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

Empyrean EnergyAnnouncement

30/03/2022 08:30

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RNS Number : 5669G  Empyrean Energy PLC  30 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 well update

 

30 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:

 

HIGHLIGHTS

 

·      Safety inspection at the China Oilfield Services Limited ("COSL")
owned NH9 drill rig have been completed and the rig is cleared and ready for
mobilisation to the Jade well location

·      High winds and seas have required a re-scheduling of up-anchor,
mobilisation and anchoring at the Jade well location to meet strict safety
protocols

·      The NH9 rig is still safely anchored at the CNOOC well location
pending suitable operable weather conditions

·      The long range forecast looks suitable

 

 

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.

 

Following handover of the rig, safety inspections have been carried out and
the NH9 rig is now cleared to move to the Jade well location pending suitable
safe sea conditions. The NH9 rig has been used to drill a well for  CNOOC
immediately preceding mobilisation to Jade. The NH9 rig is still on location
at the CNOOC well.

 

COSL will provide a new anticipated spud date once sea conditions improve and
operations can re-commence. Safety protocols require sea conditions to be a 6
or less on the Beaufort Scale for towing and anchoring operations expected to
take 4 days in total.

 

As previously advised, CNOOC EnerTech Drilling and Production Co ("CNOOC
EnerTech") are providing  comprehensive pre-drilling, drilling and testing
services to Empyrean for the Jade well. CNOOC EnerTech has a wealth of global
experience, but more importantly has vast local hands-on experience managing
the drilling of wells within the Pearl River Mouth Basin where the Block 29/11
permit sits. The Empyrean/ CNOOC EnerTech team will be present both onshore,
and offshore on the rig, during the drilling of Jade. Offshore, the team will
consist of a hand picked drilling supervisor, well site geologist, mud logger
and an electric logging expert. Gaz Bisht, Empyrean's technical director who
has a successful track record of hydrocarbon discoveries within offshore
China, has already made his way to China and is supervising the operations as
part of the onshore team.

 

Empyrean and the CNOOC EnerTech team have taken every precaution to plan for a
safe drilling campaign at Jade. The COSL owned NH9 rig and its drilling team
are 'drill fit' and the NH9 rig will be mobilised straight to the Jade well
location from its current position without the need to go back to port.

 

From the spud date, the Jade well is anticipated to take approximately 26 days
to drill to Total Depth on a trouble free basis. There are no overly
challenging drilling zones anticipated with the Jade well design and program.
If the Jade well intercepts a hydrocarbon zone, as anticipated, then testing
is planned to take approximately a further 2 weeks.

 

We will provide a further update on progress as weather conditions allow rig
operations to re-commence.

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 look forward to re-commencing rig mobilisation operations as soon as
weather conditions allow for safe working conditions. Based on the current
long range forecast, we do not expect the wait to be very long."

 

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

 

 

 

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