This announcement contains inside information
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil & Gas
30 August 2017
Empyrean Energy PLC ("Empyrean" or the "Company")
Significant Gas Shows in unexpected reservoir at Dempsey
· Additional zone of significant gas shows in unexpected sandstone reservoir
· Drilling ahead below 2,300 m (~7,670 feet) to evaluate multiple remaining conventional sandstone reservoir targets in next 900 m (~2,900 feet) of anticipated drilling
· Dempsey is testing the largest known undrilled structure in northeastern Sacramento Basin
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 in the Sacramento Basin, onshore California, that the Dempsey 1-15 well is currently drilling ahead in 8 1/2" vertical hole.
Since the last update mud logs have indicated new zones of significant gas shows in improved reservoirs. These reservoirs are interpreted to be equivalent to sandstones seen in outcrop in the coastal ranges to the west, but were not considered to be likely to be present in the Dempsey well.
The significance of these shows will become more apparent when the next wireline logs are run to more fully evaluate the intersected gas shows and reservoirs. This is planned after reaching the proposed total drilling depth of approximately 3,200 metres.
The Dempsey 1-15 well is currently drilling ahead below 2,300 m (~7,670 feet) to the highly under-explored deeper targeted reservoirs in the approximately 900 m (~2,900 feet) of remaining section to be drilled.
Dempsey is drilling the largest known, yet undrilled, mapped structural closure in the northeastern part of the prolific Sacramento Gas Basin and is interpreted to be optimally located to trap gas migrating out of gas generating areas located to the west and south.
Empyrean CEO Tom Kelly commented, "The improved quality of sands appearing in these latest unexpected zones of significant gas shows is encouraging. Drilling is in sight and we will keep our shareholders appraised of further significant developments."
Dempsey Prospect and Dempsey 1-15 Well
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. Individual, unrisked Deterministic Prospective Resources for the primary targets range from 116 Bcf to 352 Bcf of recoverable gas. Should all the stacked reservoirs be full of gas, the cumulative unrisked recoverable Prospective Resources within the Dempsey prospect could exceed 1 Tcf.
The primary targets are interpreted in a series of Cretaceous sandstone reservoirs that exhibit structurally consistent amplitude anomalies similar to those that are observed on seismic data elsewhere in the basin where conventional sandstone reservoirs have trapped natural gas in mapped structural closures, for example the Tulainyo / James and Alvares wells.
Sacgasco expects to intersect gas shows in a number of zones in the Dempsey 1-15 well and these will be assessed based on the information available, but quantitative results will need to await conventional logging after drilling each section of the well and may need flow testing to be definitive.
The Dempsey 1-15 well is planned to be drilled in three discrete sections to depths of approximately 600m, 2,000m and 3,200m associated with decreasing planned casing sizes. The well has been designed conservatively to provide flexibility to respond to well bore conditions and progressive results.
Empyrean has also been informed that since the Dempsey 1-15 well will be exploring for a new gas pool, Sacgasco has requested that the regulator keep the records confidential for two years as allowed by Section 3234 of the Public Resources Code of California. The regulator has approved the "Confidential Status" for Dempsey 1-15 in order to protect longer-term shareholder value.
Aside from compelling technical merit, the Dempsey 1-15 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 announcement has been reviewed by Empyrean's Technical Director, Mr Frank Brophy BSc (Hons), who has over 40 years experience as a petroleum geologist.
**ENDS**
For further information:
Empyrean Energy plc |
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Tom Kelly |
Tel: +61 8 9380 9920 |
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Cenkos Securities plc |
|
Neil McDonald |
Tel: +44 (0) 131 220 9771 |
Beth McKiernan |
Tel: +44 (0) 131 220 9778 |
Nick Tulloch |
Tel: +44 (0) 131 220 9772 |
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St Brides Partners Ltd |
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Lottie Brocklehurst Olivia Vita |
Tel: +44 (0) 20 7236 1177 Tel: +44 (0) 20 7236 1177 |
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 commenced 3D seismic Q2, 2017 to further mature two large oil prospects, Jade and 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 Company is currently drilling and testing a 3,200 metre (~10,500 feet) combined appraisal and exploration well, Dempsey-1, to evaluate this prospect.
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 drilling and 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
About Sacgasco Limited (ASX. SGC)
Sacgasco Limited (ASX: SGC) is an Australian-based energy company focused on conventional gas exploration in the Sacramento Basin, onshore California. SGC has an extensive portfolio of gas prospects at both exploration and appraisal stages, including multi-Tcf opportunities. The Company is targeting gas supply to the local Californian gas market and burgeoning LNG market in North America. SGC is of the view that the size of the prospects in California have the potential to supply both the domestic Californian gas market and export LNG markets.
www.sacgasco.com
