(Sharecast News) - Oil and gas developer Empyrean Energy updated the market on the post-well analysis, and the second phase of exploration and drilling, at the Topaz prospect on its wholly-owned Block 29/11 permit, offshore China on Friday.
The AIM-traded firm said post-well analysis confirmed reservoir quality better than pre-drill estimates, with regional seal confirmed and depth conversion approach validated.
As a part of post-well evaluation, its partner CNOOC's geochemical and basin modelling experts provided assistance in interpreting the critical elements of effective regional oil migration pathways, leading to positive implications for the Topaz prospect.
Based on post-drill technical evaluation, and the CNOOC-assisted migration pathways assessment, Empyrean said it had decided to enter the second phase of exploration, and drill the Topaz prospect.
Empyrean is the operator of Block 29/11 in China, and has a 100% working interest during the exploration phase.
In the event of a commercial discovery, its partner China National Offshore Oil Company (CNOOC) could assume a 51% participating interest in the development and production phase.
The second phase of exploration would require the payment of $0.25m to CNOOC, with the work obligation being the drilling of an exploration well within two years.
"Being able to combine our excellent quality 3D seismic data with the confirmed well data and post well analysis has improved the validity of the Topaz prospect as a robust and large drilling target of approximately 891 million barrels in place," said chief executive officer Tom Kelly.
"Empyrean looks forward to maximising the value from its interest in the Mako Gas Field and positioning to drill the exciting Topaz prospect.
"Empyrean has also started to assess a number of additional oil and gas projects that it believes may enhance a balanced portfolio of opportunity and will update shareholders as required."
At 1207 BST, shares in Empyrean Energy were up 2.35% at 1.42p.
Reporting by Josh White at Sharecast.com.
Empyrean (EME)