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LONDON (Alliance News) - Empyrean Energy PLC shares rose on Tuesday after it said its reserves and resources at the Sugarloaf AMI project in Texas in the US have "significantly increased", lifting the value of its proven reserves at the project by USD1.9 million.
Empyrean shares were up 3.6% to 7.25 pence per share on Tuesday morning.
The updated report on the project was conducted by DeGolyer & MacNaughton and showed a 13.8% rise in proven reserves to 6.6 million barrels of oil equivalent from the previous estimate in December of 5.8 million barrels.
The net present value of those reserves rose to USD45.7 million from the previous value of USD43.8 million.
Empyrean only holds a 3% stake in the project and all of the figures are based on the net reserves attributable to Empyrean.
Probable reserves increased 9.8% to 7.5 million barrels of oil equivalent from 6.9 million barrels, lifting the probable reserves net present value to USD135.9 million from USD121.7 million back in December.
Proven plus probable reserves rose 10.9% to 23.2 million barrels of oil equivalent from 20.9 million barrels, lifting the value of those reserves to USD294.7 million from the USD263.5 million estimate in December.
"The value of the Sugarloaf AMI continues to improve even in the current oil price environment. These figures for the Lower Eagle Ford and Austin Chalk prove the robust nature of the asset and the increasing potential for exploitation," said Chief Executive Tom Kelly.
Empyrean said there is "significant potential to increase future reserves" because it has not included the Upper Eagle Ford Shale which has recently been delineated by the operator, Marathon Oil, after the reserve update was completed. Empyrean said it also anticipates further delineation of both the Upper Eagle Ford and Austin Chalk zones.
"Furthermore, the Upper Eagle Ford formation, which is a relatively new zone identified by Marathon for appraisal and development, is not included in these figures. As announced previously, we believe this represents an exciting development opportunity similar to the Austin Chalk 12 months ago, and therefore we anticipate that as this is further appraised and developed, our Reserves and Resources could rise further," said Kelly.
"This serves to reinforce the scalability of production at our flagship asset and its status as an attractive investment proposition. We remain optimistic about the development of the Sugarloaf AMI and believe that the long-term value of the project will be recognised in our valuation," he added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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