Drilling Report

Empyrean Energy PLC
18 August 2006



                              Empyrean Energy PLC
                  ('Empyrean' or the 'Company'; Ticker: (EME))


                     Sugarloaf Hosston Prospect, Texas USA
                     -------------------------------------



- Drilling Commences at the Sugarloaf-1 well.

- Multiple reservoirs targeted.

- Deep target has multi-TCF potential.
      
      
AIM quoted Empyrean Energy PLC today announces that the Sugarloaf-1 exploration 
well, located in the onshore Gulf Coast Basin in Texas, USA, commenced drilling 
at 0200 hours on 17th August 2006. At 0600 hours today, Sugarloaf-1 was at a 
measured depth of 186 feet and drilling ahead in 22 inch diameter hole.

The proposed total depth of Sugarloaf-1 is 21,000 feet (6,400 metres) or such 
other depth as agreed by the joint venture partners.

The well has a number of geologically independent targets and is being drilled
in an area where there are numerous fields producing from a variety of
geological horizons.

The primary target is a large four-way dip closed growth fault structure
developed in the early Cretaceous aged Hosston Formation. The top of the Hosston
is interpreted from seismic to be at approximately 17,000 feet (5,200 metres)
and there is the potential for several different sandstones to be developed over
a gross 4,000 feet (1,200 metres) thickness. Mean reserves potential for the
Hosston target is 800 BCF of gas, with upside potential of several TCF.

The shallower secondary targets are in Cretaceous aged carbonate formations at
depths ranging from 12,000 to 14,000 feet (3,600 - 4,300 metres). These
formations are productive in adjacent areas. Reserves potential of the shallow
targets is estimated at around 100 BCF equivalent.

The first secondary target of the well (12,000 - 14,000 feet) is anticipated to
be reached approximately 4 weeks after spud. Given that the well is designed to
be drilled to 21,000 feet, these shallower formations will be evaluated by logs
and cased off, regardless of whether or not hydrocarbons are present. If
potentially commercial hydrocarbons are interpreted from the logs, these will be
production tested with a smaller rig as soon as practicable after the deep
drilling rig is released. Definitive results from the shallow targets will
therefore only be obtained after a testing program once the well is completed.

The primary Hosston target is expected to be reached in early to mid October and
total depth of 21,000 feet (6,400 metres) in early November. If hydrocarbons are
intersected in the Hosston Formation, they will be cased off and production
tested using a smaller completion rig.

Due to the Australian Stock Exchange ('ASX') listed partners' intentions to
issue routine ASX releases providing a Sugarloaf-1 update every Wednesday during
drilling, Empyrean Energy Plc will provide a mirror updating announcement for
consistency unless there are material matters which require an earlier release.

Executive Director, Tom Kelly, commented:

'The Sugarloaf Hosston Prospect is another exciting well for Empyrean with
multiple reservoir targets including the deeper multi-TCF gas target. The well
is close to existing hydrocarbon infrastructure and with strong energy prices in
the USA - any discovery will be rapidly brought into production. Empyrean will
continue to seek excellent risk versus reward opportunities aimed at delivering
early cash flow and building shareholder value upon exploration success.'

Participants in the Sugarloaf-1 well are:

Adelphi Energy Texas, Inc.*                                  20.0%
Texas Crude Energy Inc (Operator) et al#                     41.5%
Aurora Oil and Gas Ltd                                       20.0%
Eureka Energy Ltd                                            12.5%
Empyrean Energy plc                                           6.0%

* a wholly owned subsidiary of Adelphi Energy Limited

# includes other private US companies / investors


The information contained in this announcement was completed and reviewed by the
Technical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who has
over 40 years experience as a petroleum geologist.

For further information

Angus Prentice/Laurence Read                                
Conduit PR                                                                
Empyrean Energy plc
Tel: [phone] 
Mob: [phone]

Empyrian
Tel : [phone]

Imran Ahmad / Cecil Jordaan
HB Corporate
Tel: [phone]


                      This information is provided by RNS
            The company news service from the London Stock Exchange