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Final Results
Empyrean Energy, a US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, has announced its final results for the year ended 31 March 2014.
Highlights:
· Record financial results and production following a significant step-up in production at flagship Marathon Oil operated Sugarloaf AMI project (EME 3% working interest) targeting formations including the prolific Eagle Ford Shale and Austin Chalk in Texas
o 51% increase in revenues for the 12 months to 31 March 2014 to US$13,883,854 (2013: US$9,180,544)
o 83% increase in net profit after tax for the 12 months to 31 March 2014 to US$5,221,102 (2013: US$2,846,890)
o 50% increase in production net to Empyrean (before royalties) for the 12 months to 31 March 2014 to 335,305 barrels of oil equivalent (2013: 223,500 barrels of oil equivalent)
· Substantial increase in activity at Sugarloaf with 43 wells spudded and 39 wells brought into production during the period
o Well spacing initiatives – 90% of wells drilled in 2013 at 60 acre spacing or less resulting in an approximate 45% increase in 30 day initial production rates over wells previously drilled at greater than 60 acre spacing
o Reduction in drilling costs following improvement in drilling techniques and introduction of drill pads
· Intensive drilling programme planned with 100 wells targeted in calendar year 2014
o Funding available for current drilling schedule
· Significant potential from the overlying Austin Chalk formation
o Early Austin Chalk wells drilled to date performing similarly to the Eagle Ford Shale wells
o Further development of the Austin Chalk anticipated to require in the order of a further 300 wells, with down spacing potential of approximately 235 further wells
· Updated reserves report to 31 December 2013 on Sugarloaf AMI released in May 2014 showed:
o 54% increase in 1P Reserves to 3.54 Mmboe
o 48% increase in 2P reserves to 6.53 Mmboe
o 2C Contingent Resource for the Austin Chalk formation of 3.87 Mmboe
· Piloting 30 acre well spacing during 2014 in selected areas of the Eagle Ford Shale
· Further repayments to Macquarie Bank reducing debt to US$10.67m as at 31 March 2014 and to US$9.17m as at 29 August 2014
· Formal Sales Process and Strategic Review announced 10 July 2014
Empyrean CEO Tom Kelly said, “This has been a year of tremendous growth for Empyrean. Marathon continues to ramp up drilling at our primary asset, and we believe potentially significant reserves upside exists within both the Eagle Ford Shale and the Austin Chalk, with the latter showing signs of being a transformational pay-zone for the Company and its partners following recent successful appraisal wells.
“Empyrean has chosen to undertake a Formal Sales Process and Strategic Review with highly regarded advisors in Cenkos and Macquarie Bank advising and coordinating the process, against the backdrop of recent increased levels of corporate activity and industry interest in the region, and in order to maximise value for its shareholders.”
