Production and Operational Update

RNS Number : 7566C

Empyrean Energy PLC

19 April 2013

 



19 April 2013

Empyrean Energy PLC

("Empyrean" or the "Company"; Ticker: (EME))

Sugarloaf Project: Onshore Texas, USA

Production and Operational Update

Empyrean Energy Plc (Ticker: EME), the AIM-listed condensate and gas exploration and production company focused on the Eagle Ford Shale, Texas, USA, is pleased to provide the following update on production and operations at its Sugarloaf Project:

Highlights

·     Production on a barrel of oil equivalent basis ("BOE") net to Empyrean increased by approximately 20%  in the three months to March compared to the three months to December 2012

·     Empyrean has 79 gross wells producing, an increase of 10 wells since the end of January

·     The Austin Chalk pilot program has commenced with the first well having reached TD (total depth) and the second well currently drilling ahead

·     Well down spacing initiatives are ongoing

Production

The following is a summary of wellhead production data received from the operator from wells at the Sugarloaf Project from July 2012 through to March 2013. All figures that are stated as "Net to EME" are calculated at the working interest percentage in each well and multiplied by the net revenue interest ("NRI") to give an amount to Empyrean net of royalties but before any taxes.

Month	Gas (Net to EME) (mcf)	Condensate (Net to EME)(bbls)	BOE Total (Net to EME)	BOE/day average (Net to EME)
July 2012	13,163	5,046	7,240	234
August 2012	24,905	7,129	11,280	364
September 2012	30,355	7,814	12,873	429
October 2012	18,011	7,658	10,660	344
November 2012	20,738	10,127	13,583	453
December 2012	30,069	11,248	16,260	525
January 2013	35,386	10,972	16,870	544
February 2013	30,982	9,046	14,210	508
March 2013	37,775	11,026	17,322	559

Notes:

1.   The wells have had the Average Daily Equivalent Oil Rate recalculated on a simple 6:1 basis.

2.   Please note that reporting for production at the wellhead does not include Natural Gas Liquids (NGL's) as these are extracted and measured later. The numbers are approximate and are rounded and are subject to change as sales are completed and allocated to each well. The Company has been notified by the operator that there have been some issues with the allocation of gas production numbers for some wells since September 2012, when wells on single separators have been switched over to facilities that have both a high pressure and low pressure separator. The operator has assured the Company that these issues are being corrected and will not affect the ultimate allocation of volumes of hydrocarbons for product sold.

A revised version of this announcement in which the information from the table above has been portrayed graphically is available on the Company's website and clearly shows a positive trend.

The following is a summary of 30 and 60 day production data recently received for the following wells at the Sugarloaf Project:

	Working Interest	Total Gas Production (mmcf)	Total Condensate Production (bbls)	Average Daily Equivalent Oil Rate (boe/d)*
Morgan 2H - 30 day	3.0%	43.96	18,769	870
Morgan 3H - 30 day	3.0%	28.86	17,855	756
Pfeiffer 4H - 30 day	1.907%	38.44	19,336	858
Pfeiffer 4H- 60 day	1.907%	58.82	32,462	704
May B 1H - 60 day	3.0%	104.65	37,796	921
Mobil D 1H - 60 day	2.45%	186.16	76,186	1,787
Tipton Jonas 2H - 60 day	1.485%	48.32	25,234	555
Tipton Jonas 3H - 60 day	1.485%	40.63	27,872	577
Tipton Jonas 4H - 60 day	1.485%	42.16	28,759	596

Notes:

3.   The wells have had the Average Daily Equivalent Oil Rate recalculated on a simple 6:1 basis.

Going forward the Company intends to provide a Production and Operational Update, that incorporates a summary of wellhead production data and 30/60 day individual well data, on a quarterly basis. Where the end of the quarter coincides with a financial period end the Production and Operational Update will be released before the publication of the half year report or preliminary results after the production data has been received.

Operations

As at the end of March 2013 Empyrean had 79 gross wells that were producing at the Sugarloaf Project on acreage operated by Marathon Oil Company, a subsidiary of Marathon Oil Corporation (NYSE: MRO), an increase of 10 wells since the end of January 2013. In addition, there were two wells drilling ahead and one further well awaiting or in the process of having completion/stimulation operations carried out.

The Austin Chalk pilot program, aimed at establishing viable production from the Austin Chalk in addition to the Eagle Ford Shale, has commenced with the first well having reached total depth and drilling having commenced on the second well. There are three wells being drilled from the same drill pad in the pilot program. First production is anticipated mid-year. The Austin Chalk pilot program has the potential to increase recoverable reserves and ultimate value for the Sugarloaf Project if it is successful.

The well down spacing initiatives are ongoing. Early indications show the wells drilled on tighter spacing are behaving as forecast.. Early planning and reserves calculations on the Sugarloaf Project were based on 80 acre spacing. Down spacing has the potential to improve recoveries, reserves and ultimate value. At the Sugarloaf Project, further production history will be required before the optimum spacing regime for the next phase of development is finalised. The Austin Chalk pilot program will also be considered during this process.

Commenting today, Empyrean CEO, Tom Kelly said "We are pleased that the number of wells in production, net production and revenue have continued to trend upwards. The Austin Chalk pilot program is underway and there are some positive signs starting to come from the down spacing initiatives - we anticipated a stronger second half to the end of March 2013 and the production data has confirmed this to be the case."

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

Empyrean Energy plc 

Tom Kelly

[phone]

Shore Capital

Anita Ghanekar

Edward Mansfield

[phone]

Jonathan Charles

Lionsgate Communications

E: [e-mail]
M: [phone] 

www.lionsgatecomms.com 

Notes to Editors:

Empyrean Energy Plc is an AIM listed (Ticker : EME) condensate and gas exploration and production company focused on the Eagle Ford Shale, Texas, USA. Other assets include a 10% working interest in the Riverbend Project, Texas, just north of the prolific Brookeland Field (Austin Chalk) as well as a 57.2% interest in the Eagle Oil Pool Development Project located in the San Joaquin Basin, southern California.

Empyrean's portfolio includes an interest in over 79 producing wells with scaleable growth potential from further development and exploration upside.

 

END

 

 

MSCNKCDQPBKKNQD