TIDMEME
RNS Number : 9963Q
Empyrean Energy PLC
18 September 2017
This announcement contains inside information
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil &
Gas
18 September 2017
Empyrean Energy PLC ("Empyrean" or the "Company")
Dempsey Gas Well to Flow Test Multiple Zones
-- Wireline logs confirm numerous zones for production testing
-- Wireline log data supports the presence of gas saturated
sands consistent with previously reported significant gas shows
-- 5 1/2 " liner run and cemented to protect zones for testing
-- Drill rig being replaced by workover rig to carry out completion and testing
-- Testing expected to commence in 2 to 3 weeks based on logistics of rig moves
-- Tests to be conducted sequentially from lowest up (not in
priority of interpreted significance ) and
will cease once sufficient commercial flow is established for production
-- Dempsey has successfully drilled the largest mapped
structural closure in the 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 has completed the drilling phase, and a 5 1/2 " liner has been
run and cemented to protect all potential reservoirs beneath the
existing 9 5/8" casing.
Since the last update two wireline logging runs have been
completed. The wireline log data supports the presence of
gas-saturated porous sands consistent with the zones of significant
gas shows reported earlier.
These strata have been underexplored and under-evaluated in the
Sacramento Basin. Therefore, in the absence of nearby analogue
producing reservoirs, flow testing in the next stage of operations
will determine whether the gas sands have a combination of
porosity, permeability and access to volumes of reservoir rocks of
sufficient quality to flow gas at commercial rates for an extended
period.
The production potential of these zones of interest will become
more apparent when the zones are flow tested through perforations
in the liner.
Flow testing of the potential gas producing reservoirs will
commence in 2 to 3 weeks when the current drilling rig has been
demobilized and a more cost effective workover rig has been moved
to the Dempsey well location. For practical reasons the flow
testing process will be carried out in a sequential way from the
lowest zone of gas upwards. At such time that a zone is capable of
flowing pipeline quality gas at commercial rates, testing will be
suspended and the well placed into production for earliest cash
flow.
The previously reported gas filled sands at the existing field
reservoir levels, that are also safely protected behind casing,
will be the last sands to be perforated and tested.
A more complete understanding of the potential gas available for
future production will likely require some months of flow testing
and production, combined with integration of data from the Dempsey
1-15 well with the 3D seismic data.
Updates will be provided on meaningful results from the flow
testing of the target sandstone reservoirs.
The Dempsey 1-15 well has successfully drilled the largest
mapped structural closure in the northeastern part of the prolific
Sacramento Gas Basin and is interpreted to have trapped gas in
multiple potential reservoir zones.
Tom Kelly, Empyrean CEO, commented "With multiple interpreted
potential production zones now safely behind cemented casing, we
now embark on an exciting flow testing program. A completion rig is
being used for the flow testing operation and rig changeover is
underway. This is a positive achievement for the JV in what we all
hope will be a well that provides early cash flow from the project
from what is potentially high impact frontier exploration. We look
forward to providing updates as testing progresses."
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 intersected 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 and flow testing to be definitive.
The Dempsey 1-15 well was 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
has explored 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 allows 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.
**S**
For further information:
Empyrean Energy plc
Tom Kelly Tel: +61 8 9380 9920
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
St Brides Partners Ltd
Lottie Brocklehurst Tel: +44 (0) 20 7236 1177
Olivia Vita Tel: +44 (0) 20 7236 1177
Notes to Editors
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 1800km(2)
offshore oil permit located in the Pearl River Mouth Basin, China
where it has completed a 3D seismic survey over two large oil
prospects, Jade and Topaz. Processing and interpretation is
underway and preliminary internal interpretation of the raw seismic
data has confirmed the structural validity of the Jade and Topaz
prospects and also identified a third significant target named
Pearl, which is located north of 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 has
recently completed drilling 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.
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
This information is provided by RNS
The company news service from the London Stock Exchange
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