TIDMEME
RNS Number : 5567I
Empyrean Energy PLC
19 April 2022
This announcement contains inside information
Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil &
Gas
Empyrean Energy plc
Block 29/11, China - Elevated methane (C1) recorded in
interpreted "Gas Cloud" zone
19 April 2022
Empyrean Energy plc ("Empyrean" or the "Company"), the oil and
gas development company with interests in China, Indonesia and the
United States, is pleased to provide the following update on
drilling at the Jade prospect at its 100% owned Block 29/11 permit,
offshore China:
HIGHLIGHTS
-- LH 17-2-1 well at the Jade prospect drilled 12-1/4" section
to 2150 metres Measured Depth ("MD")
o Elevated methane (C1) ranging from 227ppm to 15440 ppm was
recorded while drilling 12-1/4" section.
o Higher values of methane (C1) ranging from 4190 ppm to 15440
ppm were recorded in the pre-drill interpreted "gas cloud" zone
between 1550 metres to 1800 metres MD.
o CNOOC has confirmed comparable methane ranges in their oil
discovery well LH 23-1-1d that is located 10km Southwest of the
Jade prospect which also had a "gas cloud" feature
-- Drilling results have validated the pre-drill interpretation
of seismic data including the presence of gas clouds over the Jade
as well as Topaz prospects
-- Based on the results thus far, Empyrean has upgraded its
internal Geological Chance of Success ("GCoS") over the Jade
prospect from 41% to 65% and Topaz prospect from 35% to 47%
-- Current operations are the installation of 9-5/8" casing
before drilling 8-1/2" hole to the Total Depth ("TD") of 2860
metres MD
Empyrean is the operator of Block 29/11 in China and has 100%
working interest during the exploration phase. In the event of a
commercial discovery, its partner, China National Offshore Oil
Company ("CNOOC"), may assume a 51% participating interest in the
development and production phase.
Progress
The NH9 Semisubmersible drilling rig made excellent progress at
LH 17-2-1 with the drilling of the 12-1/4" section to 2150 metres
MD and current operations are preparations for running 9-5/8"
casing.
During drilling of the 12-1/4" section, elevated methane (C1)
ranging from 227 parts per million ("ppm") to 15440 ppm was
recorded at the gas chromatograph during mudlogging. Negligible C2
and no C3 components were recorded. Higher values of methane (C1)
ranging from 4190 ppm to 15440 ppm were recorded in the zone
between 1550 metres to 1800 metres MD which was interpreted
pre-drill to be a "gas cloud" zone.
During the drilling of this section, EME was in regular
communication with CNOOC to fully understand and cross check the
significance of elevated methane (C1) against CNOOC discovery
wells. CNOOC has confirmed comparable methane ranges in their oil
discovery well LH 23-1-1d that is located 10km Southwest of the
Jade prospect. LH 23-1-1d also exhibited a gas cloud on seismic
data. The elevated methane readings to date have validated the
Company's pre-drill interpretation of seismic data, including the
presence of a gas cloud in overburden above the Jade prospect, a
feature also present over the Topaz prospect. It is also the case
that two dry wells drilled by AMOCO in the 1990s on the eastern
flank of Empyrean's Block 29/11 permit area did not display any gas
clouds nor did they have elevated methane (C1) whilst drilling the
same geological formation.
Based on the latest elevated methane (C1) readings, Empyrean has
upgraded its internal Geological Chance of Success ("GCoS") for the
Jade prospect from 41% to 65%. It has also upgraded the GCoS for
its Topaz prospect from 35% to 47%.
Prospect GCoS Factor (after gas cloud study) - GCoS
pre drill
Trap/ Seal Reservoir Source Timing
----------------- --------------- ---------- ---------- -----
Jade 0.9 0.95 0.68 0.7 41%
----------------- --------------- ---------- ---------- -----
Topaz 0.9 0.85 0.7 0.65 35%
----------------- --------------- ---------- ---------- -----
Prospect GCoS Factor (after elevated C1) - during GCoS
drilling
---------------------------------------------------------- -----
Trap/ Seal Reservoir Source Timing
----------------- --------------- ---------- ---------- -----
Jade 0.9 0.95 0.95 0.8 65%
----------------- --------------- ---------- ---------- -----
Topaz 0.9 0.85 0.95 0.65 47%
----------------- --------------- ---------- ---------- -----
Forward plan
Following the setting of 9-5/8" casing, the 8-1/2" hole will be
drilled to the TD of 2860 metres MD.
Well Objective
The 2021 drilling campaign is targeting a world class
conventional oil target in the Jade prospect, to which Gaffney
Cline & Associates ("GCA") assigned a GCoS of 32%. Subsequent
to this independent assessment, the Company completed a gas cloud
study and post stack seismic inversion study that it believes
further mitigates risk and increases the GCoS to 41%. Following the
elevated methane readings whilst drilling through the "gas cloud"
zone, the internal Company GCoS is now 65%.
The Jade prospect has a GCA audited mean in place potential of
225 MMbbl and a P10 in place upside of 395 MMbbl. Four recent
nearby discoveries by CNOOC immediately to the West of the Jade
prospect are filled to their P10 potential or better. All four
CNOOC discoveries have gas clouds showing in the overburden on
seismic.
Empyrean's excellent quality 3D seismic indicates that there is
a classic "fill to spill" geological setup in the basin, and a
robust regional seal, that provides the Jade and Topaz prospects
with a very real possibility of being filled in a similar fashion
to nearby discoveries. The Jade and Topaz prospects both have gas
clouds, similar to nearby discoveries, in the overburden on 3D
seismic. Dry wells nearby do not have gas clouds. The Jade prospect
is the first of the three identified prospects within Block 29/11,
which also contains the Topaz and Pearl prospects. The combined
audited mean in place potential of all three prospects is 884 MMbbl
and a P10 in place upside of 1,588 MMbbl. The post stack seismic
inversion study showed Jade and Topaz both have the potential for
excellent carbonate buildup reservoir quality with excellent
porosity and permeability. Any oil discovered is expected to be
light oil in the 38-41 API range, similar to nearby discoveries.
These attributes combined with the potential for exceptional
natural reservoir drive supports the potential for excellent
recovery rates.
The objective of the Jade well is to test for hydrocarbons down
to TD of 2860 metres MD.
The information contained in this announcement has been reviewed
by Empyrean's Executive Technical director, Gaz Bisht, who has over
31 years' experience as a hydrocarbon geologist and
geoscientist.
Empyrean CEO, Tom Kelly, stated:
"The first technical objective of the Jade well has now been
drilled. The validation of "gas clouds" through the presence of
elevated methane levels in exactly the depth zone we interpreted on
the excellent quality seismic data proves that the gas clouds exist
and supports the Company's pre-drill interpretation that the
methane is probably coming from light oil in the anticipated
reservoir section. This is a major box now ticked, if we are to
make a light oil discovery at Jade. The comparisons to nearby CNOOC
discovery wells look very compelling. Drilling operations continue
to run smoothly and safely, with progress to date right on
schedule".
For further information please contact the following:
Empyrean Energy plc
Tom Kelly Tel: +61 6146 5325
Cenkos Securities plc (Nominated Advisor and Broker)
Neil McDonald Tel: +44 (0) 20 7297 8900
Pete Lynch
Pearl Kellie
First Equity (Joint Broker)
Jason Robertson Tel: +44 (0) 20 7330 1883
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