1 August 2013
Empyrean Energy PLC
("Empyrean" or the "Company"; Ticker: (EME))
Sugarloaf Project: Onshore Texas, USA
Production and Operational Update
Empyrean Energy Plc (Ticker: EME), the AIM-listed condensate and gas exploration and production company focused on the Eagle Ford Shale, Texas, USA, is pleased to provide the following update on production and operations at its Sugarloaf Project:
Highlights
· Production on a barrel of oil equivalent basis ("BOE") net to Empyrean increased by approximately 213% in the three months to June 2013 compared to the three months to June 2012
· Production on a BOE basis net to Empyrean remained strong in the three months to June 2013 compared to the previous three months to March 2013 with a modest increase of 236 BOE or 0.48% for the quarter
· Empyrean had an interest in 91 gross producing wells at end of June 2013, an increase of 12 wells since the end of March 2013
· Testing of the Austin Chalk wells has commenced with two wells commencing production during July
· Well down spacing initiatives and testing are ongoing with encouraging early observations
· Success on the Austin Chalk and/or well down spacing initiatives could have a significant positive impact on reserves and value
Production
The following is a summary of wellhead production data received from the operator from wells at the Sugarloaf Project from April 2012 through to June 2013. All figures that are stated as "Net to EME" are calculated at the working interest percentage in each well and multiplied by the net revenue interest ("NRI") to give an amount to Empyrean net of royalties but before any taxes.
Month |
Gas (Net to EME) (mcf) |
Condensate (Net to EME)(bbls) |
BOE Total (Net to EME) |
BOE/day average (Net to EME) |
April 2012 |
7062 |
2575 |
3752 |
125 |
May 2012 |
9157 |
4009 |
5535 |
179 |
June 2012 |
14658 |
3936 |
6379 |
213 |
July 2012 |
13,163 |
5,046 |
7,240 |
234 |
August 2012 |
24,905 |
7,129 |
11,280 |
364 |
September 2012 |
30,355 |
7,814 |
12,873 |
429 |
October 2012 |
18,011 |
7,658 |
10,660 |
344 |
November 2012 |
20,738 |
10,127 |
13,583 |
453 |
December 2012 |
30,069 |
11,248 |
16,260 |
525 |
January 2013 |
35,386 |
10,972 |
16,870 |
544 |
February 2013 |
30,982 |
9,046 |
14,210 |
508 |
March 2013 |
38,628 |
11,306 |
17,744 |
572 |
April 2013 |
37,925 |
10,310 |
16,631 |
554 |
May 2013 |
38,984 |
10,308 |
16,805 |
542 |
June 2013 |
37,472 |
9,379 |
15,624 |
504 |
Notes:
1. The wells have had the Average Daily Equivalent Oil Rate calculated on a simple 6:1 basis.
2. Please note that reporting for production at the wellhead does not include Natural Gas Liquids (NGL's) as these are extracted and measured later. The numbers are approximate and are rounded and are subject to change as sales are completed and allocated to each well. The Company has been notified by the operator that there have been some issues with the allocation of gas production numbers for some wells since September 2012, when wells on single separators have been switched over to facilities that have both a high pressure and low pressure separator. The operator has assured the Company that these issues are being corrected and will not affect the ultimate allocation of volumes of hydrocarbons for product sold.
A revised version of this announcement within which the data in the table above is represented graphically is available on the Company's website.
Operations
As at the end of June 2013 Empyrean had 91 gross wells that were producing at the Sugarloaf Project on acreage operated by Marathon Oil Company, a subsidiary of Marathon Oil Corporation (NYSE: MRO), an increase of 12 wells since the end of March 2013. In addition, there were 6 wells drilling ahead and 9 further wells awaiting or in the process of having completion/stimulation operations carried out.
Since the end of June, two Austin Chalk wells have commenced production. Early indications from these wells are encouraging. These wells have been drilled within a batch of three wells, two drilled at approximately 60 acre spacing testing the Austin Chalk with a third well drilled testing the Eagle Ford Shale. Both spacing and the composition of hydrocarbons produced from the Austin Chalk zone will be very important in addition to any interaction between the Austin Chalk and underlying Eagle Ford Shale. Empyrean will be looking to capture as much positive data from these wells to update reserves in the second half of calendar 2013.
The well down spacing initiatives are ongoing. As previously announced, early indications show the wells drilled on tighter spacing are behaving as forecast. Other operators within the field have announced plans to develop their acreage at 40 acre spacing. Down spacing has the potential to improve recoveries, reserves and ultimate value. At the Sugarloaf Project, further production history will be required before the optimum spacing regime for the next phase of development is finalised. The Austin Chalk pilot program will also be considered during this process. Marathon has indicated that further guidance and results will be available during the second half of calendar 2013.
Commenting today, Empyrean CEO, Tom Kelly said "Another strong three months of production during which the oil price had a steady rise is very good for the Company. Early indications from the Austin Chalk wells are encouraging and we hope to learn more from the operator on their interpretation of these results in the near term. The potential for a significant uplift in reserves and value from the development of the Austin Chalk in addition to the Eagle Ford Shale is very real and if successful will further enhance the value of the Sugarloaf Project to Empyrean with early results to be available in a relatively short period of time."
The information contained in this announcement was completed and reviewed by the Technical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who has over 40 years experience as a petroleum geologist.
For further information
Empyrean Energy plc
Tom Kelly
+618 9480 0111
Shore Capital
Anita Ghanekar
Edward Mansfield
+44 (0) 207 408 4090
Jonathan Charles
Lionsgate Communications
E: [email protected]
M: +44 (0)7791 892509
www.lionsgatecomms.com
Notes to Editors:
Empyrean Energy Plc is an AIM listed (Ticker : EME) condensate and gas exploration and production company focused on the Eagle Ford Shale, Texas, USA. Other assets include a 10% working interest in the Riverbend Project, Texas, just north of the prolific Brookeland Field (Austin Chalk) as well as a 57.2% interest in the Eagle Oil Pool Development Project located in the San Joaquin Basin, southern California.
Empyrean's portfolio includes an interest in over 91 producing wells with scaleable growth potential from further development and exploration upside.
