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Empyrean Energy PLC - EME Dempsey 1-15 well production update Released 07:57 08-Dec-2017

RNS Number : 7978Y

Empyrean Energy PLC 08 December 2017

This announcement contains inside informa�on

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

8 December 2017

Empyrean Energy PLC ("Empyrean" or the "Company")

Dempsey 1-15 well second zone to be placed on produc�on pending s�mula�on

Empyrean Energy (EME: AIM), the oil and gas development company with interests in China, Indonesia and the United States, is pleased to announce that it has been informed by Sacgasco Limited (ASX: SGC) ("Sacgasco"), the operator of the Dempsey 1-15 well in the Sacramento Basin, onshore California, that ini�al flow tes�ng of the second deepest zone of gas shows in the Dempsey 1-15 well is complete.

This zone flowed gas on 12/64 inch choke at a rate of approximately 140 mcf/d with approximately 150psi tubing pressure at the �me tes�ng concluded. No water was produced. Following the test, shut in tubing pressure rose to over 6000psi within 32 hours.

This zone is interpreted to be a significant gas discovery with high pressures but low permeability over the zone of perfora�ons. The forward plan is to fracture s�mulate this zone to improve the permeability in the vicinity of the wellbore and achieve greater connec�vity to the zones immediately above and below.

Planning, design and the approval process has commenced. At this stage it is not known exactly how long the approval process will take. The well is to be placed on produc�on to sales un�l the approvals are gained and the well is ready to s�mulate.

As previously advised, tes�ng is occurring from the bo�om up. This zone of gas must be adequately assessed before moving up hole to the next zone of interest that exhibited significant gas shows whilst drilling.

No conclusions should be drawn as to the ul�mate flow rates or commerciality of this second deepest zone un�l the s�mula�on produc�on test and s�mula�on program and tes�ng are fully completed.

Empyrean CEO Tom Kelly commented, "It is very early days in the tes�ng of the Dempsey 1-15 well, and whilst the bo�om two zones have both flowed clean dry gas with very high down hole pressures, both zones exhibit �ght permeability. The pressure and poten�al extent of gas reservoir are significant and every effort is being made to use industry best prac�ces in order to see if we can s�mulate the second deepest zone to achieve a much be�er flow rate before moving up hole to test the next zones of interest."

This announcement has been reviewed by Empyrean's Technical Director, Mr Frank Brophy BSc (Hons), who has over 50 years experience as a petroleum geologist.

**ENDS**

For further informa�on:

Empyrean Energy plc

Tom Kelly

Tel: +61 8 9380 9920

Cenkos Securi�es plc

Neil McDonald

Tel: +44 (0) 131 220 9771

Beth McKiernan

Tel: +44 (0) 131 220 9778

St Brides Partners Ltd

Lo�e Wadham

Tel: +44 (0) 20 7236 1177

Olivia Vita

Tel: +44 (0) 20 7236 1177

The informa�on contained in this announcement was completed and reviewed by the Company's Technical Director, Mr Frank Brophy, who has over 40 years' experience as a petroleum geologist.

Notes to Editors

About Empyrean Energy Plc (LON: EME)

Empyrean is a London AIM listed oil and gas explorer with three poten�ally high impact new projects. Empyrean has a 1800km2 offshore oil permit located in the Pearl River Mouth Basin, China where it has completed 3D seismic in Q3, 2017 to further mature two large oil prospects, Jade and Topaz. Processing and interpreta�on is underway and preliminary internal interpreta�on of the raw seismic data has confirmed the structural validity of the Jade and Topaz prospects and also iden�fied a third significant target named Pearl, which is located north of Topaz. The permit is directly South East of the billion barrel+ Liuhua Oil Field operated by CNOOC and two recent discoveries to the permits West and South further enhance the merit ofJade and Topaz. Empyrean is operator and holds 100% of the explora�on rights through to commercial discovery where CNOOC have a back-in right to 51%.

Empyrean also has a 10% interest in West Natuna Explora�on Limited that holds 100% of the Duyung PSC in offshore Indonesia and is targe�ng the Mako Shallow Gas Discovery that has an independently verified 2C and 3C gas resource of between 430-650 Bcf recoverable gas. Successful tes�ng opera�ons were recently completed at the Mako South-1 Well with 10.9 million cubic feet of gas flow and be�er than expected reservoir quality and mul� Darcy permeability. The operator is currently analysing data with a view to providing a development plan.

Empyrean also has a joint venture with ASX listed Sacgasco Limited on a suite of projects in the Sacramento Basin, onshore California, USA. The package includes two mature, mul�-Tcf gas prospects, 'Dempsey' and 'Alvares', and an Area of Mutual Interest (the "Dempsey Trend AMI") that includes at least three already iden�fied, large Dempsey-style follow up prospects. Dempsey is a large structure mapped with 3D seismic and interpreted by Sacgasco to have the poten�al to hold a prospec�ve resource of over 1 Tcf of gas in up to seven stacked target reservoirs. The joint venture has completed drilling of a 2,970 metre (9,747 fee) combined appraisal and explora�on well; Dempsey 1-15, to evaluate this prospect. Wireline logs confirmed numerous zones for produc�on tes�ng.

Aside from compelling technical merit, the Dempsey-1 well loca�on sits next to exis�ng gas metering and surface infrastructure that is owned by the joint venture. This will allow for any gas discovery to be tested and connected into the local pipeline at rela�vely low cost and in an accelerated �meframe. This early poten�al for short-term cash flow in the event of a commercial discovery would be significant for the joint venture and for the state of California where gas demand is high and approximately 90% of consump�on is imported from other states. Gas produced in the Sacramento Basin currently prices at a 10-15% premium to Henry Hub Gas Prices. The joint venture is currently tes�ng the Dempsey Prospect.

Alvares is a large structure mapped with 2D seismic and interpreted by Sacgasco to hold prospec�ve resources of over 2 Tcf es�mated poten�al recoverable gas. A well drilled by American Hunter Explora�on Limited in 1982 for deeper oil intersected 5,000� of gas shows. No valid flow test was conducted due to equipment limita�ons and the deeper oil target failing. However minor gas flows to surface were recorded even with these limita�ons. The possibility of using the exis�ng well bore to sidetrack and get a valid flow test, thus reducing costs will be examined.

The Dempsey Trend AMI is an Area of Mutual Interest extending to approximately 250,000 acres and containing the Dempsey prospect (described above) as well as at least three other, Dempsey-style prospects which have been iden�fied on exis�ng seismic.

www.empyreanenergy.com

About Sacgasco Limited (ASX. SGC)

Sacgasco Limited (ASX: SGC) is an Australian-based energy company focused on conven�onal gas explora�on in the Sacramento Basin, onshore California. SGC has an extensive por�olio of gasprospects at both explora�on and appraisal stages, including mul�-Tcf opportuni�es. The Company is targe�ng gas supply to the local Californian gas market and burgeoning LNG market in North America. SGC is of the view that the size of the prospects in California have the poten�al to supply both the domes�c Californian gas market and export LNG markets.

www.sacgasco.com

This information is provided by RNS

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1-15 well production update - RNS

Empyrean Energy plc published this content on 08 December 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 08 December 2017 09:02:05 UTC.

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