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Empyrean Energy PLC: final results

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Oilfield Technology,


Empyrean Energy has announced its final results for the year ended 31 March 2018. The full Report and Accounts will be made available on the company’s website in the coming days.

Highlights

Reporting Period

Block 29/11, Pearl River Mouth Basin, China (EME 100%)

  • 580 km2 3D seismic survey successfully completed in August 2017.
  • Interpretation of onboard processed seismic data confirmed structural validity of Jade and Topaz prospects within Block 29/11.
  • Third significant target identified named 'Pearl', located north of the Topaz prospect within Block 29/11.
  • Total Preliminary Prospective Resources (Best) Estimate of 591 million bbls from Jade, Topaz and Pearl prospects.

Duyung PSC Project, Indonesia (EME 10%)

  • Secured a 10% interest in the Duyung PSC, offshore Indonesia, in April 2017.
  • Mako South-1 well was drilled to a total depth of 1707 ft and the drilling and testing operations were completed in June 2017.
  • Mako South-1 well results exceeded expectations encountering excellent reservoir quality, gas saturation, porosity, permeability and flow rates.
  • Mako South-1 well flowed at a stabilised rate of 10.9 ft3 of gas per day with multi Darcy permeability.

Sacramento Basin, California USA (EME 25 - 30%)

  • Negotiated a 25 - 30% working interest in the Northern Sacramento Basin package of gas projects.
  • Northern Sacramento Basin projects includes the Dempsey and Alvarez prospects plus a Dempsey Trend AMI with multiple targets.
  • Dempsey 1-15 well spudded in August 2017 and reached total depth of 9747 ft.
  • Wireline logs confirmed numerous potential gas bearing zones. Comprehensive production testing commenced in November 2017.

Post reporting period

Block 29/11, Pearl River Mouth Basin, China (EME 100%)

  • Based on comprehensive seismic interpretation of fully processed 3D data, 31% uplift in best case Prospective (Un-risked) Resources from 591 million bbls to 774 million bbls in Jade, Topaz and Pearl prospects announced in June 2018.
  • Detailed Oil Migration Study completed in June 2018. The study helped interpret effective oil migration pathways into the Jade, Topaz and Pearl prospects from proven hydrocarbon kitchen sags.

Duyung PSC Project, Indonesia (EME 10%)

  • The operator, Conrad Petroleum, made significant progress with completion of detailed and comprehensive technical studies by incorporating all the sub-surface data collected in the discovery well.
  • In addition, substantial commercial and facilities studies have been completed as a part of the Plan of Development (‘POD’).
  • POD, including reserves certification, submitted to Indonesian regulator SKKMigas in August 2018.
  • Heads of Agreement signed with regional utility for sale of Mako gas.

Sacramento Basin, California USA (EME 25 - 30%)

  • The JV discussed and agreed to conduct a comprehensive testing operation. A total of three zones (Zone 2, 3, and 4) were high-graded for testing in the well.
  • Comprehensive data was collected to understand the key parameters (porosity and permeability) of the reservoir.
  • Commercial Gas Flows from combined zones commenced at Dempsey at ~ 1 300 000 ft3/d.
  • JV now undertaking further subsurface work to assess the prospectivity of other opportunities along the Dempsey trend in light of the results of Dempsey 1-15.Cash flow from production at Dempsey commenced in July 2018.
  • Applications submitted to commence operations at Alvarez well.

Empyrean CEO Tom Kelly said, “After the sale of our interest in the Sugarloaf AMI in Texas in 2016, Empyrean has successfully reconstructed the Company through a series of strategic acquisitions and the Company now holds an exciting portfolio of exploration projects in China, Indonesia and the USA.

“The Company has actively worked with the operators to make substantial progress in each project during the year. As a result, we have made a discovery in Indonesia; proven commercial gas in the Sacramento Basin (Dempsey 1-15) in California; and successfully completed the acquisition, processing and interpretation of a large 3D survey over the key prospects in China.

“We expect that work over the remainder of the calendar year will continue to add significant value for the Company and its shareholders through the focused advancement of these projects.”

Chairman’s Statement

After a significant restructuring of its activities in the prior year, which included the sale of our interest in the Sugarloaf asset in Texas, Empyrean has successfully developed into an active exploration company through a series of exciting project acquisitions in China, Indonesia and the United States.

In December 2016 Empyrean acquired a permit covering 100% of the exploration rights for Block 29/11, located in the Pearl River Mouth Basin, offshore China. Under the negotiated terms, the China National Offshore Oil Company Limited (CNOOC Limited) have a back in right to 51% of the Production Sharing Contract (‘PSC’) if a commercial discovery is made following Empyrean entering a PSC.

Empyrean commenced a 580 km2 seismic acquisition survey on Block 29/11 in June 2017 which was completed in August of the same year, with preliminary interpretation confirming the structural validity of two key prospects, Jade and Topaz, which had previously been identified in vintage 2D seismic surveys, and identifying a third significant target named Pearl, located to the north of Topaz. All three prospects have significant resource potential and the prospective resource estimates were upgraded in June 2018, as detailed in the Operational Review. Empyrean has also recently completed an Oil Migration Study which has established effective potential oil migration pathways into the Jade, Topaz and Pearl prospects.

In April 2017 Empyrean acquired a 10% interest in the offshore Duyung PSC in Indonesia and participated in the drilling of the Mako South-1 well in June 2017. As previously reported, this well exceeded expectations with a stabilised flow rate of 10.9 cubic feet of high quality methane gas per day with excellent permeability (in the multi Darcy range). The results significantly de-risked the project, confirming a large accumulation of gas with extremely good reservoir quality. In August 2018 the Plan of Development, including a certification of reserves, was submitted by the operator, West Natuna Exploration Limited, to the Indonesian regulator SKKMigas. During preparation of the POD, a Heads of Agreement was signed with a regional utility for the sale of all Mako gas.

In May 2017 Empyrean entered into an agreement with ASX listed Sacgasco Limited, to test a group of projects in the Sacramento Basin California, including two mature gas prospects in Dempsey (EME 30%) and Alvarez (EME 25%) and also further identified follow up prospects along the Dempsey trend (EME 30%). Following completion of a 2970 m appraisal and exploration well, Dempsey 1-15, the operator has tested multiple gas zones which, subsequent to the reporting period end, resulted in the production of commercial gas flows. The plan at the time of this report was to connect to nearby wells to further increase production and cash flow.

Applications have also been submitted to the regulator to permit the re-entry of the Alvarez 1 wellbore. Analysis is currently being conducted with a view to assessing the integrity of the wellbore and the forward plan.

On the corporate front, the company said farewell to Frank Brophy who retired in December 2017. Frank was with Empyrean for 12 years and made an invaluable contribution over that time and his technical knowledge, and friendship, is greatly missed. However, with Frank’s departure the company was fortunate to have the highly qualified Gajendra Bisht on the Board and he has assumed the technical oversight role across the company’s project portfolio. I’d also like to thank the Board and staff for their contribution during the year, in particular Tom Kelly who contributes so much time and effort and continues to drive Empyrean forward.

The company is excited about the position it is in, with a stronger oil price and interests in three high impact exploration projects in energy hungry markets. Work will continue to accelerate all three projects to maximise their value. While the activities above continue, in parallel the Board continues to evaluate new projects to position the company for renewed growth and to further increase shareholder value.

Read the article online at: https://www.oilfieldtechnology.com/special-reports/06082018/empyrean-energy-plc-final-results/

 

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