complex that contained an estimated 1.1 billion
barrels of oil is located immediately North of Block 29/11 and has
been interpreted to have received oil from Huizhou Sag. Additional
work completed now indicates that the Pearl prospect is located
favourably for receiving oil charge from Huizhou Sag.
Empyrean CEO Tom Kelly commented, "The findings from this oil
migration study are very promising with effective potential oil
migration pathways established into all three of our prospects on
Block 29/11. Interpretation of the potential effective migration
pathways from the established kitchen area - Baiyun Sag East - as
well as from the new kitchen area - Baiyun Sag North - into Block
29/11 helps increase our overall understanding of the geology of
the block and the Jade and Topaz prospects in particular. The
additional work has also confirmed a potential oil migration
pathway from the Liuhua 11-1 field complex to the Pearl
prospect.
"We have been rigorous with the pre-drill subsurface data and
exploration tools available to us and we believe that the detailed
and comprehensive technical work we have completed to date
significantly reduces the geological risks to a point where we have
established excellent drilling targets that are of significant size
with relatively low geological risk."
**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 (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 1,800km(2)
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 Limited 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 Limited 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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