Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil & Gas
5 November 2013
Empyrean Energy PLC ('Empyrean' or 'the Company')
Production and Operational Update:
Sugarloaf Project, Onshore Texas, USA
Empyrean Energy, the profitable US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, is pleased to provide a production and operations update on its flagship Sugarloaf AMI (the 'Project') in the prolific Eagle Ford Shale, Texas. Empyrean has a 3% working interest in the Project which is operated by US major Marathon Oil Company ('Marathon' or 'the Operator').
Highlights
· 101 gross producing wells on Sugarloaf AMI as at end of September 2013, an increase of 10 wells since the end of June 2013
· Production average of approximately 544 boe/day (before Natural Gas Liquids are separated) net to Empyrean for the three months
· Production remained strong with a 2% increase (equivalent to 1,029 net BOE) over the previous quarter and a 60% increase compared to Q3 2012
· Two wells targeting the Austin Chalk, the formation directly above the Eagle Ford Shale, commenced production in July 2013 with similar flow rates to a nearby Eagle Ford Shale well observed
· Further wells planned for the Austin Chalk as part of additional testing of the formation
· Well down spacing initiatives on-going and testing results expected by YE 2013
· Success on the Austin Chalk and/or well down spacing initiatives could have a significant positive impact on reserves, production and attributable value
Empyrean CEO, Tom Kelly said, "Empyrean has reached a significant milestone at the Sugarloaf AMI with an interest in over 100 gross wells in production. We look forward to well down spacing results along with the continued assessment of the Austin Chalk with great interest, as success from either initiative is likely to further enhance reserves and build shareholder 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 September 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 |
July 2013 |
41,630 |
9,823 |
16,760 |
541 |
August 2013 |
42,089 |
9,721 |
16,736 |
540 |
Sept 2013 |
41,857 |
9,617 |
16,593 |
553 |
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, rounded and subject to change, as NGL's are extracted and sales completed and volumes re-allocated to each well.
A revised version of this announcement within which the data in the table above is represented graphically is available on the Company's website (www.empyreanenergy.com).
Operations
As at the end of September 2013, Empyrean had 101 gross wells that were producing at the Sugarloaf Project on acreage operated by Marathon Oil Company, a subsidiary of Marathon Oil Corporation (NYSE: MRO). This represents an increase of 10 wells since the end of June 2013. In addition, there was one well drilling ahead and seven further wells waiting for, or in the process of having, completion/stimulation operations.
The two wells producing from the Austin Chalk commenced production on 6 July 2013. Early results have been encouraging with the Weston 10H well achieving approximate production (measured before extraction of NGLs) of 717 BOE/day for July 2013, 699 BOE/day for August 2013 and 655 BOE/day for September 2013. The Weston 12H well achieved approximately 717 BOE/day for July 2013, 730 BOE/day for August 2013 and 675 BOE/day for September 2013. These rates are broadly similar to the Weston 11H well that has been drilled and completed from the same drill pad into the Eagle Ford Shale.
Further Austin Chalk wells have been planned and are being included in the on-going testing of wells at closer spacing intervals. The most recent well proposal anticipates a three well pad drilling programme consisting of two Eagle Ford Shale wells with an Austin Chalk well being drilled in between. These wells are being drilled at 30 acre spacing - assuming the Austin Chalk and Eagle Ford Shale are considered one reservoir - or at 60 acre spacing for the Eagle Ford Shale wells with an Austin Chalk well in between (at a 30 acre spacing to the Eagle Ford Shale wells).
Marathon continues to test wells at spacing below 80 acres across the Sugarloaf AMI area to validate well performance with expectations of more detailed development plans in late 2013 becoming available. Down spacing has the potential to improve recoveries, reserves and ultimate value. The Austin Chalk pilot programme will also be considered during this process. Marathon has indicated that further guidance and results will be available by the end of the year.
Sugarloaf Block A
An update on two wells currently being completed in the Eagle Ford Shale on Block A will be made separately as data and information comes to hand.
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.
GLOSSARY OF ABBREVIATIONS
"bbls" barrels of oil, each barrel representing 34.972 Imperial gallons or 42 U.S. gallons
"boe" barrels of crude oil equivalent derived by converting natural gas to crude oil in the ratio of six thousand cubic feet of natural gas to one barrel of crude oil
"boe/day" barrels of crude equivalent per day
"mcf" one thousand cubic feet of natural gas
**ENDS**
For further information please visit www.empyreanenergy.com or contact the following:
Tom Kelly |
Empyrean Energy plc |
Tel: +618 9481 0389 |
Neil McDonald |
Cenkos Securities Plc |
Tel: +44 (0) 131 220 9771 / +44 (0) 207 397 1953 |
Ken Fleming |
Cenkos Securities Plc |
Tel: +44 (0) 131 220 9772 / +44 (0) 207 397 1950 |
Hugo De Salis |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
Elisabeth Cowell |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
Lottie Brocklehurst |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
Notes to Editors:
Empyrean Energy Plc is an AIM listed (Ticker: EME) profitable US on-shore oil and gas development and production company focussed primarily on the advancement of its assets in Texas and California. The Company's portfolio represents a mix of assets at various stages of development. Its flagship project is the Sugarloaf AMI in the prolific Eagle Ford Shale, Texas, where it has a 3% working interest in approximately 24,300 gross acres centrally positioned in the liquids rich sweet-spot within the field. Empyrean has an interest in over 100 gross producing wells with full development expected to reach over 280 wells and further upside potential from additional formations and closer well spacing. Additionally as at end of August 2012, the Company's 2P reserves net to Empyrean for Sugarloaf AMI were 4.3 million BOE. The Company has term debt facility of up to US$50 million with Macquarie Bank in place in order to develop this acreage which is operated by US major Marathon Oil Company.
Other assets include a 57.2% interest in the Eagle Oil Pool Development Project located in the San Joaquin Basin, southern California, a proven oil and gas province. Empyrean's large working interest in this project provides the Company with flexibility and leverage with potential high impact from success. Additionally, Empyrean has a 7.5% interest in the Sugarloaf Block A operated by ConocoPhillips in the Eagle Ford Shale, and a 10% working interest in the Riverbend Project in Texas currently producing from the Wilcox formation.
