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LONDON (Alliance News) - Empyrean Energy PLC Thursday said total production related to the company's interest in the Sugarloaf AMI project in Texas rose by over a third in the fourth quarter of 2014 compared with the previous quarter, and it's in talks about securing more funding so it can continue to participate in the project.
In a statement, the company said 166,572 barrels of oil equivalent were net to its interest before royalties and costs in the fourth quarter, up 39% on the third quarter, while 111,921 barrels were net to its interests after royalties, a 38% increase on the quarter.
Empyrean has a 3% working interest in the Sugarloaf AMI project, which is operated by Marathon Oil Corp. There were 187 gross producing wells on the project at the end of 2014, which had risen to 2015 by March 20.
The company's net average daily production interest from the project was 1,811 barrels of oil equivalent during the fourth quarter before royalties and 1,217 barrels after royalties.
"Despite extremely challenging oil prices recently, our production from Sugarloaf is continuing to grow steadily as further development wells are brought on line. We are fortunate that our project is located in the liquids rich sweet spot of the Eagle Ford Shale play and therefore enjoys relatively low marginal costs of production compared with other shale plays across the US," Empyrean Chief Executive Tom Kelly said in a statement.
"Marathon continues to optimise well performance and drilling and completion costs continue to decrease. We are confident that further data gathered from existing Austin Chalk wells, in conjunction with additional Austin Chalk wells coming on line at lower spacing density, has the potential to deliver a significant increase in contingent resources along with an increase in proven reserves for existing producing locations in the short to medium term," he added.
Empyrean also said it is in active discussions with its current debt funder, Macquarie Bank, and is evaluating additional alternatives in order to secure the required additional funding to support its continued participation in the project and the current development programme.
Its shares were down 2.0% at 6.00 pence Thursday morning, but are down 24% so far in 2015.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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