REG - Empyrean Energy PLC - Block 29/11, China - Jade drilling update

Empyrean EnergyAnnouncement

07/03/2022 08:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220307:nRSG8291Da&default-theme=true

RNS Number : 8291D  Empyrean Energy PLC  07 March 2022

This announcement contains inside information

 

Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil & Gas

 

Empyrean Energy plc

 

Block 29/11, China -Jade drilling operational status

 

7 March 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 preparations to drill the Jade prospect at
its 100% owned Block 29/11 permit, offshore China (the "Jade Prospect"):

 

HIGHLIGHTS

 

·      China Oilfield Services Limited ("COSL") has successfully
completed the well site survey required over the Jade Prospect drilling
location

·      The completion of the well site survey enables the prompt lodging
of the final permit application required to drill the Jade Prospect

·      All other permits required to drill the Jade Prospect have been
obtained and finalised

·      Empyrean is now in further discussions to finalise drill rig
availability and an anticipated spud date for the Jade Prospect well

·      Early discussions with both COSL and CNOOC regarding a drilling
slot using the NH9 rig, which is currently drilling a well for CNOOC in the
region, have been positive and an update on scheduling is expected shortly

 

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.

After a sustained period of unsuitable weather, the Company is extremely
pleased to confirm that the COSL survey team has taken advantage of a small
operable weather window and has successfully completed the well site survey at
the Jade Prospect. The survey included a number of gravity samples and an
analogue survey over the Jade Prospect drill location and rig anchoring
points.

While the Company awaited suitable weather conditions over the past months the
CNOOC EnerTech team has been working efficiently and has secured seven of the
eight critical pre-drilling permits. With the completion of the well site
survey the Company can now quickly lodge the application for the final permit
to drill the Jade Prospect.

Empyrean is now in discussions to confirm a final drill rig slot using the
COSL owned NH9 rig that is currently drilling a well for CNOOC in the region
and expects to announce the targeted spud date for the Jade Prospect well as
soon as these negotiations complete and scheduling becomes clear.

The Jade Prospect

The 2021 drilling campaign is targeting a world class conventional oil target
in the Jade Prospect, to which Gaffney Cline & Associates ("GCA") assigned
a Geological Chance of Success ("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%.

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 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:

"We are delighted that the COSL survey team has been able to complete the well
site survey, given the sustained unfavourable winds and swells encountered
over the past 6 months. This now enables the completion of the permitting
process with the survey report being the final box to tick. Over the past few
months the Empyrean, COSL and CNOOC EnerTech teams have been hard at work to
finalise all required permits to drill the high impact and exciting Jade
Prospect. With the completion of the well site survey the Company can now
quickly lodge the application for the final of the eight required permits to
drill the Jade Prospect. As advised previously, the Jade Prospect looks to be
one of the highest impact exploration wells scheduled for 2022, globally.
Again, I would like to thank COSL and CNOOC for their continued excellent
support and cooperation throughout this process."

 

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) 131 220 9771
   Pete Lynch                                             Tel: +44 (0) 131 220 9772

  First Equity Limited (Joint Broker)
   Jason Robertson                       Tel: +44 (0) 20 7330 1883

 

   First Equity Limited (Joint Broker)
   Jason Robertson                       Tel: +44 (0) 20 7330 1883

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDJRMPTMTMMMMT